U.S Securities and Exchange Commission on July 28, 2023. Off Balance Sheet Arrangements Foreign Exchange and Derivatives Contracts We enter into foreign exchange forwards, options, swaps and other derivatives products to enable customers to transfer, modify or reduce their foreign exchange and interest rate risks and to manage our own interest rate and foreign exchange positions. These instruments are used to manage foreign exchange and interest rate risk relating to specific groups of on-balance sheet assets and liabilities. For additional details, see also note 13 to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Guarantees We have issued guarantees to support business requirements of certain of our clients. Guarantees represent irrevocable assurances that the Bank will pay in the event a customer fails to fulfill its financial or performance obligations. The guarantees are generally for a period not exceeding 10 years. We enter into guarantee arrangements after conducting appropriate due diligence on our clients. We generally review these facilities on an annual basis. If a client’s risk profile deteriorates to an unacceptable level, we may choose not to renew the guarantee upon expiry or may require additional security sufficient to protect our exposure. Upon default by a client under the terms of the guarantee, the beneficiary may exercise its rights under the guarantees, and we are obligated to honor payments to the beneficiaries. Banks and financial institutions are beneficiaries for some of our financial guarantees, so as to enable clients to receive financial assistance from these banks and financial institutions. If our clients default on such loans, the banks and financial institutions may exercise their rights under the guarantee and we would be obligated to honor payments to them. For additional details, see also note 22(o) to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Commitments Securitization The Bank primarily securitizes retail loans through securitization transactions involving special purpose entities, usually constituted as trusts. After securitization of the loans, we continue to act as the servicing agent, maintain customer account relationships and service these set of loans transferred to the securitization trusts. The Bank acts in different capacities and under different contracts for a consideration including as originator, liquidity facility provider, servicing agent credit enhancement provider, underwriter, and senior contributor. The Bank has provided credit enhancements (first loss and second loss enhancement) on securitized pools originated by the Bank and guarantees (second loss enhancement) provided to the pools originated by a third party. 164 Table of Contents The total outstanding first loss credit enhancements at year-end fiscal 2024 were Rs. 0.7 billion and second loss credit enhancements were Rs. 0.7 billion for securitized pools originated by the Bank. With respect to the second loss guarantees provided to the third party originated pools, the outstanding at year-end fiscal 2024 was Rs. 1.2 billion. Loan Commitments We have outstanding undrawn commitments to provide loans and financing to customers. The commitments have fixed expiration dates and are generally contingent upon the borrower’s ability to continue to meet specified credit standards. For additional details, see also note 11 to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Capital Commitments We are obligated under a number of capital contracts. Capital contracts are job orders of a capital nature, which have been committed. For additional details, see also note 12 to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Long-term Debt Obligations Long-term debt represents debt with an original contractual maturity greater than one year. Maturity distribution is based on contractual maturity, or the date at which the debt is callable at the option of the holder, whichever is earlier. For additional details, see also note 3 to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Time Deposits Time deposits represent deposits with fixed maturity terms. Most of the time deposits can be withdrawn by the depositors any time before maturity, subject to certain prepayment charges. For additional details, see also note 2 to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Life Insurance Obligations Life insurance obligations primarily include liabilities for life insurance policies, including both unit-linked and non-linked policies. A unit-linked life insurance policy is a policy in which the cash value of the policy varies according to the net asset value of units (i.e., shares) in investment assets chosen by the policyholder. The unit liability is equal to the net asset value of the units in each policy as of the valuation date. The non-unit liability for linked insurance policies and the liability for non-linked life insurance policies is calculated using the gross premium method using assumptions for interest, mortality, expense and inflation. For participating policies, the assumptions are also made for future bonuses, together with allowances for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. Total life insurance obligation at year-end fiscal 2024 was Rs. 6,094.14 billion. 165 Table of Contents Gratuity Obligations We provide gratuity, a defined benefit retirement plan covering all employees who retire or resign after a minimum prescribed period of continuous service. The plan provides a lump sum payment to eligible employees at retirement or termination of employment based on the respective employee’s salary and years of employment with us. For additional details, see also note 22(j) to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Pension Obligations The Bank provides pensions—deferred retirement plans—covering certain employees of the former Bank of Madura, Sangli Bank and Bank of Rajasthan. The plans provide for monthly pension payments to these employees when they retire and are based on the respective employees’ years of service with the Bank, the applicable salary and a cost of living adjustment. For additional details, see also note 22(j) to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Operating and Finance Lease Obligations We have commitments under long-term operating leases and finance leases principally for premises and office equipment. For additional details, see also note 22(k) to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. Capital Resources We actively manage our capital to meet regulatory norms and current and future business needs, considering the risks in our businesses, expectations of rating agencies, shareholders and investors, and the available options of raising capital. Our capital management framework is administered by the Finance Group and the Risk Management Group under the supervision of the Board and the Risk Committee. The capital adequacy position and assessment is reported to the Board and the Risk Committee periodically. Regulatory Capital The Bank is subject to the Basel III capital adequacy guidelines of the Reserve Bank of India applicable from April 1, 2013. The Basel III rules on capital consist of measures on improving the quality, consistency and transparency of capital, enhancing risk coverage, introducing a supplementary leverage ratio, reducing pro-cyclicality and promoting counter-cyclical buffers and addressing systemic risk and inter-connectedness. At year-end fiscal 2024, ICICI Bank was required to maintain a minimum Common Equity Tier-1 capital ratio of 8.20%, minimum Tier-1 capital ratio of 9.70% and minimum total capital ratio of 11.70%. The minimum total capital requirement includes a capital conservation buffer of 2.50% and a capital surcharge of 0.20% on account of the Bank being designated as a Domestic Systemically Important Bank (D-SIB). Under Pillar 1 of the Reserve Bank of India guidelines on Basel III, the Bank follows the standardized approach for measurement of credit risk, the standardized duration method for measurement of market risk and the basic indicator approach for measurement of operational risk. 166 Table of Contents Unconsolidated capital adequacy position The following table sets forth, at the dates indicated, regulatory capital, risk-weighted assets and risk-based capital ratios computed in accordance with the Reserve Bank of India’s Basel III guidelines and based on the Bank’s unconsolidated financial statements prepared in accordance with Indian GAAP. As per the Reserve Bank of India’s Basel III guidelines At year-end fiscal 2023(1) 2024(1) 2024 (in millions, except percentages) Tier 1 capital Rs. 1,884,171 Rs. 2,142,170 US$ 25,704 Of which: Common equity Tier 1 capital 1,832,771 2,142,170 25,704 Tier 2 capital 78,652 100,104 1,201 Total capital Rs. 1,962,823 Rs. 2,242,274 US$ 26,905 Credit risk: risk-weighted assets Rs. 8,936,530 Rs. 11,605,272 US$ 139,252 Market risk: risk-weighted assets 688,087 836,497 10,037 Operational risk: risk-weighted assets 1,080,534 1,285,848 15,429 Total risk-weighted assets Rs. 10,705,151 Rs. 13,727,617 US$ 164,718 Common equity Tier 1 risk-based capital ratio 17.1% 15.6% Tier 1 risk-based capital ratio 17.6% 15.6% Tier 2 risk-based capital ratio 0.7% 0.7% Total risk-based capital ratio 18.3% 16.3% (1) Post appropriation of proposed dividend In fiscal 2024, capital funds (net of deductions) increased by Rs. 279.5 billion from Rs. 1,962.8 billion at year-end fiscal 2023 to Rs. 2,242.3 billion at year-end fiscal 2024, primarily due to an increase in retained earnings, partially offset by redemption of perpetual debt instruments and an increase in capital fund deduction consequent to ICICI Lombard General Insurance Company Limited and I-Process Services (India) Private Limited becoming subsidiaries of the Bank during fiscal 2024. Risk-weighted assets relating to credit risk increased by Rs. 2,668.7 billion from Rs. 8,936.5 billion at year-end fiscal 2023 to Rs. 11,605.3 billion at year-end fiscal 2024, primarily due to an increase of Rs. 2,150.1 billion in risk-weighted assets for on-balance sheet assets and an increase of Rs. 518.6 billion in risk-weighted assets for off-balance sheet exposures. On-balance sheet risk-weighted assets increased primarily due to growth in advances and an increase in risk weight on certain categories of advances during the year. Off-balance sheet risk-weighted assets increased primarily due to an increase in non-fund exposures. Risk-weighted assets relating to market risk increased by Rs. 148.4 billion from Rs. 688.1 billion at year-end fiscal 2023 to Rs. 836.5 billion at year-end fiscal 2024, primarily on account of investments in government securities during the year. Risk-weighted assets relating to operational risk increased by Rs. 205.4 billion from Rs. 1,080.5 billion at March 31, 2023 to Rs. 1,285.9 billion at March 31, 2024. The operational risk capital charge is computed based on 15% of the average of the previous three financial years’ gross income and is revised on an annual basis at June 30. Risk-weighted assets are arrived at by multiplying the capital charge by 12.5. 167 Table of Contents Consolidated capital adequacy position Consolidation for regulatory capital calculations is based on the consolidated financial statements of the Bank and its subsidiaries, in line with the standards on consolidated prudential reporting issued by the Reserve Bank of India. The entities considered for consolidation for regulatory capital calculations include subsidiaries, associates and joint ventures of the Bank, which carry on activities of a banking or of a financial nature as stated in the reporting guidelines prescribed by the Reserve Bank of India. Entities engaged in the insurance business and businesses not pertaining to financial services are excluded from consolidation for capital adequacy calculation. Under the Basel III guidelines of the Reserve Bank of India, equity and other regulatory capital investments in the unconsolidated insurance and non-financial subsidiaries are deducted from consolidated regulatory capital of the group. At year-end fiscal 2024, our total risk-based capital ratios at the consolidated level as per Basel III guidelines of the Reserve Bank of India were common equity Tier 1 risk-based capital ratio of 15.43%, Tier 1 risk-based capital ratio of 15.43% and total risk-based capital ratio of 16.14% against the current requirement of minimum common equity Tier 1 capital ratio of 8.20%, a minimum Tier 1 capital ratio of 9.70% and a minimum total capital ratio of 11.70% respectively. Internal assessment of capital Our capital management framework includes a comprehensive internal capital adequacy assessment process conducted annually which determines the adequate level of capitalization required to meet regulatory norms and current and future business needs. The Bank also performs adequate stress testing, as determined by several stress scenarios. The internal capital adequacy assessment process is undertaken at both the stand alone bank level and the consolidated group level. The internal capital adequacy assessment process encompasses capital planning for a four-year time horizon, assessment of material risks and the relationship between risk and capital. The capital management framework is complemented by our risk management framework, which covers the policies, processes, methodologies and frameworks established for the management of material risks. Stress testing, which is a key aspect of the internal capital adequacy assessment process and the risk management framework, provides an insight into the impact of extreme but plausible scenarios on the risk profile and capital position. Based on our Board-approved stress testing framework, we conduct stress tests on our various portfolios and assess the impact on our capital ratios and the adequacy of our capital buffers for current and future periods. We periodically assess and refine our stress testing framework in an effort to ensure that the stress scenarios capture material risks as well as reflect possible extreme market moves that could arise as a result of market conditions and the operating environment. The business and capital plans and the stress testing results of the ICICI Bank entities are integrated into the internal capital adequacy assessment process. Based on the internal capital adequacy assessment process, we determine the level of capital that needs to be maintained by considering the following factors in an integrated manner: · strategic focus, business plan and growth objectives; · regulatory capital requirements as per the Reserve Bank of India guidelines; · assessment of material risks and impact of stress testing; · perception of shareholders and investors; · future strategy with regard to investments or divestments in subsidiaries; and · evaluation of options to raise capital from domestic and overseas markets, as permitted by the Reserve Bank of India from time to time. 168 Table of Contents We continue to monitor relevant developments and believe that our current robust capital adequacy position and demonstrated track record of access to domestic and overseas markets for capital raising will enable us to maintain the necessary levels of capital as required by regulations while continuing to grow our business. Liquidity Risk Liquidity risk is the current and prospective risk arising out of an inability to meet financial commitments as they fall due, through available cash flows or through the sale of assets at fair market value. It includes both the risk of unexpected increases in the cost of funding an asset portfolio at appropriate maturities and the risk of being unable to liquidate a position in a timely manner at a reasonable price. We actively monitor our liquidity position and attempt to maintain adequate liquidity at all times. Most of our incremental funding requirements are met through short-term funding sources, primarily in the form of deposits including interbank deposits. However, a large portion of our assets, primarily the corporate and home loan portfolio, have medium or long-term maturities, creating a potential for funding mismatches. The Bank promotes a continuous information flow and an active dialogue between the funding and borrowing divisions of the Bank to enable optimal liquidity management. A separate group is responsible for liquidity management. ICICI Bank is required to submit gap reports in rupee and other major currencies for domestic operations on a fortnightly basis to the Reserve Bank of India. The Bank prepares a daily maturity gap analysis for the overseas operations and rupee book for the domestic operations. Our static gap analysis is also supplemented by a short-term dynamic cash-flow analysis, in order to provide the liability raising units with a fair estimate of our funding requirements in the near-term. In addition, the Bank monitor its liquidity coverage ratio on a daily basis and certain other liquidity ratios on a fortnightly basis. ICICI Bank has a liquidity contingency plan in place, through which the Bank monitors key indicators that could signal potential liquidity challenges, to enable us to take necessary measures to ensure sufficient liquidity. Sources of Funding and Liquidity The Bank maintains diverse sources of liquidity to facilitate flexibility in meeting funding requirements. Incremental operations in India are principally funded by accepting deposits from retail and corporate depositors. These deposits are augmented by issuance of certificate of deposits, borrowings in the short-term interbank market, through refinance agencies and through the issuance of bonds. The Bank also has recourse to the liquidity adjustment facility and marginal standing facility, which are short-term funding arrangements provided by the Reserve Bank of India. The Bank generally maintains a substantial portfolio of high quality liquid securities that may be sold on an immediate basis to meet our liquidity needs. ICICI Bank also has the option of managing liquidity by borrowing in the interbank market on a short-term basis. The overnight market, which is a significant part of the interbank market, is susceptible to volatile interest rates. These interest rates on certain occasions have reached highs of 100.0% and above. To curtail reliance on such volatile funding sources, our Asset Liability Management Policy stipulates daily limits for borrowing and lending in this market. ICICI Securities Primary Dealership also relies on the repo market and interbank market for its funding requirements. It is therefore also exposed to similar risk of volatile interest rates. However, ICICI Securities Primary Dealership being a primary dealer, also has access to the standing liquidity facility from Reserve Bank of India and any liquidity adjustment facility as and when announced by Reserve Bank of India. Our gross liquid assets consist of cash, nostro balances, overnight and other short-term money market placements, government bonds and treasury bills (including investments eligible for reserve requirements and net of borrowings on account of repurchase agreements, the liquidity adjustment facility and the marginal standing facility), corporate bonds (rated AA- and above), other money market investments such as commercial papers and certificates of deposits and mutual fund investments. The Bank deducts short-term money-market borrowings (borrowings with contractual maturity up to 30 days) from the aggregate of these assets to determine net liquid assets. 169 Table of Contents The Bank maintains a significant portion of liquid assets in forms required pursuant to regulatory reserve requirements laid down of the Reserve Bank of India related to maintaining liquidity to meet our demand and time liabilities. The Reserve Bank of India stipulates a cash reserve ratio applicable to Indian banks, which requires us to maintain an average percentage of our demand and time liabilities as a cash balance deposited with the Reserve Bank of India over 14-day period. At year-end fiscal 2024, the cash reserve ratio requirement percentage specified by the Reserve Bank of India was 4.5% of a bank’s net demand and time liabilities. In addition, cash reserves may not fall below 90% of the required cash reserve ratio on any day during any 14-day reporting period. The Reserve Bank of India also stipulates a statutory liquidity ratio applicable to Indian banks, which requires us to maintain a certain percentage of demand and time liabilities in prescribed investments. At year-end fiscal 2024, the statutory liquidity ratio requirement percentage was 18.0%. Banks are permitted to avail liquidity facility against eligible securities under a special facility under the ‘Facility to Avail Liquidity for Liquidity Coverage Ratio’. Further, banks can borrow funds at their discretion by dipping into their statutory liquidity ratio to the extent allowed under the marginal standing facility. As per the Reserve Bank of India guidelines, the carve-out from the statutory liquidity ratio under the “facility to avail liquidity for liquidity coverage ratio” was 16.0% of net demand and time liabilities at year-end fiscal 2024. For the marginal standing facility, the carve out is 2.0% of net demand and time liabilities. The Reserve Bank of India has issued guidelines on the Basel III framework on liquidity standards including the liquidity coverage ratio, liquidity risk monitoring tools and liquidity coverage ratio disclosure standards. As per the Reserve Bank of India guidelines, the liquidity coverage ratio has been made applicable to Indian banks on a standalone as well as consolidated basis with a minimum requirement of 100.0% at year-end fiscal 2024. The liquidity coverage ratio requirement is met by investments in high quality liquid assets. It primarily includes government securities, in excess of mandatory statutory liquidity ratio and better-rated corporate bonds. High quality liquid assets also includes specified portion of mandatory statutory liquidity ratio requirement held in the form of government securities under the "facility to avail liquidity for liquidity coverage ratio” and “marginal standing facility” as specified by the Reserve Bank of India from time to time. The liquidity coverage ratio disclosure for the three months ended March 31, 2024 is based on a simple average of daily observations. The liquidity coverage ratio of the Group, for the three months ended March 31, 2024 was 120.7%. The Reserve Bank of India has issued guidelines on the Basel III framework on liquidity standards – net stable funding ratio. These guidelines ensure reduction in funding risk over a longer time horizon by requiring banks to fund their activities with sufficiently stable sources of funding in order to mitigate the risk of future funding stress. As per the guidelines, the net stable funding ratio should be equal to at least 100% on an ongoing basis. The net stable funding ratio of the Group, at the year-end fiscal 2024 was 125.9%. In order to enhance liquidity resilience of the Bank, the Reserve Bank of India issued its draft guidelines on Basel III framework on liquidity standards - Liquidity Coverage Ratio - Review of haircuts on High Quality Liquid Assets and run-off rates on certain categories of deposits on July 25, 2024. Technology has facilitated ability to make instantaneous bank transfers and withdrawals, leading to increase in risks, requiring proactive management. Based on the draft guidelines, retail deposits with internet and mobile banking facilities are assigned additional run-off factors and level 1 high quality liquid assets denominated in government securities will attract haircuts in line with the circular for liquidity adjustment facility and marginal standing facility. The Bank maintains liquid assets in addition to statutory liquidity ratio and cash reserve ratio requirements. Throughout fiscal 2024, the Bank maintained adequate reserves as per the regulatory requirements mentioned above. 170 Table of Contents The following table sets forth the components of the ICICI Bank’s average and balance sheet date liquid assets. At March 31, 2023 Fortnightly average for fiscal 2024 At March 31, 2024 (in billions) Statutory liquidity ratio eligible investments and other government securities, net of borrowings on account of repurchase agreement, liquidity adjustment facility and collateralized borrowings Rs. 3,105.5 Rs. 3,446.0 Rs. 3,803.7 Balance with central banks and current accounts with other banks 883.8 805.7 1,010.6 Other liquid assets 593.6 503.5 797.6 Gross liquid assets 4,582.9 4,755.2 5,611.9 (Less) Short-term borrowings 10 4.3 4.5 Net liquid assets Rs. 4,572.9 Rs. 4,750.9 Rs. 5,607.4 ICICI Bank held net liquid assets totaling to Rs. 5,607.4 billion at year-end fiscal 2024, compared to Rs. 4,572.9 billion at year-end fiscal 2023. In fiscal 2024, the Bank held fortnightly average net liquid assets of Rs. 4,750.9 billion. In addition to the amounts included in net liquid assets above, at year-end fiscal 2024, the Bank also held other fixed income non-government securities totaling to Rs. 0.4 billion compared to Rs. 4.4 billion at year-end fiscal 2023. Under local regulations, some overseas branches of the Bank are required to maintain a ‘net due’ position with other Group entities (i.e., those branches need to be a net borrower above a specified amount or they cannot be a net lender beyond a specified amount). Accordingly, surplus liquidity maintained at those branches can be utilized at other Group entities only to the extent of buffer available in the ‘net due’ position. At year-end fiscal 2024, such overseas branches of the Bank held net liquid assets of Rs. 130.0 billion (equivalent), which are included in our overall net liquid assets of the Bank of Rs. 5,607.4 billion. ICICI Bank also has access to other reliable sources of liquidity. The Reserve Bank of India conducts repo and reverse repo transactions with banks through its liquidity adjustment facility and marginal standing facility to carry out monetary policy and manage liquidity for the Indian banking system. The Reserve Bank of India stipulates interest rates applicable to fixed rate repo transactions, fixed rate reverse repo transactions agreements and its marginal standing facility, which are known as the repo rate, reverse repo rate and marginal standing facility rate respectively. In addition, the Reserve Bank of India also conducts variable rate repo or reverse repo auctions, rates for which are arrived through competitive bidding. On April 8, 2022, the Reserve Bank of India operationalized a new standing deposit facility, which replaced the fixed rate reverse repo as the floor of the liquidity adjustment facility corridor at 25 basis points below the policy repo rate. At year-end fiscal 2024, the Reserve Bank of India repo rate, fixed rate reverse repo rate, standing deposit facility and marginal standing facility rate were 6.5%, 3.35%, 6.25% and 6.75% respectively. The liquidity adjustment facility and marginal standing facility are available throughout the year. At year-end fiscal 2024, under the marginal standing facility, in addition to the eligible securities the Bank holds in excess of the statutory requirement, the Bank could borrow overnight up to 2.0% of its net demand and time liabilities outstanding at the end of the second preceding 14-day period. Further, there is a liquid market for repo transactions with other market counterparties. Banks may enter into repo transactions with the Reserve Bank of India or other market counterparties against the statutory liquidity ratio eligible securities that hold in excess of the statutory requirement. At year-end fiscal 2024, ICICI Bank had government securities amounting to Rs. 1,607.5 billion eligible for borrowings through the liquidity adjustment facility and marginal standing facility from the Reserve Bank of India. 171 Table of Contents The loan portfolio at the Bank’s overseas branches as a proportion of the total portfolio has declined from 3.3% at year-end fiscal 2023 to 2.8% at year-end fiscal 2024. ICICI Bank has a well-defined borrowing program for its overseas operations. The incremental wholesale borrowings are primarily in the form of interbank and money market borrowings. The Bank also raises refinancing from other banks against eligible trade assets. Those loans that meet the Export Credit Agencies’ criteria are refinanced as per the agreements entered into with these agencies. The Bank also raises deposit liabilities, in accordance with the regulatory framework of the host country. ICICI Bank has the ability to use its rupee liquidity in India to meet refinancing needs at its overseas branches, although this may be at a relatively high cost based on swap and exchange rates prevailing at the time. The terms of the Bank’s bond issuances and loans from other financial institutions and export credit agencies contain cross-default clauses, restrictions on its ability to merge or amalgamate with another entity and restrictions on the Bank’s ability to prematurely redeem or repay such bonds or loans. The terms of the Bank’s subordinated debt issuances eligible for inclusion in Tier 1 or Tier 2 capital include the suspension of interest payments in the event of losses or capital deficiencies, and a prohibition on redemption, even at maturity or on specified call option dates, without the prior approval of the Reserve Bank of India. The Bank is currently not, and does not expect to be, in breach of any material covenants of the Bank’s borrowings that would be construed as events of default under the terms of such borrowings. The successful management of credit, market and operational risk is an important consideration in managing liquidity risk, because the management of these risks affects the evaluation of our credit ratings by rating agencies. Rating agencies may reduce or indicate their intention to reduce the ratings at any time. Rating agencies can also decide to withdraw their ratings of the Bank, which may have the same effect as a reduction in our ratings. Any reduction or withdrawal of in our ratings may increase our borrowing costs, limit our access to capital markets and adversely affect our ability to sell or market our products, engage in business transactions (particularly longer-term transactions) and derivatives transactions, or retain our customers. See also “Risk Factors—Risks Relating to India and Other Economic and Market Risks—Any downgrade of India’s debt rating or the rating of our senior unsecured foreign currency debt by an international rating agency could adversely affect our business, liquidity and the prices of our equity shares and ADSs.” To meet expected and unexpected borrowings requirements, in respect of the Bank’s domestic operations, it may enter into collateralized borrowings in the form of repo transactions with the Reserve Bank of India, through Clearing Corporation of India Limited (a centralized clearing counterparty), or with market counterparties, against securities eligible for the statutory liquidity ratio. In general, the market value of securities sold for any such repo is higher than the value of the cash received, the difference being referred to as a haircut. The Reserve Bank of India has stipulated the haircut applicable for all such repos with the Reserve Bank of India. In case of borrowings from products settled through Clearing Corporation of India Limited, members of Clearing Corporation of India Limited’s repo segment are required to maintain margin contributions in relation to their borrowing/lending obligation at any point of time, which acts as a cushion against any fall in the value of the underlying collateral. Further, the Bank is also a member in the triparty repo segment and it may enter into collateralized borrowings in the form of repo transactions on the Triparty Repo Order Matching Platform provided by Clearcorp Dealing Systems (India) Ltd., a wholly owned subsidiary of Clearing Corporation of India Limited. Clearing Corporation of India Limited also performs the roles and responsibilities of a Triparty Repo Agent, in terms of Repurchase transactions (Repo) (Reserve Bank) Directions, 2018 as amended from time to time. The triparty repo agent has stipulated the haircuts for the eligible securities for borrowing through its platform and the market value of collateral required for any such loan is higher than the value of the loan. The Bank holds sufficient securities to meet additional collateral requirements if necessary, systems and processes in place to ensure sufficient balance in our Principal-Securities General Ledger account, Repo Constituent - Securities General Ledger account, Clearing Corporation of India Limited Securities Guarantee Fund and Tri-party repo margin account, to support the settlement of transactions. 172 Table of Contents Further, in case of any emergency requirement, additional securities may be transferred to our Securities Guarantee Fund/collateralized borrowing and lending obligations margin account on a T+0 basis. For corporate bond repos, the value of the securities is computed after applying the minimum haircut as stipulated by the clearing house or as bilaterally agreed upon with our counterparties depending upon the credit rating of the underlying security. The Bank also deals with central counterparties for settlement of government securities outright and repo transactions, foreign exchange transactions, interest rate and currency derivatives for which it needs to contribute towards margin obligations. The Bank may be required to post additional collateral under letter of credit, stand-by letter of credit, bank guarantee and unfunded risk participation agreements if our external credit rating is downgraded. In respect of overseas branch operations, generally, the collateral requirements are applicable for transactions which are cleared through clearing houses, bilateral transactions executed under International Swaps and Derivatives Association Credit Support Annex and International Swaps and Derivatives Association Global Master Repo Agreement. The Asset Liability Management Committee has approved a framework for accepting covenants linked to a credit rating downgrade of the Bank and a breach in thresholds of certain financial covenants as a part of borrowing agreements. A stress scenario has been formulated, which is linked to potential outflows due to a breach of rating downgrade covenants. Off-balance sheet items including funding commitments impact the liquidity of the Bank. The Bank analyzes the behavioral profile of various components of the off-balance sheet items. The behavioral analysis includes potential cash flows from off-balance sheet activities, such as draw down under loan commitments, contingent liabilities and market related transactions. We consider the impact of these cash flows in various liquidity risk reports. In view of the margin rules for non-centrally cleared derivative transactions issued by the Basel Committee on Banking Supervision and a discussion paper issued by the Reserve Bank of India, derivative transactions are subject to margin-reset provisions and any resulting collateral exchange is governed by the Credit Support Annex. The Bank has entered into a Credit Support Annex, which would require maintenance of collateral. The Bank considers the increased liquidity requirement on account of valuation changes in the transactions settled through qualified central counterparties including the clearing corporation of India and other exchange houses as well as for transactions covered under the Credit Support Annex. We consider the potential outflows on account of such transactions based on the look-back approach prescribed in the Reserve Bank of India guidelines. Volatility in the international debt markets may constrain our international borrowings. As of March 31, 2024, the Bank did not have any borrowing linked to credit downgrade covenants which would require the Bank to pay an increased interest rate on the borrowing. There are restrictions on the use of liquidity maintained by the UK and Canada subsidiaries of the Bank to meet their overall liquidity needs. The Office of the Superintendent of Financial Institutions of Canada has prescribed a limit of 100% of Tier 1 and Tier 2 capital (as defined under Canadian regulations) on the credit exposure to any single entity or a group of connected entities. ICICI Bank Canada has internally capped this credit exposure at CAD 150 million (32.4% of the limit specified by the Office of the Superintendent of Financial Institutions, except with respect to exposure to the ICICI Bank). The limit of CAD 150 million can be increased to a maximum of 75% of capital depending on the credit quality of the Group or Connection. In fiscal 2024, ICICI Bank Canada has complied with both regulatory and their internal limits on exposures to any single entity, including to ICICI Bank. 173 Table of Contents As per the Capital Requirements Regulation guidelines applicable for ICICI Bank UK PLC, a bank shall not incur an exposure, after taking into account the effect of the credit risk mitigation, to a client or group of connected clients the value of which exceeds 25% of its Tier 1 capital. Where that client is an institution or where a group of connected clients includes one or more institutions, that value shall not exceed 25% of the bank’s Tier 1 capital or GBP 130 million, whichever the higher. ICICI Bank UK PLC has a total capital base of US$ 361.4 million at year-end fiscal 2024 which was higher than the regulatory requirement. Additionally, ICICI Bank UK PLC stipulates various internal limits to manage exposure concentrations within the Bank. The key parameters of risk concentrations measured include sectoral, country, rating category based, counterparty and large exposures. Capital Expenditure The following tables set forth, for the periods indicated, certain information related to capital expenditure by category of fixed assets. Fiscal 2022 Cost at year-end fiscal 2022 Additions/transfers/ revaluation Deletions/ transfers Depreciation Net assets at year-end fiscal 2022 (in millions) Premises Rs. 95,782 Rs. 3,335(1) Rs. (4,771 ) Rs. (23,514 ) Rs. 70,832 US$ 850 Other fixed assets (including furniture and fixtures) 97,137 15,252 (13,605 ) (66,817 ) 31,968 384 Assets given on lease 17,735 156 — (14,636 ) 3,255 39 Total Rs. 210,654 Rs. 18,743 Rs. (18,376 ) Rs. (104,967 ) Rs. 106,055 US$ 1,273 (1) Includes gain on revaluation recorded through reserve of Rs. 1,743 million. Fiscal 2023 Cost at year-end fiscal 2023 Additions transfers/ revaluation Deletions/ transfers Depreciation Net assets at year-end fiscal 2023 (in millions) Premises Rs. 94,346 Rs. 2,793(1) Rs. (2,799 ) Rs. (25,545 ) Rs. 68,795 US$ 825 Other fixed assets (including furniture and fixtures) 98,785 18,437 (6,220 ) (73,174 ) 37,828 454 Assets given on lease 17,891 12 — (14,836 ) 3,067 37 Total Rs. 211,022 Rs. 21,242 Rs. (9,019 ) Rs. (113,555 ) Rs. 109,690 US$ 1,316 (1) Includes gain on revaluation recorded through reserve of Rs. 812 million. 174 Table of Contents Fiscal 2024 Cost at year-end fiscal 2024 Additions/ transfers/revaluations Deletions/ transfers Depreciation Net assets at year-end fiscal 2024 (in millions) Premises Rs. 94,340 Rs. 9,806(1) Rs. (1,171 ) Rs. (28,099 ) Rs. 74,876 US$ 898 Other fixed assets (including furniture and fixtures) 111,003 42,595 (4,553 ) (94,384 ) 54,661 656 Assets given on lease 17,902 1 (3 ) (15,034 ) 2,866 34 Total Rs. 223,245 Rs. 52,402 Rs. (5,727 ) Rs. (137,517 ) Rs. 132,403 US$ 1,588 (1) Includes gain on revaluation recorded through reserve of Rs. 1,195 million. Significant Changes Except as otherwise stated in this annual report, we have experienced no significant changes since the date of fiscal 2024 consolidated financial statements contained in this annual report. Segment Revenues and Assets The Reserve Bank of India in its guidelines on “segmental reporting” has stipulated specified business segments and their definitions, for the purposes of public disclosures on business information for banks in India. The consolidated segmental report for fiscal 2024, based on the segments identified and defined by the Reserve Bank of India, has been presented as follows: · Retail Banking includes our exposures which satisfy the four qualifying criteria of “regulatory retail portfolio” as stipulated by the Reserve Bank of India’s Basel III guidelines. These criteria are as follows: (i) Orientation criterion: The exposure is to an individual person or persons or to a small business; person under this clause would mean any legal person capable of entering into contracts and would include but not be restricted to an individual, Hindu Undivided Family, partnership firm, trust, private limited companies, public limited companies, or co-operative societies. A small business is defined as one where the three-year average annual turnover is less than Rs. 500 million. (ii) Product criterion: All exposures should take the form of any of the following: · revolving credits and lines of credit (including overdrafts); · term loans and leases (e.g. installment loans and leases, student and educational loans); and · small business facilities and commitments. (iii) Low value of individual exposures: The maximum aggregate retail exposure to one counterparty should not exceed the absolute threshold limit of Rs. 75 million. (iv) Granularity criterion: The regulatory retail portfolio should be sufficiently diversified to a degree that reduces the risks in the portfolio. The aggregate exposure to one counterparty should not exceed 0.2% of the overall retail portfolio. 175 Table of Contents · Wholesale Banking includes all advances to trusts, partnership firms, companies and statutory bodies by the Bank which are not included in the Retail Banking segment, as per the Reserve Bank of India guidelines for the Bank. · Treasury includes the entire investment and derivative portfolio of the Bank and ICICI Strategic Investments Fund. · Other Banking includes leasing operations and other items not attributable to any particular business segment of the Bank. It also includes the Bank’s banking subsidiaries, i.e., ICICI Bank UK PLC and ICICI Bank Canada. · Life Insurance represents results of ICICI Prudential Life Insurance Company Limited. · Others include ICICI Home Finance Company Limited, ICICI Venture, ICICI International Limited, ICICI Securities Primary Dealership Limited, ICICI Securities Limited, ICICI Securities Holdings Inc., ICICI Securities Inc., ICICI Prudential Asset Management Company Limited, ICICI Prudential Trust Limited, ICICI Investment Management Company Limited, ICICI Trusteeship Services Limited, ICICI Prudential Pension Funds Management Company Limited, ICICI Lombard General Insurance Company Limited and I-Process Services (India) Private Limited. · Unallocated includes items such as income tax paid in advance net of provision for tax, deferred tax and provisions to the extent estimated at the entity level. Framework for Transfer Pricing Liabilities of retail banking and wholesale banking segments are transfer priced to a central treasury unit, which pools all funds and lends to the business units at appropriate rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve requirements and a specific charge for directed lending to certain priority sectors. Current account and savings account deposits are transfer priced at rates linked to the interest rate on savings account deposits. For term deposits and borrowings, the transfer pricing is primarily based on the categories specified in the Transfer Pricing Policy. Transfer pricing to our asset creation units is based on the incremental cost of deposits (blended for current account and savings account deposits) and borrowings adjusted for the maturity of the asset (term premium) and regulatory reserve requirements. The allocated capital is also considered as a source of funding for the purpose of segmental reporting. 176 Table of Contents Fiscal 2024 compared with Fiscal 2023 The following table sets forth, for the periods indicated, profit before tax of various segments. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Retail Banking Rs. 175,337 Rs. 188,492 US$ 2,134 53.8% Wholesale Banking 157,858 199,717 2,396 26.5 Treasury 140,372 146,409 1,757 4.3 Other Banking 10,014 16,384 197 63.6 Life Insurance 8,969 9,232 111 2.9 Others(1) 42,024 62,302 748 48.3 Inter-Segment adjustments (15,509 ) (18,193 ) (218 ) 17.3 Share of profit from associates(1) 9,983 10,738 129 7.6 Unallocated expenses (56,500 ) — — N/M Profit before tax Rs. 472,548 Rs. 615,081 US$ 7,382 30.2% N/M – Not meaningful 1. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank effective from February 29, 2024. I-Process Services (India) Private Limited ceased to be an associate and became a wholly-owned subsidiary of the Bank effective from March 22, 2024. Retail Banking The following table sets forth, for the periods indicated, the principal components of profit before tax for our retail banking segment. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Net interest income Rs. 317,100 Rs. 387,324 US$ 4,648 22.1% Other income 121,877 136,921 1,643 12.3 Total income 438,977 524,245 6,291 19.4 Operating expenses 240,344 283,844 3,406 18.1 Profit before provisions 198,633 240,401 2,885 21.0 Provisions 23,296 51,909 623 N/M Profit before tax Rs. 175,337 Rs. 188,492 US$ 2,262 7.5% N/M – Not meaningful The following table sets forth, for the periods indicated, the outstanding balances of key assets and liabilities for our retail banking segment. Outstanding balance at March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Advances Rs. 5,765,239 Rs. 6,901,522 US$ 82,812 19.7% Deposits 8,587,318 9,819,674 117,827 14.4 The profit before tax of the retail banking segment increased by 7.5% from Rs. 175.3 billion in fiscal 2023 to Rs. 188.5 billion in fiscal 2024, primarily due to an increase in net interest income and other income, partially offset by an increase in operating expenses and provisions. Net interest income increased by 22.1% from Rs. 317.1 billion in fiscal 2023 to Rs. 387.3 billion in fiscal 2024, primarily due to an increase in yield and growth in the average loan portfolio. Other income increased by 12.3% from Rs. 121.9 billion in fiscal 2023 to Rs. 136.9 billion in fiscal 2024, primarily due to an increase in fees from credit card portfolio and lending linked fees. Operating expenses increased by 18.1% from Rs. 240.3 billion in fiscal 2023 to Rs. 283.8 billion in fiscal 2024, primarily due to an increase in employee expenses, direct marketing agency expenses and technology related expenses. 177 Table of Contents Provisions (net of write-back) increased from Rs. 23.3 billion in fiscal 2023 to Rs. 51.9 billion in fiscal 2024, primarily due to higher net additions to non-performing assets in retail and rural loans. During fiscal 2023 there were higher recoveries and upgrades from non-performing assets resulting in lower provisioning requirement. Wholesale Banking The following table sets forth, for the periods indicated, the principal components of profit before tax for our wholesale banking segment. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Net interest income Rs. 150,003 Rs. 192,088 US$ 2,305 28.1% Other income 55,492 68,570 823 23.6 Total income 205,495 260,658 3,128 26.8 Operating expenses 67,489 83,058 997 23.1 Profit before provisions 138,006 177,600 2,131 28.7 Provisions (19,852 ) (22,117 ) (265 ) 11.4 Profit before tax Rs. 157,858 Rs. 199,717 US$ 2,396 26.5% The following table sets forth, for the periods indicated, the outstanding balances of key assets and liabilities for our wholesale banking segment. Outstanding balance at March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Advances Rs. 4,146,135 Rs. 4,607,263 US$ 55,283 11.1% Deposits 3,209,497 4,258,587 51,099 32.7 The profit before tax of the wholesale banking segment increased by 26.5% from Rs. 157.9 billion in fiscal 2023 to Rs. 199.7 billion in fiscal 2024, primarily due to an increase in net interest income, other income and higher recoveries on non-performing loans, partially offset by an increase in operating expenses. Net interest income increased by 28.1% from Rs. 150.0 billion in fiscal 2023 to Rs. 192.1 billion in fiscal 2024, primarily due to a growth in average loan portfolio and increase in yield. Other income increased by 23.6% from Rs. 55.5 billion in fiscal 2023 to Rs. 68.6 billion in fiscal 2024, primarily due to an increase in income from foreign exchange and derivative transactions and commercial banking fees. Operating expenses increased by 23.1% from Rs 67.5 billion in fiscal 2023 to Rs. 83.1 billion in fiscal 2024, primarily due to an increase in employee expenses and technology related expenses. Write-back of provision increased from Rs. 19.9 billion in fiscal 2023 to Rs. 22.1 billion in fiscal 2024, primarily due to higher recoveries and upgrades from non-retail non-performing assets. See also “Operating and Financial Review and Prospects—Other Income—Provisions and contingencies (excluding provision for tax)”. 178 Table of Contents Treasury The following table sets forth, for the periods indicated, the principal components of profit before tax for our treasury segment. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Net interest income Rs. 147,901 Rs. 153,886 US$ 1,846 4.0% Other income 26,516 30,309 364 14.3 Total income 174,417 184,195 2,210 5.6 Operating expenses 17,905 20,711 249 15.7 Profit before provisions 156,512 163,484 1,961 4.5 Share of profit from associates 9,983 10,738 129 7.6 Provisions 6,157 6,337 76 2.9 Profit before tax Rs. 140,372 Rs. 146,409 US$ 1,756 4.3% The following table sets forth, for the periods indicated, the closing balances of key assets and liabilities for our treasury segment. Closing balance at March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Investments Rs. 3,667,972 Rs. 4,677,377 US$ 56,124 27.5% Borrowings 1,193,255 1,249,676 14,995 4.7 Our treasury operations include the maintenance and management of regulatory reserves, proprietary trading in equity and fixed income and a range of foreign exchange and derivatives products and services, such as forward contracts, swaps and options. The profit before tax of the treasury segment increased by 4.3% from Rs. 140.4 billion in fiscal 2023 to Rs. 146.4 billion in fiscal 2024, primarily due to an increase in net interest income and other income, partially offset by an increase in operating expenses. Net interest income increased by 4.0% from Rs. 147.9 billion in fiscal 2023 to Rs. 153.9 billion in fiscal 2024, primarily due to an increase in average investment portfolio. Other income increased by 14.3% from Rs. 26.5 billion in fiscal 2023 to Rs. 30.3 billion in fiscal 2024. The dividend from subsidiaries and joint ventures was Rs. 20.7 billion in fiscal 2024, compared to Rs. 17.8 billion in fiscal 2023. There was a gain on government securities and other fixed income positions of Rs. 4.1 billion in fiscal 2024, primarily due to softening of yields on government securities during the period as compared to a loss of Rs. 1.0 billion in fiscal 2023. Additionally, fiscal 2024 includes the transfer of accumulated translation loss of Rs. 3.4 billion related to closure of Bank’s Offshore Banking Unit, SEEPZ Mumbai, to the profit and loss account. Operating expenses increased by 15.7% from Rs. 17.9 billion in fiscal 2023 to Rs. 20.7 billion in fiscal 2024, primarily due to an increase in premium paid towards purchase of priority sector lending certificates and employee expenses. 179 Table of Contents Provisions on investments increased marginally from Rs. 6.2 billion in fiscal 2023 to Rs. 6.3 billion in fiscal 2024. During fiscal 2024, the Bank made provision amounting to Rs. 5.4 billion on its investments in Alternative Investment Funds (AIFs), pursuant to Reserve Bank of India guidelines dated December 19, 2023. During fiscal 2023, the Bank has made an additional provision of Rs. 3.1 billion on security receipts. Other Banking The following table sets forth, for the periods indicated, the principal components of profit before tax for our other banking segment. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Net interest income Rs. 15,793 Rs. 22,800 US$ 274 44.4% Other income 4,240 5,382 65 26.9 Total income 20,033 28,182 339 40.7 Operating expenses 8,899 11,105 133 24.8 Profit before provisions 11,134 17,077 206 53.4 Provisions 1,120 693 8 (38.1) Profit before tax Rs. 10,014 Rs. 16,384 US$ 198 63.6% The following table sets forth, for the periods indicated, the outstanding balances of the key assets and liabilities for our other banking segment. Outstanding balance on March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Advances Rs. 681,405 Rs. 743,794 US$ 8,925 9.2% Investments 86,751 85,250 1,023 (1.7) Deposits 337,012 384,131 4,609 14.0 Borrowings Rs. 150,749 Rs. 144,510 US$ 1,734 (4.1)% Other banking business includes our leasing operations, our overseas banking subsidiaries and other items not attributable to any particular business segment of the Bank. The profit before tax of the other banking segment increased by 63.6% from Rs. 10.0 billion in fiscal 2023 to Rs. 16.4 billion in fiscal 2024, primarily due to an increase in net interest income, other income and a decrease in provisions, partially offset by an increase in operating expenses. Net interest income increased by 44.4% from Rs. 15.8 billion in fiscal 2023 to Rs. 22.8 billion in fiscal 2024. Net interest income of ICICI Bank Canada increased from Rs. 5.3 billion in fiscal 2023 to Rs. 7.3 billion in fiscal 2024, primarily due to higher interest income on commercial loans, residential mortgages and commercial mortgages primarily due to increase in benchmark interest rates partially offset by an increase in interest expense on customer deposits on account of repricing of deposits at higher benchmark rates compared to the previous period. Net interest income of ICICI Bank UK PLC increased from Rs. 4.2 billion in fiscal 2023 to Rs. 5.5 billion in fiscal 2024, primarily due to an increase in yield on interest earning assets on account of increase in base rate, partially offset by an increase in interest expenses due to higher benchmark interest rates. Net interest income of the Bank’s other banking business increased from Rs. 6.3 billion in fiscal 2023 to Rs. 9.8 billion in fiscal 2024. 180 Table of Contents Other income increased by 26.9% from Rs. 4.2 billion in fiscal 2023 to Rs. 5.4 billion in fiscal 2024, primarily due to an increase in other income of banking subsidiaries, partially offset by a decrease in other income of our other banking segment. Other income of ICICI Bank Canada increased from Rs. 1.6 billion in fiscal 2023 to Rs. 2.0 billion in fiscal 2024. Other income of ICICI Bank UK PLC increased from Rs. 0.6 billion in fiscal 2023 to Rs. 1.5 billion in fiscal 2024. Other income of our other banking segment decreased from Rs. 2.1 billion in fiscal 2023 to Rs. 1.9 billion in fiscal 2024. Operating expenses increased by 24.8% from Rs. 8.9 billion in fiscal 2023 to Rs. 11.1 billion in fiscal 2024, primarily due to an increase in operating expenses of the banking subsidiaries. Operating expenses of other banking segment of the Bank increased from Rs. 3.0 billion in fiscal 2023 to Rs. 3.7 billion in fiscal 2024. Operating expenses of ICICI Bank Canada increased from Rs. 2.9 billion in fiscal 2023 to Rs. 3.5 billion in fiscal 2024. Operating expenses of ICICI Bank UK PLC increased from Rs. 3.0 billion in fiscal 2023 to Rs. 3.9 billion in fiscal 2024. Provisions decreased from Rs. 1.1 billion in fiscal 2023 to Rs. 0.7 billion in fiscal 2024. Provisions of our other banking segment of the Bank decreased from Rs. 555 million in fiscal 2023 to Rs. 300 million in fiscal 2024. ICICI Bank Canada made a provision of Rs. 147 million in fiscal 2023, compared to a write-back of Rs. 82 million is fiscal 2024. Provisions of our subsidiary in the UK increased from Rs. 513 million in fiscal 2023 to Rs. 580 million in fiscal 2024. Life Insurance The following table sets forth, for the periods indicated, the principal components of profit before tax for our life insurance segment. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Premium earned Rs. 399,328 Rs. Rs. 432,357 US$ 5,188 8.3% Premium on re-insurance ceded and accepted (13,732 ) (14,760 ) (177 ) 7.5 Net premium earned 385,596 417,597 5,011 8.3 Other income 27,698 28,055 337 1.3 Investment income 64,544 96,827 1,162 50.0 Total income 477,838 542,479 6,510 13.5 Commission paid 18,639 37,220 447 99.7 Claims/benefits paid 53,427 69,204 830 29.5 Operating expenses 48,683 43,073 517 (11.5 ) Total expenses 120,749 149,497 1,794 23.8 Transfer to linked funds 179,008 189,030 2,268 5.6 Provisions for policy holder liabilities (non-linked) 169,112 194,720 2,336 15.1 Profit before tax Rs. 8,969 Rs. 9,232 US$ 112 2.9% 181 Table of Contents The following table sets forth, for the periods indicated, the outstanding balance of key assets and liabilities for our life insurance segment. Outstanding balance on March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Investments Rs 986,010 Rs 1,195,060 US$ 14,340 21.2% Assets held to cover linked liabilities 1,440,581 1,648,424 19,780 14.4 Liabilities on life policies Rs 2,388,674 Rs 2,813,183 US$ 33,755 17.8% The profit before tax of ICICI Prudential Life Insurance Company increased by 2.9% from Rs. 897 million in fiscal 2023 to Rs. 923 million in fiscal 2024, primarily due to an increase in premium earned and an increase in investment income in the shareholder segment due to favorable market conditions. The total premium income of ICICI Prudential Life Insurance Company increased by 8.3% from Rs. 399.3 billion in fiscal 2023 to Rs. 432.4 billion in fiscal 2024, primarily due to an increase in retail renewal premium and group premium. Net retail renewal premium increased by 9.0% from Rs. 223.8 billion in fiscal 2023 to Rs. 244.0 billion in fiscal 2024. Net group premium increased by 15.9% from Rs. 86.2 billion in fiscal 2023 to Rs. 99.9 billion in fiscal 2024. Other income of ICICI Prudential Life Insurance Company increased by 1.3% from Rs. 27.7 billion in fiscal 2023 to Rs. 28.1 billion fiscal 2024. Investment income of ICICI Prudential Life Insurance Company increased by 50.0% from Rs. 64.5 billion in fiscal 2023 to Rs. 96.8 billion in fiscal 2024, primarily due to an increase in profit on sale of investments and interest income. Commission expenses of ICICI Prudential Life Insurance Company increased by 99.7% from Rs. 18.6 billion in fiscal 2023 to Rs. 37.2 billion in fiscal 2024, primarily due to an increase in new business commission and rewards. Claims and benefit payouts of ICICI Prudential Life Insurance Company increased by 29.5% from Rs. 53.4 billion in fiscal 2023 to Rs. 69.2 billion in fiscal 2024, primarily due to an increase in death claims, maturity claims and survival claims. Transfer to linked funds including the investible portion of the premium on linked policies of ICICI Prudential Life Insurance Company increased by 5.6% from Rs. 179.0 billion in fiscal 2023 to Rs. 189.0 billion in fiscal 2024, primarily due to an increase in linked premium. The investible portion of the premium on linked policies of life insurance represents the premium income including renewal premium received on linked policies of life insurance business invested, after deducting charges and premium for risk coverage, in the underlying asset or index chosen by the policy holder. Provision for policyholder liabilities increased from Rs. 169.1 billion in fiscal 2023 to Rs. 194.7 billion in fiscal 2024. Employee expenses increased from Rs. 14.5 billion in fiscal 2023 to Rs. 16.4 billion in fiscal 2024. Other operating expenses decreased from Rs. 34.3 billion in fiscal 2023 to Rs. 26.7 billion in fiscal 2024, primarily due to lower advertisement cost. 182 Table of Contents Others The “Others” segment mainly includes ICICI Prudential Asset Management Company Limited, ICICI Venture, ICICI Securities Limited, ICICI Securities Primary Dealership Limited, ICICI Home Finance Company Limited and ICICI Lombard General Insurance Company Limited. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank effective from February 29, 2024. ICICI Prudential Asset Management Company manages the ICICI Prudential Mutual Fund, a leading mutual fund in India. ICICI Securities Limited and ICICI Securities Primary Dealership Limited are engaged in equity underwriting and brokerage and primary dealership in government securities respectively. ICICI Securities Limited owns icicidirect.com, a leading online brokerage platform and is engaged in equities underwriting, securities broking and distribution of financial products. The following table sets forth, for the periods indicated, the principal components of profit before tax for our Other segment. Year ended March 31, 2023 2024 2024 2024/2023 % change (in millions, except percentages) Net interest income Rs. 15,281 Rs. 24,427 US$ 293 59.9% Other income 57,004 94,186 1,130 65.2 Total income 72,285 118,613 1,423 64.1 Operating expenses 29,630 55,937 671 88.8 Operating profit before provisions 42,655 62,676 752 46.9 Provision and contingencies 631 374 4 (40.7 ) Profit before tax Rs. 42,024 Rs. 62,302 US$ 748 48.3% The profit before tax of the Others segment increased by 48.3% from Rs. 42.0 billion in fiscal 2023 to Rs. 62.3 billion in fiscal 2024, primarily due to an increase in profit before tax of ICICI Securities Limited, ICICI Prudential Asset Management Company Limited, ICICI Securities Primary Dealership Limited and ICICI Home Finance Company Limited. Net interest income increased by 59.9% from Rs. 15.3 billion in fiscal 2023 to Rs. 24.4 billion in fiscal 2024, primarily due to an increase in net interest income of our securities broking subsidiary, general insurance subsidiary, housing finance subsidiary and primary dealership subsidiary. Other income increased by 65.2% from Rs. 57.0 billion in fiscal 2023 to Rs. 94.2 billion in fiscal 2024, primarily due to an increase in brokerage income of our securities broking subsidiary, higher trading gains in our primarily dealership subsidiary and an increase in management fees from equity and hybrid scheme, Alternate Investment Fund (AIFs) and Portfolio Management Services (PMS) of our asset management subsidiary. Operating expenses increased by 88.8% from Rs. 29.6 billion in fiscal 2023 to Rs. 55.9 billion in fiscal 2024, primarily due to an increase in other operating expenses of our housing finance subsidiary, asset management subsidiary and securities broking subsidiary. 183 Table of Contents The profit before tax of ICICI Securities Limited increased from Rs. 15.2 billion in fiscal 2023 to Rs. 23.1 billion in fiscal 2023 primarily due to an increase in fee income and net interest income, partially offset by increase in staff cost and other administrative expenses. The profit before tax of ICICI Prudential Asset Management Company Limited increased from Rs. 20.1 billion in fiscal 2023 to Rs. 24.3 billion in fiscal 2024, primarily due to an increase in income from fund operations, partially offset by a decrease in other income and an increase in staff cost and other administrative expenses. The profit before tax of ICICI Securities Primary Dealership Limited increased from Rs. 1.7 billion in fiscal 2023 to Rs. 5.6 billion in fiscal 2024, primarily due to an increase in other income and net interest income, partially offset by an increase in staff cost and other administrative expenses. The profit before tax of ICICI Home Finance Company Limited increased from Rs. 4.9 billion in fiscal 2023 to Rs. 7.1 billion in fiscal 2024, primarily due to an increase in net interest income and fee income and decrease in provision, partially offset by an increase in operating expenses. Total profit before tax for fiscal 2024 from other segments includes profit before tax of Rs. 2.2 billion from ICICI Lombard General Insurance Company Limited. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank effective from February 29, 2024. Unallocated Expenses During fiscal 2023, the Bank on a prudent basis made an additional contingency provision of Rs. 56.5 billion, to further strengthen the balance sheet. The contingency provision was not allocated to any segment and included in unallocated. For a discussion of our results in fiscal 2023 compared to fiscal 2022 and certain comparative numbers in fiscal 2022, please refer to “Part I — Item 5. Operating and Financial Review and Prospects” contained in our Annual Report on Form 20-F for fiscal 2023 filed with the U.S Securities and Exchange Commission on July 28, 2023. Reconciliation of Net Profit (after minority interest) between Indian GAAP and U.S. GAAP Our consolidated financial statements are prepared in accordance with Indian GAAP, which differs in certain significant aspects from U.S. GAAP. The following discussion explains the significant adjustments to our consolidated profit after tax under Indian GAAP in fiscal 2024, fiscal 2023 and fiscal 2022 that would result from the application of U.S. GAAP instead of Indian GAAP. During fiscal 2024, the Bank re-acquired control in ICICI Lombard General Insurance Company Limited. Accordingly, the existing investments in ICICI Lombard General Insurance Company Limited were fair valued on the date of acquisition of control based on the closing market price of shares of ICICI Lombard General Insurance Company Limited. During fiscal 2024, ICICI Prudential Life Insurance Company Limited implemented ASU 2018-12- Long Duration Targeted improvements for insurance contracts. Consolidated net income attributable to the shareholders of ICICI Bank under U.S. GAAP increased from Rs. 250.0 billion in fiscal 2023 to Rs. 613.8 billion in fiscal 2024, while profit after tax attributable to the shareholders of ICICI Bank under Indian GAAP increased from Rs. 340.4 billion in fiscal 2023 to Rs. 442.6 billion in fiscal 2024. This was primarily due to impairment allowance amounting to Rs. 122.0 billion recognized in fiscal 2023 on investments in ICICI Lombard General Insurance Company Limited under U.S. GAAP and fair value gain amounting to Rs. 140.2 billion on existing investments in ICICI Lombard General Insurance Company Limited due to acquisition of control in fiscal 2024. 184 Table of Contents The difference in accounting for the allowances of credit losses resulted in a lower net income by Rs. 53.2 billion in fiscal 2024 (fiscal 2023: higher net income by Rs. 15.6 billion) under U.S. GAAP as compared to Indian GAAP, primarily due to recognition of lifetime allowances of credit losses on incremental performing loans originated in fiscal 2024. Further, during fiscal 2024, there were upgrades/recoveries in certain impaired loans where the reversal of allowance of credit loss on these loans was higher under Indian GAAP as compared to reversal of allowance of credit loss under U.S. GAAP, resulting in lower net income under U.S. GAAP. The geopolitical factors and the uncertain consequences, macroeconomic environment including the outlook on growth across the world and India may have an impact on the results of the Bank and the Group. The Group makes adjustments to appropriately address these economic circumstances over and above the model output under U.S. GAAP by increasing the probability of default estimates based on management judgement. Accordingly, the Bank made management overlay on loan exposures under U.S. GAAP at March 31, 2024. Under Indian GAAP, the Bank, on prudent basis, held contingency provisions amounting to Rs. 131.0 billion at March 31, 2024 to strengthen the balance sheet. The allowance for credit loss on loans and other financial assets under amortized cost was higher by Rs. 13.4 billion at March 31, 2024 (March 31, 2023: lower by Rs. 38.8 billion) under U.S. GAAP as compared to Indian GAAP. Further, under Indian GAAP, specific provision is made on loans where strategic debt restructuring was invoked/implemented as prescribed by the Reserve Bank of India. The Bank has opted for fair value accounting for such loans and guarantees through income statement under U.S. GAAP. Accordingly, the impact of accounting on these loans is accounted in "Allowance for loan losses" for Indian GAAP and in the line item “Valuation of debt and equity securities” for U.S. GAAP. The Bank held fair value loss of Rs. 5.9 billion at March 31, 2024 under U.S. GAAP in the line item “Valuation of debt and equity securities” on such loans. See also note 21(a) to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. The difference in accounting for the valuation of debt and equity securities resulted in higher net income by Rs. 33.3 billion in fiscal 2024 as compared to lower income of Rs. 0.1 billion in fiscal 2023 under U.S. GAAP, as compared to Indian GAAP. Under Indian GAAP unrealized losses on held-for-trading and available-for-sale securities at category level are taken to profit and loss account, while net unrealized gains on investments by category are ignored. Under U.S. GAAP, unrealized gains or losses on trading assets are recognized in the profit and loss account and unrealized gains or losses on debt securities classified as ‘available-for-sale’, which include all securities classified as ‘held-to-maturity’ under Indian GAAP, are recognized in other comprehensive income under stockholders’ equity except for the unrealized losses on debt securities identified as credit loss which are recognized in profit and loss account. The impact of difference in mark-to-market accounting for investment securities between U.S. GAAP and Indian GAAP resulted in a higher net income by Rs. 24.1 billion under U.S. GAAP in fiscal 2024 (fiscal 2023: Rs. 7.9 billion). The impairment allowance on the debt investments under U.S. GAAP resulted in lower net income by Rs. 5.1 billion under U.S. GAAP in fiscal 2024 (fiscal 2023: 2.3 billion). Further, there was a positive impact of other adjustments of Rs. 2.6 billion in fiscal 2024 as compared to negative impact of Rs. 4.5 billion on net income in fiscal 2023 under U.S. GAAP. These primarily include difference due to premium/discount amortization on debt securities and difference in gain on debt securities sold during the year, due to classification of all securities under held-to-maturity under Indian GAAP to available-for-sale category under U.S. GAAP. 185 Table of Contents The difference on account of business combination accounting resulted in a higher net income by Rs. 140.3 billion under U.S. GAAP in fiscal 2024 (fiscal 2023: Rs. 0.2 billion). This was primarily due to fair valuation gain amounting to Rs. 140.2 billion recognized on the investments in ICICI Lombard General Insurance Company Limited due to acquisition of control in fiscal 2024. The difference in accounting for consolidation resulted in higher net income by Rs. 20.8 billion in fiscal 2024 as compared to lower net income by Rs. 123.5 billion in fiscal 2023 under U.S. GAAP, as compared to Indian GAAP. This was primarily due to impairment allowance amounting to Rs. 122.0 billion recognized in fiscal 2023 on ICICI Lombard General Insurance Company Limited under U.S. GAAP. In fiscal 2024, our life insurance affiliate made a net income of Rs. 43.5 billion (fiscal 2023: net income: Rs. 11.4 billion) under U.S. GAAP as compared to net profit of Rs. 8.5 billion (fiscal 2023: Rs. 8.1 billion) under Indian GAAP. The higher net income was primarily on account of lower policyholders’ liabilities and unallocated policyholders’ surplus, marked-to-market gains on trading portfolio and equity securities and net of amortization of deferred acquisition cost. See also note 22(h) to our “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes” included herein. We earn fees and incur costs on the origination of loans which are recognized upfront under Indian GAAP but are amortized under U.S. GAAP. Amortization of loan origination fees and costs resulted in higher income by Rs. 5.3 billion in fiscal 2024 (fiscal 2023: Rs. 6.5 billion) under U.S. GAAP as compared to Indian GAAP. Retirement benefit cost was higher by Rs. 1.1 billion in fiscal 2024 (fiscal 2023: lower by Rs. 1.2 billion) under U.S. GAAP as compared to Indian GAAP. While under Indian GAAP, actuarial gain or loss is recognized in the profit and loss account, under U.S. GAAP, the actuarial gain/loss is recognized through other comprehensive income and thereafter amortized through the income statement. During fiscal 2024, there was lower amortization of actuarial gain/loss from other comprehensive income under U.S. GAAP as compared to actuarial gain recognized in other comprehensive income, resulting in retirement benefit costs being higher under U.S. GAAP in fiscal 2024 as compared to Indian GAAP. See also “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes -Note 21(e)” included herein. Deferred tax expenses were lower by Rs. 18.3 billion in fiscal 2024 (fiscal 2023: Rs. 10.9 billion) under U.S. GAAP, as compared to Indian GAAP. Deferred taxes are recognized on temporary differences related to investments in subsidiaries, branches and affiliates under U.S. GAAP while under Indian GAAP, no deferred taxes are recognized on temporary differences related to investments in subsidiaries, branches and affiliates. In fiscal 2024, there was reduction in deferred tax assets by Rs. 10.7 billion under U.S. GAAP as compared to reduction in deferred tax assets by Rs. 2.1 billion in fiscal 2023. The Bank and its housing finance subsidiary create a Special Reserve through appropriation of profits, in order to avail the tax benefits as per the Income Tax Act, 1961. Under Indian GAAP, deferred tax liability has been recognized on such Special Reserve in accordance with the guidelines issued by Reserve Bank of India. Under U.S. GAAP, deferred taxes are recognized and measured based on the expected manner of recovery and deferred taxes are not recognized if the expected manner of recovery does not give rise to tax consequences. Accordingly, a deferred tax liability was not created on the Special Reserve based on the Group’s continuing intention to not ever withdraw/utilize such Special Reserve and based on an opinion from the legal counsel about non-taxability of such Special Reserve in the scenario of liquidation. In fiscal 2024, deferred tax expenses were lower by Rs. 7.8 billion (fiscal 2023: 6.6 billion) under U.S. GAAP as compared to Indian GAAP. Further, there was a difference due to the positive tax impact of Rs. 20.0 billion in fiscal 2024 on U.S. GAAP adjustments over Indian GAAP as compared to the positive tax impact of Rs. 8.6 billion in fiscal 2023. See also “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes—Note 21(i)” included herein. 186 Table of Contents Consolidated net income attributable to the shareholders of ICICI Bank of Rs. 250.0 billion in fiscal 2023 under U.S. GAAP was lower than the profit after tax attributable to the shareholders of ICICI Bank of Rs. 340.4 billion under Indian GAAP. In fiscal 2023, the net income under U.S. GAAP was lower primarily due to impairment loss on ICICI Lombard General Insurance Company Limited, offset in part by, lower loan loss provisioning under U.S. GAAP as compared to Indian GAAP, the positive impact of amortization of loan processing fees net of costs, higher net income of our life insurance affiliate under U.S.GAAP as compared to net gain under Indian GAAP, lower deferred tax expenses under U.S. GAAP as compared to Indian GAAP. Consolidated net income attributable to the shareholders of ICICI Bank of Rs. 511.8 billion in fiscal 2022 under U.S. GAAP was higher than the profit after tax attributable to the shareholders of ICICI Bank of Rs. 251.1 billion under Indian GAAP. In fiscal 2022, the net income under U.S. GAAP was higher primarily due to gain on deconsolidation of ICICI Lombard General Insurance Company Limited, lower loan loss provisioning under U.S. GAAP as compared to Indian GAAP, the positive impact of amortization of loan processing fees net of costs and higher income on accounting for debt and equity securities under U.S. GAAP as compared to Indian GAAP, offset, in part, by net loss of our life insurance affiliate under U.S.GAAP as compared to net gain under Indian GAAP, higher deferred tax expenses under U.S. GAAP as compared to Indian GAAP and the impact of differences in accounting for compensation costs under U.S. GAAP. For a further description of significant differences between Indian GAAP and U.S. GAAP, a reconciliation of net income and stockholders’ equity to U.S. GAAP and certain additional information required under U.S. GAAP, see notes 21 and 22 to our consolidated financial statements included herein. Research and Development We focus on strengthening our technological capabilities, with key priorities being resilience, scalability and security of our platforms. We continue to invest in new technology platforms and work on emerging technologies like cloud adoption and exploring potential usage of artificial intelligence across banking use cases. Critical Accounting Policies and Estimates In order to understand our financial condition and the results of operations, it is important to understand our critical accounting policies and estimates and the extent to which we use judgments and estimates in applying those policies. Our accounting and reporting policies are in accordance with Indian GAAP and conform to standard accounting practices relevant to our products and services and the businesses in which we operate. Indian GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses in the reported period. Accordingly, we use a significant amount of judgment and estimates based on assumptions for which the actual results are uncertain when we make the estimation. See also “Consolidated Financial Statements—Schedule 17—Significant Accounting Policies” included herein. 187 Table of Contents ICICI Bank Limited Revenue recognition Interest income is recognized in the profit and loss account as it accrues, except in the case of non-performing assets where it is recognized upon realization as per the income recognition and asset classification norms of the Reserve Bank of India. Income on discounted instruments is recognized over the tenure of the instrument on a constant yield basis. Dividend income is accounted on accrual basis when the right to receive the dividend is established. Commission received on guarantees and letters of credit issued and annual/renewal fee on credit cards, debit cards and prepaid cards are amortized on a straight line basis over the contractual period of the fees. Fees paid/received for priority sector lending certificates is amortized on straight-line basis over the period of the certificate. All other fees are accounted for as and when they become due where the Bank is reasonably certain of ultimate collection. The revenue recognition involve uncertainties and are significantly affected by the assumptions used and judgments made for collectability of the income. Changes in assumptions could significantly affect these estimates and the resulting recognition. Accounting for Investments ICICI Bank follows the trade date method of accounting for the purchase and sale of investments, except for Government of India and state government securities, for which the settlement date method of accounting is followed as per the Reserve Bank of India guidelines. The Bank accounts for its investments in accordance with the guidelines on classification, valuation and operation of investment portfolio by banks issued by the Reserve Bank of India. Investments are classified into the following categories: (a) held-to-maturity, (b) available-for-sale and (c) held-for-trading. Under each classification, we further categorize investments into (a) government securities, (b) other approved securities, (c) shares, (d) bonds and debentures (including commercial paper and certificate of deposits), (e) subsidiaries and joint ventures and (f) others (mutual funds, pass through certificates, security receipts and other related investments). Investments that are held principally for resale within 90 days from the date of purchase are classified as held-for-trading securities. Investments which the Bank intends to hold until maturity are classified as held-to-maturity securities. Investments which are not classified in either of the above categories are classified under available-for-sale securities. Investments in the equity of subsidiaries and joint ventures are categorized as held-to-maturity or available for sale in accordance with the Reserve Bank of India guidelines. Costs, including brokerage and commission pertaining to trading book investments paid at the time of acquisition and broken period interest (the amount of interest from the previous interest payment date until the date of purchase of instruments) on debt instruments, are charged to the profit and loss account. The Bank computes the market value of its securities in the available-for-sale and held-for-trading categories on a scrip-wise basis (that is, by individual securities). The depreciation or appreciation on securities, other than securities acquired by way of conversion of outstanding loans is aggregated for each category. Net appreciation in each category under each investment classification, if any, is ignored, as it is unrealized while net depreciation is provided. Depreciation on securities acquired by way of conversion of outstanding loan is fully provided. Non-performing investments are identified based on the Reserve Bank of India guidelines. 188 Table of Contents Held-to-maturity securities are carried at their acquisition cost or at the amortized cost, if acquired at a premium over the face value. Any premium over the face value of the fixed rate and floating rate securities acquired is amortized over the remaining period to maturity on a constant yield basis and straight line basis respectively. Available-for-sale and held-for-trading securities of the Bank are valued in accordance with the guidelines issued by the Reserve Bank of India. The Bank amortizes the premium, if any, over the face value of its fixed and floating rate investments in government securities classified as available-for-sale over the remaining period to maturity on a constant yield basis and straight line basis respectively. The market value of quoted investments is based on the closing quotes on recognized stock exchanges or prices declared by the Primary Dealers Association of India jointly with Fixed Income Money Market and Derivatives Association/Financial Benchmark India Private Limited, periodically. The Bank computes the market value of its unquoted government securities which are in the nature of statutory liquidity ratio securities included in the available-for-sale and held-for-trading categories in accordance with rates published by the Financial Benchmark India Private Limited. For unquoted corporate bonds, the Bank computes the market value in accordance with security level valuation published by the Fixed Income Monetary Market and Derivatives Association. The Bank computes the market value of unquoted non-government fixed income securities, including Pass Through Certificates, wherever linked to the yield-to-maturity rates, with a mark-up, reflecting associated credit risk, over the yield to maturity rates for government securities published by the Fixed Income Money Market and Derivatives Association. The sovereign foreign securities and non-INR India linked bonds are valued on the basis of prices published by the sovereign regulator or counterparty quotes. Treasury bills, commercial papers and certificate of deposits being discounted instruments, are valued at carrying cost. The units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund. The Bank computes the market value of its unquoted equity shares at the break-up value, if the latest balance sheet is available. If such a balance sheet is not available, the unquoted equity shares are valued at Re. 1 in accordance with the Reserve Bank of India guidelines. The Bank computes the market value of its unquoted equity shares at the break-up value, if the latest balance sheet is available. If such a balance sheet is not available, the unquoted equity shares are valued at Re. 1, in accordance with the Reserve Bank of India guidelines. Investments in units of Venture Capital Funds/Alternative Investment Funds are recognized under held-to-maturity category for an initial period of three years and valued at cost. The units of Venture Capital Funds/Alternative Investment Funds are valued at the net asset value declared by the Venture Capital Fund/Alternative Investment Funds. If the latest net asset value is not available continuously for more than 18 months, the units of Venture Capital Funds/Alternative Investment Funds are valued at Re. 1, in accordance with the Reserve Bank of India guidelines. The Bank assesses investments in subsidiaries for any other than temporary diminution in value and appropriate provisions are made. Depreciation/provision on non-performing investments is made as per internal provisioning norms, subject to minimum provisioning requirements of the Reserve Bank of India. 189 Table of Contents Gain/loss on sale of investments is recognized in the profit and loss account. Cost of investments is computed based on the first-in-first-out method. The profit from sale of investment under held-to-maturity category, net of taxes and transfer to statutory reserve is transferred to “Capital Reserve” in accordance with the Reserve Bank of India guidelines. The Bank undertakes short sale transactions in dated central government securities in accordance with Reserve Bank of India guidelines. The short positions are categorized under held-for-trading category and are marked to market. The mark-to-market loss is charged to profit and loss account and gains, if any, are ignored as per Reserve Bank of India guidelines. The Bank accounts for repurchase, reverse repurchase and transactions with Reserve Bank of India under the liquidity adjustment facility/marginal standing facility as borrowing and lending transactions in accordance with the Reserve Bank of India guidelines. The valuation methodologies for investment involve uncertainties and are significantly affected by the assumptions used and judgments made regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows and other factors. Changes in assumptions could significantly affect these estimates and the resulting fair values. Loans and Other Credit Facilities Loans and advances are classified into performing and non-performing loans as per Reserve Bank of India guidelines. Under Reserve Bank of India guidelines, an asset is generally classified as non-performing if any amount of interest or principal remains overdue for more than 90 days, in respect of term loans. In respect of overdraft or cash credit, an asset is classified as non-performing if the account remains out of order for a period of 90 days and in respect of bills, if the account remains overdue for more than 90 days. Loans held at the overseas branches that are identified as impaired as per host country regulations, but which are standard as per the extant Reserve Bank of India guidelines, are classified as non-performing loans to the extent of the amount outstanding in the respective host country. Non-performing loans and advances are classified as standard, substandard, doubtful and loss assets based on number of days overdue. Interest on non-performing advances is transferred to an interest suspense account and not recognized in profit and loss account until received. The Bank considers an account as restructured, where for economic or legal reasons relating to the borrower’s financial difficulty, the Bank grants concessions to the borrower, that the Bank would not otherwise consider. The moratorium granted to the borrowers based on Reserve Bank of India guidelines is not accounted as restructuring of loan. Certain specified guidelines by the Reserve Bank of India requires the asset classification to be maintained as “Standard”. Therefore, the borrowers where resolution plan was implemented under these guidelines are classified as standard restructured. Provisions are generally made by the Bank on standard, substandard, doubtful and loss assets as per internal provisioning norms, subject to minimum provisioning requirements of the Reserve Bank of India. The Bank holds specific provisions against non-performing loans and a general provision against standard loans. The Bank also makes specific provision on certain performing loans as per the direction of the Reserve Bank of India. Loss assets and unsecured portions of doubtful assets are fully provided for. For impaired loans held in overseas branches, which are performing as per Reserve Bank of India guidelines, provisions are made as per the host country regulations. For loans held in overseas branches, which are non-performing loans as per the Reserve Bank of India guidelines and as per host country regulations, provisions are made at the higher of the provisions required as per internal provisioning norms and host country regulations. In respect of borrowers classified as non-cooperative borrowers or willful defaulters, the Bank makes accelerated provisions as per Reserve Bank of India guidelines. The Bank held specific provisions for non-performing retail loans that are higher than the minimum regulatory requirements. 190 Table of Contents In respect of non-retail loans reported as fraud to the Reserve Bank of India, the entire amount, is provided for over a period not exceeding four quarters starting from the quarter in which fraud has been detected. In respect of non-retail loans where there has been a delay in reporting the fraud to the Reserve Bank of India or which are classified as loss accounts, the entire amount is provided immediately. In the case of fraud in retail accounts, the entire amount is provided immediately. In respect of borrowers classified as non-cooperative borrowers or willful defaulters, the Bank makes accelerated provisions as per Reserve Bank of India guidelines. The Bank makes provision on restructured loans subject to minimum requirements as per Reserve Bank of India guidelines. Provision due to diminution in the fair value of restructured/rescheduled loans and advances is made in accordance with the applicable Reserve Bank of India guidelines. Non-performing and restructured loans are upgraded to standard as per the extant Reserve Bank of India guidelines or host country regulations, as applicable. In terms of Reserve Bank of India guidelines, the non-performing advances are written-off in accordance with the Bank’s policy. Amounts recovered against bad debts written-off are recognized in the profit and loss account. The Bank also creates general provisions on performing loans based on the guidelines issued by the Reserve Bank of India including provisions on loans to borrowers having unhedged foreign currency exposure, loans to specific borrowers in specific stressed sectors, exposures to step-down subsidiaries of Indian companies and incremental exposures to borrowers identified as per Reserve Bank of India’s large exposure framework. For performing loans in overseas branches, the general provision is made at higher of aggregate provision required as per host country regulations and the Reserve Bank of India requirement. Additionally, the Bank creates provisions on individual country exposures including indirect country risk (other than for home country exposure). The countries are categorized into seven risk categories: insignificant, low, moderately low, moderate, moderately high, high and very high and provisioning is made on exposures exceeding 180 days on a graded scale ranging from 0.25% to 25%. For exposures with a contractual maturity of less than 180 days, provision is required to be held at 25% of the rates applicable to exposures exceeding 180 days. The indirect exposure is estimated at 50% of the exposure. If the Bank’s net funded exposure in respect of a country is less than 1% of its total assets, no provision is required for such country exposure. The Bank makes additional provisions as per Reserve Bank of India guidelines for the cases where viable resolution plan has not been implemented within the timelines prescribed by the Reserve Bank of India, from the date of default. These additional provisions are written-back on satisfying the conditions for reversal as per Reserve Bank of India guidelines. The Bank, on prudent basis, has made contingency provisions on its loan portfolio, including for borrowers who had taken moratorium at any time during fiscal 2021 under the extant Reserve Bank of India guidelines related to COVID-19 regulatory package. The Bank also makes an additional contingency provision on certain standard assets. The contingency provision is included in ‘Other Liabilities and Provisions’. The Bank has a Board approved policy for making floating provision for the year which is in addition to the specific and general provisions made by the Bank. The floating provision can only be utilized, with the approval of Board and the Reserve Bank of India, for contingencies which do not arise in the normal course of business and are exceptional and non-recurring in nature and for making specific provision for impaired loans required by Reserve Bank of India guidelines or any regulatory guidance/instructions. The floating provision is netted-off from loans. 191 Table of Contents The provisions on loans involve uncertainties and are significantly affected by the assumptions used and judgments made for provisions on non-performing loans and on performing loans and other credit exposures. Changes in assumptions could significantly affect these estimates and the resulting provisions. ICICI Prudential Life Insurance Company Premium for non-linked policies is recognized as income (net of goods and service tax) when due from policyholders. For unit-linked business, premium is recognized as income when the associated units are created. Premium on lapsed policies is recognized as income when such policies are reinstated. Reinsurance premium ceded is accounted in accordance with the terms and conditions of the relevant treaties with the reinsurer. Profit commission on reinsurance ceded is net off premium ceded on reinsurance. Death and rider claims are accounted for on receipt of intimation. Survival, maturity and annuity benefits are accounted when due. Withdrawals and surrenders under non-linked policies are accounted on the receipt of intimation and for unit-linked policies are accounted in the respective schemes when the associated units are cancelled. Reinsurance claims are accounted for in the period in which the claim is intimated. Income from unit-linked policies, which includes fund management charges, policy administration charges, mortality charges and other charges, if any, are recovered from the unit-linked funds in accordance with terms and conditions of policies issued and are recognized when due. Acquisition costs are costs that vary with and are primarily related to acquisition of insurance contracts. It consists of costs like commission, stamp duty, policy issuance, employee cost and other related costs pertaining to the acquisition of insurance contracts. These costs are expensed in the period in which they are incurred. The actuarial liabilities, for all in-force policies and policies where premiums are discontinued but a liability exists as at the valuation date, are calculated in accordance with the accepted actuarial practice, requirements of Insurance Act, 1938, as amended from time to time, regulations notified by the Insurance Regulatory and Development Authority of India, relevant Guidance notes and Actuarial Practice Standards of the Institute of Actuaries of India. The unit liability in respect of linked business is the value of the units standing to the credit of policyholders, using the net asset value prevailing at the valuation date. The actuarial liability in respect of both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, mortality, morbidity, persistency, expense, inflation, and in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation including allowances for possible adverse deviations. The Funds for Future Appropriations, in the participating segment represents the surplus, which is not allocated to policyholders or shareholders as at the Balance Sheet date. Investments are made and accounted for in accordance with the Insurance Act, 1938, Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016, Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, Investments – Master circular, Investment Policy of the Company, ‘Guidance Note on Accounting for Derivative Contracts’ issued by the Institute of Chartered Accountants of India and various other circulars/notifications issued by the Insurance Regulatory and Development Authority of India in this context from time to time. 192 Table of Contents Unclaimed amount of policyholders’ liability is determined on the basis of net asset value of the units outstanding as at the valuation date. Income on unclaimed amount of policyholders is accreted to the unclaimed fund and is accounted for on an accrual basis, net of fund management charges. Borrowing costs are charged to the profit and loss account in the period in which these are incurred. Fair Value Measurements We determine the fair values of our financial instruments based on the fair value hierarchy established in ASC Topic 820. The standard describes three levels of inputs that may be used to measure fair value. The valuation of Level 1 instruments is based upon the unadjusted quoted prices of identical instruments traded in active markets. The valuation of Level 2 instruments is based upon the quoted prices for similar instruments in active markets, the quoted prices for identical or similar instruments in markets that are not active, prices quoted by market participants and prices derived from valuation models which use significant inputs that are observable in active markets. Inputs used include interest rates, yield curves, volatilities and credit spreads, which are available from public sources such as Reuters, Bloomberg, Foreign Exchange Dealers Association of India, Financial Benchmark India Private Limited and the Fixed Income Money Markets and Derivatives Association of India. The valuation of Level 3 instruments is based on valuation techniques or models which use significant market unobservable inputs or assumptions. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable or when the determination of the fair value requires significant management judgment or estimation. The valuation methodologies adopted by us for valuing our investments and derivatives portfolio are summarized below. A substantial portion of the portfolio is valued based on the unadjusted quoted or traded prices or based on models using market observable inputs such as interest rates, yield curves, volatilities and credit spreads available from public sources like Fixed Income Money Markets and Derivatives Association of India, Foreign Exchange Dealers Association of India, Financial Benchmark India Private Limited, Reuters, Bloomberg and stock exchanges. The rupee denominated fixed income portfolio, which includes all rupee investments in government securities and corporate bonds, is valued based on guidelines for market participants established by the Fixed Income Money Market and Derivatives Association. The Fixed Income Money Market and Derivatives Association is an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies and is a voluntary market body for bonds, derivatives and money markets in India. The international investments portfolio is generally valued on the basis of quoted prices. In certain markets, due to illiquidity, we use alternate valuation methodologies based on our own assumptions and estimates of the fair values. A substantial part of the derivatives portfolio is valued using market observable inputs like swap rates, foreign exchange rates, volatilities and forward rates. The valuation of derivatives is carried out primarily using the market quoted swap rates and foreign exchange rates. Certain structured derivatives are valued based on counterparty quotes. The exposure regarding derivative transactions is computed and is marked against the credit limits approved for the respective counterparties. We also hold investments and derivatives that have been valued based on unobservable inputs or that involve significant assumptions made by the management in arriving at their fair values. Such instruments are classified under Level 3 as per the classification defined in FASB ASC Topic 820 “Fair Value Measurements and Disclosures”. 193 Table of Contents A description of the valuation methodologies of Level 3 investments under U.S. GAAP Our total investment in Level 3 instruments amounted to Rs. 210.2 billion at year-end fiscal 2024. Out of the total Level 3 investments, investments amounting to Rs. 208.0 billion were India-linked and investments amounting to Rs. 2.2 billion were non-India linked. India-linked investments consisted of pass through certificates of Rs. 190.8 billion, corporate bonds of Rs. 3.6 billion, equity shares of Rs. 12.0 billion and other securities of Rs. 1.8 billion. Non-India linked investments consisted of mortgage backed securities of Rs. 2.1 billion and equity shares of Rs. 0.1 billion at year-end fiscal 2024. The valuation of Indian pass through certificates is dependent on the estimated cash flows that the underlying trust would pay out. The underlying trust makes assumptions with regards to various variables to arrive at the estimated cash flows. The cash flows for pass through certificates are discounted at the yield-to-maturity rates and credit spreads published by Financial Benchmark India Private Limited and Fixed Income Money Market and Derivatives Association on month ends. Bonds that have been identified as illiquid and valued on the basis of a valuation model are classified as Level 3 instruments only if the input used to value those securities is collected from unobservable market data or if the bonds were valued after making adjustment to the market observable data. The investment in bonds of Rs. 3.6 billion were valued at the amortized cost net of impairment or using significant management estimates and assumptions or based on market value of the underlying collateral. Due to illiquidity in the asset backed and mortgage backed security markets, a substantial part of these securities are classified as Level 3 and valuation models are used to value these securities. Our Canadian subsidiary holds retained interest, largely representing the excess spread of mortgage interest over the rate of return on the mortgaged backed securities, which has been recorded as available-for-sale securities in the balance sheet at fair value of Rs. 2.1 billion determined using an internal model. Non-India linked equity shares of Rs. 0.1 billion were valued by applying discount to the market price of same company. The methodologies we use for validating the valuation model of products which are valued with reference to market observable inputs include comparing the outputs of our models with counterparty quotes, in comparison with pricing from third party pricing tools, replicating the valuation methodology used in the model or other methods used on a case-by-case basis. The valuation is also carried out under various scenarios and are checked for consistency. However, for products where there are no reliable market prices or market observable inputs available, valuation is carried out using models developed using alternate approaches and incorporating proxies wherever applicable. The independent validation of valuation models is performed by an entity/unit independent of the risk management group. Convergence of Indian Accounting Standards with International Financial Reporting Standards In 2016, the Ministry of Corporate Affairs issued the roadmap for implementation of new Indian Accounting Standards (Ind AS), converged with International Financial Reporting Standards, for scheduled commercial banks, insurance companies and non-banking financial companies. However, currently the implementation of Ind AS for banks and insurance companies has been deferred until further notice pending the consideration of some recommended legislative amendments by the Government of India. We are in an advanced stage of preparedness for implementation of Ind AS, as and when these are made applicable to the Indian banks. Further, there may be regulatory guidelines and clarifications in some critical areas of Ind AS application, which we will need to suitably incorporate in our implementation project as and when those are issued. 194 Table of Contents Financial statements prepared under Ind AS may diverge significantly from the financial statements and other financial information included or incorporated by reference in this annual report. The major areas of differences include classification and mark-to-market accounting of financial assets, impairment of financial assets and allowance for expected credit losses, accounting of loan processing fees and costs, amortization of premium or discount on purchase of financial assets, consolidation accounting and deferred taxes. Separately, during fiscal 2024, Reserve Bank of India, issued a master direction on “prudential norms on classification, valuation and operations of investment portfolio of commercial banks”, which is broadly based on the principles of the International Financial Reporting Standard 9, the Bank has implemented this master direction with effect from April 1, 2024. Further, during fiscal 2023, Reserve Bank of India, through its discussion paper on “Introduction of Expected Credit Loss framework for provisioning by banks” has proposed to adopt an expected credit loss framework based on the approach used in International Financial Reporting Standard 9, supplemented by regulatory backstops wherever necessary. The major areas of differences include classification and mark-to-market accounting of financial assets, impairment of financial assets and allowance for expected credit losses, accounting of loan processing fees and costs, and amortization of premium or discount on purchase of financial assets. 195 Table of Contents MANAGEMENT Directors and Executive Officers Our Board of Directors is responsible for the management of our business. Our organizational documents provide for a minimum of three directors and a maximum of 15 directors, excluding the Government Director and the Debenture Director (defined below), if any. We may, subject to the provisions of our organizational documents and the Companies Act, 2013 change the maximum number of directors by a special resolution, subject to approval by our shareholders. Approval of a special resolution requires that the votes cast by shareholders in favor of the resolution are not less than three times the number of the votes, if any, cast against the resolution. In addition, under the Banking Regulation Act, 1949, the Reserve Bank of India may require us to convene a meeting of our shareholders for the purposes of appointing new directors to our Board of Directors. The Banking Regulation Act requires that at least 51% of our directors should have special knowledge or practical experience in banking and areas relevant to banking including accountancy, agriculture and rural economy, co-operation, economics, finance, law, small scale industry, information technology, payment and settlement systems, human resources, risk management and business management. All our directors possess special knowledge in more than one area specified in the Banking Regulation Act and applicable regulations. The appointment of the chairman and executive directors requires the approval of the Reserve Bank of India, in addition to the approval of our shareholders that is generally required for the appointment of all directors (other than the Government Director and the Debenture Director, if any). In classifying our directors as independent, we have relied on the declaration of independence provided by the independent directors as prescribed under the Companies Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, which were also placed before the Board at its meeting held on April 27, 2024. The Companies Act, 2013 excludes the Government Director from the definition of independent director. Our directors are also subject to ‘fit and proper’ criteria as prescribed by the Reserve Bank of India to be considered while appointing persons as directors of banking companies. Our directors (other than the Government Director) are required to make declarations confirming their ongoing compliance of the ‘fit and proper’ criteria. Our Board Governance, Remuneration & Nomination Committee and Board of Directors have reviewed the declarations received from all the existing directors in this regard and determined that all our directors satisfy the ‘fit and proper’ criteria and can continue on the Board. Further, pursuant to the Reserve Bank of India guidelines, a person is eligible for appointment as non-executive director, if he or she is between 35 and 75 years of age. After attaining the age of 75 years, no person can continue in this position. Our organizational documents also provide that we may execute trust deeds in respect of our debentures under which the trustee or trustees may appoint a director, known as the Debenture Director. The debenture director is not subject to retirement by rotation and may only be removed as provided in the relevant trust deed. Currently, we do not have a Debenture Director on our Board of Directors. Of our 12 directors as at July 1, 2024, four directors are in our whole-time employment (the Managing Director & CEO, and three Executive Directors) and the remaining eight directors are independent directors. The eight independent directors include retired public servants, corporate executives, advisors and chartered accountants. Of the eight independent directors, three have specialized knowledge in respect of agriculture and rural economy and four in small-scale industry. The Companies Act provides that an independent director shall not hold office for more than two consecutive terms of up to five years each provided that the director is re-appointed by passing a special resolution on completion of the first term. In line with the Reserve Bank of India guidelines, the total tenure of non-executive director, continuously or otherwise, on the board of a bank, shall not exceed eight years. After completing eight years on the board of a bank the person, may be considered for re-appointment only after a minimum gap of three years. The Companies Act provides that in respect of banking companies, the provisions of the Companies Act shall apply except in so far as they are inconsistent with the provisions of the Banking Regulation Act. 196 Table of Contents Pursuant to the provisions of the Companies Act, at least two-thirds of the total number of our non-independent directors are subject to retirement by rotation. The Government Director and the debenture director are not subject to retirement by rotation as per our organizational documents. One-third of the directors liable to retire by rotation must retire from office at each annual general meeting of shareholders. A retiring director is eligible for re-election. Mr. Girish Chandra Chaturvedi was appointed as an independent director from July 1, 2018 to June 30, 2021. Subsequently, he was appointed as non-executive (part-time) Chairman effective July 17, 2018 to June 30, 2021. Mr. Girish Chandra Chaturvedi was re-appointed for the second term as an independent director and as non-executive (part-time) Chairman for a period of three years effective from July 1, 2021 to June 30, 2024. Mr. Girish Chandra Chaturvedi retired as Non-Executive Part-time Chairman on close of business hours of June 30, 2024. Mr. Sandeep Bakhshi was appointed as a wholetime director and Chief Operating Officer (Designate) effective from July 31, 2018 and as the Managing Director and Chief Executive Officer effective October 15, 2018 for a period till October 3, 2023. He was re-appointed as Managing Director and Chief Executive Officer of the Bank for a period of three years with effect from October 4, 2023 to October 3, 2026. Requisite approvals from Reserve Bank of India and shareholders for such appointment are in place. Mr. Sandeep Batra was appointed as a wholetime director (designated as an Executive Director) effective December 23, 2020 till December 22, 2023. He was re-appointed as wholetime director (designated as an Executive Director) for a further period of two years with effect from December 23, 2023 to December 22, 2025. Requisite approvals from Reserve Bank of India and shareholders for such appointment are in place. Mr. Rakesh Jha was appointed as a wholetime director (designated as an Executive Director) for a period of three years effective September 2, 2022. Requisite approvals from Reserve Bank of India and shareholders for such appointment are in place. Mr. Ajay Kumar Gupta was appointed as a wholetime director (designated as an Executive Director) effective March 15, 2024 till November 26, 2026. Requisite approvals from Reserve Bank of India and shareholders for such appointment are in place. Mr. Pradeep Kumar Sinha was appointed as an Additional (Independent) Director for a period of five years from February 17, 2024. Effective July 1, 2024, he was appointed as Non-executive Part-time Chairman. Requisite approvals from Reserve Bank of India and shareholders for such appointment are in place. The following Independent Directors were re-appointed for which requisite approvals are in place: · Mr. Hari Mundra as an Independent Director of the Bank for a second term commencing from October 26, 2023 to October 25, 2024; · Mr. B. Sriram as an Independent Director of the Bank for a second term commencing from January 14, 2024 to January 13, 2027; · Mr. S. Madhavan as an Independent Director of the Bank for a second term commencing from April 14, 2024 to April 13, 2027. The Board of Directors of the Bank at its meeting held on June 29, 2024, approved the appointment of Mr. Rohit Bhasin and Mr. Punit Sood, as Additional (Independent) Directors for a period of five years, with effect from July 26, 2024 and October 1, 2024, respectively, subject to the approval of shareholders which will be sought in due course of time. 197 Table of Contents Our Board had the following members at July 1, 2024: Name, designation and profession Age Date of first Appointment Particulars of other Directorship(s) at July 1 , 2024 Mr. Pradeep Kumar Sinha Non-Executive Independent Director Profession: Government Servant (Retired) 68 February 17, 2024 (appointed as part-time Chairman effective July 1, 2024) Director · Carbon U Turn Technology Private Limited Mr. Uday Chitale Non-Executive Independent Director Profession: Advisor 74 January 17, 2018 Director · ICICI Lombard General Insurance Company Limited · Indian Council for Dispute Resolution Ms. Neelam Dhawan Non-Executive Independent Director Profession: Advisor 64 January 12, 2018 Chairperson Capillary Technologies India Limited Director Yatra Online Limited Yatra Online Inc. Capita PLC Fractal Analytics Private Limited Nudge Lifeskills Foundation Hindustan Unilever Limited Tech Mahindra Limited Mr. Subramanian Madhavan Non-Executive Independent Director Profession: Advisor 67 April 14, 2019 Director · HCL Technologies Limited · Procter & Gamble Health Limited · CBIX Technology Solutions Private Limited · Shopkhoj Content Private Limited · Lifestyle International Private Limited · Sterlite Technologies Limited · Eicher Motors Limited · Welspun Enterprises Limited Mr. Hari L. Mundra Non-Executive Independent Director Profession: Advisor 74 October 26, 2018 Director · Tata Autocomp Systems Limited 198 Table of Contents Name, designation and profession Age Date of first Appointment Particulars of other Directorship(s) at July 1 , 2024 Mr. Radhakrishnan Nair Non-Executive Independent Director Profession: Advisor 69 May 2, 2018 Director · Axis Mutual Fund Trustee Limited · ICICI Securities Primary Dealership Limited · ICICI Prudential Life Insurance Company Limited · Geojit Financial Services Limited · Geojit Credits Private Limited · Inditrade Capital Limited · Alpha Alternatives Fund - Infra Advisors Private Limited · Bilwa Global Asset Management Private Limited Independent Member · Kerala Infrastructure Investment Fund Board Mr. Balasubramanyam Sriram Non-Executive Independent Director Profession: Advisor 65 January 14, 2019 Director · TVS Credit Services Limited · Nippon Life India Asset Management Limited · IndiaIdeas Com Limited · TVS Supply Chain Solutions Limited · National Bank for Financing Infrastructure and Development (NaBFID) · TVS Motor Company Limited · Dreamplug Technologies Private Limited Ms. Vibha Paul Rishi Non-Executive Independent Director Profession: Company Director 64 January 23, 2022 Director · Tata Chemicals Limited · ICICI Prudential Life Insurance Company Limited · Pratham Education Foundation · Tata Chemicals North America Inc., USA · TCE Group Limited, UK · Gusiute Holdings (UK) Limited, UK · Piramal Pharma Limited Mr. Sandeep Bakhshi Managing Director and CEO Profession: Company Executive 64 October 15, 2018 None 199 Table of Contents Name, designation and profession Age Date of first Appointment Particulars of other Directorship(s) at July 1 , 2024 Mr. Sandeep Batra Executive Director Profession: Company Executive 58 December 23, 2020 Chairperson · ICICI Prudential Life Insurance Company Limited · ICICI Venture Funds Management Company Limited · ICICI Prudential Asset Management Company Limited Director · ICICI Lombard General Insurance Company Limited Mr. Rakesh Jha Executive Director Profession: Company Executive 52 September 2, 2022 Chairperson · ICICI Home Finance Company Limited · ICICI Lombard General Insurance Company Limited Director · ICICI Venture Funds Management Company Limited · ICICI Securities Limited · Mastercard AsiaPacific Pte. Ltd (Director – Mastercard Asia Pacific Advisory Board) Mr. Ajay Kumar Gupta Executive Director Profession: Company Executive 57 March 15, 2024 Chairman · I-Process Services (India) Private Limited 200 Table of Contents Our executive officers as at March 31, 2024, who received executive remuneration in fiscal 2024, were as follows: Name Age Designation and Responsibilities Years of Work Experience Total remuneration in Fiscal 2024 (in Rupees) Bonus Paid in Fiscal 2024 (in Rupees)(1) Stock Options Granted during Fiscal 2023 Stock Options Granted during Fiscal 2024 Total Stock Options Granted through March 31, 2024 Total Stock Options Outstanding at March 31, 2024(2) Shareholding at March 31, 2024(3) Mr. Sandeep Bakhshi 64 Managing Director and CEO 41 71,175,333 28,480,666 317,800 299,100 9,994,200 6,738,500 205,000 Mr. Sandeep Batra 58 Executive Director 36 61,890,686 24,844,962 249,100 231,000 5,125,500 3,860,500 214,000 Mr. Rakesh Jha 52 Executive Director 28 62,672,579 21,291,253 249,100 231,000 6,304,825 4,165,550 31,700 Mr. Ajay Kumar Gupta(4) 57 Executive Director 32 35,765,452 12,521,333 133,100 113,700 2,566,885 1,291,360 580,418 Mr. Anindya Banerjee 48 Group Chief Financial Officer 26 31,160,102 11,356,505 89,200 101,200 2,740,000 1,739,700 200,400 (1) Bonus amounts earned for fiscal 2023 were subject to deferment policy of the Bank in-line with the regulatory stipulations. The above amounts include payouts of the non-deferred portion of the bonus amount pertaining to fiscal 2023. The balance amount shall be equally deferred over a period of three years. The above amount also include the deferred portion of the bonus amount approved in earlier years that was paid during the fiscal 2024. (2) Each stock option, once exercised, would be equivalent to one equity share of the Bank. See also “—Compensation and Benefits to Directors and Officers—Employee Stock Option Scheme” for a description of the other terms of these stock options. (3) Executive officers and directors (including non-executive directors) as a group held 0.02% of the Bank’s equity shares at March 31, 2024. (4) Ajay Gupta was appointed as Executive Director effective March 15, 2024. The above remuneration is his full year earned salary. 201 Table of Contents The profile of our non-executive directors as at July 1, 2024 was as follows: Mr. Pradeep Kumar Sinha has a master’s degree in economics from the Delhi School of Economics and Philosophy in Social Sciences. He joined the Indian Administrative Service in 1977. He was a Visiting Fellow at the University of Oxford in 1999. He served mostly in the Government of India and rose to the highest position of Cabinet Secretary, the head of civil services. He served as the Cabinet Secretary for more than 4 years before moving to the Prime Minister’s Office. He retired from there in March 2021 after 44 years of service. He has been a government nominee director in numerous major public undertakings. Mr. Uday Chitale is a chartered accountant with professional standing of over 45 years and was a senior partner of M. P. Chitale & Co, chartered accountants. He is also active in the field of arbitration and conciliation of commercial disputes. He has served on the boards of several companies and was a board member of the Bank from 1997-2005 as well. He served on the global board of directors and as Vice President-Asia Pacific of the worldwide association of accounting firms DFK International. He is also a member of the Board of Governors of National Institute of Securities Markets promoted by Securities and Exchange Board of India. Ms. Neelam Dhawan is an economics graduate from St Stephen’s College, Delhi University and has a master in business administration degree from the Faculty of Management Studies, Delhi University. Ms. Dhawan has over 38 years of experience in the information technology industry. Starting from 1982, she has held various positions across Hindustan Computers Limited, IBM, Microsoft and Hewlett Packard Enterprise. She has been Managing Director and leader of the country businesses for 11 years for Microsoft and later Hewlett Packard in India. Her last executive assignment was in Hewlett Packard Enterprise that of as Vice President for Global Industries, Strategic Alliances, and Inside Sales for Asia Pacific and Japan. Mr. Subramanian Madhavan is a chartered accountant and holds a post graduate diploma in business management from the Indian Institute of Management, Ahmedabad. He started his career with Hindustan Unilever Limited. He had thereafter established a highly successful tax practice and served large Indian and multinational clients. He was then a senior partner and Executive Director in PricewaterhouseCoopers Private Limited. He has over 38 years of experience in accountancy, economics, finance, law, information technology, human resources, risk management, business management and banking. Mr. Hari L. Mundra has a bachelor of arts degree and a post graduate degree in business management from the Indian Institute of Management, Ahmedabad. He began his career in 1971 in Hindustan Unilever Limited and was the youngest member of its board as the Vice President and Executive Director in charge of exports at the time he left in 1995. He subsequently held leadership positions in major Indian industrial conglomerates, in areas including pharmaceuticals and healthcare, and petrochemicals. He has over 50 years of extensive industrial experience, both in India and Indonesia. 202 Table of Contents Mr. Radhakrishnan Nair holds degrees in science, securities laws, management and law. He has over 40 years of experience in banking industry and in the field of securities and insurance regulation. He started his banking career with Corporation Bank and also served as the Managing Director of Corporation Bank Securities Limited. He was Executive Director at Securities and Exchange Board of India from 2005 to 2010 and Member (Finance and Investment) in the Insurance Regulatory and Development Authority of India from 2010 to 2015. He has been a member of various committees of International Organization of Securities Commissions and the International Association of Insurance Supervisors. Mr. Balasubramanyam Sriram is a Certificated Associate of the Indian Institute of Banking Finance (formerly known as The Indian Institute of Bankers) and holds diplomas in international law and diplomacy from the Indian Academy of International Law & Diplomacy and management from the All India Management Association. He has bachelor’s and master’s degrees in science (physics) from St. Stephen’s College, Delhi University. Mr. Sriram worked with State Bank of India for about 37 years. Mr. Sriram was Managing Director of State Bank of Bikaner & Jaipur from 2013 to 2014, Managing Director of State Bank of India from 2014 to 2018 and Managing Director & Chief Executive Officer of IDBI Bank Limited from June-September 2018. He was a part time member of the Insolvency and Bankruptcy Board of India. Ms. Vibha Paul Rishi is an economics graduate from Lady Shri Ram College, Delhi University and also has a master’s in business administration with a specialisation in marketing from the Faculty of Management Studies, University of Delhi. She has worked at senior positions in branding, strategy, innovation and human capital around the world. She started her career with the Tata Group and was part of the core team for launching Titan watches. She was thereafter associated with PepsiCo for 17 years in leadership roles in the areas of marketing and innovation in India, U.S. and UK. She was one of the founding team members of PepsiCo when it started operations in India. Ms. Rishi serves on the boards and board committees of several reputed companies. Mr. Rohit Bhasin is a chartered accountant with over 20 years of experience in PricewaterhouseCoopers , where he was a member of its India leadership team and partner oversight committee. He also worked with Standard Chartered Bank in India for nearly a decade. He has been an independent director and audit committee chairperson of several listed Indian companies. Mr. Punit Sood has a bachelor’s degree in electronics and communications from the Indian Institute of Technology, Roorkee and is a post graduate in management and information systems from the Indian Institute of Management, Ahmedabad. He has over 35 years of experience in banking and information technology. He is currently Managing Director at NatWest Digital Services India Private Limited. He has also been Managing Director and Chief Information Officer at JP Morgan Services India, and Chief Executive Officer and Managing Director at Citi Technology Services India. The profile of our executive officers as at July 1, 2024 was as follows: Mr. Sandeep Bakhshi is an engineer and has a master’s degree in business administration. Mr. Sandeep Bakhshi joined ICICI Limited in the year 1986. Over the years he has worked in various assignments at ICICI Limited, ICICI Lombard General Insurance Company Limited, ICICI Bank Limited and ICICI Prudential Life Insurance Company Limited. He joined ICICI Bank Limited on June 19, 2018 as Chief Operating Officer (Designate) and was appointed as Managing Director and Chief Executive Officer of ICICI Bank Limited effective October 15, 2018. 203 Table of Contents Mr. Sandeep Batra is a chartered accountant and a company secretary by qualification. He joined as Chief Financial Officer of ICICI Prudential Life Insurance Company Limited in the year 2000 and subsequently has held positions as Group Compliance Officer of ICICI Bank Limited, Executive Director of ICICI Prudential Life Insurance Company Limited and President at ICICI Bank Limited. He was appointed as Executive Director of ICICI Bank Limited effective December 23, 2020 and is currently responsible for corporate communications, finance, customer service, legal, human resources and secretarial functions and has administrative oversight over risk management, internal audit and compliance functions. He is the Chairman of ICICI Prudential Life Insurance Company, ICICI Prudential Asset Management Company and ICICI Ventures. He also serves on the Board of ICICI Lombard General Insurance Company. Mr. Rakesh Jha is an engineering graduate from the Indian Institute of Technology at Delhi and a post-graduate in management from the Indian Institute of Management, Lucknow. He joined ICICI in 1996 and has worked in various areas. He was the Group Chief Financial Officer in his previous role. He was appointed as an Executive Director on the Board of ICICI Bank with effect from September 2, 2022. He is responsible for the retail, small enterprises and corporate banking businesses of the Bank. He is the Chairman of ICICI Lombard General Insurance Company Limited and ICICI Home Finance Company Limited. He also serves on the Board of ICICI Securities Limited and ICICI Venture Funds Management Company Limited. Mr. Ajay Kumar Gupta is a chartered accountant. He joined ICICI Group in November 1991 and has worked across corporate banking, project finance, sme, debt service management, credit & policy and operations. He is responsible for credit policy formulation and credit underwriting for retail and business banking, operations, technology and data sciences and analytics function of the Bank. He is the Chairman of I-Process Service (India) Private Limited. Mr. Anindya Banerjee is a chartered accountant. He joined ICICI Group in 1998 and initially worked in the area of corporate banking before moving to planning and strategy function in the corporate office. He was appointed as the Group Chief Financial Officer of the Bank with effect from May 1, 2022. His current responsibilities include financial reporting, planning and strategy and asset-liability management. Corporate Governance Our corporate governance policies recognize the accountability of the Board and the importance of making the Board transparent to all our constituents, including employees, customers, investors and the regulatory authorities, and for demonstrating that our shareholders are the ultimate beneficiaries of our economic activities. Our corporate governance framework is based on an effective majority independent Board, the separation of the Board’s supervisory role from the executive management and the constitution of Board committees, generally comprising a majority of independent directors and most of the Committees being chaired by independent directors, to oversee critical areas and functions of executive management. Our corporate governance philosophy encompasses regulatory and legal requirements, such as the compliance with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, aimed at a high level of business ethics, effective supervision and enhancement of value for all stakeholders. Securities and Exchange Board of India through its notification dated June 14, 2023 (published in e-gazette on June 15, 2023) issued Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023 amending the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The amendments are effective from July 14, 2023, except few, which were effective from June 15, 2023. Through the same notification; Securities and Exchange Board of India has also amended Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 by prescribing the materiality thresholds for determination of materiality of events/ information for disclosure to the stock exchange(s). 204 Table of Contents Our Board’s role, functions, responsibility and accountability are clearly defined. In addition to its primary role of monitoring corporate performance, the functions of our Board include: · approving corporate philosophy and mission; · participating in the formulation of strategic and business plans; · reviewing and approving financial plans and budgets; · monitoring corporate performance against strategic and business plans, including overseeing operations; · ensuring ethical behavior and compliance with laws and regulations; · reviewing and approving borrowing limits; · formulating exposure limits; and · keeping shareholders informed regarding plans, strategies and performance. To enable our Board of Directors to discharge these responsibilities effectively, executive management provides detailed reports on its performance to the Board on a quarterly basis. Our Board functions either as a full board or through various committees constituted to oversee specific operational areas. These Board committees meet regularly. The quorum of the Board committees was increased from at least two members to at least three members with effect from June 30, 2019, to transact business at any Board Committee meeting and in case where the Committee comprises of two members only or where two members are participating, then any Independent Director may attend the meeting to fulfil the requirement of three members. The constitution and main functions of the various committees are given below. Audit Committee On the date of filing of this annual report, the Audit Committee is comprised of four independent directors: Mr. Uday Chitale, Mr. Subramanian Madhavan, Mr. Radhakrishnan Nair and Mr. Rohit Bhasin. Mr. Uday Chitale is the Chairman of the Committee. Mr. Uday Chitale, Mr. Subramanian Madhavan, Mr. Radhakrishnan Nair and Mr. Rohit Bhasin qualify as Audit Committee financial experts. The Audit Committee provides direction to the audit function and monitors the quality of internal and statutory audit. The responsibilities of the Audit Committee include examining the financial statements and auditors’ report and overseeing the financial reporting process to ensure fairness, sufficiency and credibility of financial statements, review of the quarterly and annual financial statements before submission to the Board, review of management’s discussion and analysis, recommendation of appointment, terms of appointment, remuneration and removal of central and branch statutory auditors and chief internal auditor, approval of payment to statutory auditors for other permitted services rendered by them, reviewing and monitoring with the management the auditor’s independence and the performance and effectiveness of the audit process, approval of transactions with related parties or any subsequent modifications and utilization of loans and/or advances from/investment by the Bank in its subsidiaries. The Audit Committee also reviews the functioning of the Whistle-Blower Mechanism, adequacy of internal control systems and the internal audit function, compliance with inspection and audit reports and reports of statutory auditors, findings of internal investigations, management letters/letters on internal control weaknesses issued by statutory auditors/internal auditors, investment in shares and advances against shares. The Audit Committee responsibilities also include reviewing with the management the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for the purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency, monitoring the utilization of proceeds of a public or rights issue and making appropriate recommendations to the Board to take steps in this matter, discussion on the scope of audit with external auditors, examination of reasons for substantial defaults, if any, in payment to stakeholders, valuation of undertakings or assets, evaluation of risk management systems and scrutiny of inter-corporate loans and investments. The Audit Committee is also empowered to appoint/oversee the work of any registered public accounting firm, establish procedures for receipt and treatment of complaints received regarding accounting, internal accounting controls and auditing matters and engage independent counsel as also provide for appropriate funding for compensation to be paid to any firm/advisors. In addition, the Audit Committee also exercises oversight on the regulatory compliance function of the Bank. The Committee also considers and comments on rationale, cost-benefits and impact of schemes involving merger/demerger/amalgamation etc., on the Bank and its shareholders. The Audit Committee is also empowered to approve the appointment of the Chief Financial Officer (i.e. the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate. 205 Table of Contents Board Governance, Remuneration & Nomination Committee On the date of filing this annual report, the Board Governance, Remuneration & Nomination Committee is comprised of three independent directors: Ms. Neelam Dhawan, Mr. Balasubramanyam Sriram and Mr. Pradeep Kumar Sinha. Ms. Neelam Dhawan is the Chairperson of the Committee. The functions of the Committee include recommending appointments of directors to the Board, identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the wholetime/independent directors and the Board and to extend or continue the term of appointment of independent directors on the basis of the report of performance evaluation of independent directors, recommending to the Board a policy relating to the remuneration for the directors, key managerial personnel and other employees, recommending to the Board the remuneration (including performance bonus and perquisites) to wholetime directors and senior management personnel. The functions also include approving the policy for and quantum of bonus payable to the members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employees Stock Option Scheme/Employee Stock Unit Scheme and decide on the grant of options/units to employees and wholetime directors of the Bank and its subsidiary companies. Corporate Social Responsibility Committee On the date of filing this annual report, the Corporate Social Responsibility Committee is comprised of five directors: Mr. Pradeep Kumar Sinha, Mr. Radhakrishnan Nair, Ms. Vibha Paul Rishi, Mr. Uday Chitale and Mr. Rakesh Jha. Mr. Pradeep Kumar Sinha, an independent director and non-executive part-time Chairman of the Bank is the Chairman of the Committee. The functions of the Committee include review of corporate social responsibility initiatives undertaken by the ICICI Group and the ICICI Foundation for Inclusive Growth, formulation and recommendation to the Board of a corporate social responsibility policy indicating the activities to be undertaken by the Bank and recommendation of the amount of the expenditure to be incurred on such activities, identifying the focus, from among the themes specified in Schedule VII of the Companies Act, 2013 (the Act), for initiatives to be undertaken by the Bank, reviewing and recommending the annual corporate social responsibility plan to the Board with details of projects and schedule of implementation, making recommendations to the Board with respect to the corporate social responsibility initiatives, policies and practices of the ICICI Group, monitoring the corporate social responsibility activities, implementation and compliance with the corporate social responsibility policy, reviewing the submissions to be made to the Board with respect to implementation of the annual corporate social responsibility action plan including the disbursement of funds for the purposes and manner as approved, implementation of on-going projects as per approved timelines and year-wise allocation of funds, any modifications to be suggested to on-going projects, earmarking unspent corporate social responsibility amount, if any, in subsequent periods as prescribed in the Act and suggest deployment of any amount spent in excess of the requirement for set-off in subsequent years, reviewing impact assessment of projects, and reviewing and implementing, if required, any other matter related to corporate social responsibility initiatives as recommended/suggested by the Reserve Bank of India or any other body. 206 Table of Contents Credit Committee On the date of filing of this annual report, the Credit Committee is comprised of four directors: Mr. Sandeep Bakhshi, Mr. Balasubramanyam Sriram, Mr. Hari L. Mundra and Mr. Rakesh Jha. Mr. Sandeep Bakhshi, Managing Director and CEO, is the Chairman of the Committee. The functions of the Committee inter alia includes review of developments in key industrial sectors, major credit portfolios and approval of credit proposals as per the authorization approved by the Board. Customer Service Committee On the date of filing of this annual report, the Customer Service Committee is comprised of four directors: Ms. Vibha Paul Rishi, Mr. Hari L. Mundra, Mr. Sandeep Bakhshi and Mr. Rakesh Jha. Ms. Vibha Paul Rishi, an independent director, is the Chairperson of the Committee. The functions of the Committee include review of customer service initiatives, overseeing the functioning of the Standing Committee on Customer Service (Customer Service Council) and evolving innovative measures for enhancing the quality of customer service and improvement in the overall satisfaction level of customers. Fraud Monitoring Committee On the date of filing of this annual report, the Fraud Monitoring Committee is comprised of five directors: Mr. Radhakrishnan Nair, Mr. Subramanian Madhavan, Ms. Neelam Dhawan, Mr. Sandeep Bakhshi and Mr. Rakesh Jha. Mr. Radhakrishnan Nair, an independent director, is the Chairman of the Committee. The Committee monitors and reviews all the frauds involving an amount of Rs. 10 million and above with the objective of identifying the systemic lacunae, if any, that facilitated perpetration of the fraud and put in place measures to rectify the same. The functions of this Committee include identifying the reasons for delay in detection, if any, and reporting to the top management of the Bank and Reserve Bank of India on the same. The status of filing of complaint with law enforcement agencies and recovery position is also monitored by the Committee. The Committee also ensures that staff accountability is examined at all levels in all the cases of frauds and action, if required, is completed quickly without loss of time. The role of the Committee is also to review the efficacy of the remedial action taken to prevent recurrence of frauds, such as strengthening of internal controls. Information Technology Strategy Committee On the date of filing of this annual report, the Information Technology Strategy Committee is comprised of four directors: Mr. Balasubramanyam Sriram, Ms. Neelam Dhawan, Mr. Sandeep Batra and Mr. Ajay Kumar Gupta. Mr. Balasubramanyam Sriram, an independent director, is the Chairman of the Committee. 207 Table of Contents The functions of the Committee are to approve the strategy for information technology and policy documents, ensure that the information technology strategy is aligned with business strategy, review performance with reference to information technology and information security key risk indicators including periodic review of such risk indicators, ensure proper balance of information technology investments for sustaining the Bank’s growth, oversee the aggregate funding of information technology at Bank-level, ascertain if the management has resources to ensure the proper management of information technology risks, review contribution of information technology to business, oversee the activities of Digital Council, review technology from a future readiness perspective, overseeing key projects progress and critical information technology systems performance including review of information technology capacity requirements and adequacy and effectiveness of business continuity management and disaster recovery, review of special information technology initiatives, review cyber risk, consider the Reserve Bank of India inspection report/directives received from time to time by the Bank in the areas of information technology and cyber security and to review the compliance of various actionables arising out of such reports/directives as may be deemed necessary from time to time and review deployment of skilled resources within the technology and information security functions to ensure effective and efficient deliveries. Risk Committee On the date of filing of this annual report, the Risk Committee is comprised of five directors: Mr. Subramanian Madhavan, Mr. Pradeep Kumar Sinha, Ms. Vibha Paul Rishi, Mr. Rohit Bhasin and Mr. Sandeep Batra. Mr. Subramanian Madhavan, an independent director, is the Chairman of the Committee. The functions of the Committee are to review ICICI Bank’s risk management policies pertaining to credit, market, liquidity, operational, outsourcing, reputation risks, business continuity plan and disaster recovery plan and approve broker empanelment policy and any amendments thereto. The functions of the Committee also include setting limits on any industry or country, review of the Enterprise Risk Management framework, risk appetite for the Bank, stress testing framework, internal capital adequacy assessment process and framework for capital allocation; review of the Basel framework, risk dashboard covering various risks, outsourcing activities, the activities of the Asset Liability Management Committee and the proceedings of the Group Risk Management Committee. The Committee also carries out Cyber Security risk assessment. The appointment, removal and terms of remuneration of the Chief Risk Officer is subject to review by the Committee. The Committee keeps the Board of Directors informed about the nature and content of its discussions, recommendations and actions to be taken. The Committee coordinates its activities with other committees, in instances where there is any overlap with activities of such committees, as per the framework laid down by the Board of Directors. Stakeholders Relationship Committee On the date of filing of this annual report, the Stakeholders’ Relationship Committee is comprised of three directors: Mr. Hari L. Mundra, Mr. Uday Chitale and Mr. Sandeep Batra. Mr. Hari L. Mundra, an independent director, is the Chairman of the Committee. The functions of the Committee include approval and rejection of transmission of shares, bonds, debentures, issue of duplicate certificates, allotment of securities from time to time, redressal and resolution of grievances of security holders, delegation of authority for opening and operation of bank accounts for payment of interest/dividend. Review Committee for Identification of Wilful Defaulters/Non Co-operative Borrowers The Managing Director and CEO is the Chairman of this Committee and any two independent directors comprise the remaining members. The function of the Committee is to review the order of the Committee for identification of wilful defaulters/non co-operative borrowers (a Committee comprising wholetime directors and senior executives of the Bank to examine the facts and record the fact of the borrower being a wilful defaulter/non co-operative borrower) and confirm the same for the order to be considered final. 208 Table of Contents Code of Ethics We have adopted a Group Code of Business Conduct and Ethics for our directors and all our employees. This code aims at ensuring consistent standards of conduct and ethical business practices across the constituents of the Company and is reviewed on an annual basis. We have not granted a waiver from any provision of the code to any of our directors or executive officers. All directors and members of the senior management have confirmed compliance with Group Code of Business Conduct and Ethics for fiscal 2024. Code on Prohibition of Insider Trading We have adopted a Code on Prohibition of Insider Trading to govern the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of our Code on Prohibition of Insider Trading has been filed as an exhibit to this annual report. Principal Accountant: Fees and Services The total fees to our principal accountant relating to the audit of consolidated financial statements of the Group, and financial statements of subsidiaries for fiscal 2023 and fiscal 2024 and the fees for other professional services offered to the Group billed in fiscal 2023 and fiscal 2024 are as follows: Year ended March 31, 2023 2024 2024 (in millions) (in thousands) Audit Audit of ICICI Bank Limited and our subsidiaries Rs. 183 Rs. 188 US$ 2,256 Audit-related services .. .. .. Opinion on non-statutory accounts .. .. .. Others 9 10 120 Sub-total 192 198 2,376 Non-audit services Tax compliance 1 1 12 Other services .. .. .. Sub-total 1 1 12 Total Rs. 193 Rs. 199 US$ 2,388 Fees for “others” under the audit services category are principally fees related to certification services. Our Audit Committee approved the fees paid to our principal accountant relating to audit of consolidated financial statements for fiscal 2024 and fees for other professional services billed in fiscal 2024. Our Audit Committee pre-approves all assignments undertaken for us by our principal accountant. Summary Comparison of Corporate Governance Practices The following is a summary comparison of significant differences between our corporate governance practices and those required by the New York Stock Exchange for United States issuers. 209 Table of Contents Independent Directors A majority (eight of 12 as at July 1, 2024) of our Board are independent directors, as defined under applicable Indian legal requirements. Section 149 of the Companies Act, 2013 as amended from time to time and Regulation 16 the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time, have defined an independent director and specified the eligibility criteria for a director to be classified as independent. All independent directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 as amended and Regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (SEBI Listing Regulations) which have been relied on by the Bank and were placed at the Board Meeting held on April 27, 2024. The Board has accordingly determined the independence of these directors. Pursuant to the Companies Act, the director nominated by Government of India would not be classified as independent. Although the judgment on independence must be made by our Board as required under the Companies Act, 2013, there is no requirement that our Board affirmatively make such determination, in accordance with the independence test as required by the New York Stock Exchange rules. Non-Management Directors Meetings Independent directors are required to meet at least once in a financial year without the non-independent directors and members of the management. At such meetings, the independent directors are required to review the performance of the Chairman of the Board, non-independent directors, Board Committees, and the Board as a whole. The independent directors met on April 27, 2024, to carry out these reviews. Prior to this, the independent directors had met on April 22, 2023, separately to carry out similar reviews. Board Governance, Remuneration & Nomination Committee and Audit Committee All members of our Board Governance, Remuneration & Nomination Committee are independent, as defined under applicable Indian legal requirements. All members of our Audit Committee are independent under Rule 10A-3 under the Exchange Act. The constitution and main functions of these committees as approved by our board are described above and comply with the spirit of the New York Stock Exchange requirements for United States issuers. Corporate Governance Guidelines Under New York Stock Exchange rules, United States issuers are required to adopt and disclose corporate governance guidelines addressing matters such as standards of director qualification, responsibilities of directors, director compensation, director orientation and continuing education, management succession and annual performance review of the Board of Directors. While as a foreign private issuer, we are not required to adopt such guidelines, under our home country regulations, pursuant to the notification of the Companies Act, the Bank has disclosed the policy on director appointments and remuneration including criteria for determining qualifications and independence of a director in its Indian annual report to shareholders for fiscal 2024. The Bank is also required to provide a statement indicating the manner in which formal annual evaluation has been made by the board of its own performance and that of its committees and individual directors and this statement has been included in the Indian annual report. Controls and Procedures We have carried out an evaluation under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) at year-end fiscal 2024. 210 Table of Contents As a result, it has been concluded that, as of the end of the period covered by this report, the disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. However, as a result of our evaluation, we noted certain areas where our processes and controls, including information technology related processes and controls, could be improved. The Audit Committee monitors the resolution of any identified significant process and control improvement opportunities to a satisfactory conclusion. In the areas of IT and cyber risk, IT Strategy Committee also exercises oversight. We are committed to continuing to implement and improve internal controls and our risk management processes, and this remains a key priority for us. We also have a process whereby business and financial officers throughout the Bank attest to the accuracy of reported financial information as well as the effectiveness of disclosure controls, procedures and processes. There are inherent limitations to the effectiveness of any system, especially of disclosure controls and procedures, including the possibility of human error, circumvention or overriding of the controls and procedures, in a fast-changing environment or when entering new areas of business or expanding geographic reach or deploying emerging technologies. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. We have experienced significant growth in a fast-changing environment, and management is aware that this may pose significant challenges to the control framework. See also “Risk Factors—Risks Relating to Our Business—There is operational risk associated with the financial industry which, when realized, may have an adverse impact on our business”. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act). Our internal control over financial reporting system has been designed to provide reasonable assurance regarding the reliability of financial reporting and preparation and fair presentation of our published Indian GAAP consolidated financial statements and disclosures relating to U.S. GAAP net income reconciliation, stockholders’ equity reconciliation and other disclosures as required by U.S Securities and Exchange Commission and applicable GAAP. Management maintains an internal control system intended to ensure that financial reporting provides reasonable assurance that transactions are executed in accordance with the authorizations of management and directors, assets are safeguarded and financial records are reliable. Our internal control over financial reporting includes policies and procedures that: · pertain to the maintenance of records that accurately and fairly reflect in reasonable detail the transactions and dispositions of our assets; · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are made only in accordance with authorizations of management and the executive directors; and · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. All internal control over financial reporting systems, no matter how well-designed, have inherent limitations, and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. 211 Table of Contents Management assessed the effectiveness of our internal control over financial reporting at year-end fiscal 2023 based on criteria set by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on the assessment, management concluded that our internal control over financial reporting was effective at year-end fiscal 2024. Effectiveness of our internal control over financial reporting at year-end fiscal 2024 has been audited by KPMG Assurance and Consulting Services LLP (formerly known as KPMG), an independent registered public accounting firm, as stated in their attestation report, which is included herein. Change in Internal Control Over Financial Reporting No change in our internal control over financial reporting occurred during the period covered by this annual report that has materially affected or is reasonably likely to materially affect our internal control over financial reporting. Compensation and Benefits to Directors and Officers Remuneration Under our organizational documents, each of our non-executive directors, except the government director, is entitled to receive remuneration for attending each meeting of our Board or of a Board committee. The amount of remuneration payable to non-executive directors is set by our Board from time to time in accordance with the limits prescribed by the Companies Act and the rules thereunder. The Board of Directors has approved the payment of Rs. 100,000 as sitting fee for attending each meeting of the Board or a Board committee. In line with the Reserve Bank of India guidelines including Reserve Bank of India circular dated February 9, 2024, an increase in payment of fixed remuneration from Rs. 2,000,000 per annum to Rs. 3,000,000 per annum was approved by shareholders for each non-executive Director of the Bank (other than part-time Chairman and the Government Nominee Director) with effect from February 10, 2024. The Reserve Bank of India has also approved a revision in remuneration of Rs. 5,000,000 per annum for the non-executive chairman with effect from April 1, 2024. In addition, we reimburse our directors for expenses in connection with attending Board and Committee meetings and related matters. If a director is required to perform services for us beyond attending meetings, we may remunerate the director as determined by our Board of Directors which remuneration may be either in addition to or as substitution for the remuneration discussed above. Non-executive directors are not entitled to the payment of any benefits at the end of their terms of office. Our Board or a Committee thereof may fix the salary and supplementary allowance payable to the wholetime directors. We are required to obtain specific approval of the Reserve Bank of India for the actual monthly salary, supplementary allowance, annual performance bonus and employee stock options paid each year to our wholetime directors. In addition to the basic salary and supplementary allowance, our executive directors are entitled to certain perquisites (evaluated as per Indian Income-Tax rules, wherever applicable, and otherwise at actual cost to the Bank in other cases) including the benefit of the Bank’s furnished accommodation, gas, electricity, furnishings, club fees, personal and group insurance, use of car, running and maintenance of cars including drivers, telephone or IT assets at residence or reimbursement of expenses in lieu thereof, payment of income tax on perquisites by Bank to the extent permissible under the Income Tax Act, 1961 and rules framed thereunder, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund, gratuity and other retirement benefits, in accordance with the scheme(s) and rule(s) applicable from time to time to retired wholetime directors of the Bank or the members of the Staff. In line with the staff loan policy applicable to specified grades of employees who fulfil prescribed eligibility criteria to avail loans for purchase of residential property, the whole-time Directors are also eligible for housing loans. 212 Table of Contents There are no service contracts with our wholetime directors providing for benefits upon termination of their employment. The total compensation paid by the Bank to its directors and executive officers during fiscal 2024 was Rs. 361.2 million. Bonus Each year, our Board of Directors awards discretionary bonuses to employees and whole-time directors on the basis of the Bank’s performance and individual performance. The aggregate amount of bonuses and performance linked retention pay to all eligible employees of ICICI Bank for fiscal 2024 was Rs. 25.1 billion. Employee Stock Option Scheme ICICI Bank has an Employees Stock Option Scheme - 2000 (“Scheme 2000”) which was instituted in fiscal 2000 to enable the employees and Wholetime Directors of ICICI Bank and its subsidiaries to participate in the future growth and financial success of the Bank. The Scheme 2000 aims to achieve the twin objectives of aligning employee interest to that of the shareholders and retention. Through employee stock option grants, the Bank seeks to foster a culture of long-term sustainable value creation. The Scheme 2000 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (the SEBI SBEB & SE Regulations). The options are granted by the Board Governance, Remuneration & Nomination Committee and noted/approved by the Board as the case may be. Pursuant to the Scheme 2000, as amended from time to time, up to 10.0% of the aggregate issued equity shares of the Bank at the time of the grant of stock options can be allocated under the employee stock option scheme. The stock options entitle eligible employees to apply for equity shares. At March 31, 2024, this 10.0% limit was equivalent to 702.23 million shares, of which the Bank has granted 625.52 million options under the Scheme 2000. Employees and directors of the Bank and its subsidiaries are eligible employees for grants of stock options. The Bank has no holding company. The maximum number of options granted to any eligible employee in a year is restricted to 0.05% of the Bank’s issued equity shares at the time of the grant. Options granted after April 1, 2014 vest in a graded manner over a three-year period, with 30%, 30% and 40% of the options vesting on each of the first three anniversaries of the grant date respectively, except as follows: · For 275,000 options granted in April 2014, 50% vested on April 30, 2017 and the balance 50% vested on April 30, 2018. · For 34,362,900 options granted in September 2015, 50% vested on April 30, 2018 and the balance 50% vested on April 30, 2019. Options granted prior to April 1, 2014 vested in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the options vesting on each of the first four anniversaries of the grant date, except as follows: · For the options granted in February 2011, 50% of the options vested on April 30, 2014 and 50% vested on April 30, 2015. 213 Table of Contents The price for options granted is equal to the closing price on the stock exchange which recorded the highest trading volume preceding the date of grant of options. Options granted in February 2011 were granted at an exercise price which was approximately 3.0% below the closing price preceding the date of grant of options. Pursuant to the approval of shareholders in June 2017, the exercise period is such period not exceeding ten years from the date of vesting of options as may be determined by the Board of Governance, Remuneration & Nomination Committee for each grant. In September 2018, the shareholders approved the change in exercise period to not exceeding five years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee for all future grants effective May 2018. The following table sets forth certain information regarding the stock option grants made to employees under the Scheme 2000 at March 31, 2024. The Bank granted all of these options at no cost to its employees. Options granted include grants to wholetime directors and employees of subsidiaries of the Bank. The Bank has not granted any stock options to its non-executive directors. The following table sets forth certain information regarding the options granted by the Bank at March 31, 2024. Particulars ICICI Bank Options granted (net of lapsed) 625,519,291 Options vested 612,719,017 Options exercised 426,787,825 Options forfeited/lapsed 112,057,823 Amount realized by exercise of options Rs. 63,760,798,453 Total number of options in force 198,731,466 Weighted average exercise price of options in force Rs. 411.26 See also “Consolidated financial statements—Schedules forming part of the consolidated financial statements—Additional notes—Note 18” under U.S. GAAP included herein. ICICI Prudential Life Insurance Company has an employees stock option scheme, which allows that the aggregate number of shares issued or issuable since March 31, 2016 pursuant to the exercise of any options granted to eligible employees, shall not exceed a figure equivalent to 3.54% of the number of shares issued at March 31, 2016. The maximum number of options granted to any eligible employee in a financial year shall not exceed 0.1% of the issued shares of the Company at the time of grant of options. ICICI Prudential Life Insurance Company had 28,450,010 stock options outstanding (net of forfeited or lapsed options) at year-end fiscal 2024. ICICI Lombard General Insurance Company has an employee stock option scheme, which allows up to 8.98% of the issued capital to be allocated to employee stock options. The maximum number of options granted to any eligible employee in a financial year shall not exceed 0.1% of the issued shares of the Company at the time of grant of options. ICICI Lombard General Insurance Company had 14,536,884 employee stock options outstanding (net of forfeited or lapsed options) at year-end fiscal 2024. ICICI Securities Limited has an employee stock option scheme, which allows up to 5.0% of the issued capital to be allocated to employee stock options. The maximum number of options granted to any eligible employee in a financial year shall not exceed 0.1% of the issued shares of the Company at the time of grant of options. ICICI Securities Limited had 60,60,085 employee stock options outstanding (net of forfeited or lapsed options) at year-end fiscal 2024. 214 Table of Contents Employees Stock Unit Scheme The Board of Directors of ICICI Bank Limited at its meeting held on June 28, 2022, approved the adoption of Employees Stock Unit Scheme - 2022 (“Unit Scheme 2022”), which was subsequently approved by the members at the annual general meeting held on August 30, 2022. The key objectives of the Unit Scheme 2022 are to deepen the co-ownership amongst the (i) mid level and front-line managers, and (ii) employees of Bank’s select unlisted wholly owned subsidiaries with the following key considerations: i. to enable employees’ participation in the business as an active stakeholder to usher in an “Owner-Manager” culture and to act as a retention mechanism; ii. to enhance motivation of employees; and iii. to enable employees to participate in the long term growth and financial success of the Bank. The Unit Scheme 2022 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. A maximum of 100,000,000 units, shall be granted in one or more tranches over a period of seven years from the date of approval of the Unit Scheme 2022 by the shareholders, which shall entitle the unit holder one fully paid-up equity share of face value of Rs. 2 of the Bank as adjusted for any changes in capital structure of the Bank against each Unit exercised . Units granted under the Unit Scheme 2022 shall vest not later than the maximum vesting period of four years. The Bank has granted upto March 31, 2024, 4.19 million stocks. According to the Unit Scheme 2022, the maximum number of units granted to any eligible employee shall not exceed 20,000 units in any financial year and 0.14% of the total units available for grant over a period of seven years from the date of approval of the Unit Scheme 2022 by the shareholders. Units granted under the Unit Scheme 2022 vest in a graded manner over a three-year period with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 13 months from the date of grant. The exercise period will not exceed five years from date of vesting of units or such shorter period as may be determined by the Board Governance, Remuneration & Nomination Committee for each grant. The exercise price shall be the face value of equity shares of the Bank i.e. Rs. 2 for each unit. Besides continuity of employment, vesting shall also be dependent on achievement of certain corporate performance parameter(s) such as: · Risk Calibrated Core Operating profit; · Provision/asset quality; · Other parameters, if any, as the Board Governance, Remuneration & Nomination Committee may determine The following table sets forth certain information regarding the stock unit grants made to employees under the Unit Scheme 2022 at March 31, 2024. Particulars ICICI Bank Units granted (net of lapsed) 4,190,810 Units vested 2,700 Units exercised 0 Units forfeited/lapsed 228,860 Amount realized by exercise of Units Rs. -- Total number of units in force 4,190,810 Weighted average exercise price of units in force Rs. 2 215 Table of Contents The Board of Directors of ICICI Prudential Life Insurance Company at its meeting held on June 10, 2023, approved the adoption of Employees Stock Unit Scheme - 2023 (ICICI Life Scheme 2023), which was subsequently approved by the members at the annual general meeting held on July 28, 2023. The ICICI Life Scheme 2023 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. A maximum of 14,500,000 units, shall be granted in one or more tranches over a period of six years from the date of approval of the ICICI Life Scheme 2023 by the shareholders, which shall entitle the Unit holder one fully paid-up equity share of face value of Rs. 10 of the company (as adjusted for any changes in capital structure of the Bank) against each unit exercised and accordingly, up to 14,500,000 equity shares of face value of Rs. 10 (approximately 1% of the outstanding shares as on March 31, 2023) each shall be allotted to all eligible employees taken together under the ICICI Life Scheme 2023.The maximum number of units granted to any Eligible Employee shall not exceed 60,000 units in any financial year. Units granted under this ICICI Life Scheme 2023 shall vest not later than the maximum vesting period of four years. In addition, vesting of Units shall also be dependent on mandatory achievement of corporate performance condition(s). The exercise price shall be the face value of equity shares of the Company i.e. Rs. 10 for each unit. ICICI Prudential Life Insurance Company did not grant any units under the employees stock unit scheme to its employees during fiscal 2024. The Board of Directors of ICICI Lombard General Insurance Company at its meeting held on April 18, 2023, approved the adoption of Employees Stock Unit Scheme - 2022 (ICICI General Scheme 2023), which was subsequently approved by the members at the annual general meeting held on July 06, 2023. The ICICI General Scheme 2023 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. A maximum of 5,000,000 units shall be granted under the ICICI General Scheme 2023, which shall entitle the Unit holder one fully paid-up equity share of face value of Rs. 10 of the company against each unit exercised and accordingly, up to 5,000,000 equity shares of face value of Rs. 10 each shall be allotted to all eligible employees taken together under the ICICI General Scheme 2023.The maximum number of units granted to any Eligible Employee shall not exceed 20,000 units in any financial year. Units granted under this ICICI General Scheme 2023 shall vest not later than the maximum vesting period of four years. In addition, the vesting of the units shall be based on one or more of relevant parameters as : • Market Share; • Combined Ratio; and • Performance of the eligible employee Such other conditions as the Board Nomination & Remuneration Committee may decide. Exercise price shall be the face value of equity shares of the company i.e. Rs. 10 for each unit. 216 Table of Contents ICICI Lombard General Insurance Company did not grant any units under employees stock unit scheme to its employees during fiscal 2024. The Board of Directors of ICICI Securities Limited at its meeting held on July 21, 2022, approved the adoption of Employees Stock Unit Scheme - 2022 (“Scheme 2022”), which was subsequently approved by the members at the annual general meeting held on August 26, 2022. The Scheme 2022 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. ICICI Securities Limited has an employees stock units scheme, which allows up to 16,138,000 units to be allocated to employee stock units under this scheme. The maximum number of options granted to any eligible employee in a financial year shall not exceed 100,000 units of the issued shares of the company at the time of grant of options. ICICI Securities Limited had 708,220 employee stock units outstanding (net of forfeited or lapsed options) at year-end fiscal 2024. Loans The Bank has internal rules for grant of loans to employees and executive directors to acquire certain assets such as property, vehicles and other consumer durables at significantly lower interest rates than the market rate. The Bank’s loans to employees have been made at interest rates ranging from 2.5% to 3.5% per annum and are repayable over fixed periods of time. The loans are generally secured by the assets acquired by the employees. Pursuant to the Banking Regulation Act, the Bank’s non-executive directors are not eligible for any loans. At year-end fiscal 2024, outstanding loans to the Bank’s employees totaled Rs. 23.57 billion compared to Rs. 10.7 billion at year-end fiscal 2023. This amount included loans to certain executive directors amounting to Rs. 61.47 million at year-end fiscal 2024 compared to Rs. 85.4 million at year-end fiscal 2023, made on the same terms, including as to interest rates and collateral, as loans to other employees. Loans to executive directors are given after approval by the Reserve Bank of India. See also “Related Party Transactions”. Gratuity The Bank pays gratuity to employees who retire or resign after a minimum prescribed period of continuous service and, in the case of employees at overseas locations, in accordance with the rules in force in the respective countries. The Bank makes contributions to gratuity funds for employees which are administered by ICICI Prudential Life Insurance Company Limited. Actuarial valuation of the gratuity liability for all the above funds is determined by an actuary appointed by the Bank. Actuarial valuation of gratuity liability is determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. The accounts of the fund are audited by independent auditors. The total corpus of the fund at year-end fiscal 2024 based on its audited financial statements was Rs. 18.1 billion compared to Rs. 14.0 billion at year-end fiscal 2023. 217 Table of Contents Superannuation Fund The Bank contributes 15% of the total annual basic salary and dearness allowance (if applicable) to a superannuation fund in respect of the employees to whom it applies. The Bank’s employees may elect on retirement or resignation to receive one-third or one-half, depending on the tenure of service, of the total balance as commutation and a periodic pension based on the remaining balance. In the event of the death of an employee, his or her beneficiary receives the remaining accumulated balance, if eligible. The Bank also gives a cash option to its employees, allowing them to receive the amount that would otherwise be contributed by the Bank in their monthly salary during their employment. The superannuation fund is administered by Life Insurance Corporation of India and ICICI Prudential Life Insurance Company Limited. Employees have the option to choose between funds administered by the Life Insurance Corporation of India and ICICI Prudential Life Insurance Company Limited. The total corpus of the superannuation fund was Rs. 6.1 billion at year-end fiscal 2024 compared to Rs. 5.3 billion at year-end fiscal 2023. Provident Fund The Bank is statutorily required to maintain a provident fund as part of its retirement benefits to its employees. The provident fund, to which both ICICI Bank and its employees contribute a defined amount, is a savings scheme under which ICICI Bank at present is required to pay to employees a minimum annual return as specified from time to time, which was specified at 8.25 % for fiscal 2024. If such return is not generated internally by the fund, ICICI Bank is liable for the difference. There are separate provident funds for employees inducted from merged entities (Bank of Madura, The Bank of Rajasthan and Sangli Bank) and for other employees of the Bank. These funds are managed by in-house trustees. Each employee contributes 12.0% of his or her basic salary and the Bank contributes an equal amount to the funds. Out of the 12% of employer contribution, 8.33% subject to a maximum of Rs. 1,250 contributed per employee to the Employee Pension Scheme with Employee Provident Fund Organization. Pursuant to Supreme Court judgement in November 2022, certain eligible employees are given an option to contribute the entire 8.33% to employee pension scheme with Employee Provident Fund Organization. The investments of the funds are made according to rules prescribed by the Government of India. The accounts of the funds are audited by independent auditors. The total corpuses of the funds for employees inducted from merged entities and other employees of the Bank at year-end fiscal 2024, based on their audited financial statements, amount to Rs. 1.6 billion and Rs. 57.2 billion respectively, as compared to Rs. 1.8 billion and Rs. 47.7 billion, respectively, at year-end fiscal 2023. Pension Fund The Bank provides for pension, a deferred retirement plan covering certain employees of the former Bank of Madura, Sangli Bank and Bank of Rajasthan. The plan provides for pension payments, including dearness relief, on a monthly basis to these employees on their retirement based on the respective employee’s salary and years of service with the Bank. For the former Bank of Madura, Sangli Bank and Bank of Rajasthan employees in service, funds are managed by the trust and the liability is funded as per actuarial valuation. The trust purchases annuities from the Life Insurance Corporation of India and ICICI Prudential Life Insurance Company Limited as part of its master policies for payment of pension to retired employees of the former Bank of Madura, Sangli Bank and Bank of Rajasthan. Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan. The corpus, based on audited financial statements at year-end fiscal 2024 was Rs.17.3 billion compared to Rs. 17.7 billion at year-end fiscal 2023. 218 Table of Contents National Pension Scheme National Pension Scheme is a voluntary, defined contribution retirement savings scheme. The Bank contributes up to 10% of basic salary to National Pension Scheme for employees who opt to participate in the scheme. These funds are invested by Pension Fund Regulatory and Development Authority and are regulated by professional fund managers as per the investment option selected by the respective employees. At the time of retirement, up to 60% of the accumulated contributions (including returns thereon) can be withdrawn as lump-sum by the employee. The residual accumulated contributions need to be used for the purchase of a life annuity from a Pension Fund Regulatory and Development Authority empaneled life insurance company. The Bank has contributed Rs. 349.3 million for fiscal 2024 (fiscal 2023: Rs. 279.8 million) to National Pension Scheme for employees who opted for the scheme. Interest of Management in Certain Transactions Except as otherwise stated in this annual report, no amount or benefit has been paid or given to any of our directors or executive officers. Disclosure on Recovery of Erroneously Awarded Compensation During or after the fiscal year of 2024, we were not required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to the compensation recovery policy required by the listing standards adopted by the New York Stock Exchange. 219 Table of Contents Supervision and Regulation The following description is a summary of certain sector-specific laws and regulations in India that are applicable to us. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set out below are not exhaustive, and are only intended to provide general information. The key legislation governing banking companies in India is the Banking Regulation Act, 1949. The provisions of the Banking Regulation Act are in addition to and not, save as expressly provided in the Banking Regulation Act, in derogation of the Companies Act and any other law currently in force. Other important laws which govern banking companies in India include the Reserve Bank of India Act, 1934 and Foreign Exchange Management Act, 1999, Payment and Settlement System Act, 2007, Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Negotiable Instrument Act, 1881 and Insolvency and Bankruptcy Code, 2016 as amended from time to time. Additionally, the Reserve Bank of India, from time to time, issues guidelines to be followed by banks. Compliance with all regulatory requirements is evaluated with respect to financial statements under Indian GAAP. Banking companies in India are also governed by the provisions of the Companies Act, 2013 and if such companies are listed on a stock exchange in India, then various regulations of the Securities and Exchange Board of India additionally apply to such companies. Reserve Bank of India Regulations The Banking Regulation Act requires a company to obtain a license from the Reserve Bank of India to carry on banking business in India. This license is subject to such conditions as the Reserve Bank of India may choose to impose, such as, but not limited to, the bank having adequate capital and earnings prospects, the bank having the ability to pay its present and future depositors in full as their claims accrue, and that the affairs of the bank will not be or are not likely to be conducted in a manner detrimental to the interests of present or future depositors. The Reserve Bank of India can cancel the license if the bank, at any point, fails to meet the required conditions or if the bank ceases to carry on banking operations in India. ICICI Bank is regulated and supervised by the Reserve Bank of India because it is licensed as a banking company. The Reserve Bank of India requires us to furnish statements and information relating to our business. It has issued, among other things, guidelines for commercial banks relating to banking activities and prudential guidelines relating to recognition of income, classification of assets, provisioning, exposure norms on concentration risk, valuation of investments and maintenance of capital adequacy. The Reserve Bank of India carries out an annual risk assessment of banks under its risk-based supervision exercise. The Reserve Bank of India has also set up a Board for Financial Supervision (“BFS”), under the chairmanship of the Governor of the Reserve Bank of India. The primary objective of BFS is to undertake consolidated supervision of the financial sector comprising Scheduled Commercial and Co-operative Banks, All India Financial Institutions (“AIFIs”), Local Area Banks, Small Finance Banks, Payments Banks, Credit Information Companies, Non-Banking Finance Companies and Primary Dealers. Requirements of the Banking Regulation Act Prohibited Business The Banking Regulation Act specifies the business activities in which a bank may engage. Banks are prohibited from engaging in business activities other than the specified activities. Statutory Reserve In order to augment capital, Commercial Banks shall transfer not less than 25 per cent of the 'net profit' before appropriations to the Statutory Reserve. 220 Table of Contents Ownership and Voting Restrictions The Government of India regulates foreign ownership in Indian banks. Foreign investors (including indirect foreign investment) may own up to 74.0% of the equity of a private sector bank in India subject to rules and regulations issued by the Government of India and the Reserve Bank of India from time to time. While foreign investment of up to 49.0% in private sector banks does not require any specific approval, foreign investments greater than 49.0% and up to 74.0% require prior approval of the Government of India, unless such investments are otherwise exempted from the requirement for approval. Investments by foreign investors exempted from the requirement for Government of India approval include certain aggregate foreign portfolio investments up to 49.0% or the relevant sectoral cap (whichever is lower) that do not result in the transfer of ownership or control from Indian residents to non-resident investors, and foreign investment through rights and bonus issues fulfilling certain conditions. Additionally, in the case of proposals requiring prior approval of the Government of India, such proposals involving total foreign equity inflow of more than Rs. 50.0 billion, also require approval of the Cabinet Committee on Economic Affairs. In January 2023, the Reserve Bank of India issued Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies with regard to shareholding in banking companies. As per the guidelines, banks are required to have board-approved “fit and proper” criteria for major shareholders (shareholders holding 5.0% or more of the paid-up share capital or voting rights, along with relatives, associate enterprises and persons acting in concert) and continuously monitor the fit and proper status of major shareholders, including changes in the Significant Beneficial Owner (“SBO”) of its major shareholder. Voting rights are capped at 26.0% for a single shareholder. However, any acquisition of shareholding/voting rights of 5.0% or more will require the prior approval of the Reserve Bank of India. If aggregate holding of a major shareholder falls below 5.0%, Reserve Bank of India approval will again be needed to raise the holding again to 5.0% or above. Regulatory Reporting and Examination Procedures The Reserve Bank of India is responsible for supervising the Indian banking system under various provisions of the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934. The supervision framework has evolved over time and the Reserve Bank of India has been progressively moving in line with BCBS’s “Core Principles for Effective Banking Supervision”. The existing supervisory framework has been modified towards establishing a risk-based supervision framework. This framework is intended to make the supervisory process for banks more efficient and effective, with the Reserve Bank of India applying differentiated supervision to each bank based on its risk profile. A detailed qualitative and quantitative assessment of the bank’s risk is conducted by the supervisor on an ongoing basis and an Inspection and Risk Assessment Report (“IRAR”) is issued by the Reserve Bank of India. The Reserve Bank of India has designated a senior supervisory manager for the banks under this framework who will be the single point of contact for a designated bank. We have been subject to supervision under this framework since 2013. The Reserve Bank of India also discusses the IRAR with our management team, including the Chairman of the Bank, the Chairman of the Audit Committee, and the Managing Director and CEO. The IRAR, along with the report on actions taken by us, has to be placed before our Board of Directors. On approval by our Board of Directors, we are required to submit the report on actions taken by us to the Reserve Bank of India. See also, “—Loan Loss Provisions and Non-Performing Assets—Asset Classification.” Appointment and Remuneration of the Chairman, Managing Director and Other Directors We are required to obtain prior approval of the Reserve Bank of India before we appoint our Chairman, Managing Director and any other executive directors and fix their remuneration. The Reserve Bank of India has issued guidelines on “fit and proper” criteria for directors of banks. Our directors must satisfy the requirements of these guidelines. 221 Table of Contents The Reserve Bank of India has issued guidelines on the compensation of wholetime directors/CEOs/material risk takers and control function staff of private sector and foreign banks operating in India. The Reserve Bank of India has also issued guidelines on the compensation of non-executive directors of private sector banks. The Reserve Bank of India has issued guidelines on the minimum qualifications and experience required for the position of Chief Financial Officer and Chief Technology Officer in banks. Penalties The Reserve Bank of India may impose penalties on banks and their employees for infringement of regulations under the Banking Regulation Act. The penalty may be a fixed amount or may be related to the amount involved in any contravention of the regulations. The penalty may also include imprisonment. Assets to be Maintained in India Every bank is required to ensure that its assets in India (including import-export bills drawn in India and the Reserve Bank of India approved securities, even if the bills and the securities are held outside India) are not less than 75.0% of its demand and time liabilities in India. Restriction on Creation of Floating Charge Prior approval of the Reserve Bank of India is required for creating floating charge on our undertaking or property. Currently, all of our borrowings, including bonds, are unsecured. Maintenance of Records Banks are required to maintain books, records and registers. The Banking Regulation Act specifically requires banks to maintain books and records in a particular manner and file the same with the Registrar of Companies on a periodic basis. The Know Your Customer Guidelines framed by the Reserve Bank of India also provide for certain records to be updated at regular intervals. As per the Prevention of Money Laundering Act, 2002, records of a transaction are to be preserved for five years from the date of the transaction between a customer and the bank. The Know Your Customer records are required to be preserved for a period of five years from the date of cessation of the relationship with the customer. The Banking Companies (Period of Preservation of Records) Rules, 1985 requires such records to be preserved for eight years. The Banking Companies (Period of Preservation of Records) Rules, 1985 requires a bank’s records of books, accounts and other documents relating to stock and share registers to be maintained for a period of eight years. The Reserve Bank of India has advised system providers to ensure that data relating to payment systems operated by them are stored only in a system located in India. See also, “—Information Technology and Cyber Security.” Governance of Banks As part of steps taken to strengthen risk management in banks, the Reserve Bank of India has issued guidelines which aim to separate the credit risk management function from the credit approval process and also bring uniformity in the approach followed by banks. In 2021, the Reserve Bank of India issued instructions with regard to the Chairman and meetings of the board, composition of certain committees of the board, age, tenure and remuneration of directors, and appointment of wholetime directors of banks. The upper age limit for non-executive directors, including the Chairman, is 75 years and the total tenure of a non-executive director on the board of a bank cannot exceed eight years. 222 Table of Contents In 2020, the Reserve Bank of India advised that as part of a robust compliance system, banks are required to have an effective compliance culture, independent compliance function and a strong compliance risk management programme. As per the guidelines, banks shall have a board-approved compliance policy explaining its compliance philosophy, expectations on compliance culture, role of Chief Compliance Officer (“CCO”), and processes for managing and reporting on compliance risk throughout the bank. Banks are required to develop and maintain a quality assurance and improvement program covering all aspects of the compliance function and such programs are subject to an independent external review periodically (at least once every three years). The policy shall be reviewed at least once a year. The selection of the candidate for the post of the CCO shall be done on the basis of a well-defined selection process and recommendations made by the senior executive level selection committee constituted by the Board for this purpose. The CCO shall be appointed for a minimum fixed tenure of not less than three years. Appointment of auditors The appointment of the statutory auditors of banks is subject to the approval of the Reserve Bank of India. In 2021, the Reserve Bank of India issued revised guidelines for the appointment of statutory auditors and statutory central auditors. For entities with an asset size of Rs. 150.0 billion and above, the statutory audit must be conducted under joint audit by at least two audit firms. The Reserve Bank of India can direct a special audit in the interest of the depositors or in the public interest. The Reserve Bank of India has also put in place a graded enforcement action framework to enable appropriate action in respect of statutory auditors where any lapses in conducting a bank’s statutory audit have been observed. Lapses that would be considered for invoking the enforcement framework include misstatement of a bank’s financial statements, wrong certifications, wrong information given in the Long Form Audit Report, and variances in audited financial statements found during the Reserve Bank of India’s inspection and non-adherence to instructions and guidelines issued by the Reserve Bank of India. Restrictions on Payment of Dividends The Banking Regulation Act requires banks to completely write off capitalized expenses and transfer the stipulated percentage of the disclosed yearly profit to a reserve account before declaring a dividend. Banks have to comply with prudential requirements to be eligible to declare dividends. Capital Adequacy Requirements We are required to comply with the Reserve Bank of India’s capital adequacy guidelines. The Reserve Bank of India’s Basel III guidelines prescribe a minimum common equity Tier 1 risk-weighted capital ratio of 5.5%, a minimum Tier 1 risk-based capital ratio of 7.0% and a minimum total risk-based capital ratio of 9.0%. The guidelines require banks to maintain a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets above the minimum requirements to avoid restrictions on capital distributions and discretionary bonus payments. We were declared a systemically important bank in India by the Reserve Bank of India in 2015, and have continued to be categorized as a systemically important bank in India in subsequent years. The additional common equity Tier 1 requirement for us is 0.20% of risk-weighted assets. The Reserve Bank of India requires maintenance of a minimum leverage ratio of 4.0% for domestic systemically important banks. See also “Risk Factors— Risks that arise as a result of our presence in a highly regulated sector – We are subject to capital adequacy requirements stipulated by the Reserve Bank of India, including Basel III, as well as general market expectations regarding the level of capital adequacy large Indian private sector banks should maintain, and any inability to maintain adequate capital due to changes in regulations, a lack of access to capital markets, or otherwise may impact our ability to grow and support our businesses” and “ – Risks that arise as a result of our presence in a highly regulated sector – We are subject to liquidity requirements of the Reserve Bank of India, and any inability to maintain adequate liquidity due to changes in regulations, a lack of access to capital markets, or otherwise may impact our ability to grow and support our businesses.” 223 Table of Contents With respect to computation of risk-weighted assets for capital adequacy purposes, we follow the standardized approach for the measurement of credit and market risks and the basic indicator approach for the measurement of operational risk. Under Pillar 2 of the Basel framework, banks are required to develop and put in place, with the approval of their boards, an Internal Capital Adequacy Assessment Process commensurate with their size, level of complexity, risk profile and scope of operations. The Reserve Bank of India has also issued guidelines on stress testing to advise banks to put in place appropriate stress testing policies and frameworks, including “sensitivity tests” and “scenario tests”, for the various risk factors, the details and results of which are included in the Internal Capital Adequacy Assessment Process. Prompt Corrective Action by the Reserve Bank of India The Prompt Corrective Action (“PCA”) framework is a framework under which banks with weak financial condition are put under watch by the Reserve Bank of India and subject to restrictions on operations and business. As per the guidelines, a bank may be placed under the framework at any point in time, if it is found to breach any of the parameters prescribed. In 2021, the Reserve Bank of India reviewed and revised the PCA framework. The key criteria for invocation of the PCA include (i) falling below a capital adequacy ratio of 10.25% and/or below a common equity Tier 1 ratio of 6.75%, (ii) exceeding net non-performing asset ratio of 6.0%, or (iii) a leverage ratio of below 4.0%. Legal Reserve Requirements Cash Reserve Ratio A bank is required to maintain a specified percentage of its net demand and time liabilities, excluding interbank deposits, by way of cash reserve with itself and by way of balance in current account with the Reserve Bank of India. In May 2022, the Reserve Bank of India increased the cash reserve ratio by 50 basis points from 4.00% to 4.50% of net demand and time liabilities. Statutory Liquidity Ratio In addition to the cash reserve ratio, a bank is required to maintain a specified percentage of its net demand and time liabilities by way of liquid assets like cash, gold or approved unencumbered securities. Investments in sovereign gold bonds may be included in the calculation of statutory liquidity ratio. Currently, the statutory liquidity ratio is 18.0%. Liquidity Coverage Ratio In line with the Basel III framework, banks in India are required to maintain a minimum liquidity coverage ratio which is a ratio of the stock of high-quality liquid assets to total net cash outflows over the next 30 calendar days under certain prescribed stressed conditions. The liquidity coverage ratio is designed to ensure that a bank maintains an adequate level of unencumbered high-quality liquid assets to meet any acute liquidity requirements over a hypothetical stressed period lasting 30 days. A minimum liquidity coverage ratio of 100.0% is required. 224 Table of Contents Net Stable Funding Ratio (“NSFR”) The Reserve Bank of India has issued guidelines on NSFR. The ratio promotes resilience over a longer time horizon by requiring banks to fund their activities with more stable sources on an ongoing basis. The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. Banks are required to maintain a ratio of at least 100.0%. Regulations Relating to Advancing Loans The provisions of the Banking Regulation Act govern the advancing of loans by banks in India. The Reserve Bank of India also issues directions covering the loan activities of banks. These directions and guidelines issued by the Reserve Bank of India have been consolidated in the Master Circular on “Loans and Advances—Statutory and Other Restrictions.” Banks are free to determine their own lending rates, but each bank must disclose its minimum interest rate which takes into consideration all elements of lending rates that are common across borrowers. Interest rates on all new floating rate retail loans and loans to micro, small and medium enterprises extended by banks are required to be linked to an external benchmark. The external benchmark includes the Reserve Bank of India policy repo rate, Government of India 91-day treasury bill yield, Government of India 182-day treasury bill yield or any other benchmark market interest rate produced by Financial Benchmarks India Private Limited. Banks are free to offer floating rate loans to other types of borrowers (i.e., corporate borrowers) either on external benchmark or marginal cost of funds based lending rate which is the internal benchmark for such purposes. Banks have to review and publish their marginal cost of funds based lending rate every month on a preannounced date for different maturities, ranging from overnight rate up to one year basis methodology, prescribed by the Reserve Bank of India for computation of marginal cost of funds based lending rate. There shall be no lending below the benchmark rate for a particular maturity for all loans linked to that benchmark. Under Section 20(1) of the Banking Regulation Act, a bank cannot grant any loans and advances against the security of its own shares and a banking company is prohibited from entering into any commitment for granting any loans or advances to or on behalf of any of its directors, or any firm in which any of its directors is interested as partner, manager, employee or guarantor, or any company (not being a subsidiary of the banking company or a company registered under Section 25 of the Companies Act, 1956 or a government company) of which, or the subsidiary or the holding company of which, any of the directors of the bank is a director, managing agent, manager, employee or guarantor or in which he holds substantial interest, or any individual in respect of whom any of its directors is a partner or guarantor. There are certain exemptions in this regard as the explanation to the section provides that “loans or advances” shall not include any transaction which the Reserve Bank of India may specify by general or special order as not being a loan or advance for the purpose of this section. There are guidelines on loans against equity shares in respect of amount, margin requirement and purpose. The Reserve Bank of India has issued guidelines requiring banks to put in place a policy for exposure to real estate with the approval of their boards. The Reserve Bank of India has also permitted banks to extend financial assistance to Indian companies for acquisition of equity in overseas joint ventures or wholly owned subsidiaries or in other overseas companies, new or existing, as strategic investment. Banks are not permitted to finance acquisitions by companies in India. Based on the “Recommendations of the Working Group on Digital Lending – Implementation” dated August 10, 2022, the Reserve Bank of India issued “Guidelines on Digital Lending” on September 2, 2022. The requirements of the guidelines include calculation of Annual Percentage Rate (“APR”) and displaying the same in the prescribed format of Key Fact Statement (“KFS”), providing KFS to the customer, appointing Nodal Grievance Redressal Officer for dealing with complaints/issues related to digital lending, providing cooling off /look up periods during which a borrower can foreclose a digital lending loan without paying any penalty, providing digitally signed documents to the borrowers and other requirements. 225 Table of Contents The Reserve Bank of India guidelines on fair lending practices on penal charges in loan accounts, require Regulated Entities (“REs”) to formulate a board-approved policy on penal charges or similar charges on loans. The guidelines also require that the penalty charged for noncompliance with material terms and conditions of loan contracts be charged in the form of “penal charges” and not “penal interest”. Penal charges should be clearly disclosed in the loan agreement, Most Important Terms & Conditions (“MITC”)/ KFS and on the website of the Bank, etc. The Reserve Bank of India guidelines on regulatory measures towards consumer credit and bank credit to non-banking financial companies (“NBFCs”) require all top-up loans extended by REs against movable assets which are inherently depreciating in nature, such as vehicles, to be treated as unsecured loans for credit appraisal, prudential limits and exposure purposes. Directed Lending Priority Sector Lending The guidelines on lending to priority sectors require commercial banks to lend a certain percentage of bank credit to specific sectors (the priority sectors) such as agriculture, small, micro and medium enterprises, education, housing, social infrastructure, renewable energy and loans to start-ups. The Reserve Bank of India’s total priority sector target is 40.0% of adjusted net bank credit (“ANBC”) or of the credit equivalent amount of off-balance sheet exposure (“CEOBE”), whichever is higher, with sub-targets of 7.5% to micro enterprises within the overall target of 18.0% in agriculture. The target for lending to small and marginal farmers is 10.0% from fiscal 2024. The target for lending to identified weaker sections of society is 12.0% from fiscal 2024. Under the Reserve Bank of India criterion, an Udyam Registration Certificate (“URC”) is necessary for lending to micro, small and medium enterprises to qualify for priority sector and the Bank shall be guided by the classification recorded in URC. In 2021, retail and wholesale traders were permitted to register online and obtain URC, resulting in them continuing to qualify under priority sector lending. Informal Micro Enterprises (“IMEs”) with an Udyam Assist Certificate shall be treated as a micro enterprise for purposes of priority sector lending classification. Banks falling short of their priority sector lending targets are required to contribute allocated amounts to specific Government of India funds (i.e., Rural Infrastructure Development Fund (“RIDF”)), established with National Bank for Agriculture and Rural Development (“NABARD”) and other funds with NABARD/ National Housing Bank (“NHB”)/ Small Industries Development Bank of India (“SIDBI”)/ Micro Units Development & Refinance Agency Limited (“MUDRA”). The interest rates on contribution to RIDF or any other funds, tenure of deposits, and other features are fixed by the Reserve Bank of India from time to time. The interest rates on these contributions are below market rates. Export Credit The Reserve Bank of India allows exporters to avail themselves of short-term working capital financing at internationally comparable interest rates. Export credit is available both in rupee as well as in foreign currency. This enables exporters to have access to an internationally competitive financing option. 226 Table of Contents Regulations Governing Overseas Direct Investment In August 2022, the Reserve Bank of India along with the Central Government issued a new Overseas Investment regime (i.e., Foreign Exchange Management (Overseas Investment) Rules, Regulations and Directions) to promote the ease of doing business, to cover wider economic activity and significantly reduce the need for seeking specific approvals from the Reserve Bank of India. Regulations on International Trade Settlement in Indian Rupees (“INR”) In July 2022, the Reserve Bank of India notified an additional arrangement for invoicing, payment, and settlement of exports/imports in INR in order to promote growth of global trade with emphasis on exports from India and to support the interest of global trading community in INR. Credit Exposure Limits As a prudential measure aimed at better risk management and avoidance of concentration of credit risks, the Reserve Bank of India has prescribed credit exposure limits for banks and long-term lending institutions in respect of their lending to individual borrowers and to all companies in a single group (or sponsor group). The Reserve Bank of India requires banks to fix internal limits of exposure to specific sectors. These limits are subject to periodic review by the banks. Further, the Reserve Bank of India has issued guidelines on large borrowers which prescribe a limit of 20.0% and 25.0% of the eligible capital base in respect of exposures to single counterparty and groups of connected counterparties. Capital Market Exposure Limits The Reserve Bank of India guidelines on capital market exposures stipulate that a bank’s exposure to capital markets in all forms (both fund-based and non-fund-based) by way of investments in shares, convertible bonds/debentures, units of equity oriented mutual funds, loans against shares, and secured and unsecured advances to stock brokers, should not exceed 40.0% of its net worth on both a stand-alone and consolidated basis as of March 31 of the previous year. Limits on intra-group transaction and exposures The Reserve Bank of India has prescribed a single group entity exposure limit of 5.0% of the paid-up capital and reserves of the bank for non-financial companies and unregulated financial services companies and 10.0% in the case of regulated financial entities. The aggregate group exposure cannot exceed 20.0% of paid-up capital and reserves and surplus in case of all group entities (financial and non-financial) taken together and 10.0% in the case of all non-financial companies and unregulated financial services companies taken together. Banks’ exposures to other banks/financial institutions in the group in the form of equity and other capital instruments are exempted from the above limits. If the exposure exceeds the permissible limits, the excess amount would be deducted from common equity Tier 1 capital of the bank. Master Direction on Transfer of Loan Exposure and Securitisation of Standard Assets In order to provide banks with options to manage liquidity, rebalance their exposure or strategic sales and resolve their non-performing assets, the Reserve Bank of India issued Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 in September 2021. Originators need to satisfy the Minimum Holding Period requirement (three months and six months) and Minimum Retention Ratio of 10% with due diligence as mentioned in extant guideline. Securitisation involves transactions where credit risk in assets are redistributed by repackaging them into tradeable securities with different risk profiles which may give investors of various classes access to exposures which they otherwise might be unable to access directly. The Reserve Bank of India issued the Master Direction (Securitisation of Standard Assets) Directions, 2021 in September 2021. Originators need to satisfy the Minimum Holding Period requirement (three months and six months) and Minimum Retention Ratio (5% or 10%) as mentioned in extant guideline. 227 Table of Contents Credit Information Bureaus Pursuant to the Credit Information Companies (Regulation) Act, 2005, every credit institution, including a bank, has to become a member of a credit information bureau and furnish to it such credit information as may be required of the credit institution by the credit information bureau about individuals or groups who enjoy a credit relationship with it. In October 2023, the Reserve Bank of India published the framework for compensation to customers for delayed updation or rectification of credit information, which requires credit information companies and credit institutions to implement the compensation framework for delayed updation or rectification of credit information. Loan Loss Provisions and Non-Performing Assets The Reserve Bank of India’s Master Circular on “Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances” dated April 2, 2024 as amended, provides consolidated instructions and guidelines relating to income recognition, asset classification and provisioning standards. Asset Classification In particular, an advance is a non-performing asset where interest and/or installment of principal remains overdue for a period of more than 90 days in respect of a term loan; the account remains “out-of-order” in respect of an overdraft or cash credit; the bill remains overdue for a period of more than 90 days in case of bills purchased and discounted; installment of principal or interest remains overdue for two crop seasons for short duration crops or for one crop season for long duration crops; the amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitization transaction. In respect of derivative transactions, the overdue receivables related to positive mark-to-market value of a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for payment; or in respect of credit card transactions, if the minimum amount due, as mentioned in the statement, remains overdue for a period of more than 90 days from the payment due date mentioned in the statement. Interest in respect of non-performing assets is not recognized or credited to the income account unless collected. Non-performing assets are classified as described below. Sub-Standard Assets. Assets that are non-performing assets for a period not exceeding 12 months. Such an asset has well-defined credit weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the bank will sustain some loss, if deficiencies are not corrected. Doubtful Assets. Assets that have remained sub-standard for a period of 12 months. A loan classified as doubtful has all the weaknesses inherent in assets that are classified as sub-standard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. Loss Assets. Assets on which losses have been identified by the bank or internal or external auditors during the performance of their audit procedures or during the Reserve Bank of India inspection but the amount has not been written off fully. 228 Table of Contents There are separate guidelines for classification of loans for projects under implementation which are based on the date of commencement of commercial production and date of completion of the project as originally envisaged at the time of financial closure. The Reserve Bank of India, under its risk-based supervision exercise, carries out the risk assessment of banks on an annual basis. As a part of this assessment, the Reserve Bank of India separately reviews asset classification and provisioning of credit facilities given by banks to its borrowers. This assessment is initiated subsequent to the completion of the annual audit and the publication of audited financial statements for the given financial year. Any divergences in classification or provisioning arising out of the supervisory process are given effect in the financial statements in subsequent periods after conclusion of the exercise. Such divergences are required to be disclosed by banks in their financial statements if either the additional provisioning requirement assessed by the Reserve Bank of India exceeds 5.0% of the published profits before provisions and contingencies for the period, or the additional gross non-performing assets identified by the Reserve Bank of India 5.0% of the published incremental gross non-performing assets for the reference period, or both. The assessment of divergence in asset classification and provisioning conducted by the Reserve Bank of India for ICICI Bank in fiscal 2020, fiscal 2021, fiscal 2022 and fiscal 2023 did not require any additional disclosures. Restructured Loans Standard restructured loans are subject to higher standard asset provisioning requirements and higher risk weights for capital adequacy purposes. The higher risk weights and provision shall continue until satisfactory performance under the revised payment schedule has been established for the specified period. If the restructured account is overdue as per the revised schedule for a period beyond the minimum period prescribed for classification of a loan as non-performing, it is required to be downgraded to non-performing status with reference to the pre-restructuring payment schedule. See also “Risk Factors—Risks Relating to Our Business—The future trajectory of the COVID-19 pandemic is uncertain and could adversely affect our business, the quality of our loan portfolio and our financial performance”. Provisioning and Write-offs Provisions under Indian GAAP are based on guidelines specific to the classification of the assets. The following guidelines apply to the various asset classifications: Standard Assets: The allowances on the performing portfolios are based on guidelines issued by the Reserve Bank of India. The provisioning requirement is a uniform rate of 0.4% for all standard assets except certain advances which require provision in the range of 0.25% to 2.0%. Reserve Bank of India guidelines require banks to maintain provisions for standard assets at rates higher than the regulatory requirement in respect of advances to stressed sectors of the economy. For assets referred to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, banks have to make provisions to the extent of 50.0% of the secured portion and 100.0% of the unsecured portion of the outstanding loans. Sub-standard Assets: A provision of 15.0% is required for all sub-standard assets. A provision of 25.0% is required for accounts that are unsecured. Unsecured infrastructure loan accounts classified as sub-standard require provisioning of 20.0%. Doubtful Assets: A 100.0% provision/write-off is required against the unsecured portion of a doubtful asset and is charged against income. For the secured portion of assets classified as doubtful, a 25.0% provision is required for assets that have been classified as doubtful for a year, a 40.0% provision is required for assets that have been classified as doubtful for one to three years and a 100.0% provision is required for assets classified as doubtful for more than three years. The value assigned to the collateral securing a loan is the amount reflected on the borrower’s books or the realizable value determined by third-party appraisers. 229 Table of Contents Loss Assets: The entire asset is required to be written off or provided for. Guidelines Relating to Use of Recovery Agents by Banks The Reserve Bank of India has asked banks to put in place a due diligence process for the engagement of recovery agents, structured to cover, among others, individuals involved in the recovery process. Banks are expected to communicate details of recovery agents to borrowers and have in place a grievance redressal mechanism pertaining to the recovery process. Legislative Framework for Enforcement of Security by Banks for Non-performing Assets/Recovery of Debts due to Banks The SARFAESI Act provides that a secured creditor may, in respect of loans classified as non-performing in accordance with the Reserve Bank of India guidelines, give notice in writing to the borrower requiring it to discharge its liabilities within 60 days, failing which the secured creditor may, inter alia, take possession/sell off the assets constituting the security for the loan, take over the management of the business of the borrower, appoint a person to manage the secured assets taken in possession and the like with the ultimate objective of recovering the money due to the bank. See also “—Regulations Relating to Sale of Assets to Asset Reconstruction Companies”. The Recovery of Debts and Bankruptcy Act, 1993 provides for establishment of Debt Recovery Tribunals with the objective of expeditious adjudication and recovery of debts due to any bank or financial institution or to a consortium of banks and financial institutions. Under this Act, the procedures for recoveries of debt have been simplified and time frames have been stipulated for disposal of cases. Upon establishment of the Debt Recovery Tribunal, no court or other authority can exercise jurisdiction in relation to matters covered by this Act, except the higher courts in India in certain circumstances. We are also adopting an alternate dispute resolution mechanism both online and offline (entailing pre-litigation Lok Adalat, mediation, conciliation or arbitration or combination thereof administered by Legal Service Authorities or an independent institution) for speedy resolution of claims and disputes of certain retail assets and services as an alternative to approaching courts or tribunals. In addition, we focus on proactive management of accounts under supervision. Our strategy is aimed at early-stage solutions to incipient problems. Resolution of Stressed Assets Insolvency and Bankruptcy Code, 2016 The Insolvency and Bankruptcy Code, 2016, provides a time-bound revival and rehabilitation mechanism. The corporate insolvency resolution process can be initiated by the creditors on occurrence of a default above a specific threshold amount. The National Company Law Tribunal has been set up as the adjudicating authority, the National Company Law Appellate Tribunal has been set up to hear appeals on the orders of the adjudicating authority with jurisdiction over companies and limited liability entities, and the Insolvency and Bankruptcy Board of India has been set up as the new insolvency regulator overseeing insolvency professionals and information utilities, and promoting transparency. Regulations Relating to Sale of Assets to Asset Reconstruction Companies The Reserve Bank of India has issued guidelines to banks on the process to be followed for sales of financial assets to asset reconstruction companies in the Master Direction on Transfer of Loans. These guidelines provide that a bank may sell financial assets to an asset reconstruction company provided the asset is a non-performing asset. 230 Table of Contents Banks can also invest in security receipts or pass-through certificates issued by the asset reconstruction company or trusts set up by it to acquire the financial assets. The Reserve Bank of India has also issued guidelines governing the affairs of asset reconstruction companies. Framework for Early Identification of Stress and Information Sharing Reserve Bank of India, circular dated July 15, 2024 has issued Master Directions on Fraud Risk Management which states that there shall be a Board approved policy on fraud risk management delineating roles and responsibilities of board/board committees and senior management of the Bank which shall also incorporate measures for ensuring compliance with principles of natural justice prior to fraud classification, in a time-bound manner. Banks shall have a framework for early warning signals and red flagging of accounts under the overall fraud risk management policy approved by the board, which shall provide for, among others, a system of robust early warning signals which is integrated with core banking solution or other operational systems. See also “Supervision and Regulation—Legislative Framework for Recovery of Debts due to Banks” and “Supervision and Regulation—Legislative Framework for Recovery of Debts due to Banks— Resolution of Stressed Assets—The Banking Regulation (Amendment) Ordinance, 2017”. Regulations Relating to the Opening of Branches The opening and relocation of branches are governed by the provisions of Section 23 of the Banking Regulation Act. Banks are permitted to open banking outlets in Tier 1 to Tier 6 centers without the prior approval of the Reserve Bank of India, subject to certain requirements. Banks must allocate 25.0% of the total number of new banking outlets opened during a year to unbanked rural centers. An unbanked rural center is defined as an area classified as Tier 5 and Tier 6 centers that does not have core banking system enabled banking outlets. A banking outlet is a fixed-point service delivery unit, manned by either a bank’s staff or its business correspondent, and where services of acceptance of deposits, encashment of checks/cash withdrawal or lending of money are provided for a minimum of four hours per day for at least five days a week. Regulations Governing Use of Business Correspondents To increase the outreach of banking and promote greater financial inclusion, the Reserve Bank of India allows banks to engage business correspondents for providing banking and financial services at locations other than a bank branch. Regulations Relating to Deposits The Reserve Bank of India permits banks to independently determine interest rates offered on term deposits. However, banks cannot pay interest on current account deposits. Interest rates payable on savings deposits are not regulated. However, a uniform interest rate on savings deposits must be paid on deposits up to Rs. 100,000 and differential rates can be paid on deposits of over Rs. 100,000. The payment of interest on savings deposits is calculated on daily product basis. Domestic time deposits and rupee-denominated non-resident ordinary accounts have a minimum maturity of seven days. Rupee-denominated non-resident external rupee accounts have a minimum maturity of one year and foreign currency denominated for non-resident Indians have a minimum maturity of one year and a maximum maturity of five years. Banks are allowed to offer differential rates of interests on domestic term deposits and for bulk term deposits of Rs. 30 million and above. The Reserve Bank of India allows banks to offer early withdrawal facility in a term deposit as a distinguishing feature for offering differential rates of interest. All term deposits of individuals of Rs. 10 million and below should, necessarily, have premature withdrawal facility. For all other term deposits, customers should be given the option to choose between term deposits either with or without premature withdrawal facility. Banks will be required to disclose in advance the schedule of interest rates payable on deposits. 231 Table of Contents Banks are free to determine the interest rates on non-resident (external) rupee deposits and ordinary non-resident accounts. However, the interest rates cannot exceed the rate offered by the bank on comparable domestic rupee deposits. The Reserve Bank India’s Framework for acceptance of green deposits came into effect on June 1, 2023. The purpose of the framework is to encourage REs to offer green deposits to customers, protect the interests of the depositors, aid customers to achieve their sustainability agenda, address greenwashing concerns and help augment the flow of credit to green activities and projects. Regulations Relating to Payments In 2021, the Reserve Bank of India introduced the Legal Entity Identifier system for single payment transactions of value Rs.500 million and above undertaken by non-individual entities using centralised payment systems like real time gross settlement (“RTGS”) and national electronic funds transfer (“NEFT”). In 2021, the Reserve Bank of India also issued master directions on digital payment security controls, which provide necessary guidelines for the REs to set up a robust governance structure and implement common minimum standards of security controls for channels like internet, mobile banking, card payments, among others. This is to create an enhanced environment for customers to use digital payment products in a more safe and secure manner. Regulations Relating to Customer Service and Customer Protection Enhancing customer service and customer protection is a focus area for the Reserve Bank of India, which has regularly emphasized offering efficient, fair and speedy customer service. In this regard, the Reserve Bank of India has issued several guidelines. The Reserve Bank of India has issued a charter of customer rights, which provides the broad overarching principles for the protection of bank customers. The charter describes five basic rights of bank customers which are the right to fair treatment, the right to transparency, fair and honest dealing, the right to suitability, the right to privacy and the right to grievance redress and compensation. The Reserve Bank of India has issued procedural guidelines for redressal of grievances by an internal ombudsman. The Reserve Bank of India has issued directions to banks for determining customer liability in case of Unauthorized Electronic Banking Transaction. The Reserve Bank of India does not allow entities regulated by it, including banks, to deal in virtual currencies or to provide services facilitating any person or entity in dealing with or settling virtual currencies. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of virtual currencies. Personal Data Protection and Privacy The Bank has a global presence in several jurisdictions including Hong Kong, Singapore, the United States, the United Kingdom, Canada, China, the Dubai International Financial Centre and Bahrain. The Bank is committed to ensuring compliance with applicable laws across these jurisdictions. It has an integrated and centralised strategy for achieving data privacy compliance across all jurisdictions. 232 Table of Contents Privacy regulations require the personal data of customers to be protected throughout its entire life cycle. Accordingly, the Bank has undertaken several comprehensive measures such as categorising all personal data and sensitive personal data as ‘Confidential Information’, keeping records of all its processing activities, entering into non-disclosure and confidentiality agreements with employees and third parties who are privy to customers’ personal data and providing customers the option to exercise various rights which they enjoy under applicable data protection regulations and incident handling procedures. On August 11, 2023, the Indian Government enacted the Digital Personal Data Protection Act, 2023, introducing several compliance requirements for the collection and processing of personal data. The digital personal data protection Act is proposed to come into force in a phased manner, i.e. as and when the Central Government notifies the provisions of the digital personal data protection Act, from time to time. Rules under the digital personal data protection Act have not yet been issued by the Central Government. Regulations Governing Mobile Banking The Reserve Bank of India permits Indian banks to offer mobile banking services to their customers. Transactions involving a debit to the customer’s account should have a two-level authentication to execute the transaction. The Reserve Bank of India has issued guidelines requiring banks to provide easy registration for mobile banking services. Regulations Governing Credit, Debit and Co-branded Cards The Reserve Bank of India issued master directions for the issuance of credit and debit cards. The directions cover the general and conduct regulations relating to credit, debit and co-branded cards which shall be read along with prudential, payment and technology and cyber security related directions applicable to credit, debit and co-branded cards. Regulations Governing Prepaid Payment Instruments The Reserve Bank of India has issued master directions on issuance and operation of prepaid payment instruments. Issuers are required to have board-approved policy for issuance of various types/categories of prepaid instruments, engaging agents, co-branding arrangement, re-validation of gift instruments and all related activities. Deposit Insurance Demand and time deposits accepted by Indian banks must be insured with the Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the Reserve Bank of India. The limit on insurance coverage for depositors in insured banks is Rs. 500,000 per depositor. Banks are required to pay the insurance premium for the eligible amount to the Deposit Insurance and Credit Guarantee Corporation on a semi-annual basis. The cost of the insurance premium cannot be passed on to the customer. The Depositor Education and Awareness Fund Scheme, 2014—Section 26A of the Banking Regulation Act, 1949 The Reserve Bank of India has advised that banks shall calculate the cumulative balances in all eligible accounts which are unclaimed for more than 10 years along with interest accrued, and the amount due in each calendar month shall be transferred on the last working day of the subsequent month. 233 Table of Contents Borrowings by Banks in India The Reserve Bank of India has permitted banks to borrow and lend in Call, Notice and Term Money Markets as per the internal board-approved limits within the prescribed prudential limits for interbank liabilities. (a) The IBL of a bank should not exceed 200% of its net worth as on March 31 of the previous year. (b) The banks whose CRAR is at least 25% more than the minimum CRAR (9%) (i.e., 11.25%) as on March 31, of the previous year, are allowed to have a higher limit up to 300% of the net worth for IBL. The Reserve Bank of India has allowed banks to borrow funds from their overseas branches and correspondent banks (including borrowings for financing export credit, external commercial borrowings and overdrafts from their head office/nostro account) up to a limit of 100.0% of unimpaired Tier 1 capital or US$10 million, whichever is higher. Banks are permitted to raise funds through issuance of rupee denominated bonds overseas. The Reserve Bank of India has permitted banks to issue perpetual debt instruments that can qualify for inclusion as additional Tier 1 capital and debt capital instruments that can qualify for inclusion as Tier 2 capital, by way of rupee denominated bonds in the overseas market, and long-term bonds for financing infrastructure and affordable housing projects. Gold Monetization Scheme and Sovereign Gold Bonds The Gold Monetisation Scheme (“GMS”) is intended to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce the country’s reliance on the import of gold. The minimum deposit at any one time is 10 grams of raw gold. The short-term deposits are allowed for a period of one to three years and treated as the bank’s on-balance sheet liability, medium-term deposits for five to seven years and long-term deposits for 12-15 years. The redemption of medium and long-term deposits, at the option of the depositor, can be either in the Indian rupee equivalent of the value of the deposited gold or in the gold itself. The Sovereign Gold Bonds (“SGBs”) are issued by the Government of India under Section 3 of the Government Securities Act, 2006. SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. The Bond is issued by the Reserve Bank of India on behalf of the Government of India. The investment in sovereign gold bond is restricted based on the investor type. Regulations Relating to Know Your Customer and Anti-Money Laundering The Prevention of Money Laundering Act (“PMLA”), 2002, seeks to prevent and criminalize money laundering and terrorist financing in line with recommendations made by the Financial Action Task Force. The PMLA lays down the obligations on designated entities (including banks) for maintaining records and reporting certain transactions to the Financial Intelligence Unit. It also lists out the predicate offences, appointment of the Designated Director and Principal Officer and their respective obligations under the Act. Prevention of Money Laundering Rules (“PMLR”), 2005 have also been framed under this Act. Both the PMLA and PMLR are amended from time to time. The Reserve Bank of India has also provided directions in line with the PMLA and PMLR that cover key aspects including customer acceptance policy, customer due-diligence procedures, monitoring of transactions risk management, regulatory reporting, training of employees and independent audit of AML/KYC framework. These directions are updated from time to time. 234 Table of Contents Regulations Relating to Investments Banks are required to undertake investment activities as per the terms and conditions specified in the extant Reserve Bank of India guideline on Classification, Valuation and Operation of Investment Portfolio of Commercial Banks dated September 12, 2023. Banks are required to adopt a board-approved comprehensive investment policy. The entire investment portfolio (including SLR securities and non-SLR securities) is to be classified under three categories: ‘Held to Maturity’ (“HTM”), ‘Available for Sale’ (“AFS”) and ‘Fair Value through Profit and Loss’ (“FVTPL”). ‘Held for Trading’ (“HFT”) shall be a separate investment subcategory within FVTPL. Investments in own subsidiaries, joint ventures and associates will be a separate category. The category of the investment shall be decided by the bank at the time of acquisition. Banks shall not reclassify investments between categories without the approval of their board of directors. Further, reclassification shall also require the prior approval of the RBI. A bank’s investment in unlisted non-SLR securities shall not exceed 10 percent of its total investment in non-SLR securities as on March 31 of the previous year. The criterion used to classify an asset as a Non-Performing Asset (“NPA”) shall be used to classify an investment as a Non-Performing Investment (“NPI”) (i.e., an NPI is one where interest/ instalment, including maturity proceeds is due and remains unpaid for more than 90 days). In the case of equity shares, in the event the investment in the shares of any company is valued at Re.1 per company on account of the non-availability of the latest balance sheet, those equity shares shall be classified as NPI. Investments in Alternative Investment Funds ‘Regulated entities’ shall not make investments in any scheme of alternative investment funds which has downstream investments either directly or indirectly in a debtor company of the regulated entity. Debtor company of the regulated entity, shall mean any company to which the regulated entity currently has or previously had a loan or investment exposure anytime during the preceding 12 months. If an alternative investment funds scheme, in which regulated entity is already an investor, makes a downstream investment in any such debtor company, then the regulated entities shall liquidate its investment in the scheme within 30 days from the date of such downstream investment by the alternative investment funds. In case regulated entities are not able to liquidate their investments within 30 days, they shall make 100 percent provision on such investments. Provisioning shall be required only to the extent of investment by the regulated entity in the AIF scheme which is further invested by the alternative investment funds in the debtor company. Downstream investments shall exclude investments in equity shares of the debtor company of the regulated entity, but shall include all other investments, including investment in hybrid instruments. Subsidiaries and Other Financial and Non-Financial Services Investments In terms of Section 19(2) of the Banking Regulation Act, banks should not hold shares in any company except as provided in subsection (1) of that Act, whether as pledgee, mortgagee or absolute owner, of an amount exceeding 30.0% of the paid-up share capital of that company or 30.0% of its own paid-up share capital and reserves and surplus, whichever is less. Further, in terms of Section 19(3) of the Banking Regulation Act, banks should not hold shares, whether as pledgee, mortgagee or absolute owner, in any company in the management of which any managing director or manager of the bank is in any manner concerned or interested. 235 Table of Contents Banks need prior permission of the Reserve Bank of India to form a subsidiary. Banks are required to maintain an “arm’s-length” relationship with subsidiaries. Under the Reserve Bank of India guidelines, a bank’s equity investments in a subsidiary, or a financial services company (including a financial institution, a stock or other exchange or a depository) which is not a subsidiary, should not exceed 10.0% of the bank’s paid-up share capital and reserves and the total investments made in all subsidiaries and all non-subsidiary financial services companies should not exceed 20.0% of the bank’s paid-up share capital and reserves. The aggregate equity investments made in all subsidiaries and other entities engaged in financial services and non-financial services, including overseas investments shall not exceed 20.0% of the bank’s paid-up share capital and reserves. Regulations on Asset Liability Management The Reserve Bank of India in November 2012 issued guidelines on Liquidity Risk Management by Banks. It includes guidance on liquidity risk governance, measurement, monitoring and the reporting to the Reserve Bank of India on liquidity positions. Stress Testing The Reserve Bank of India in November 2012 issued guidelines on stress testing. It covers guidelines on overall objectives, governance, design and implementation of stress testing programmes. Banks are required to carry out the stress tests involving prescribed shocks at a minimum. Though a bank should assess its resilience to withstand shocks of all levels of severity indicated in the stress testing guidelines, the bank should be able to survive, at least the baseline shocks. Guidelines on Banks’ Asset Liability Management Framework – Interest Rate Risk On February 17, 2023, the Reserve Bank of India released guidelines on ‘Governance, measurement and management of Interest Rate Risk in Banking Book’. Until the date for implementation is communicated by the Reserve Bank of India, the Bank is required to submit the disclosures in the prescribed format to the Department of Regulation, Reserve Bank of India on a quarterly basis with effect from the quarter end of March 2023. Information Technology and Cyber Security The Reserve Bank of India’s guidelines on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds (G. Gopalakrishna Committee) broadly cover nine subject areas relating to Information Technology, including information technology governance, information security, information technology operations, information technology services outsourcing, information systems audit, cyber frauds, business continuity planning, customer education and legal issues. The implementation of the guidelines is to be monitored by senior management on an ongoing basis. In April 2023, the Reserve Bank of India issued Master Direction on Outsourcing of Information Technology Services. Banks have been extensively leveraging information technology and information technology enabled services to support their business models, products and services offered to their customers. In November 2023, the Reserve Bank of India issued Master Direction on Information Technology Governance, Risk, Controls and Assurance Practices. The Master Direction focuses on areas of information technology governance, information technology infrastructure & service management, information technology & information security risk management, business continuity & disaster recovery management and information systems audit. 236 Table of Contents Banks shall put in place a Risk Management framework for Outsourcing of information technology services that shall comprehensively deal with the processes and responsibilities for identification, measurement, mitigation/ management and reporting of risks associated with Outsourcing of information technology services arrangements. The Reserve Bank of India’s Cyber Security Framework in Banks requires banks to put in place a cyber-security policy containing an appropriate approach to combat cyber threats given the level of complexity of business and acceptable levels of risk. See also “Risk Factors—Risks Relating to Technology—We face security risks, including denial of service attacks, hacking, social engineering attacks targeting our colleagues and customers, malware intrusion or data corruption attempts, and identity theft that could result in the disclosure of confidential information, adversely affect our business or reputation, and create significant legal and financial exposure”. Foreign Currency Dealership The Reserve Bank of India has granted us a full-fledged authorized dealers’ license to deal in foreign exchange through our designated branches. Further, banks are permitted to hedge foreign currency loan exposures of Indian corporations in the form of interest rate swaps, currency swaps and forward rate agreements, subject to certain conditions. Our foreign exchange operations are subject to the guidelines specified by the Reserve Bank of India. Statutes Governing Foreign Exchange and Cross-Border Business Transactions Foreign exchange and cross-border transactions undertaken by banks are subject to the provisions of FEMA. Banks are required to monitor transactions of customers based on predefined rules using a risk-based approach which envisages identification of unusual transactions, undertaking due diligence on such transactions and, if confirmed as suspicious, reporting to the Financial Intelligence Unit of the respective jurisdiction. The Reserve Bank of India issues guidelines on External Commercial Borrowings (“ECB”) and Trade Credits from time to time. The Reserve Bank of India issued revised directions in January 2024 on facilities for hedging exchange risk by residents and non-residents. According to the directions, derivative products can be offered to any person resident in India or resident outside India having foreign exchange risk on an anticipated or contracted basis in line with issued guidelines. The Reserve Bank of India has permitted non-residents to undertake transactions in the rupee interest rate derivatives markets for the purpose of hedging interest rate risk or otherwise. For purposes other than hedging, non-residents (other than individuals) are permitted to take overnight index swaps transactions directly with market makers in India or by way of back-to-back arrangements through a foreign branch/parent/group entity of the market maker. In 2021, the Reserve Bank of India issued revised guidelines for offering over-the-counter derivatives. It has prescribed broad principles to be adhered to by market makers with respect to governance frameworks, introduction of new products, user dealing conduct, pricing and valuation, risk management, internal control, and internal audit. 237 Table of Contents In June 2022, the Reserve Bank of India issued Master Directions for exchange of variation margin to minimize the counterparty credit risk arising out of dealing in Non Centrally Cleared Derivatives (“NCCDs”). Further, in May 2024, the Reserve Bank of India amended the above direction and also issued directions for exchange of Initial Margin (“IM”) for NCCDs. Consolidated Supervision Guidelines Banks are required to prepare consolidated financial statements intended for public disclosure. Banks are also required to submit to the Reserve Bank of India consolidated prudential returns reporting their compliance with various prudential norms on a consolidated basis, excluding insurance subsidiaries and group companies engaged in businesses not pertaining to financial services. See also “Selected Statistical Information—Loan Concentration.” Moratorium, Reconstruction and Amalgamation of Banks The Reserve Bank of India can apply to the Government of India to suspend the business of a banking company. The Government of India, after considering the application of the Reserve Bank of India, may order a moratorium staying commencement of action or proceedings against such company for a maximum period of six months. During such period of moratorium, the Reserve Bank of India may prepare a scheme for the reconstruction of the bank or merger of the bank with any other bank only if: (a) in the public interest; (b) in the interest of the depositors; (c) in order to secure the proper management of the bank; or (d) in the interests of the banking system of the country as a whole. The Reserve Bank of India has issued guidelines on amalgamation between private sector banks and between banks and non-banking finance companies. The guidelines particularly emphasize the examination of the rationale for mergers, the systemic benefits arising from it and the advantages accruing to the merged entity. With respect to a merger between two private sector banks, the guidelines require the draft scheme of merger to be approved by the shareholders of both banks with a two-thirds majority after approval by the boards of directors of the two banks concerned. The approved scheme needs to be submitted to the Reserve Bank of India for valuation and approval in accordance with the Banking Regulation Act. With respect to a merger of a bank and a nonbanking company, where the non-banking company is proposed to be amalgamated with the bank, the banking company has to obtain the approval of the Reserve Bank of India after the scheme of amalgamation is approved by its board and the board of the non-banking finance company, but before it is submitted to the tribunal for approval. See also “—Other Statutes—Competition Act.” Other Statutes Companies Act Companies in India, including banks, in addition to the sector-specific statutes and the regulations and guidelines prescribed by the sectoral regulators, are required to comply with relevant provisions of the Companies Act 2013. The Companies Act includes provisions to make independent directors more accountable, improve corporate governance practices and make corporate social responsibility mandatory for companies above a certain size and require them to spend a minimum of 2.0% of the average net profits of the preceding three years for corporate social responsibility initiatives. Any shortfall in this regard must be explained in the annual report. Any excess amount spent over and above the requirement for that year may be set off against the requirement to spend for succeeding financial years. Any unspent amount in case of an ongoing project has to be transferred to the Unspent Corporate Social Responsibility Account and spent as stipulated under the Companies Act, 2013 and in other cases transfer such unspent amount to the fund specified under Schedule VII of the Companies Act within the stipulated period. 238 Table of Contents Competition Act The Competition Act, 2002 established the Competition Commission of India with the objective of promoting competition, preventing unfair trade practices and protecting the interest of consumers. The Competition Act, 2002 prohibits anti-competitive agreements and abuse of market dominance, and requires the approval of the Competition Commission for mergers and acquisitions involving companies above a certain size. Secrecy Obligations The obligations of banks relating to maintaining secrecy arise out of common law principles governing relationships with customers. Banks cannot disclose any information to third parties except under clearly defined circumstances. The following are the exceptions to this general rule: · where disclosure is required to be made under any law; · where there is an obligation to disclose to the public; · where we need to disclose information in its interest; and · where disclosure is made with the express or implied consent of the customer. Banks are also required to disclose information if ordered to do so by a court. The Reserve Bank of India may, in the public interest, publish the information obtained from the bank. Under the provisions of the Banker’s Books Evidence Act, a copy of any entry in a bankers’ book, such as ledgers, day books, cash books and account books certified by an officer of the bank may be treated as prima facie evidence of the transaction in any legal proceeding. Regulations and Guidelines of the Securities and Exchange Board of India The Securities and Exchange Board of India (“SEBI”) was established to protect the interests of investors in securities and to promote the development of and to regulate the Indian securities market. We and our subsidiaries and affiliates are subject to SEBI’s regulations for public capital issuances, private placements as well as underwriting, custodian, designated depository participant, merchant banker, depository participant, investment advisory, private equity, trading member, clearing member, asset management, portfolio management, banker to the issue, research analyst and debenture trusteeship activities. These regulations provide for our/our subsidiaries’ registration with SEBI for each of these activities, functions and responsibilities. We and our subsidiaries are required to adhere to codes of conduct applicable to these activities. Income Tax Benefits As a banking company, the Bank is entitled to certain tax benefits under the Indian Income Tax Act. We are allowed a deduction of up to 20.0% of the profits derived from the business of providing long-term finance (defined as loans and advances extended for a period of not less than five years) for industrial or agricultural development, development of infrastructure facility in India or development of housing in India, computed in the manner specified under the Indian Income Tax Act and carried to a Special Reserve Account. The deduction is allowed subject to the aggregate of the amounts transferred to the Special Reserve Account for this purpose from time to time not exceeding twice our paid-up share capital and general reserves. The amount withdrawn from such a Special Reserve Account would be chargeable to income tax in the year of withdrawal, in accordance with the provisions of the Indian Income Tax Act. In accordance with the guidelines issued by the Reserve Bank of India in December 2013, banks are required to create deferred tax liability on the special reserve on a prudent basis. The deferred tax liability is permitted to be charged through the profit and loss account. In India, while computing taxable income, provision on non-performing loans is allowed as a deduction from income only up to 8.5% of the total income and 10.0% of the aggregate average advances made by the rural branches of the bank. The balance of the provisions, which comprises a significant majority of the provision, is allowed as a deduction from the taxable income at the time of write-off of the loans. 239 Table of Contents Regulations Governing Insurance Companies The Insurance (Amendment) Act, 2021, was passed by the Indian Parliament and notified in 2021. The Act, amongst other things, raised the foreign investment limit in the insurance sector from 49.0% to a composite limit of 74.0%. An earlier amendment to the law eliminated the requirement that promoters of an insurance company reduce their stake to 26.0% after 10 years. ICICI Prudential Life Insurance Company Limited and ICICI Lombard General Insurance Company Limited, our subsidiary/associate and affiliate offering life insurance and general insurance products, respectively, are subject to the provisions of the Insurance Act, 1938 and subsequent rules and amendments notified, and the various regulations prescribed by the Insurance Regulatory and Development Authority of India (“IRDAI” or “Authority”). These regulate and govern, among other things, registration as an insurance company, investment, solvency margin requirements, licensing/ registration of insurance agents and other insurance intermediaries, advertising, sale and distribution of insurance products and services and protection of policyholders’ interests. Regulations Governing Mutual Funds ICICI Prudential Asset Management Company Limited (the “AMC”), our asset management subsidiary, is regulated by SEBI for its asset management activity. The AMC is primarily governed by SEBI (Mutual Funds) Regulations 1996, SEBI (Portfolio Managers) Regulations, 2020 and SEBI (Alternative Investment Funds) Regulations 2012 and circulars issued under the respective regulations. These regulations, among other things, provides for the requirements of registration, restrictions on business activities of asset management companies, process/requirements for launching funds/portfolios, requirements for valuation policies and disclosures and reporting requirements. Further, the respective regulations provide for investment restrictions applicable to the funds/portfolios. Regulations Governing International Operations Our international operations are governed by regulations in the countries in which we have a presence. Further, the Reserve Bank of India has notified that foreign branches/foreign subsidiaries of Indian banks/AIFIs can deal in financial products, including structured financial products, which are not available or are not permitted by the Reserve Bank in the domestic market without prior approval of the Reserve Bank of India, subject to compliance with certain conditions. Overseas Banking Subsidiaries Our wholly owned subsidiary in the United Kingdom, ICICI Bank UK PLC, is authorized and regulated by the Prudential Regulation Authority and Financial Conduct Authority. Our subsidiary in the United Kingdom has seven branches located in the United Kingdom and one branch in mainland Europe, located in Eschborn, Germany. Our wholly owned subsidiary in Canada, ICICI Bank Canada (a Schedule II Bank in Canada), is regulated by the Office of the Superintendent of Financial Institutions. Our subsidiary in Canada has 9 branches and 5 Customer Service Centers in Halifax, Kitchener, Ottawa, Winnipeg and Edmonton. 240 Table of Contents Offshore Branches Our overseas branches in Singapore, Bahrain, Hong Kong, the Dubai International Financial Centre, China and New York are regulated by the Monetary Authority of Singapore, Central Bank of Bahrain, Hong Kong Monetary Authority, Dubai Financial Services Authority, National Financial Regulatory Administration, Federal Reserve Board and the Office of the Comptroller of the Currency respectively. In addition, we also have an Offshore Banking Unit located in the Santacruz Electronic Exports Promotion Zone, Mumbai and an IFSC Banking Unit at Unit No 408, 4th Floor, Brigade International Financial Centre, GIFT Multi Services SEZ, Gandhinagar 382 344, Gujarat, India. In 2021, the Reserve Bank of India released a circular regarding infusion of capital in overseas branches and subsidiaries and retention/repatriation/transfer of profits in these centers by banks incorporated in India. As per the circular, prior approval of the Reserve Bank of India is not required for capital infusion/ transfers (including retention/repatriation of profits) for banks which meet the regulatory capital requirements (including capital buffers). Banks shall however seek the approval of their boards for the same. Banks are required to report all such instances of infusion of capital and retention/transfer/repatriation of profits in overseas branches and subsidiaries to the Reserve Bank of India. Regulations Governing Banking Units in International Financial Services Centres in India As per guidelines issued by the Reserve Bank of India, public and private sector banks dealing in foreign exchange are permitted to set up one banking unit in each international financial services center in India. Banks need prior approval of the Reserve Bank of India before opening a banking unit, and this will be treated on par with a foreign branch of an Indian bank. In 2020, the Government established the International Financial Services Centres Authority, a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre. In 2020, the International Financial Services Centres Authority announced regulations for banking and investment activities in the IFSC. Banking units were permitted to undertake additional activities, subject to compliance with the terms and conditions or guidelines as specified by the International Financial Services Centres Authority. With a view to further enhancing ‘ease of doing banking business’, the International Financial Services Centres Authority has issued the International Financial Services Centres Authority Banking Handbook which is a compendium of directions of the Authority to the IBU operating in GIFT IFSC and to the banking companies incorporated in India or outside India looking to set up an IBU as a branch in GIFT IFSC. The Handbook is organised in three components, including: (a) General directions, (b) Conduct of Business directions, and (c) Prudential Directions applicable to IBUs. The provisions of International Financial Services Centres Authority Banking Handbook have been effective since January 1, 2022. The respective handbooks are updated from time to time by the International Financial Services Centres Authority to incorporate amendments. Representative Offices We have representative offices in various jurisdictions that are regulated by the respective regulatory authorities. Foreign Account Tax Compliance Act The Government of India entered into a Model 1 inter-governmental agreement with respect to the Foreign Account Tax Compliance Act with the United States. ICICI Bank is registered with the Internal Revenue Service in the United States. In addition, the United States has entered into Model 1 inter-governmental agreements with respect to the Foreign Account Tax Compliance Act with the United Kingdom, Canada, Germany, Singapore, the United Arab Emirates, Bahrain and reached a similar agreement in substance with China, Malaysia and Indonesia, and a Model 2 inter-governmental agreement with respect to the Foreign Account Tax Compliance Act with Hong Kong. ICICI Bank has taken measures to comply with the terms of applicable inter-governmental agreements with respect to the Foreign Account Tax Compliance Act and any regulations issued thereunder. 241 Table of Contents Common Reporting Standards The Common Reporting Standard formally referred to as the Standard for Automatic Exchange of Financial Account Information, is an information standard for the automatic exchange of information, developed in the context of the Organization for Economic Cooperation and Development. In India requirements under the Foreign Account Tax Compliance Act/Common Reporting Standard are implemented by the Central Board of Direct Taxes. The common reporting standard has been adopted by the United Kingdom, Canada, Germany, Hong Kong, Singapore, Malaysia, Indonesia, China, the United Arab Emirates and Bahrain. 242 Table of Contents Exchange Controls Restrictions on Conversion of Rupees There are restrictions on the conversion of rupees into dollars. The Foreign Exchange Management Act, 1999 has substantially eased the restrictions on current account transactions, with a few exceptions. However, the Reserve Bank of India continues to exercise control over capital account transactions (i.e., those which alter the assets or liabilities, including contingent liabilities, of persons). Issuance of Depositary receipts, Restrictions on Sale of the Equity Shares underlying ADSs and Repatriation of Sale Proceeds The Securities and Exchange Board of India, via circular dated October 10, 2019, has provided a framework for the issuance of depositary receipts. As per the circular, only a company incorporated in India and listed on a recognized stock exchange in India may issue permissible securities or their holders may transfer permissible securities, for the purpose of issuing depositary receipts subject to compliance with the eligibility criteria defined by SEBI. SEBI has further issued operational guidelines dated October 1, 2020, for monitoring foreign holdings in depositary receipts. Pursuant to the operational guidelines, every listed company shall appoint one Indian depository as the designated depository for the purposes of monitoring such limits. Subsequently, SEBI issued a circular dated December 18, 2020, according to which non-resident indians shall neither subscribe to any further issue nor make any further acquisition of depositary receipts except issue of depositary receipts to non-resident Indians pursuant to share based employee benefit schemes or pursuant to bonus issue or rights issue. The Listed Company has the obligation to identify the non-resident Indian holders who are issued depositary receipts in terms of employee benefit scheme and provide such information to the designated depository for monitoring limits. There are no end-use restrictions on American Depositary Receipt issue proceeds except for the real estate sector and stock markets, in which investment of ADR issue proceeds is prohibited. An ADR holder is entitled to hold or transfer ADRs or redeem them into underlying ordinary shares with the option to continue holding ordinary shares. ADR holders have the same rights in respect of bonus and rights issues as any ordinary shareholder of the company. ADSs issued by Indian companies to non-residents have free convertibility outside India. Under current Indian laws there is a general permission for the sale or transfer of equity shares underlying ADSs obtained after conversion of ADRs by a person not resident in India to a resident of India if the sale is proposed to be made through a recognized stock exchange or when the underlying shares are being sold in terms of an offer made under Securities Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. For all other cases of sale of shares underlying the ADRs, permission of the Reserve Bank of India is required. If a sale of securities has taken place in terms of the rules laid down by the government, Reserve Bank of India guidelines and other applicable regulations, the sale proceeds may be freely remitted as long as (i) the securities were held on repatriation basis, (ii) either the securities has been sold in compliance with the pricing guidelines issued by the Reserve Bank of India or the Reserve Bank of India’s approval has been obtained in other cases and (iii) a no objection or tax clearance certificate from the income tax authority has been obtained. The issuance of fresh depositary receipts and any changes or modifications in the existing terms and conditions of ADR/GDR should be in accordance with DR Scheme, 2014 or/and be subject to approval or clarification from the Reserve Bank of India or the SEBI. 243 Table of Contents Investment in depositary receipts by a person resident outside India should be in terms of schedule IX of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 dated October 17, 2019. 244 Table of Contents Restriction on Foreign Ownership of Indian Securities The Government of India strictly regulates ownership of Indian companies by foreigners. Foreign investment in securities issued by Indian companies, including the equity shares represented by ADSs, is governed by the Foreign Exchange Management Act, 1999, and rules and regulations thereunder, as amended from time to time (“Act”). The Act authorizes the Reserve Bank of India to impose restrictions on inflow or outflow of foreign exchange and provides that certain transactions cannot be carried out without the general or special permission of the Reserve Bank of India or relevant departments of the Government of India. The Foreign Exchange Management Act, 1999 has eased restrictions on current account transactions. However, the Reserve Bank of India continues to exercise control over capital account transactions (i.e., those which alter the assets or liabilities, including contingent liabilities, of persons). The Government has laid down rules and the Reserve Bank of India has issued regulations under the Foreign Exchange Management Act, 1999 to regulate the various kinds of capital account transactions, including certain aspects of the purchase and issuance of shares of Indian companies. The issue or transfer of any security of an Indian company by a person resident outside of India, foreign investment in equity instruments (equity shares, compulsorily convertible debentures, compulsorily convertible preference shares and share warrants) as well as issuance of rupee denominated shares for issuing ADSs, are all governed by applicable rules and regulations issued under the Foreign Exchange Management Act, 1999, the Depository Receipts Scheme 2014 and by the Securities and Exchange Board of India, and may be made only in accordance with the terms and conditions specified under such rules and regulations. The foreign investment limit in Indian companies includes, in addition to foreign direct investments, investment by Foreign Portfolio Investors, Non-Resident Indians, Foreign Currency Convertible Bonds, American Depository Receipts, Global Depository Receipts and convertible preference shares held by foreign entities. The Foreign Exchange Management (Non-debt Instruments) Rules, 2019, as amended (“Rules”) provide for, among other things, the following restrictions on foreign ownership for private sector banks: · Foreign investors (including indirect foreign investment made by foreign portfolio investors) may own up to 74.0% of the equity share capital of a private sector bank in India subject to rules and regulations issued by the Government of India and the Reserve Bank of India from time to time. While foreign investment up to 49.0% in private sector banks does not require any specific approval, foreign investment beyond 49.0% and up to 74.0% requires prior approval of the Government of India, unless such investments are otherwise exempted from the requirement for approval. Investments by foreign investors exempted from the requirement for Government of India approval include aggregate foreign portfolio investment (as defined in the Rules) up to 49.0% of the paid-up capital on a fully diluted basis or a sectoral cap (whichever is lower) that does not result in the transfer of ownership or control of the resident Indian company from resident Indian citizens or transfer of ownership or control to persons resident outside India, and other investments by a person resident outside India shall be subject to the conditions of Government approval and compliance of sectoral conditions as laid down in the Rules. The Rules allow Indian companies to freely issue rights and bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap and fulfilling certain conditions laid out in the applicable laws and statute. The aggregate foreign investment limit of 74.0% includes investments by way of foreign direct investments, ADSs/Global Depositary Receipts (Depository Receipts), Foreign Currency Convertible Bonds (mandatorily and compulsorily convertible) and investment under the Portfolio Investment Scheme by foreign portfolio investors and non-resident Indians/Overseas Citizens of India, and also includes shares acquired by subscription to private placements and public offerings and acquisition of shares from existing shareholders. At least 26.0% of the paid-up capital would have to be held by Indian residents at all times, except in regard to a wholly owned subsidiary of a foreign bank. 245 Table of Contents · Additionally, in the case of proposals requiring prior approval of the Government of India, those proposals involving total foreign equity inflow of more than Rs. 50.0 billion, shall require approval of the Cabinet Committee on Economic Affairs. · An individual non-resident Indian’s holding is restricted to 5.0% of the total paid-up share capital both on repatriation and non-repatriation basis and the aggregate limit of investment by all non-resident Indians cannot exceed 10.0% of the total paid up capital both on repatriation and non-repatriation basis. However, non-resident Indian holdings can be allowed up to 24.0% of the total paid-up capital, both on repatriation and non-repatriation basis, subject to a special resolution to this effect passed by the shareholders of the bank. · Aggregate holding by a person along with his relatives, associate enterprises and persons acting in concert with him, whether directly or indirectly, beneficial or otherwise, of shares or voting rights, of 5% or more of the paid-up share capital or voting rights (“major shareholding”) in a banking company shall require prior approval of the Reserve Bank of India pursuant to Reserve Bank of India (Acquisition and Holding of Shares or Voting Rights in Banking Companies) Directions dated January 16, 2023. The persons from Financial Action Task Force non-compliant jurisdictions shall not be permitted to acquire major shareholding in a banking company. However, existing major shareholding by persons from Financial Action Task Force non-compliant jurisdiction shall be continued, provided that there shall not be any further acquisition without prior approval of the Reserve Bank of India. If aggregate holding of a person falls below 5%, fresh Reserve Bank of India approval will be required for raising it again to 5% or above. Additionally, the ceiling on voting rights for a single shareholder is 26.0% of the total voting rights of all shareholders of the bank. · A permissible holder may purchase or sell equity shares of a public Indian company which is listed or to be listed on an International Exchange under Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme. Under the Portfolio Investment Scheme: i. Foreign portfolio investors, as referred in Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, may hold share capital up to sectoral cap applicable to such Indian company. However, an Indian company may, with the resolution of its board of directors and a special resolution: (i) decrease the aggregate limit before March 31, 2020 to a lower threshold of 24.0% or 49.0% or 74.0% or (ii) increase the aggregate limit to 49.0% or 74.0% or the sectoral cap or any statutory ceiling. However, once the aggregate limit is increased, the limit cannot be reduced later. No single foreign portfolio investor may own 10.0% or more of total paid-up equity capital on a fully diluted basis on behalf of itself or it’s investor group. ii. Overseas corporate bodies are not permitted to invest under the Portfolio Investment Scheme, although they may continue to hold investments that have already been made under the Portfolio Investment Scheme until such time as these investments are sold on the stock exchange. Overseas corporate bodies are derecognized as a class of investor entity by the Reserve Bank of India under various routes and schemes under the foreign exchange rules and regulations. 246 Table of Contents Foreign Portfolio Investment Scheme – Purchase of shares or convertible debentures or warrants The Securities and Exchange Board of India issued the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, as amended from time to time. Under the foreign portfolio investment regime, foreign institutional investors, sub-accounts and qualified foreign investors were merged into a new investor class called as foreign portfolio investors. A foreign portfolio investor registered with the Securities and Exchange Board of India can purchase shares or convertible debentures or warrants of an Indian company. The total holding by each foreign portfolio investor or its investor group shall be less than 10.0% of the total paid-up equity capital on a fully diluted basis or less than 10.0% of the paid-up value of each series of debentures or preference shares or share warrants issued by an Indian company. If the total investment exceeds the aforementioned threshold limit, the foreign portfolio investor shall divest the excess holding within five trading days from the date of settlement of the trades resulting in the breach. In the event of failure to do so, the entire investment in the company by such foreign portfolio investors including its investor group shall be considered as Foreign Direct Investment and the foreign portfolio investor and its investor group shall not make further portfolio investment in that company. The clubbing of investment limit of foreign portfolio investors is based on common ultimate beneficial ownership. Except for the exemptions provided in these regulations, multiple entities registered as foreign portfolio investors and directly or indirectly, having common ownership of more than 50.0% or common control, shall be treated as part of the same investor group and the investment limits of all such entities shall be clubbed at the investment limit as applicable to a single foreign portfolio investor. Transfer of equity instruments by a person resident outside India A person resident outside India (other than a non-resident Indian/overseas citizen of India or a former overseas corporate body) may transfer by way of sale or gift the equity instruments of an Indian company or units held by him or it to any person resident outside India provided that: i. prior government approval shall be obtained for any transfer in case the company is engaged in a sector which requires government approval; and ii. where the equity instruments are held by the person resident outside India on a non-repatriable basis, the transfer by way of sale where the transferee intends to hold the equity instruments on a repatriable basis, shall be in compliance with and subject to the adherence to entry routes, sectoral caps or investment limits, as specified in Rules and attendant conditionalities for such investment, pricing guidelines, documentation and reporting requirements for such transfers, as may be specified by the Reserve Bank of India from time to time. A person resident outside India holding equity instruments of an Indian company or units: i. may transfer the same to a person resident in India by way of gift; ii. may sell the same to a person resident in India on a recognized stock exchange in India through a registered broker in the manner prescribed by Securities and Exchange Board of India; or iii. may sell the same to a person resident in India, subject to the adherence to pricing guidelines, documentation and reporting requirements for such transfers as may be specified by the Reserve Bank of India in consultation with the Government from time to time. The Reserve Bank of India guidelines relating to acquisition by purchase or otherwise of shares or voting rights of a banking company, if such acquisition results in any person owning or controlling 5.0% or more of the paid-up share capital or voting rights of the banking company, are also applicable to foreign investment, whether directly or indirectly, beneficial or otherwise. For more details on the Reserve Bank of India guidelines relating to acquisition and holding of shares or voting rights in banking companies, see “Supervision and Regulation—Ownership Restrictions”. 247 Table of Contents Reporting of foreign investments The Reserve Bank of India has issued guidelines on reporting of foreign investments with the objective of integrating different reporting structures for foreign investments in India. As per the guidelines, a Single Master Form must be filed online. The Single Master Form, as amended from time to time, provides a facility for reporting total foreign investments in an Indian entity as well as investments by persons residing outside India in an investment vehicle. Indian entities not complying with this pre-requisite will not be able to receive foreign investments (including indirect foreign investments) and will be deemed non-compliant under Foreign Exchange Management Act, 1999 and regulations made thereunder, as amended from time to time. All the reporting prescribed under “Foreign Investment in India”, except if specifically stated otherwise, is required to be done through the Single Master Form, as amended from time to time, available on the Foreign Investment Reporting and Management System platform of the Reserve Bank of India. The Reserve Bank of India through its circular dated January 4, 2023, advised that the forms submitted with respect to reporting of foreign investment in Single Master Form on Firms Portal will be auto-acknowledged and the Authorised Dealer Category-I banks shall verify the same within five working days based on the uploaded documents, as specified. Further, in case of forms filed with delayed reporting of less than or equal to three years, the Authorised Dealer Category-I banks will approve the same, subject to payment of late submission fee. For delayed reporting greater than three years, the Authorised Dealer Category-I bank will approve the forms subject to compounding of contravention. Under the erstwhile provisions, in case of delayed reporting, the case was supposed to be referred to Reserve Bank of India, whereas basis the recent amendment, powers have been given to Authorised Dealer to approve delayed reporting subject to payment of late submission fees/compounding, as the case may be. Currently, an Indian entity or an investment vehicle making a downstream investment in another Indian entity which is considered as indirect foreign investment for the investee Indian entity in terms of Foreign Exchange Management (Non-Debt Instrument) Rules, 2019, shall notify the Secretariat for Industrial Assistance, DPIIT, about such investment (including modality of investment in new/existing ventures) within 30 days of such investment, even if equity instruments have not been allotted. Such entity or investment vehicle shall also file Form DI with the Reserve Bank of India within 30 days from the date of allotment of equity instruments. Issue of ADSs Indian companies are permitted to raise foreign currency resources through the issuance of shares represented by ADSs to foreign investors under the Depository Receipts Scheme, 2014, as amended from time to time. Such issuance is subject to sectoral cap, entry route, minimum capitalization norms, pricing norms, among other things, as applicable as per the rules and regulations established by the Government of India and/or Reserve Bank of India from time to time in this regard. An Indian company issuing ADSs must comply with certain reporting requirements specified by the Reserve Bank of India. An Indian company may issue ADSs if it is eligible to issue shares to persons resident outside India under the foreign direct investment scheme, and shall not exceed the limit on foreign holding of such eligible securities under the extant Foreign Exchange Management Act, 1999 and the rules made thereunder, as amended from time to time. Similarly, an Indian company which is not eligible to raise funds from the Indian capital markets, including a company which has been restricted from accessing the securities market by the Securities and Exchange Board of India, will not be eligible to issue ADSs. As per the Depository Receipts Scheme, 2014, if the issue or purchase of permissible securities underlying the depository receipts does not require approval under the Foreign Exchange Management Act, 1999, no Government of India approval will be required for issuance, purchase or holding of such depository receipts. Overseas corporate bodies as defined under applicable rules, which are not eligible to invest in India and entities prohibited to buy, sell or deal in securities by the Securities and Exchange Board of India are not eligible to subscribe to ADSs issued by Indian companies. 248 Table of Contents For transfer of ADSs, investors may need to seek specific approval from Government of India on a case-by-case basis. However, Notwithstanding the foregoing, if any investor were to withdraw its equity shares from the ADS program, its investment would be subject to the general restrictions on foreign ownership noted above and may be subject to the portfolio investment restrictions. Secondary purchases of securities of a banking company in India by foreign direct investors or investments by non-resident Indians, and foreign portfolio investors above the ownership levels set forth above require the Indian government’s approval on a case-by-case basis. It is unclear whether similar case-by-case approvals of ownership of equity shares withdrawn from the depositary facility by non-resident Indians, overseas corporate bodies and foreign portfolio investors would be required. Furthermore, if an investor withdraws equity shares from the ADS program and its direct or indirect holding in a private Indian bank is equal to or exceeds 25.0% of its total equity, or when such holding is or exceeds 25.0% of the total equity and thereafter such investor acquires additional 5.0% equity within any financial year, such investor may be required to make a public offer for acquiring shares of the remaining shareholders under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011, as amended from time to time. For more details on the Reserve Bank of India guidelines relating to acquisition by purchase or otherwise of shares of a private bank, see “Supervision and Regulation—Ownership Restrictions”. Depository Receipts Scheme, 2014 An eligible person may now, issue or transfer eligible securities to a foreign depository for the purpose of issuance of depository receipts in terms of Depository Receipts Scheme, 2014, as amended from time to time. However, depository receipts issued under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 shall be deemed to have been issued under the corresponding provisions of the Depository Receipts Scheme, 2014. 249 Table of Contents Dividends Under Indian law, a company pays dividends upon a recommendation by its Board of Directors and approval by a majority of the shareholders at the annual general meeting of shareholders held within six months from the end of each fiscal year. The shareholders have the right to decrease but not increase the dividend amount recommended by the Board of Directors. Dividends may be paid out of the company’s profits for the fiscal year for which the dividend is declared or out of undistributed profits of prior fiscal years, after excluding amount representing unrealized gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value. Dividends can also be paid by a company in the interim period, termed “interim dividend” which does not require the approval of the shareholders unless it is combined with the final dividend being recommended by the Board of Directors. The Reserve Bank of India has stipulated that banks may declare and pay dividend out of the profits from the relevant accounting period, without prior approval of the Reserve Bank of India if they satisfy the minimum prudential requirements and subject to the prudential cap on dividend payout ratio prescribed in the guidelines issued in this regard by the Reserve Bank of India. See also “Supervision and Regulation—Restrictions on Payment of Dividends”. Equity shares issued by us are pari passu in all respects including dividend entitlement. We have paid dividends consistently every year from fiscal 1996, the second year of our operations, other than for fiscal 2020, as the Board of Directors did not recommend any dividend in view of the Reserve Bank of India circular ‘Declaration of dividends by banks (Revised)’ dated April 17, 2020, directing banks not to make any dividend payouts from the profits pertaining to fiscal 2020, with the intent that banks conserve capital to retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty caused by COVID-19. The following table sets forth, for the periods indicated, the dividend per equity share and the total amount of dividends paid out on the equity shares during the fiscal year by ICICI Bank, each exclusive of dividend tax. This may be different from the dividend declared for the year. Dividend per equity share Total amount of dividends paid (in Rs.) (Rs. in billion) Dividend paid during the fiscal year 2020 1.00 6.4 2021 Nil Nil 2022 2.00 13.9 2023 5.00 34.8 2024 8.00 56.0 From fiscal 2021, dividend income is taxable in the hands of shareholders and companies are not liable to pay dividend distribution tax on distributed profits. For fiscal 2024, the Board of Directors has proposed a dividend, of Rs. 10.00 per equity share, which will be paid during fiscal 2025 after approval by the shareholders in the forthcoming annual general meeting. Future dividends will depend upon our revenues, cash flow, financial condition, the regulations of the Reserve Bank of India and other factors. Owners of ADSs will be entitled to receive dividends payable in respect of the equity shares represented by such ADSs. The equity shares represented by ADSs rank pari passu with existing equity shares. At present, we have equity shares issued in India and equity shares represented by ADSs. 250 Table of Contents Taxation Indian Tax The following discussion of material Indian tax consequences to investors in ADSs and equity shares who are not resident in India, regardless of whether such investors are of Indian origin or not (each, a “non-resident investor”), is based on the provisions of the Indian Income-tax Act, 1961 (the Income Tax Act), including the special tax regime for ADSs contained in section 115AC of the Income Tax Act, which has been extended to cover additional ADSs that an investor may acquire in a merger or restructuring of the company, and certain regulations implementing the section 115AC regime. The Income-tax Act is amended every year by the Finance Act of the relevant year. Some or all of the tax consequences described herein may be amended or modified by future amendments to the Income-tax Act. This summary is not intended to constitute a complete analysis of the tax consequences under Indian law of the acquisition, ownership and sale of ADSs and equity shares by non-resident investors. Holders should, therefore, consult their own tax advisers regarding the tax consequences of such acquisition, ownership and sale, including the tax consequences under Indian law, the law of the jurisdiction of their residence, any tax treaty between India and their country of residence, and in particular the application of the regulations implementing the section 115AC regime. Residence For the purposes of the Income-tax Act, an individual is a resident of India during any fiscal year if such individual: (a) is in India in that year for 182 days or more or (b) is in India for a period or periods aggregating 365 days or more during the four years preceding that fiscal year and periods aggregating 60 days or more in that fiscal year. The period of 60 days is replaced with 182 days (where an individual is having income in India other than foreign source less than Rs. 1.5 million)/replaced with 120 days (where an individual is having income in India other than foreign source more than Rs. 1.5 million) in the case of an Indian citizen or person of Indian origin who, being resident outside India, comes on a visit to India during the fiscal year. The period of 60 days is replaced with 182 days in the case of: · an Indian citizen who leaves India for purposes of employment or · as a member of the crew of an Indian ship during the fiscal year. A company is resident in India in any fiscal year if it is an Indian company or its place of effective management in that year is in India. A firm or other association of persons is resident in India except where the control and the management of its affairs are situated wholly outside India. Taxation of Distributions As per provision of the income tax laws, dividend received in respect of ADS will be taxable at the rate of 10% and payer of the dividend would be required to deduct tax at the rate of 10%. Taxation on Exchange of ADSs The receipt of equity shares upon the surrender of ADSs by a non-resident investor would not give rise to a taxable event for Indian tax purposes. 251 Table of Contents Taxation on Sale of ADSs or Equity Shares Any transfer of ADSs outside India by a non-resident investor to another non-resident investor will not give rise to Indian capital gains tax in the hands of the transferor. Gains on the transfer of ADSs by Foreign Institutional Investors to an Indian resident will be subject to capital gains tax. Subject to any relief under any relevant double taxation treaty, gain arising from the sale of an equity share will generally give rise to liability for Indian income tax in the hands of the transferor and tax will be required to be withheld at source. Gains will either be taxable as capital gains or as business income, depending upon the nature of holding. Where the equity share has been held for more than 12 months (measured from the date on which the request for redemption of the ADS was made), the resulting long-term capital gains will be taxable as per the provision of the Income Tax Act, at the rate of 10% (plus the applicable surcharge and education cess) under the provision of the Income Tax Act, if the total long-term capital gain exceeds Rs. 0.1 million and the shares are traded on a recognized stock exchange and the securities transaction tax, described below, is paid on such sale and purchase. For computing capital gains relating to the acquisition made before February 1, 2018, the cost of acquisition shall be higher of actual cost of acquisition or lower of price of equity shares quoted on stock exchange on January 31, 2018 (if no trading then immediately preceding day) or sale price. Further, an additional requirement for payment of securities transaction tax on conversion of ADSs to equity shares has been relaxed subject to certain conditions. If the equity share has been held for 12 months or less, the resulting short-term capital gains will be taxable at a tax rate of 15% (plus the applicable surcharge and education cess). This rate of tax is applicable provided the gains are treated as capital gains and provided the shares are sold on recognized Indian stock exchanges and are subject to securities transaction tax. In other cases, the rate of tax applicable under the provisions of the Income-tax Act varies, subject to a maximum rate of 40% (plus the applicable surcharge and education cess). The actual rate depends on a number of factors, including without limitation the nature of the non-resident investor. The above rate may be reduced under the provisions of the double taxation treaty entered into by the Government of India with the country of residence of the non-resident investors. The double taxation treaty between the United States and India (the “Treaty”) does not provide U.S. residents with any relief from Indian tax on capital gains i.e. it will be taxable as per the local laws of India. Tax on long-term and short-term capital gains, if payable, as discussed above, upon a sale of equity shares, (a) To be deducted at source by the person responsible for paying the non-resident, in accordance with the relevant provisions of the Income Tax Act. As per the provisions of the Income Tax Act, any income by way of capital gains payable to non-residents may be subject to withholding of tax at the rate under the Income Tax Act or the double taxation treaty, whichever is more beneficial to the assessee, unless a lower withholding tax certificate is obtained from the tax authorities. (b) To get the benefit of the applicable double taxation treaty, the non-resident investor must furnish a certificate of his or her residence in a country outside India and such other documents as may be prescribed under the Act such as valid Permanent Account Number issued by the Indian Income Tax authorities or tax identification number issued by the Income Tax authorities country of tax residence along with certain other details such as name, e-mail ID, contact number, address etc. 252 Table of Contents Where Permanent Account Number is submitted, it should be linked to Aadhaar (applicable in case of individuals if Aadhaar is obtained in India) and investor should have filed his income tax returns in India in past one year, otherwise tax will be deducted at the higher rate which may go upto 20% or more. (c) The non-resident will be entitled to a certificate evidencing such tax deduction in accordance with the provisions of the Income Tax Act. (d) However, as per provisions of the Income Tax Act, no deduction of tax shall be made from capital gain arising from transfer of securities, payable to a Foreign Institutional Investor. For purposes of determining the amount of capital gains arising on a sale of an equity share for Indian tax purposes, the cost of acquisition of an equity share received upon the surrender of an ADS will be the price of the share prevailing on the BSE Limited or the National Stock Exchange of India Limited on the date a request for such redemption was made. The holding period of an equity share received upon the surrender of an ADS will commence on the date on which request for such redemption of the ADS was made. A sale/purchase of equity shares entered into on a recognized stock exchange in India, whether settled by actual delivery or transfer, will be subject to the securities transaction tax in the hands of purchaser and seller at the rate of 0.1% on the value of the transaction at the time of sale. However, when settlement is done other than by actual delivery or transfer, it will be subject to the securities transaction tax in the hands of seller at the rate of 0.025% on the value of the transaction at the time of sale. Rights Distributions to non-resident investors of additional ADSs or equity shares or rights to subscribe for equity shares made with respect to ADSs or equity shares are not subject to Indian income tax in the hands of the non-resident investor. In case of capital gains derived from the extinguishment of rights outside India by a non-resident investor that is not entitled to exemption under a tax treaty, to another non-resident investor, the sale may be deemed by the Indian tax authorities to be situated within India (as our situs is in India), in which case, any gains realized on the sale of the rights will be subject to Indian capital gains taxation, in the manner discussed above under “—Taxation on Sale of ADSs or Equity Shares”. Bonus The holding period in case of bonus shares will commence from the date of allotment of such bonus shares. The cost of acquisition of bonus shares acquired before January 31, 2018 will be the fair market value of the bonus shares as on January 31, 2018 but shall not exceed the sales price. The cost of acquisition of bonus shares acquired after January 31, 2018 will be considered as nil. General Anti Avoidance Rule The provisions for General Anti Avoidance of Tax are effective from April 1, 2017. The powers to invoke provisions under General Anti Avoidance of Tax are bestowed upon the Indian Income Tax Authorities if they allege that the primary motive of a particular transaction or arrangement is to obtain a tax advantage. If provisions under General Anti Avoidance of Tax are invoked by tax authorities, then a tax benefit or benefit under the tax treaty may be denied. 253 Table of Contents Stamp Duty Pursuant to an amendment to the Indian Stamp Act, 1899 effective July 1, 2020, stamp duty is payable on any issue/ transfer of equity shares in non-physical form. Our equity shares are compulsorily delivered in non-physical form. Upon the issuance of the equity shares underlying ADSs, we, are required to pay a stamp duty of 0.005% of the total market value of the equity shares issued. A transfer of ADSs is not subject to stamp duty under Indian law. However, transfer of equity shares (on delivery basis) by a non-resident investor is subject to stamp duty at the rate of 0.015% of the market value of the equity shares on the trade date. Such stamp duty is payable, (i) by the buyer in case the transfer of equity shares is through a stock exchange and (ii) by the seller in case the transfer of equity shares is other than through a stock exchange or is through a depository or is other than through a depository. Other Taxes At present, there are no taxes on wealth, gifts or inheritance which apply to the ADSs or underlying equity shares. Goods and Services Tax Goods and Services Tax is a single comprehensive tax levied on the manufacture, sale and consumption of goods and services at a national level. It is applicable from July 1, 2017 on all transactions of goods and services on which various indirect taxes levied by the Centre and States is submersed except goods and services outside the purview of Goods and Services Tax and transactions below the threshold limit. Brokerage fees paid to stockbrokers in connection with the sale or purchase of shares which are listed on any recognized stock exchange in India are subject to Goods and Services Tax at a rate of 18%. The stockbroker is responsible for collecting the Goods and Services Tax and paying it to the relevant authority. Sale of the securities including ADS and equity shares is outside the purview of Goods and Services Tax. United States Federal Income Tax The following is a description of material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of ADSs or equity shares, but it does not purport to be a comprehensive description of all tax considerations that may be relevant to your decision to own ADSs or equity shares. This discussion applies to you only if you are a U.S. Holder that owns ADSs or equity shares as capital assets for U.S. federal income tax purposes. This discussion does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, including alternative minimum tax consequences, tax consequences of the “Medicare contribution tax” on “net investment income” and tax consequences that may be applicable to you if you are a person subject to special rules, such as: · an insurance company; · a tax-exempt entity; · a dealer or trader in securities who uses a mark-to-market method of tax accounting; · one of certain financial institutions; · a person who owns ADSs or equity shares as part of an integrated investment (including a straddle or conversion transaction); · a person whose functional currency is not the U.S. dollar; 254 Table of Contents · a person who acquired or received ADSs or equity shares pursuant to the exercise of any employee stock option or otherwise as compensation; · a person holding ADSs or equity shares in connection with a trade or business conducted outside of the United States; · a person who owns, directly, indirectly or constructively, 10.0% or more of our stock, by vote or value; or · a partnership or other entity or arrangement classified as a partnership for U.S. federal income tax purposes. If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes owns ADSs or equity shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships owning ADSs or equity shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of ADSs or equity shares. This discussion is based on the tax laws of the United States including the Internal Revenue Code of 1986, as amended, (the “Code”), proposed and final Treasury regulations, revenue rulings, judicial decisions and the income tax treaty between the United States and India, or the “Treaty”, all as of the date hereof, which may change, possibly with retroactive effect. You are a “U.S. Holder” if, for U.S. federal income tax purposes, you are a beneficial owner of ADSs or equity shares and: · a citizen or individual resident of the United States; · a corporation, or other entity taxable as a corporation, created or organized under the laws of the United States, any state therein or the District of Columbia; or · an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. In general, if you own ADSs you will be treated as the owner of the underlying equity shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, you will not recognize gain or loss upon an exchange of ADSs for the underlying equity shares represented by those ADSs. Please consult your tax adviser with regard to the application of U.S. federal income tax laws to ADSs or equity shares in your particular circumstances, including the passive foreign investment company (“PFIC”) rules described below, as well as any tax consequences arising under the laws of any state, local or other taxing jurisdiction. Taxation of Dividends Distributions you receive on ADSs or equity shares, other than certain pro rata distributions of equity shares or rights to acquire equity shares to all holders of equity shares (including holders of ADSs), will generally constitute foreign-source dividend income for U.S. federal income tax purposes. Subject to the PFIC rules described below, the amount of the dividend you will be required to include in income will be based on the U.S. dollar value of the rupees received, calculated by reference to the exchange rate in effect on the date the payment is received by the depositary (in the case of ADSs) or by you (in the case of equity shares) regardless of whether the payment is converted into U.S. dollars on the date of receipt. If the dividend is converted into U.S. dollars on the date of receipt, you should not be required to recognize foreign currency gain or loss in respect of the dividend income. You may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt. If you realize gain or loss on a sale or other disposition of rupees, it will constitute U.S. source ordinary income or loss. The amount of the dividend will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Subject to applicable limitations and the PFIC discussion below, if you are a non-corporate U.S. Holder, dividends paid to you may be taxable at the favorable rates applicable to long-term capital gains. If you are a non-corporate U.S. Holder, you should consult your tax adviser to determine whether you are subject to any special rules that limit your ability to be taxed at these favorable rates. 255 Table of Contents Dividend income will include any amounts withheld in respect of Indian taxes and will be treated as non-U.S. source income. Indian income taxes withheld from cash dividends on the ADSs or equity shares generally will be creditable against a U.S. Holder’s U.S. federal income tax liability, subject to applicable limitations that vary depending upon your circumstances. The rules governing foreign tax credits are complex. For example, Treasury regulations provide that, in the absence of an election to apply the benefits of an applicable income tax treaty, in order for non-U.S. income taxes to be creditable the relevant non-U.S. income tax rules must be consistent with certain U.S. federal income tax principles, and we have not determined whether the Indian income tax system meets these requirements. The U.S. Internal Revenue Service has released notices that provide relief from certain of the provisions of the Treasury regulations described above for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). In lieu of claiming a non-U.S. tax credit, U.S. Holders may elect to deduct non-U.S. taxes (including Indian taxes) in computing their taxable income, subject to applicable limitations. An election to deduct creditable non-U.S. taxes instead of claiming foreign tax credits applies to all such non-U.S. taxes paid or accrued in the taxable year. U.S. Holders should consult their tax advisers regarding the creditability or deductibility of Indian taxes in their particular circumstances. Taxation of Capital Gains You will recognize gain or loss for U.S. federal income tax purposes on the sale or exchange of ADSs or equity shares. The gain or loss will generally be U.S. source capital gain or loss, and subject to the PFIC rules discussed below will be long-term capital gain or loss if you have owned such ADSs or equity shares for more than one year. You should consult your tax adviser about the treatment of capital gains, which may be taxed at lower rates than ordinary income for non-corporate taxpayers, and capital losses, the deductibility of which may be limited. The amount of the gain or loss will equal the difference between your tax basis in the ADSs or equity shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. Under certain circumstances as described under “ --Indian Tax --Taxation on sale of ADSs or Equity Shares,” you may be subject to Indian tax upon the disposition of equity shares. Under the Code, any gain or loss on the sale or exchange of ADSs or equity shares will generally be U.S. source. However, although the application of the Treaty in this respect is subject to uncertainty, it is possible that under the Treaty your gains from dispositions of equity shares may be treated as foreign source. In that case, you may be able to claim foreign tax credit in respect of any Indian income tax on this gain if you are eligible for Treaty benefits and elect to apply them. If you are not eligible for Treaty benefits, or if your gain from a disposition of equity shares is not treated as foreign source gain under the Treaty, Treasury regulations generally preclude you from claiming foreign tax credit with respect to any Indian income tax on such gain. However, as noted above the IRS released notices that provide relief from certain of the provisions of these Treasury regulations (including the limitation described in the preceding sentence) for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). Even if the Treasury regulations do not preclude you from claiming foreign tax credit with respect to any Indian income tax on any gain from dispositions of equity shares, other limitations may limit your ability to claim a foreign tax credit with respect to such tax. It is possible that any Indian tax on disposition gains that is not credited against your U.S. federal income tax liability may either be deductible or reduce the amount realized on a disposition. If the Indian tax is creditable, an election to deduct it instead of claiming a foreign tax credit with respect thereto applies to all non-U.S. taxes paid or accrued in the taxable year. The rules governing foreign tax credits and deductibility of foreign taxes are complex. You should consult your tax adviser with respect to your ability to credit any Indian income taxes on dispositions against your U.S. federal income tax liability, including the uncertainty as to whether Indian taxes on dispositions are generally creditable under the Treaty, the requirement to report Treaty-based return positions and the creditability or deductibility of the Indian tax on disposition gains in your particular circumstances (including any applicable limitations). 256 Table of Contents Any Indian stamp duty paid or securities transaction tax on the purchase or sale of equity shares will not be creditable against your U.S. federal income tax liability. However, stamp duty or securities transaction tax may increase your tax basis in the equity shares if you are a buyer of the shares, or reduce the amount of gain (or increase the amount of loss) you recognize on the sale or other disposition of the shares. Passive Foreign Investment Company Rules In general, a foreign corporation is a PFIC for any taxable year in which (i) 75.0% or more of its gross income consists of passive income (such as dividends, interest, rents, royalties and investment gains) or (ii) 50.0% or more of the average value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income. There are certain exceptions for active business income, including exceptions for certain income earned by foreign active banks and insurance companies. Based upon certain proposed Treasury regulations (the “Active Banks Proposed Regulations”), which were proposed to be effective for taxable years beginning after December 31, 1994, and under current guidance can be relied upon, we do not believe we were a PFIC for our taxable year that ended March 31, 2023. Because there can be no assurance that the Active Banks Proposed Regulations will be finalized in their current form (and the manner of their application is not entirely clear), because the rules applicable to active insurance companies are subject to change (including under certain proposed Treasury regulations), and because the composition of our income and assets will vary over time and our PFIC status for any taxable year will depend, in large part, on the extent to which our income and assets will be considered active under the exceptions for active banks or insurance companies, there can be no assurance that we will not be a PFIC for any taxable year. If we were a PFIC for any taxable year during which you owned ADSs or equity shares, you may be subject to adverse tax consequences. Generally, gain recognized upon a disposition (including, under certain circumstances, a pledge) of ADSs or equity shares by you would be allocated ratably over your holding period for such ADSs or equity shares. The amounts allocated to the taxable year of disposition and to years before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for that taxable year for individuals or corporations, as appropriate, and an interest charge would be imposed on the tax attributable to the allocated amounts. Further, to the extent that distributions received by you on your ADSs or equity shares during a taxable year exceed 125% of the average of the annual distributions on such ADSs or equity shares received during the preceding three taxable years or your holding period, whichever is shorter, the excess distributions would be subject to taxation in the same manner as gain, as described above in this paragraph. If we were a PFIC for any year during which you owned ADSs or equity shares, we generally would continue to be treated as a PFIC with respect to such ADSs or equity shares for all succeeding years during which you owned the ADSs or equity shares, even if we ceased to meet the threshold requirements for PFIC status. Alternatively, if we were a PFIC and if ADSs or equity shares were “regularly traded” on a “qualified exchange,” you could make a mark-to-market election that would result in tax treatment different from the general tax treatment for PFICs described above. ADSs or equity shares would be treated as “regularly traded” in any calendar year in which more than a de minimis quantity of ADSs or equity shares, as the case may be, were traded on a qualified exchange on at least 15 days during each calendar quarter. The New York Stock Exchange, on which our ADSs are listed, is a qualified exchange for this purpose. A foreign exchange is a “qualified exchange” if it is regulated by a governmental authority in the jurisdiction in which the exchange is located and with respect to which certain other requirements are met. 257 Table of Contents If you make the mark-to-market election (assuming the election is available), you generally will recognize as ordinary income any excess of the fair market value of ADSs or equity shares at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of ADSs or equity shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If you make the election, your tax basis in ADSs or equity shares will be adjusted to reflect these income or loss amounts. Any gain recognized on the sale or other disposition of ADSs or equity shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election) and any excess loss will be a capital loss. In addition, if we were a PFIC or, with respect to you, were treated as a PFIC for the taxable year in which we paid a dividend or for the prior taxable year, the favorable tax rates with respect to dividends paid to certain non-corporate U.S. Holders, described above under “—United States Federal Income Tax —Taxation of Dividends”, would not apply. If we are a PFIC for any taxable year during which you owned our ADSs or equity shares, you will generally be required to file IRS Form 8621 with your annual U.S. federal income tax returns, subject to certain exceptions. You should consult your tax adviser regarding whether we are or were a PFIC and the potential application of the PFIC rules. Information Reporting and Backup Withholding Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding, unless (i) you are an exempt recipient or (ii) in the case of backup withholding, you provide a correct taxpayer identification number and certify that no loss of exemption from backup withholding has occurred. The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is timely furnished to the Internal Revenue Service. 258 Table of Contents Presentation of Financial Information Pursuant to the issuance and listing of our securities in the United States under registration statements filed with the United States Securities Exchange Commission, we file annual reports on Form 20-F, which must include financial statements prepared under generally accepted accounting principles in the United States (U.S. GAAP) or financial statements prepared according to a comprehensive body of accounting principles with a reconciliation of net income and stockholders’ equity to U.S. GAAP. When we first listed our securities in the United States, Indian GAAP was not considered a comprehensive body of accounting principles under the United States securities laws and regulations. However, pursuant to a significant expansion of Indian accounting standards, Indian GAAP constitutes a comprehensive body of accounting principles and since fiscal 2006, we have included in the annual report consolidated financial statements prepared according to Indian GAAP, which varies in certain respects from U.S. GAAP. For a reconciliation of net income and stockholders’ equity to U.S. GAAP, a description of significant differences between Indian GAAP and U.S. GAAP and certain additional information required under U.S. GAAP, see notes 21 and 22 to our consolidated financial statements herein. The data for fiscal 2022 through fiscal 2024 have been derived from our consolidated financial statements. The accounting and reporting policies used in the preparation of our financial statements reflect general industry practices and conform with Indian GAAP including the Accounting Standards (AS) issued by Institute of Chartered Accountants of India, guidelines issued by the Reserve Bank of India, the Securities and Exchange Board of India and the Insurance Regulatory and Development Authority as applicable to relevant companies. In the case of foreign subsidiaries, Generally Accepted Accounting Principles as applicable to the respective subsidiaries are followed. Certain subsidiaries of the Bank, namely ICICI Securities Limited, ICICI Securities Primary Dealership Limited, ICICI Prudential Asset Management Company Limited and ICICI Home Finance Limited have adopted Ind AS, revised set of accounting standards issued by The Institute of Chartered Accountants of India (which largely converges the Indian accounting standards with International Financial Reporting Standards). However, for preparation of consolidated financial statements of the Bank, financial statements continued to be as per current Indian GAAP of these entities have been considered. All the numbers reported/considered in this document for these subsidiaries are based on current Indian GAAP. The consolidated financial statements for fiscal 2022 through fiscal 2024 were audited by joint auditors MSKA & Associates, Chartered Accountants and KKC & Associates LLP (formerly known as Khimji Kunverji & Co LLP), Chartered Accountants under auditing standards issued by the Institute of Chartered Accountants of India. The consolidated financial statements for fiscal 2022 through fiscal 2024 have also been audited by KPMG Assurance and Consulting Services LLP (formerly known as KPMG), an independent registered public accounting firm in India, in accordance with the auditing standards of the United States Public Company Accounting Oversight Board. Our published Indian GAAP consolidated financial statements and disclosures relating to U.S. GAAP net income reconciliation and stockholders’ equity reconciliation as required by U.S. Securities and Exchange Commission and applicable GAAP, audited by KPMG Assurance and Consulting Services LLP (formerly known as KPMG), are set forth at the end of this annual report. Under U.S. GAAP, the consolidation of ICICI’s majority ownership interest in ICICI Prudential Life Insurance Company Limited, is accounted for by the equity method, because of substantive participative rights retained by the minority shareholders. Under Indian GAAP, ICICI Prudential Life Insurance Company Limited is consolidated on a line-by-line basis. 259 Table of Contents During fiscal 2024, the Board of Directors of the Bank approved the increase of the shareholding in ICICI Lombard General Insurance Company Limited (ICICI General) in multiple tranches up to 4.0%, making ICICI General a subsidiary of the Bank. Following the receipt of the necessary regulatory approval(s), the Bank through stock exchange mechanism acquired an additional stake in ICICI General in multiple tranches, resulting in an increase in shareholding of more than 50.0%. Consequently, ICICI General ceased to be an associate and became a subsidiary of the Bank effective February 29, 2024 in consolidated financial statements under Indian GAAP as well as under U.S. GAAP. During fiscal 2023, the Board of Directors of the Bank approved making I-Process Services (India) Private Limited (I-Process) a wholly-owned subsidiary of the Bank. Following the receipt of the necessary regulatory approval(s), the Bank entered into a share purchase agreement in relation to an investment in the equity shares of I-Process through off-market transactions. Consequently, I-Process ceased to be an associate and became a subsidiary of the Bank effective March 20, 2024 and subsequently became a wholly-owned subsidiary of the Bank effective March 22, 2024 in consolidated financial statements under Indian GAAP as well as under U.S. GAAP. Although we have translated in this annual report certain rupee amounts into dollars for convenience, this does not mean that the rupee amounts referred to could have been, or could be, converted into dollars at any particular rate, the rates stated earlier in this annual report, or at all. Except in the section on “Market Price Information”, all translations from rupees to U.S. dollars are based on the exchange rate as set forth in the H.10 statistical release of the Federal Reserve Board on March 29, 2024. 260 Table of Contents Additional Information Memorandum and Articles of Association Objects and Purposes Pursuant to Clause III.A.1 of ICICI Bank’s Memorandum of Association, ICICI Bank’s main objective is to, among other things, carry on the business of banking in any part of India or outside India. Provisions Relating to Directors Certain provisions of our Articles of Association relating to directors are set forth as follows: · Article 128 of the Articles of Association provides that no director shall be required to hold any qualification shares of the Company. · Article 135 of the Articles of Association provides that no director of ICICI Bank shall, as a director, take any part in the discussion of or vote on any contract or arrangement if such director is directly or indirectly concerned or interested in such contract or arrangement. · Article 137 of the Articles of Association provides that at every Annual General Meeting of the Company, one third of such directors for the time being as are liable to retire by rotation or if their number is neither three nor a multiple of three, then the number nearest to one-third, shall retire from office. The Debenture Directors, the Government Directors and the other Non-Rotational Directors shall not be subject to retirement under the Articles of Association. · Article 138 of the Articles of Association provides that the directors to retire by rotation at every Annual General Meeting shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day, those who are to retire shall (unless they otherwise agree among themselves) be determined by lot. There is no provision under the Articles of Association requiring the mandatory retirement of directors at a specified age. Pursuant to the Reserve Bank of India guidelines, a person is eligible for appointment as non-executive director, if he or she is between 35 and 75 years of age. After attaining the age of 75 years, no person can continue in this position. Further, pursuant to the Reserve Bank of India guidelines, no person can continue as Managing Director and Chief Executive Officer or wholetime director beyond the age of 70 years. Within the overall limit of 70 years, individual Bank's Boards are free to prescribe a lower retirement age for the wholetime directors, including the Managing Director and Chief Executive Officer. · Directors have no powers to vote in absence of a quorum. · Article 79 of the Articles of Association provides that the directors may by a resolution passed at a meeting of the Board of Directors, borrow moneys and raise and secure the payment of amounts in a manner and upon such terms and conditions in all respects as they think fit and in particular by the issue of bonds, redeemable debentures or debenture stock, or any mortgage or charge or other security on the undertaking or the whole or any part of the property of ICICI Bank (both present and future) including our uncalled capital. 261 Table of Contents Amendment to Rights of Holders of Equity Shares Any change to the existing rights of the equity holders can be made only by amending the Articles of Association which would require a special resolution of the shareholders, passed by not less than three times the number of votes cast against the resolution. General Meetings of Shareholders We are required to convene our annual general meeting within a period of five months from the date of closing of the financial year. The Board may convene an extraordinary general meeting when necessary or at the request of a shareholder or shareholders holding at least 10% of our paid up capital carrying voting rights. A general meeting of a company may be called by giving not less than clear 21 days notice in the manner prescribed under the applicable laws/regulations. Change in Control Provisions Article 56 of the Articles of Association provides that the Board of Directors may at its discretion decline to register or acknowledge any transfer of any securities in respect of securities upon which we have a lien or while any money in respect of the securities desired to be transferred on any of them remain unpaid. Moreover, the Board of Directors may refuse to register the transfer of any securities if the total nominal value of any securities intended to be transferred by any person would, together with the total nominal value of any securities held in ICICI Bank, exceed 1% of the paid-up equity share capital of ICICI Bank or if the Board of Directors is satisfied that as a result of such transfer, it would result in the change in the Board of Directors or change in the controlling interest of ICICI Bank and that such change would be prejudicial to the interests of ICICI Bank. However, under the Indian Companies Act, the enforceability of such transfer restrictions is unclear. Documents on Display The documents concerning us which are referred to herein may be inspected at the Securities and Exchange Commission (“SEC”). You may read and copy any document filed or furnished by us at the SEC’s public reference rooms in Washington D.C., New York and Chicago, Illinois or obtain them by mail upon payment of prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information. The SEC also maintains a website at www.sec.gov, which contains, in electronic form, each of the reports and other information that we have filed electronically with the SEC. Information about ICICI Bank is also available on the web at www.icicibank.com. Annual Report to Security Holders We intend to submit annual report provided to security holders in electronic format as an exhibit to a current report on Form 6-K. 262 Table of Contents Exhibit Index Exhibit No. Description of Document 1.1 ICICI Bank Memorandum of Association, as amended (incorporated herein by reference to Exhibit 1.1 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2020 filed on July 31, 2020). 1.2 ICICI Bank Articles of Association, as amended (incorporated herein by reference to Exhibit 1.2 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2020 filed on July 31, 2020). 2.1 Deposit Agreement among ICICI Bank, Deutsche Bank and the holders from time to time of American Depositary Receipts issued thereunder (including as an exhibit, the form of American Depositary Receipt) (incorporated herein by reference to ICICI Bank’s Registration Statement on Form F-1 (File No. 333-30132)*). 2.2 Letter Agreements dated February 19, 2002 and April 1, 2002 (incorporated herein by reference to Exhibit 2.2 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2002 filed on September 30, 2002), Letter Agreement dated March 8, 2005 (incorporated by reference to Exhibit 4.3 to ICICI Bank’s Registration Statement on Form F-3 (File No. 333-121664)) and Letter Agreement dated November 4, 2011 (incorporated by reference to Exhibit 2.3 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2012 filed on July 31, 2012) amending and supplementing the Deposit Agreement. 2.3 Letter Agreement dated June 2, 2016, supplementing the Letter Agreement dated November 4, 2011 (incorporated by reference to Exhibit 2.3 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2016 filed on August 1, 2016). 2.4 Letter Agreement dated October 31, 2017, amending and supplementing the Letter Agreement dated November 4, 2011 (incorporated herein by reference to Exhibit 2.4 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2018 filed on July 31, 2018). 2.5 Amendment No.1 to the Deposit Agreement originally dated March 31, 2020 and as amended and supplemented from time to time (incorporated herein by reference to Exhibit a(ii) to ICICI Bank's Registration Statement on Form F-6 filed on July 1, 2024). 2.6 ICICI Bank’s Share Certificate Specimen. 2.7 Description of Securities Registered under Section 12 of the Exchange Act. 4.1 ICICI Bank Employees Stock Option Scheme - 2000, as amended (incorporated herein by reference to Exhibit 4.1 to ICICI Bank’s Annual Report on Form 20-F for the year ended March 31, 2019 filed on July 31, 2019). 4.2 ICICI Bank Employees Stock Unit Scheme – 2022 (incorporated herein by reference to Exhibit 4.2 to ICICI Bank's Annual Report on Form 20-F for the year ended March 31, 2023 filed on July 28, 2023). 8.1 List of Subsidiaries (included under “Business–Subsidiaries, Associates and Joint Ventures” herein). 11.1 Code of Business Conduct and Ethics, as amended. 11.2 ICICI Bank Code on Prohibition of Insider Trading. 12.1 Certification of the Managing Director and Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act. 12.2 Certification of the Group Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act. 13.1 Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act. 97.1 ICICI Bank Compensation Policy *Paper filing 263 Table of Contents SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on our behalf. For ICICI BANK LIMITED By: /s/ Anindya Banerjee Name: Mr. Anindya Banerjee Title: Group Chief Financial Officer Place: Mumbai Date: July 31, 2024 264 Table of Contents ICICI Bank Limited and subsidiaries Consolidated Financial Statements For the year ended March 31, 2023 and March 31, 2024 together with Auditors’ Report 1 Table of Contents Index to Consolidated Financial Statements Contents Page Report of Independent Registered Public Accounting Firm F-2 Consolidated balance sheet F-9 Consolidated profit and loss account F-10 Consolidated cash flow statement F-11 Schedules to the consolidated financial statements F-13 2 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors ICICI Bank Limited: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of ICICI Bank Limited (the ‘Bank’) and subsidiaries (the Company) as of March 31, 2024 and 2023, the related consolidated profit and loss accounts and consolidated cash flows statements for each of the years in the three-year period ended March 31, 2024, and the related notes and financial statement schedules 1 to 18B (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2024, in conformity with generally accepted accounting principles in India. Differences from U.S. Generally Accepted Accounting Principles Accounting principles generally accepted in India vary in certain significant respects from U.S. generally accepted accounting principles. Information relating to the nature and effect of such differences is presented in Note 21 of Schedule 18B to the consolidated financial statements. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. F-2 Table of Contents Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Allowance for Credit Losses As discussed in Note 7 of Schedule 18B to the consolidated financial statements, the Company’s allowance for credit losses under generally accepted accounting principles in India (Indian GAAP) was Rs. 222,697.6 million as at 31 March 2024 (the March 31, 2024 Indian GAAP ACL). As discussed in Note 21 of Schedule 18B to the consolidated financial statements, the Company’s allowance for credit losses included in the reconciliation of stockholders’ equity from Indian GAAP to U.S. GAAP as of March 31, 2024 was Rs. (13,384.3) million which included allowance for credit losses on loans evaluated on a collective basis (the March 31, 2024 collective ACL) and allowance for credit losses on loans evaluated on an individual basis (the March 31, 2024 individual ACL). The March 31, 2024 Indian GAAP ACL, the March 31, 2024 collective ACL and the March 31, 2024 individual ACL are collectively referred to as ‘total ACL’. The March 31, 2024 collective ACL includes the measure of expected credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. The Company estimated the March 31, 2024 collective ACL using a current expected credit losses methodology which is based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the loan balances. The quantitative calculation of expected credit losses is the product of multiplying the Company’s estimates of probability of default (PD), loss given default (LGD), and individual loan level exposure at default (EAD). For the quantitative calculation, the Company uses models to develop the PD and LGD, which are derived from internal historical default and loss experience, that incorporate the relevant macro-economic scenario over reasonable and supportable forecast periods. Further, the probability of default for subsequent periods reverts to the long run average observed behavior. All such periods are established for each portfolio segment. The Company estimates the EAD using a model which estimates prepayments over the life of the loans. In order to capture the unique risks of the loan portfolio within the PD, LGD, and EAD models, the Company segments the portfolio into pools, incorporating certain criteria including, but not limited to customer type, risk rating and delinquency status for commercial loans and product type, delinquency status, credit scores and months on book for non-commercial loans. The Company has developed internal models to assign credit risk ratings to borrowers, which are used for the segmentation of commercial loans. The model output for the collective ACL is adjusted by increasing the probability of default estimates to take into consideration model imprecision not yet reflected in the calculation. Judgment is applied in making this adjustment, including taking into account uncertainties associated with the economic conditions, product or portfolio, as well as other relevant internal and external factors affecting the credit quality of the portfolio. We identified the assessment of collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of collective ACL due to significant measurement uncertainty. The assessment as of the March 31, 2024 of collective ACL encompassed the evaluation of the Collective ACL methodology, including the methods and models used to estimate the PD, LGD, and EAD and their significant assumptions. Such significant assumptions included portfolio segmentation, the relevant macro-economic scenario, the reasonable and supportable forecast periods, the historical observation period, and credit risk ratings for commercial loans and prepayment estimates. F-3 Table of Contents Allowance for Credit Losses (continued) The assessment also included the evaluation of the qualitative factors and their significant assumptions, including selection of relevant macroeconomic variables and consideration of uncertainties such as elevated geopolitical risks along with the attendant volatility in oil and commodity prices, continuing high interest rates for longer periods, weak growth outlook across the world, stagnant job growth in IT and startups and expected uneven distribution of monsoon. The assessment also included an evaluation of the conceptual soundness and performance of the PD, LGD and commercial loan credit risk rating models. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to Company’s measurement of the collective ACL estimates, including controls over the: - review of the Collective ACL methodology - review of the PD, LGD, commercial loan credit risk rating and EAD models - identification and determination of the significant assumptions used in the PD, LGD, commercial loan credit risk rating and EAD models - determination of the key assumptions and inputs used to estimate the quantitative and qualitative calculation of the Collective ACL, including selection of relevant macroeconomic variables and consideration of uncertainties such as elevated geopolitical risks along with the attendant volatility in oil and commodity prices, continuing high interest rates for longer periods, weak growth outlook across the world, stagnant job growth in IT and startups and expected uneven distribution of monsoon - validation of the PD, LGD and commercial loan credit risk rating model for the Collective ACL We evaluated the Company’s development of the Collective ACL estimates by testing certain sources of data, factors, and assumptions that the Company used and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in: - evaluating the Collective ACL methodology for compliance with U.S. generally accepted accounting principles - evaluating judgments made by the Company relative to the development and performance monitoring testing of the PD, LGD, and EAD models by comparing them to relevant Company - specific metrics and trends and the applicable industry and regulatory practices - assessing the conceptual soundness and performance testing of the PD, LGD, commercial loan credit risk rating and EAD models by inspecting the model documentation to determine whether the models are suitable for their intended use - evaluating the methodology used to develop and incorporate the relevant macro-economic scenario over the reasonable and supportable forecast periods and underlying assumptions by comparing it to the Company’s business environment and relevant industry practices - assessing the macro-economic variables through benchmarking to publicly available forecasts, where available - evaluating the length of the historical observation period and reasonable and supportable forecast periods to evaluate the length of each period by comparing them to specific portfolio risk characteristics and trends - determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices F-4 Table of Contents Allowance for Credit Losses (continued) - testing the methodology used for estimation of individual credit risk ratings for commercial loans by performing quantitative validation of credit rating models used to assign the credit risk ratings. - evaluating the methodology used for estimating the prepayments within the EAD models over the life of the loans - evaluating the methodology used to develop the qualitative factors, including consideration of uncertainties such as elevated geopolitical risks with the attendant volatility in oil and commodity prices, high interest rates for longer periods, weak growth outlook across the world, stagnant job growth in IT and startups and expected uneven distribution of monsoon and the effect of those factors on the Collective ACL compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative calculations Liabilities in respect to life insurance policies As given in the consolidated financial statements, liabilities for life insurance policies in force is included in the total liabilities for policies in force of Rs. 2,813,183 million. The liabilities in respect of life insurance policies in force under Indian GAAP are estimated in accordance with accepted actuarial practice, requirements of Insurance Act, 1938, as amended from time to time, regulations notified by the Insurance Regulatory and Development Authority of India (IRDAI) and relevant Guidance Notes/ Actuarial Practice Standards of the Institute of Actuaries of India. The actuarial liability for non-linked policies, both participating and non-participating, is calculated by the Company using the gross premium method, that involves assumptions for interest, mortality, morbidity, expenses and inflation, and in the case of participating policies, future bonuses together with allowance for taxation and allocation of future profits to shareholders. These assumptions are determined as prudent estimates updated at the date of valuation, including allowances for possible adverse deviations. We identified the assessment of liabilities for life insurance policies in force under Indian GAAP to be a critical audit matter since it involves a high degree of audit effort, including subjective and complex auditor judgment in evaluating management’s estimate, and use of actuarial professionals with specialized skill and knowledge to assist in performing procedures and evaluating the estimate of such liabilities. Specifically, there is significant judgement in determination of assumptions for all policies in force under Indian GAAP. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to Company’s measurement of liabilities for life insurance policies in force under Indian GAAP, including controls over the valuation process and underlying data which included assessment and approval of the methods and assumptions adopted over such measurements as well as appropriate access and change management controls over the actuarial models. We involved actuarial professionals with specialized skills and knowledge who assisted in: - assessing the methodology for selecting assumptions by comparing the methodology used against industry standard actuarial practice - assessing the methodology for calculating the liabilities by reference to the requirements of the industry standard actuarial practice and assessing the impact of current year changes in methodology on the calculation of policyholder liabilities - evaluating the analysis of the movements in liabilities during the year, including consideration of whether the movements were in line with the methodology and assumptions adopted - evaluating judgments applied by management in setting assumptions, including evaluating the results of experience studies used as the basis for setting those assumptions - independently re-calculating the liabilities for a selection of individual policies for select products to assess whether the selected model calibration had been appropriately implemented F-5 Table of Contents Liabilities in respect to life insurance policies (continued) - evaluating the appropriateness of the methodology and assumptions used in the Company’s annual premium deficiency tests and assessed the reasonableness of results We have served as the Company’s auditor since 1999. /s/ KPMG Assurance and Consulting Services LLP Mumbai, Maharashtra, India July 31, 2024 F-6 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors ICICI Bank Limited: Opinion on Internal Control Over Financial Reporting We have audited ICICI Bank Limited (the ‘Bank’) and subsidiaries’ (the Company) internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2024 and 2023, the related consolidated profit and loss accounts and consolidated cash flows statements for each of the years in the three-year period ended March 31, 2024, and the related notes and financial statement schedules 1 to 18B (collectively, the consolidated financial statements), and our report dated July 31, 2024 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. F-7 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG Assurance and Consulting Services LLP Mumbai, Maharashtra, India July 31, 2024 F-8 Table of Contents ICICI Bank Limited and subsidiaries Consolidated balance sheet (Rs. in thousands) At Schedule March 31, 2024 March 31, 2023 CAPITAL AND LIABILITIES Capital 1 14,046,790 13,967,750 Employees stock options outstanding 1A 14,053,180 7,608,859 Reserves and surplus 2 2,533,338,376 2,123,401,284 Minority interest 2A 138,884,162 66,867,526 Deposits 3 14,435,799,524 12,108,321,521 Borrowings 4 2,074,280,008 1,890,618,073 Liabilities on policies in force 2,813,183,300 2,388,673,665 Other liabilities and provisions 5 1,617,044,935 985,446,292 TOTAL CAPITAL AND LIABILITIES 23,640,630,275 19,584,904,970 ASSETS Cash and balances with Reserve Bank of India 6 899,430,231 686,489,413 Balances with banks and money at call and short notice 7 728,258,795 678,075,515 Investments 8 8,271,625,050 6,395,519,671 Advances 9 12,607,762,029 10,838,663,147 Fixed assets 10 132,402,763 109,690,036 Other assets 11 976,409,788 875,453,870 Goodwill on consolidation 24,741,619 1,013,318 TOTAL ASSETS 23,640,630,275 19,584,904,970 Contingent liabilities 12 57,578,163,337 50,359,511,032 Bills for collection 1,007,917,603 864,576,684 Significant accounting policies and notes to accounts 17 & 18 The Schedules referred to above form an integral part of the Consolidated Balance Sheet. F-9 Table of Contents ICICI Bank Limited and subsidiaries Consolidated profit and loss account (Rs. in thousands, except per share data) Year ended Schedule March 31, 2024 March 31, 2023 March 31, 2022 I. INCOME Interest earned 13 1,595,159,252 1,210,668,098 954,068,654 Other income 14 765,218,020 651,119,912 621,294,514 TOTAL INCOME 2,360,377,272 1,861,788,010 1,575,363,168 II. EXPENDITURE Interest expended 15 741,081,627 505,433,879 411,666,711 Operating expenses 16 977,827,922 824,390,232 731,517,275 Provisions and contingencies (refer note 18.6) 191,400,276 187,333,629 174,340,856 TOTAL EXPENDITURE 1,910,309,825 1,517,157,740 1,317,524,842 III. PROFIT/(LOSS) Net profit for the year (before share in profit of associates and minority interest) 450,067,447 344,630,270 257,838,326 Add: Share of profit in associates 10,737,680 9,982,876 7,544,279 Net profit for the year before minority interest 460,805,127 354,613,146 265,382,605 Less: Minority interest 18,241,392 14,246,738 14,281,645 Net profit after minority interest 442,563,735 340,366,408 251,100,960 Profit brought forward 656,386,769 508,988,514 385,155,990 TOTAL PROFIT/(LOSS) 1,098,950,504 849,354,922 636,256,950 IV. APPROPRIATIONS/TRANSFERS Transfer to Statutory Reserve 102,221,000 79,742,000 58,349,000 Transfer to Capital Reserve 332,500 878,200 15,742,037 Transfer to Capital Redemption Reserve .. .. .. Transfer to/(from) Investment Reserve Account .. .. .. Transfer to/(from) Investment Fluctuation Reserve 9,927,900 1,043,810 3,828,798 Transfer to Special Reserve 31,353,000 26,254,000 15,328,500 Transfer to/(from) Revenue and other reserves 872,340 50,255,680 657,420 Dividend paid during the year 55,985,964 34,794,463 13,852,335 Balance carried over to balance sheet 898,257,800 656,386,769 528,498,860 TOTAL 1,098,950,504 849,354,922 636,256,950 Significant accounting policies and notes to accounts 17 & 18 Earnings per share (refer note 18.1) Basic (Rs.) 63.19 48.86 36.21 Diluted (Rs.) 61.96 47.84 35.44 Face value per share (Rs.) 2.00 2.00 2.00 The Schedules referred to above form an integral part of the Consolidated Profit and Loss Account. F-10 Table of Contents ICICI Bank Limited and subsidiaries Consolidated cash flow statement (Rs. in thousands) Year ended March 31, 2024 March 31, 2023 March 31, 2022 Cash flow from/(used in) operating activities Profit before taxes 596,839,961 458,300,782 335,675,367 Adjustments for: Depreciation and amortisation 19,958,856 16,351,038 14,699,244 Net (appreciation)/depreciation on investments1 16,172,037 27,053,455 18,320,870 Provision in respect of non-performing and other assets 9,635,716 (3,653,501 ) 63,775,215 General provision for standard assets 11,658,491 4,898,941 4,065,438 Provision for contingencies & others 8,780,202 54,236,861 16,513,472 (Profit)/loss on sale of fixed assets (144,093 ) (542,579 ) (56,635 ) Employees stock options expense 7,029,081 5,180,508 2,669,253 (i) 669,930,251 561,825,505 455,757,552 Adjustments for: (Increase)/decrease in investments 167,355,354 (158,286,285 ) (166,685,392 ) (Increase)/decrease in advances (1,782,646,848 ) (1,638,931,648 ) (1,349,047,011 ) Increase/(decrease) in deposits 2,329,930,107 1,194,663,589 1,314,257,752 (Increase)/decrease in other assets 18,818,794 (165,971,353 ) 46,750,597 Increase/(decrease) in other liabilities and provisions 302,893,172 277,742,529 329,993,864 (ii) 1,036,350,579 (490,783,168 ) 175,174,482 Refund/(payment) of direct taxes (iii) (133,436,047 ) (108,754,258 ) (49,817,733 ) Net cash flow from/(used in) operating activities((i)+(ii)+(iii)) (A) 1,572,844,783 (37,711,921 ) 581,114,301 Cash flow from/(used in) investing activities Purchase of fixed assets (36,785,464 ) (24,676,808 ) (18,599,746 ) Proceeds from sale of fixed assets 698,893 2,874,176 1,174,397 (Purchase)/sale of held to maturity securities (1,423,224,353 ) (658,250,590 ) (375,789,070 ) Net cash flow from/(used in) investing activities (B) (1,459,310,924 ) (680,053,222 ) (393,214,419 ) Cash flow from/(used in) financing activities Proceeds from issue of share capital (including ESOPs) 11,708,675 9,420,691 7,979,764 Proceeds from long-term borrowings 391,968,191 417,361,966 356,976,668 Repayment of long-term borrowings (391,468,771 ) (268,917,978 ) (346,030,278 ) Net proceeds/(repayment) of short-term borrowings 181,423,005 124,836,960 169,436,188 Dividend paid (55,985,964 ) (34,794,463 ) (13,852,335 ) Net cash flow from/(used in) financing activities (C) 137,645,136 247,907,176 174,510,007 Effect of exchange fluctuation on translation reserve (D) 4,234,435 3,163,063 (1,268,443 ) F-11 Table of Contents ICICI Bank Limited and subsidiaries Consolidated cash flow statement (Continued) (Rs. in thousands) Year ended March 31, 2024 March 31, 2023 March 31, 2022 Net increase/(decrease) in cash and cash equivalents (A) + (B) + (C) + (D) 255,413,430 (466,694,904 ) 361,141,446 Cash and cash equivalents at beginning of the year 1,364,564,928 1,831,259,832 1,475,705,302 Add: Addition of ICICI Lombard General Insurance Company Limited and I-Process Services (India) Private Limited as a subsidiary in consolidation during the year 7,710,668 Less: Reduction due to discontinuation of ICICI Lombard General Insurance Company Limited from consolidation during the year (5,586,916 ) Cash and cash equivalents at end of the year 1,627,689,026 1,364,564,928 1,831,259,832 1. Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice. F-12 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) SCHEDULE 1 - CAPITAL (Rs. in thousands) At March 31, 2024 March 31, 2023 Authorised capital 12,500,000,000 equity shares of Rs. 2 each (March 31, 2023: 12,500,000,000 equity shares of Rs. 2 each) 25,000,000 25,000,000 Equity share capital Issued, subscribed and paid-up capital 6,982,815,731 equity shares of Rs. 2 each (March 31, 2023: 6,948,771,375 equity shares) 13,965,631 13,897,543 Add: 39,519,912 equity shares of Rs. 2 each (March 31, 2023: 34,044,356 equity shares) issued during the year 79,040 68,088 14,044,671 13,965,631 Add: Forfeited equity shares1 2,119 2,119 TOTAL CAPITAL 14,046,790 13,967,750 1. On account of forfeiture of 266,089 equity shares of Rs. 10 each. SCHEDULE 1A - Employees stock options outstanding (Rs. in thousands) At March 31, 2024 March 31, 2023 Opening Balance 7,608,859 2,664,141 Additions during the year1 7,028,323 5,172,383 Deductions during the year2 (584,002) (227,665) Closing Balance 14,053,180 7,608,859 1. Represents cost of stock options/units recognised during the year. 2. Represents amount transferred to Securities Premium on account of exercise of employee stock options and to General Reserve on lapses of employee stock options. SCHEDULE 2 - RESERVES AND SURPLUS (Rs. in thousands) At March 31, 2024 March 31, 2023 II. Statutory reserve Opening balance 435,778,519 356,036,519 Additions during the year 102,221,000 79,742,000 Deductions during the year .. .. Closing balance 537,999,519 435,778,519 II. Special reserve Opening balance 160,232,000 133,978,000 Additions during the year 31,353,000 26,254,000 Deductions during the year .. .. Closing balance 191,585,000 160,232,000 F-13 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) (Rs. in thousands) At March 31, 2024 March 31, 2023 III. Securities premium Opening balance 507,229,514 497,645,058 Additions during the year1 12,206,924 9,584,456 Deductions during the year .. .. Closing balance 519,436,438 507,229,514 IV. Investment reserve account Opening balance .. .. Additions during the year .. .. Deductions during the year .. .. Closing balance .. .. V. Investment fluctuation reserve2 Opening balance 21,758,809 20,714,999 Additions during the year 9,927,900 1,043,810 Deductions during the year .. .. Closing balance 31,686,709 21,758,809 VI. Capital reserve Opening balance 150,662,553 149,784,353 Additions during the year3 690,995 878,200 Deductions during the year .. .. Closing balance4 151,353,548 150,662,553 VII. Capital redemption reserve Opening balance 3,500,000 3,500,000 Additions during the year .. .. Deductions during the year .. .. Closing balance 3,500,000 3,500,000 (Rs. in thousands) At March 31, 2024 March 31, 2023 VIII. Foreign currency translation reserve Opening balance 15,594,494 12,431,431 Additions during the year5 4,234,435 3,163,063 Deductions during the year .. .. Closing balance 19,828,929 15,594,494 IX. Revaluation reserve Opening balance 30,918,416 32,284,975 Additions during the year6 1,174,473 839,517 Deductions during the year7 (980,148 ) (2,206,076 ) Closing balance 31,112,741 30,918,416 X. Revenue and other reserves Opening balance 141,340,210 88,597,221 F-14 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) Additions during the year 7,381,788 52,798,858 Deductions during the year (144,306 ) (55,869 ) Closing balance8,9,10 148,577,692 141,340,210 XI. Balance in profit and loss account 898,257,800 656,386,769 Deductions during the year .. .. Balance in profit and loss account 898,257,800 656,386,769 TOTAL RESERVES AND SURPLUS 2,533,338,376 2,123,401,284 1. Includes Rs. 12,206.2 million (March 31, 2023 : Rs. 9,576.3 million) on exercise of employee stock options. 2. Represents amount transferred by the Bank to Investment Fluctuation Reserve (IFR) on net profit on sale of AFS and HFT investments during the period. The amount not less than the lower of net profit on sale of AFS and HFT category investments during the period or net profit for the period less mandatory appropriations is required to be transferred to IFR, until the amount of IFR is at least 2% of the HFT and AFS portfolio. 3. Represents appropriations made by the Bank for profit on sale of investments in held-to-maturity category and profit on sale of land and buildings, net of taxes and transfer to statutory reserve. 4. Includes capital reserve on initial/subsequent investment on subsidiaries and associates amounting to Rs 437.6 million (March 31, 2023: Rs 79.1 million). 5. Includes transfer of accumulated translation loss of Rs 3,396.6 million related to closure of Bank’s Offshore Banking Unit, SEEPZ Mumbai, to profit and loss account in terms of Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates. 6. Represents gain on revaluation of premises carried out by the Bank and ICICI Home Finance Company Limited. 7. Includes amount transferred from revaluation reserve to general reserve on account of incremental depreciation charge on revaluation and revaluation surplus on premises sold. Also includes the amount of loss on revaluation of certain assets which were held for sale. 8. Includes Rs 6,841.3 million towards fair value change account of insurance subsidiaries (March 31, 2023: Rs 1,435.9 million). 9. Includes unrealised profit/(loss), net of tax, of Rs 20.1 million (March 31, 2023: Rs 161.5 million) pertaining to the investments in the available-for-sale category of ICICI Bank UK PLC. 10. Includes unrealised profit/(loss) pertaining to the investments of venture capital funds. SCHEDULE 2A - MINORITY INTEREST (Rs. in thousands) At March 31, 2024 March 31, 2023 Opening minority interest 66,867,526 59,808,935 Subsequent increase/(decrease) during the year1 72,016,636 7,058,591 CLOSING MINORITY INTEREST 138,884,162 66,867,526 1. FY2024 includes deduction of minority interest relating to ICICI Lombard General Insurance Company Limited amounting to Rs. 63,102.1 million on becoming a subsidiary. SCHEDULE 3 - DEPOSITS (Rs. in thousands) At March 31, 2024 March 31, 2023 A. I. Demand deposits i) From banks 47,613,641 49,978,962 ii) From others 1,940,571,390 1,608,349,299 II. Savings bank deposits 4,060,887,215 3,848,298,564 III. Term deposits i) From banks 208,627,693 113,475,314 ii) From others 8,178,099,585 6,488,219,382 TOTAL DEPOSITS 14,435,799,524 12,108,321,521 F-15 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) (Rs. in thousands) At March 31, 2024 March 31, 2023 B. I. Deposits of branches in India 13,954,785,283 11,638,079,242 II. Deposits of branches/subsidiaries outside India 481,014,241 470,242,279 TOTAL DEPOSITS 14,435,799,524 12,108,321,521 SCHEDULE 4 - BORROWINGS (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Borrowings In India i) Reserve Bank of India1 26,186,900 18,899,200 ii) Other banks 104,714,012 71,911,178 iii) Financial institutions2 661,840,505 608,942,331 iv) Borrowings in the form of a) Deposits 38,106,055 36,624,470 b) Commercial paper 172,960,808 98,022,849 c) Bonds and debentures (excluding subordinated debt) 525,303,878 506,782,072 v) Capital instruments a) Innovative Perpetual Debt Instruments (IPDI) (qualifying as additional Tier 1 capital) .. 51,400,000 b) Unsecured redeemable debentures/bonds (subordinated debt included in Tier 2 capital) 48,594,148 53,206,653 TOTAL BORROWINGS IN INDIA 1,577,706,306 1,445,788,753 II. Borrowings outside India i) Capital instruments Unsecured redeemable debentures/bonds (subordinated debt included in Tier 2 capital) 4,135,575 5,962,274 ii) Bonds and notes 133,372,570 133,419,412 iii) Other borrowings 359,065,557 305,447,634 TOTAL BORROWINGS OUTSIDE INDIA 496,573,702 444,829,320 TOTAL BORROWINGS 2,074,280,008 1,890,618,073 1. Represents borrowings made by the group under Liquidity Adjustment Facility (LAF) and Standing Liquidity Facility (SLF). 2. Includes borrowings made by the Group under repo and refinance. 3. Secured borrowings in I and II above amounting to Rs. 266,868.8 million (March 31, 2023: Rs. 239,969.1 million) other than the borrowings under collateralised borrowing and lending obligation, market repurchase transactions (including tri-party repo) with banks and financial institutions and transactions under liquidity adjustment facility and marginal standing facility. SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Bills payable 128,193,100 136,037,076 II. Inter-office adjustments (net) 420,905 3,228,016 III Interest accrued 38,985,508 33,390,137 F-16 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) (Rs. in thousands) At March 31, 2024 March 31, 2023 IV Sundry creditors 639,120,659 242,830,603 V. General provision for standard assets 61,602,061 49,946,771 VI. Unrealised loss on foreign exchange and derivative contracts 176,519,175 183,764,747 VI Others (including provisions)1 572,203,527 336,248,942 TOTAL OTHER LIABILITIES AND PROVISIONS 1,617,044,935 985,446,292 1. Includes contingency provision of the Bank amounting to Rs. 131,000.0 million (March 31, 2023: Rs. 131,000.0 million) and specific provision for standard loans amounting to Rs. 9,795.3 million (March 31, 2023: Rs. 14,946.9 million) of the Bank. SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Cash in hand (including foreign currency notes) 89,558,463 86,812,982 II. Balances with Reserve Bank of India a) In current account 625,031,768 480,256,431 b) In other accounts1 184,840,000 119,420,000 TOTAL CASH AND BALANCES WITH RESERVE BANK OF INDIA 899,430,231 686,489,413 1. Represents lending made by the group under Liquidity Adjustment Facility (LAF) and Standing Deposit Facility (SDF). SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE (Rs. in thousands) At March 31, 2024 March 31, 2023 I. In India i) Balances with banks a) in current accounts 3,553,758 3,103,280 b) in other deposit accounts 125,802,157 107,287,660 ii) Money at call and short notice a) with banks 4,170,250 8,217,000 b) with other institutions1 180,191,880 59,652,392 TOTAL 313,718,045 178,260,332 II. Outside India i) in current accounts 218,885,291 310,635,743 ii) in other deposit accounts 80,151,629 26,782,094 iii) Money at call and short notice 115,503,830 162,397,346 TOTAL 414,540,750 499,815,183 TOTAL BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE 728,258,795 678,075,515 1. Includes lending by the group under reverse repo. F-17 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) SCHEDULE 8 - INVESTMENTS (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Investments in India [net of provisions] i) Government securities 5,055,928,340 3,960,623,208 ii) Other approved securities .. .. iii) Shares (includes equity and preference shares) 219,751,396 127,225,123 iv) Debentures and bonds (including commercial paper and certificate of deposits) 967,627,791 526,539,870 v) Assets held to cover linked liabilities of life insurance business1 1,648,424,014 1,440,580,565 vi) Cost of equity investment in associates2 15,102,339 64,140,775 vii) Others (mutual fund units, pass through certificates, security receipts, and other related investments) 222,672,130 128,457,645 TOTAL INVESTMENTS IN INDIA 8,129,506,010 6,247,567,186 II. Investments outside India [net of provisions] i) Government securities 79,489,098 89,972,472 ii) Others (equity shares, bonds and certificate of deposits) 62,629,942 57,980,013 TOTAL INVESTMENTS OUTSIDE INDIA 142,119,040 147,952,485 TOTAL INVESTMENTS 8,271,625,050 6,395,519,671 A. Investments in India Gross value of investments1 8,133,543,306 6,275,011,504 Less: Aggregate of provision/depreciation/(appreciation) 4,037,296 27,444,318 Net investments 8,129,506,010 6,247,567,186 B. Investments outside India Gross value of investments 146,627,653 153,368,477 Less: Aggregate of provision/depreciation/(appreciation) 4,508,613 5,415,992 Net investments 142,119,040 147,952,485 TOTAL INVESTMENTS 8,271,625,050 6,395,519,671 1. Includes net appreciation amounting to Rs. 384,547.0 million (March 31, 2023: Rs. 169,588.6 million) on investments held to cover linked liabilities of life insurance business. 2. Includes goodwill on consolidation of associates amounting to Rs. 163.1 million (March 31, 2023: Rs. 221.9 million). SCHEDULE 9 - ADVANCES (net of provisions) (Rs. in thousands) At March 31, 2024 March 31, 2023 A. i) Bills purchased and discounted1 500,789,314 497,557,667 ii) Cash credits, overdrafts and loans repayable on demand 3,577,416,833 2,866,747,206 iii) Term loans 8,529,555,882 7,474,358,274 TOTAL ADVANCES 12,607,762,029 10,838,663,147 F-18 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) (Rs. in thousands) At March 31, 2024 March 31, 2023 B. i) Secured by tangible assets (includes advances against book debts) 9,000,168,618 7,713,019,424 ii) Covered by bank/government guarantees 91,804,264 159,202,710 iii) Unsecured 3,515,789,147 2,966,441,013 TOTAL ADVANCES 12,607,762,029 10,838,663,147 C. I. Advances in India i) Priority sector 3,739,060,521 2,807,812,582 ii) Public sector 510,801,139 516,152,443 iii) Banks 16,359,843 7,698,171 iv) Others 7,598,518,682 6,769,499,593 TOTAL ADVANCES IN INDIA 11,864,740,185 10,101,162,789 II. Advances outside India i) Due from banks 14,422,000 8,076,480 ii) Due from others a) Bills purchased and discounted 116,325,237 152,553,948 b) Syndicated and term loans 257,939,039 245,267,859 c) Others 354,335,568 331,602,071 TOTAL ADVANCES OUTSIDE INDIA 743,021,844 737,500,358 TOTAL ADVANCES 12,607,762,029 10,838,663,147 1. Net of bills re-discounted amounting to Rs. 5,000.0 million (March 31, 2023: Rs. 10,000.0 million). F-19 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) SCHEDULE 10 - FIXED ASSETS (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Premises Gross block At cost at March 31 of preceding year 94,340,437 94,345,827 Additions during the year1,4 9,806,147 2,793,216 Deductions during the year (1,171,073 ) (2,798,606 ) Closing balance 102,975,511 94,340,437 Depreciation At March 31 of preceding year 25,545,325 23,514,011 Charge during the year2,4 3,196,062 2,486,973 Deductions during the year (641,864 ) (455,659 ) Total depreciation 28,099,523 25,545,325 Net block3 74,875,988 68,795,112 II. Other fixed assets (including furniture and fixtures) Gross block At cost at March 31 of preceding year 111,002,632 98,784,940 Additions during the year5,6 42,594,957 18,437,437 Deductions during the year (4,553,076 ) (6,219,745 ) Closing balance 149,044,513 111,002,632 Depreciation At March 31 of preceding year 73,174,464 66,817,309 Charge during the year5,6 25,873,227 12,459,081 Deductions during the year (4,663,727 ) (6,101,926 ) Total depreciation 94,383,964 73,174,464 Net block 54,660,549 37,828,168 III. Lease assets Gross block At cost at March 31 of preceding year 17,902,406 17,890,746 Additions during the year 530 11,660 Deductions during the year (2,650 ) .. Closing balance7 17,900,286 17,902,406 Depreciation At March 31 of preceding year 14,835,650 14,636,086 Charge during the year 199,375 199,564 Deductions during the year (965 ) .. Total depreciation, accumulated lease adjustment and provisions 15,034,060 14,835,650 Net block 2,866,226 3,066,756 TOTAL FIXED ASSETS 132,402,763 109,690,036 1. Includes net revaluation gain amounting to Rs. 1,194.7 (March 31, 2023: Rs. 811.7 million) on account of revaluation carried out by the Bank and its housing finance subsidiary. 2. Including depreciation charge on account of revaluation of Rs. 812.5 million for the year ended March 31, 2024 (year ended March 31, 2023: Rs. 755.2 million). 3. Includes assets amounting to Rs. 8.8 million of the Bank (March 31, 2023: Rs. 428.8 million) which are held for sale. 4. Includes premises cost amounting to Rs. 3,723.1 million and accumulated depreciation amounting to Rs. 305.5 million pertaining to ICICI Lombard General Insurance Company Limited on becoming a subsidiary w.e.f. February 29, 2024. 5. Includes other fixed assets cost amounting to Rs. 12,054.0 million and accumulated depreciation amounting to Rs. 9,567.3 million pertaining to ICICI Lombard General Insurance Company Limited on becoming a subsidiary w.e.f. February 29, 2024. F-20 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated balance sheet (Continued) 6. Includes other fixed assets cost amounting to Rs. 47.5 million and accumulated depreciation amounting to Rs. 43.8 million pertaining to I-Process Services (India) Private Limited on becoming a subsidiary w.e.f. March 20, 2024. 7. Includes assets taken on lease by the Bank amounting to Rs. 1,185.7 million (March 31, 2023: Rs. 1,187.8 million). SCHEDULE 11 – OTHER ASSETS (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Inter-office adjustments (net) .. .. II. Interest accrued 208,551,090 151,100,647 III. Tax paid in advance/tax deducted at source (net) 12,595,878 20,372,701 IV. Stationery and stamps 251,899 379,124 V. Non-banking assets acquired in satisfaction of claims1,2 .. .. VI. Advance for capital assets 8,831,572 9,009,963 VII. Deposits 72,688,283 54,892,587 VIII. Deferred tax asset (net) (refer note 18.9) 63,115,807 76,194,441 IX. Deposits in Rural Infrastructure and Development Fund 200,918,559 216,216,187 X. Unrealised gain on foreign exchange and derivative contracts 169,989,164 178,022,993 XI. Others 239,467,536 169,265,227 TOTAL OTHER ASSETS 976,409,788 875,453,870 1. Assets amounting to ₹ 2.6 million were transferred from banking assets to non banking asset by the Bank during the year ended March 31, 2024 (year ended March 31, 2023: Nil). Assets amounting to ₹ 827.7 million were sold by the Bank during the year ended March 31, 2024 (year ended March 31, 2023: Nil). 2. Net of provision held by the Bank amounting to Rs. 28,189.9 million (March 31, 2023: Rs. 29,011.8 million). SCHEDULE 12 - CONTINGENT LIABILITIES (Rs. in thousands) At March 31, 2024 March 31, 2023 I. Claims against the Group not acknowledged as debts 110,275,158 88,006,837 II. Liability for partly paid investments 3,573,880 4,790,087 III. Liability on account of outstanding forward exchange contracts1 15,786,739,940 15,492,543,076 IV. Guarantees given on behalf of constituents a) In India 1,365,548,848 1,102,115,003 b) Outside India 121,463,607 134,004,861 V. Acceptances, endorsements and other obligations 514,009,699 435,202,811 VI. Currency swaps1 541,254,033 570,626,929 VII. Interest rate swaps, currency options and interest rate futures1 39,017,579,690 32,435,271,591 VIII. Other items for which the Group is contingently liable 117,718,482 96,949,837 TOTAL CONTINGENT LIABILITES 57,578,163,337 50,359,511,032 1. Represents notional amount. F-21 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account SCHEDULE 13 - INTEREST EARNED (Rs. in thousands) Year ended March 31, 2024 March 31, 2023 March 31, 2022 I. Interest/discount on advances/bills 1,165,897,763 879,292,351 668,865,377 II. Income on investments (including dividend) 381,070,710 279,050,297 219,906,420 III. Interest on balances with Reserve Bank of India and other inter-bank funds 26,498,839 23,054,570 18,195,960 IV. Others1,2 21,691,940 29,270,880 47,100,897 TOTAL INTEREST EARNED 1,595,159,252 1,210,668,098 954,068,654 1. Includes interest on income tax refunds amounting to Rs. 2,828.2 million (March 31, 2023: Rs. 1,203.2 million). 2. Includes interest and amortisation of premium on non-trading interest rate swaps and foreign currency swaps. SCHEDULE 14 - OTHER INCOME (Rs. in thousands) Year ended March 31, 2024 March 31, 2023 March 31, 2022 I. Commission, exchange and brokerage 235,718,656 196,484,672 172,883,870 II. Profit/(loss) on sale of investments (net)1 36,689,228 12,730,117 23,145,295 III. Profit/(loss) on revaluation of investments (net) 1,182,467 (1,317,590 ) 1,981,586 IV. Profit/(loss) on sale of land, buildings and other assets (net)2 144,093 542,579 56,635 V. Profit/(loss) on exchange/derivative transactions (net) 30,860,575 30,509,008 29,933,143 VI. Premium and other operating income from insurance business 458,528,108 411,367,848 389,595,741 VII. Miscellaneous income (including lease income) 2,094,893 803,278 3,698,244 TOTAL OTHER INCOME 765,218,020 651,119,912 621,294,514 1. Includes profit/(loss) on sale of assets given on lease. SCHEDULE 15 - INTEREST EXPENDED (Rs. in thousands) Year ended March 31, 2024 March 31, 2023 March 31, 2022 I. Interest on deposits 587,844,555 394,765,407 336,132,833 II. Interest on Reserve Bank of India/inter-bank borrowings 32,114,853 13,380,975 4,402,009 III. Others (including interest on borrowings of erstwhile ICICI Limited) 121,122,219 97,287,497 71,131,869 TOTAL INTEREST EXPENDED 741,081,627 505,433,879 411,666,711 F-22 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) SCHEDULE 16 - OPERATING EXPENSES (Rs. in thousands) Year ended March 31, 2024 March 31, 2023 March 31, 2022 I. Payments to and provisions for employees 191,719,774 152,341,687 123,416,025 II. Rent, taxes and lighting1 17,054,394 15,846,567 14,085,917 III Printing and stationery 3,610,245 2,713,187 2,232,877 IV. Advertisement and publicity 28,292,745 32,807,911 23,313,796 V. Depreciation on property 19,152,745 14,946,054 13,112,160 VI. Depreciation (including lease equalisation) on leased assets 199,361 199,538 187,914 VII. Directors’ fees, allowances and expenses 146,009 137,405 123,496 VIII. Auditors’ fees and expenses 264,719 248,666 219,598 IX. Law charges 1,494,968 1,771,894 1,707,140 X. Postages, courier, telephones, etc. 8,875,883 7,475,175 7,092,062 XI. Repairs and maintenance 36,171,827 34,644,161 26,994,748 XII. Insurance 16,843,829 14,788,575 13,025,817 XIII. Direct marketing agency expenses 37,986,800 32,599,179 25,697,664 XIV. Claims and benefits paid pertaining to insurance business 78,282,341 53,426,955 59,037,802 XV. Other expenses pertaining to insurance business2 424,318,817 363,124,210 339,724,982 XVI. Other expenditure3,4 113,413,465 97,319,068 81,545,277 TOTAL OPERATING EXPENSES 977,827,922 824,390,232 731,517,275 1. Includes lease expense amounting to Rs. 13,877.7 million (March 31, 2023: Rs. 12,512.8 million). 2. Includes commission expenses and reserves for actuarial liabilities (including the investible portion of the premium on the unit-linked policies). 3. Includes expenses on purchase of Priority Sector Lending Certificates (PSLC) for the Bank amounting to Rs. 16,428.5 million (March 31, 2023: Rs. 15,035.2 million). 4. Includes expenses on reward program by the Bank amounting to Rs. 18,414.8 million (March 31, 2023: Rs. 12,764.2 million). F-23 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) SCHEDULE 17 Significant accounting policies Overview ICICI Bank Limited, together with its subsidiaries and associates (collectively, the Group), is a diversified financial services group providing a wide range of banking and financial services including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services. ICICI Bank Limited (the Bank), incorporated in Vadodara, India is a publicly held banking company governed by the Banking Regulation Act, 1949. Principles of consolidation The consolidated financial statements include the financials of ICICI Bank, its subsidiaries and associates. Entities, in which the Bank holds, directly or indirectly, through subsidiaries and other consolidating entities, more than 50.00% of the voting rights or where it exercises control, over the composition of board of directors/governing body, are fully consolidated on a line-by-line basis in accordance with the provisions of AS 21 on ‘Consolidated Financial Statements’. Investments in entities where the Bank has the ability to exercise significant influence are accounted for under the equity method of accounting and the pro-rata share of their profit/(loss) is included in the consolidated profit and loss account. Assets, liabilities, income and expenditure of jointly controlled entities are consolidated using the proportionate consolidation method. Under this method, the Bank’s share of each of the assets, liabilities, income and expenses of the jointly controlled entity is reported in separate line items in the consolidated financial statements. The Bank does not consolidate entities where the significant influence/control is intended to be temporary or entities which operate under severe long-term restrictions that impair their ability to transfer funds to parent/investing entity or where the objective of control is not to obtain economic benefit from their activities. All significant inter-company balances and transactions with subsidiaries and entities consolidated as per AS-21 have been eliminated on consolidation. Basis of preparation The accounting and reporting policies of the Group used in the preparation of the consolidated financial statements conform to Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines issued by the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) from time to time and the Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standard) Rule 2021, as applicable to relevant companies and practices generally prevalent in the banking industry in India. In the case of the foreign subsidiaries, Generally Accepted Accounting Principles as applicable to the respective foreign subsidiaries are followed. The Group follows the accrual method of accounting except where otherwise stated, and the historical cost convention. In case the accounting policies followed by a subsidiary are different from those followed by the Bank, the same have been disclosed in the respective accounting policy. Further, ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. Accordingly, ICICI Lombard General Insurance Company Limited has been accounted for the equity method prescribed by AS-23 on ‘Accounting for Investments in Associates in Consolidated Financial F-24 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Statements’ till February 29, 2024 and has been consolidated on a line-by-line basis as prescribed by AS-21 on ‘Consolidated Financial Statements’ from March 1, 2024 till the reporting date. The preparation of consolidated financial statements requires management to make estimates and assumptions that are considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the consolidated financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the consolidated financial statements are prudent and reasonable. Actual results could differ from these estimates. The impact of any revision in these estimates is recognised prospectively from the period of change. The consolidated financial statements include the results of the following entities in addition to the Bank. Sr. no. Name of the entity Country of incorporation Nature of relationship Nature of business Ownership interest 1. ICICI Bank UK PLC United Kingdom Subsidiary Banking 100.00% 2. ICICI Bank Canada Canada Subsidiary Banking 100.00% 3. ICICI Securities Limited India Subsidiary Securities broking and merchant banking 74.73% 4. ICICI Securities Holdings Inc.1 USA Subsidiary Holding company 100.00% 5. ICICI Securities Inc.1 USA Subsidiary Securities broking 100.00% 6. ICICI Securities Primary Dealership Limited India Subsidiary Securities investment, trading and underwriting 100.00% 7. ICICI Venture Funds Management Company Limited India Subsidiary Private equity/venture capital fund management 100.00% 8. ICICI Home Finance Company Limited India Subsidiary Housing finance 100.00% 9. ICICI Trusteeship Services Limited India Subsidiary Trusteeship services 100.00% 10. ICICI Investment Management Company Limited India Subsidiary Asset management and Investment advisory 100.00% 11. ICICI International Limited Mauritius Subsidiary Asset management 100.00% 12. ICICI Prudential Pension Funds Management Company Limited2 India Subsidiary Pension fund management and Points of Presence 100.00% F-25 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Sr. no. Name of the entity Country of incorporation Nature of relationship Nature of business Ownership interest 13. ICICI Prudential Life Insurance Company Limited India Subsidiary Life insurance 51.20% 14. ICICI Lombard General Insurance Company Limited3 India Subsidiary General insurance 51.27% 15. ICICI Prudential Asset Management Company Limited India Subsidiary Asset management 51.00% 16. ICICI Prudential Trust Limited India Subsidiary Trusteeship services 50.80% 17. I-Process Services (India) Private Limited4 India Subsidiary Services related to back end operations 100.00% 18. ICICI Strategic Investments Fund India Consolidated as per AS 21 Venture capital fund 100.00% 19. NIIT Institute of Finance Banking and Insurance Training Limited5 India Associate Education and training in banking, finance and insurance 18.79% 20. ICICI Merchant Services Private Limited5 India Associate Merchant acquiring and servicing 19.01% 21. India Infradebt Limited5 India Associate Infrastructure re-finance 42.33% 22. India Advantage Fund-III5 India Associate Venture capital fund 24.10% 23. India Advantage Fund-IV5 India Associate Venture capital fund 47.14% 24. Arteria Technologies Private Limited5 India Associate Software company 19.98% 1. ICICI Securities Holding Inc. is a wholly owned subsidiary of ICICI Securities Limited. ICICI Securities Inc. is a wholly owned subsidiary of ICICI Securities Holding Inc. 2. ICICI Prudential Pension Funds Management Company Limited is a wholly owned subsidiary of ICICI Prudential Life Insurance Company Limited. 3. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. 4. I-Process Services (India) Private Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. March 20, 2024 and became a wholly owned subsidiary of the Bank w.e.f. March 22, 2024. 5. These entities have been accounted as per the equity method as prescribed by AS-23 on ‘Accounting for Investments in Associates in Consolidated Financial Statements’. Comm Trade Services Limited has not been consolidated under AS-21, since the investment is temporary in nature. Falcon Tyres Limited, in which the Bank holds 26.39% equity shares has not been accounted as per equity method under AS-23, since the investment is temporary in nature. F-26 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) SIGNIFICANT ACCOUNTING POLICIES 1. Translation of foreign currency items The consolidated financial statements of the Group are reported in Indian rupees (Rs.), the national currency of India. Foreign currency income and expenditure items of domestic operations are translated at the exchange rates prevailing on the date of the transaction. Income and expenditure items of integral foreign operations (representative offices) are translated at daily closing rates, and income and expenditure items of non-integral foreign operations (foreign branches, offshore banking units, foreign subsidiaries) are translated at quarterly average closing rates. Monetary foreign currency assets and liabilities of domestic and integral foreign operations are translated at closing exchange rates notified by Foreign Exchange Dealers’ Association of India (FEDAI) relevant to the balance sheet date and the resulting gains/losses are recognised in the profit and loss account. Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated at relevant closing exchange rates notified by FEDAI at the balance sheet date and the resulting gains/losses from exchange differences are accumulated in the foreign currency translation reserve until the disposal of the net investment in the non-integral foreign operations. Pursuant to RBI guideline, the Bank does not recognise the cumulative/proportionate amount of such exchange differences as income or expenses, which relate to repatriation of accumulated retained earnings from overseas operations, in the profit and loss account. Contingent liabilities on account of guarantees, endorsements and other obligations denominated in foreign currencies are disclosed at the closing exchange rates notified by FEDAI relevant to the balance sheet date. 2. Revenue recognition a) Interest income is recognised in the profit and loss account as it accrues, except in the case of non-performing assets (NPAs) where it is recognised upon realisation, as per the income recognition and asset classification norms of RBI/NHB/other applicable guidelines. b) Income on discounted instruments is recognised over the tenure of the instrument. c) Dividend income is accounted on an accrual basis when the right to receive the dividend is established. d) Loan processing fee is accounted for upfront when it becomes due except in the case of foreign banking subsidiaries, where it is amortised over the period of the loan. e) Project appraisal/structuring fee is accounted for on the completion of the agreed service. f) Arranger fee is accounted for as income when a significant portion of the arrangement is completed and right to receive is established. g) Commission received on guarantees and letters of credit issued is amortised on a straight-line basis over the period of the guarantee/letters of credit. h) Fund management and portfolio management fees are recognised on an accrual basis. F-27 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) i) The annual/renewal fee on credit cards, debit cards and prepaid cards are amortised on a straight line basis over one year. j) All other fees are accounted for as and when they become due where the Group is reasonably certain of ultimate collection. k) Fees paid/received for priority sector lending certificates (PSLC) is amortised on straight-line basis over the period of the certificate. l) Income from securities brokerage activities is recognised as income on the trade date of the transaction. Brokerage income in relation to public or other issuances of securities is recognised based on mobilisation and terms of agreement with the client. m) Life insurance premium for non-linked policies is recognised as income (net of goods and service tax) when due from policyholders. For unit linked business, premium is recognised when the associated units are created. Premium on lapsed policies is recognised as income when such policies are reinstated. Top-up premiums paid by unit linked policyholders’ are considered as single premium and recognised as income when the associated units are created. Income from unit linked policies, which includes fund management charges, policy administration charges, mortality charges and other charges, if any, are recovered from the linked funds in accordance with the terms and conditions of the policy and are recognised when due. n) In case of general insurance business, premium including reinsurance accepted (net of goods & services tax) other than for long-term (with term more than one year) motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018 is recorded on receipt of complete information, for the policy period at the commencement of risk. For crop insurance, the premium is accounted based on management estimates that are progressively actualised on receipt of information. For installment cases, premium is recorded on installment due dates. Reinstatement premium is recorded as and when such premiums are recovered. Premium earned including reinstatement premium and re-insurance accepted is recognised as income over the period of risk or the contract period based on 1/365 method, whichever is appropriate on a gross basis other than instalment premiums received for group health policies, wherein the instalment premiums are recognised over the balance policy period. Any subsequent revisions to premium as and when they occur are recognised over the remaining period of risk or contract period, as applicable. In case of long-term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018, premium received (net of goods & services tax) for third party liability coverage is recognised equally over the policy period at the commencement of risk on 1/n basis where ‘n’ denotes the term of the policy in years and premium received for own damage coverage is recognised in accordance with movement of Insured Declared Value (IDV) over the period of risk, on receipt of complete information. Reinstatement premium is recorded as and when such premiums are recovered. Premium allocated for the year is recognised as income earned based on 1/365 method, on a gross basis. Reinstatement premium is allocated on the same basis as the original premium over the balance term of the policy. Any subsequent revisions to premium as and when they occur are recognised on the same basis as the original premium over the balance term of the policy. Adjustments to premium income arising on cancellation of policies are recognised in the period in which the policies are cancelled. Adjustments to premium income for corrections to area covered under crop insurance are recognised in the period in which the information is confirmed by the concerned government/nodal agency. Commission on reinsurance ceded is recognised as income in the period of ceding the risk. Profit commission under reinsurance treaties, wherever applicable, is recognised as income in the year of final determination of profits as confirmed by reinsurers and combined with commission on reinsurance ceded. Sliding scale commission under reinsurance treaties, wherever applicable, is determined at every balance sheet date as per terms of the respective F-28 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) treaties. Any changes in the previously accrued commission is recognised immediately and any additional accrual is recognised on confirmation from reinsurers. Such commission is combined with commission on reinsurance ceded. o) In case of life insurance business, reinsurance premium ceded/accepted is accounted in accordance with the terms of the relevant treaties/arrangements with the reinsurer/insurer. Profit commission on reinsurance ceded is netted off against premium ceded on reinsurance. p) In case of general insurance business, insurance premium on ceding of the risk other than for long-term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018 is recognised simultaneously along with the insurance premium in accordance with reinsurance arrangements with the reinsurers. In case of long-term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018, reinsurance premium is recognised on the insurance premium allocated for the year simultaneously along with the recognition of the insurance premium in accordance with the reinsurance arrangements with the reinsurers. Any subsequent revision to premium ceded is recognised in the period of such revision. Adjustment to reinsurance premium arising on cancellation of policies is recognised in the period in which the policies are cancelled. Adjustments to reinsurance premium for corrections to area covered under crop insurance are recognised simultaneously along with related premium income. q) In the case of general insurance business, premium deficiency is recognised when the sum of expected claim costs and related expenses and maintenance costs exceed the reserve for unexpired risks and is computed at a segmental revenue account level. The premium deficiency is calculated and duly certified by the Appointed Actuary. 3. Stock based compensation The following entities within the group have granted stock options/units to their employees: · ICICI Bank Limited · ICICI Prudential Life Insurance Company Limited · ICICI Lombard General Insurance Company Limited · ICICI Securities Limited The Employees Stock Option Scheme 2000 (Option Scheme) of the Bank provides for grant of options on the Bank’s equity shares to wholetime directors and employees of the Bank and its subsidiaries. The options granted vest in a graded manner and may be exercised within a specified period. The Employees Stock Unit Scheme - 2022 (Unit Scheme) provides for grant of units at face value to the eligible employees of the Bank and its subsidiaries. The units granted vest in a graded manner and as per vesting criteria and may be exercised within a specified period. Till March 31, 2021, the Bank recognised cost of stock options granted under Employee Stock Option Scheme, using intrinsic value method. Under Intrinsic value method, options cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date. Pursuant to RBI clarification dated August 30, 2021, the cost of stock options/units granted after March 31, 2021 is recognised based on fair value method. The cost of stock options/units granted up to March 31, 2021 continues to be recognised on intrinsic value method. The Bank uses Black-Scholes model to fair value the options/units on the grant date and the inputs used in the valuation model include F-29 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) assumptions such as the expected life of the share option/units, volatility, risk free rate and dividend yield. The cost of stock options/units is recognised in the profit and loss account over the vesting period. ICICI Prudential Life Insurance Company Limited, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited have also formulated similar stock options/units schemes for their employees for grant of equity shares of their respective companies. The intrinsic value method is followed by them to account for their stock-based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date and amortised over the vesting period. The fair market price is the closing price on the stock exchange with the highest trading volume of the underlying shares of the Bank, ICICI Prudential Life Insurance Company Limited, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited, immediately prior to the grant date. The banking subsidiaries namely, ICICI Bank UK PLC and ICICI Bank Canada, account for the cost of the options/units granted to employees by ICICI Bank using the fair value method as followed by the Bank. 4. Income taxes Income tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Group. The current tax expense and deferred tax expense is determined in accordance with the provisions of the Income Tax Act, 1961 and as per Accounting Standard 22 - Accounting for Taxes on Income respectively. Deferred tax adjustments comprise changes in the deferred tax assets or liabilities during the year and change in tax rate. Deferred tax assets and liabilities are recognised by considering the impact of timing differences between taxable income and accounting income for the current year, and carry forward losses. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The impact of changes in the deferred tax assets and liabilities is recognised in the profit and loss account. Deferred tax assets are recognised and re-assessed at each reporting date, based upon the management’s judgement as to whether their realisation is considered as reasonably certain. However, in case of domestic companies, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. In the consolidated financial statements, deferred tax assets and liabilities are computed at an individual entity level and aggregated for consolidated reporting. Minimum Alternate Tax (MAT) credit is recognised as an asset to the extent there is convincing evidence that the Group will pay normal income tax during specified period, i.e., the period for which MAT credit is allowed to be carried forward as per prevailing provisions of the Income Tax Act 1961. In accordance with the recommendation contained in the guidance note issued by ICAI, MAT credit is to be recognised as an asset in the year in which it becomes eligible for set off against normal income tax. The Group reviews MAT credit entitlements at each balance sheet date and writes down the carrying amount to the extent there is no longer convincing evidence to the effect that the Group will pay normal income tax during the specified period. F-30 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) 5. Claims and benefits paid In the case of general insurance business, claims incurred comprise claims paid, estimated liability for outstanding claims made following a loss occurrence reported and estimated liability for claims incurred but not reported (IBNR) and claims incurred but not enough reported (IBNER). Further, claims incurred also include specific claim settlement costs such as survey/legal fees and other directly attributable costs. Claims (net of amounts receivable from re-insurers/co-insurers) are recognised on the date of intimation based on internal management estimates or on estimates from surveyors/insured in the respective revenue account. Estimated liability for outstanding claims at the balance sheet date is recorded net of claims recoverable from/payable to co-insurers/re-insurers and salvage to the extent there is certainty of realisation and includes provision for solatium fund. Salvaged stock is recognised at estimated net realisable value based on independent valuer’s report. Estimated liability for outstanding claim is determined by the management on the basis of ultimate amounts likely to be paid on each claim based on the past experience and in cases where claim payment period exceeds four years based on actuarial valuation. These estimates are progressively revalidated on availability of further information. Claims IBNR represent that amount of claims that may have been incurred during the accounting period but have not been reported or claimed. The claims IBNR provision also includes provision, if any, required for claims that have been incurred but are not enough reported (IBNER). The provision for claims IBNR/claims IBNER is based on an actuarial estimate duly certified by the Appointed Actuary of the entity. The actuarial estimate is derived in accordance with relevant IRDAI regulations and Guidance Note GN 21 issued by the Institute of Actuaries of India. In the case of life insurance business, benefits paid comprise policy benefits and claim settlement costs, if any. Death and rider claims are accounted for on receipt of intimation. Survival and maturity benefits are accounted when due. Withdrawals and surrenders under non linked policies are accounted on the receipt of intimation. Amount payable on lapsed/discontinued policies are accounted for on expiry of lock-in-period of these policies. Surrenders, withdrawals and lapsation are disclosed at net of charges recoverable.Claim settlement cost, legal and other fees form part of claim cost wherever applicable. Reinsurance claims receivable are accounted for in the period in which the claim is intimated. Repudiated claims and other claims disputed before the judicial authorities are provided for on prudent basis as considered appropriate by the management. 6. Liability for life policies in force In the case of life insurance business, the actuarial liabilities for life policies in force and policies where premiums are discontinued but a liability exists as at the valuation date, are calculated in accordance with accepted actuarial practice, requirements of Insurance Act, 1938, as amended from time to time, and regulations notified by the Insurance Regulatory and Development Authority of India, relevant Guidance Notes and Actuarial Practice Standards of the Institute of Actuaries of India. 7. Reserve for unexpired risk Reserve for unexpired risk is recognised net of re-insurance ceded and represents premium written that is attributable to and is to be allocated to succeeding accounting periods. For fire, marine cargo and miscellaneous business it is calculated on a daily pro-rata basis, except in the case of marine hull business which is computed at 100.00% of net premium written on all unexpired policies at balance sheet date. 8. Actuarial method and valuation In the case of life insurance business, the actuarial liability on both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, F-31 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) mortality, morbidity, expense and inflation, and in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. The liability for the unexpired portion of the risk for the non-unit liabilities of linked business and attached riders is the higher of liability calculated using discounted cash flows and unearned premium reserves. The unit liability in respect of linked business has been taken as the value of the units standing to the credit of policyholders, using the Net Asset Value (NAV) prevailing at the valuation date. An unexpired risk reserve and a reserve in respect of claims incurred but not reported are created, for one year renewable group term insurance. The interest rates used for valuing the liabilities are in the range of 5.04% to 6.56% per annum (previous year – 4.99% to 6.58% per annum). Mortality rates used are based on the published “Indian Assured Lives Mortality (2012-2014) Ult.” mortality table for assurances and “Indian Individual Annuitant’s Mortality Table (2012-15)” table for annuities, adjusted to reflect expected experience while morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates supplied by reinsurers. Expenses are provided for at least at current levels, in respect of renewal expenses, with no allowance for future improvements. Per policy renewal expenses for regular premium policies are assumed to inflate at 4.91% per annum (previous year – 4.90%). 9. Acquisition costs for insurance business Acquisition costs are those costs that vary with and are primarily related to the acquisition of insurance contracts and are expensed in the period in which they are incurred except for commission on long term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018. In case of long-term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018 commission is expensed at the applicable rates on the premium allocated for the year. 10. Employee benefits Gratuity The Group pays gratuity, a defined benefit plan, to employees who retire or resign after a minimum prescribed period of continuous service and in case of employees at overseas locations as per the rules in force in the respective countries. The Group makes contribution to recognised trusts which administer the funds on their own account or through insurance companies. Actuarial valuation of the gratuity liability is determined by an independent actuary appointed by the Group. Actuarial valuation of gratuity liability is determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. The actuarial gains or losses arising during the year are recognised in the profit and loss account. Superannuation Fund and National Pension Scheme The Bank has a superannuation fund, a defined contribution plan, which is administered by trustees and managed by insurance companies. The Bank contributes maximum 15.0% of the total annual basic F-32 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) salary for certain employees to superannuation funds. ICICI Prudential Life Insurance Company Limited, ICICI Prudential Asset Management Company Limited, ICICI Home Finance Company Limited, ICICI Venture Funds Management Company Limited and ICICI Investment Management Company Limited have accrued for superannuation liability based on a percentage of basic salary payable to eligible employees for the period of service. The Group contributes up to 10.0% of the total basic salary of certain employees to National Pension Scheme (NPS), a defined contribution plan, which is managed and administered by pension fund management companies. The employees are given an option to receive the amount in cash in lieu of such contributions along with their monthly salary during their employment. The amounts so contributed/paid by the Group to the superannuation fund and NPS or to employees during the year are recognised in the profit and loss account. The Group has no liability towards future benefits under superannuation fund and national pension scheme other than its annual contribution. Pension The Bank provides for pension, a defined benefit plan covering eligible employees of erstwhile Bank of Madura, erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The Bank makes contribution to a trust which administers the funds on its own account or through insurance companies. The plan provides for pension payment including dearness relief on a monthly basis to these employees on their retirement based on the respective employee’s years of service with the Bank and applicable salary. Actuarial valuation of the pension liability is determined by an independent actuary appointed by the Bank. Actuarial valuation of pension liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. The actuarial gains or losses arising during the year are recognised in the profit and loss account. Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan. Provident fund The Group is statutorily required to maintain a provident fund, a defined benefit plan, as a part of retirement benefits to its employees. Each employee contributes a certain percentage of his or her basic salary and the Group contributes an equal amount for eligible employees. The Group makes contribution as required by The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 to Employees’ Pension Scheme administered by the Regional Provident Fund Commissioner and the balance contributions are transferred to funds administered by trustees. The funds are invested according to the rules prescribed by the Government of India. The Group recognises such contribution as an expense in the year in which it is incurred. Interest payable on provident fund should not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. Actuarial valuation for the interest obligation on the provident fund balances is determined by an actuary appointed by the Group. The actuarial gains or losses arising during the year are recognised in the profit and loss account. The overseas branches of the Bank and its eligible employees contribute a certain percentage of their salary towards respective government schemes as per local regulatory guidelines. The contribution made by the overseas branches is recognised in profit and loss account at the time of contribution. F-33 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Compensated absences The Group provides for compensated absences based on actuarial valuation conducted by an independent actuary. 11. Provisions, contingent liabilities and contingent assets The Group estimates the probability of any loss that might be incurred on outcome of contingencies on the basis of information available upto the date on which the consolidated financial statements are prepared. A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates of amounts required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. In cases where the available information indicates that the loss on the contingency is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made in the consolidated financial statements. In case of remote possibility, neither provision nor disclosure is made in the consolidated financial statements. The Group does not account for or disclose contingent assets, if any. The Bank estimates the probability of redemption of customer loyalty reward points using an actuarial method by employing an independent actuary and accordingly makes provision for these reward points. Actuarial valuation is determined based on certain assumptions regarding mortality rate, discount rate, cancellation rate and redemption rate. 12. Cash and cash equivalents Cash and cash equivalents include cash in hand, foreign currency notes, balances with RBI, balances with other banks and money at call and short notice. 13. Investments i) Investments of the Bank are accounted for in accordance with the extant RBI guidelines on classification, valuation and operation of investment portfolio by Banks. a. The Bank follows trade date method of accounting for purchase and sale of investments, except for government of India and state government securities where settlement date method of accounting is followed in accordance with RBI guidelines. b. All investments are classified into ‘Held to Maturity’ (HTM), ‘Available for Sale’ (AFS) and ‘Held for Trading’ (HFT) on the date of purchase as per the extant RBI guidelines on classification, valuation and operation of investment portfolio by Banks. Reclassifications, if any, in any category are accounted for as per the RBI guidelines. Under each classification, the investments are further categorised as (a) government securities, (b) other approved securities, (c) shares, (d) bonds and debentures and (e) others. c. Investments that are held principally for resale within 90 days from the date of purchase are classified as HFT securities. Investments which the Bank intends to hold till maturity are classified as HTM securities. Investments which are not classified in either of the above categories are classified under AFS securities. d. Costs including brokerage and commission pertaining to trading book investments paid at the time of acquisition and broken period interest (the amount of interest from the previous F-34 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) interest payment date till the date of purchase of instruments) on debt instruments are charged to the profit and loss account. e. Securities are valued scrip-wise. Depreciation/appreciation on securities, other than those acquired by way of conversion of outstanding loans, is aggregated for each category. Net appreciation in each category under each investment classification, if any, being unrealised, is ignored, while net depreciation is provided. The depreciation on securities acquired by way of conversion of outstanding loans is fully provided. Non-performing investments are identified based on the RBI guidelines. f. HTM securities are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. Any premium over the face value of fixed rate and floating rate securities acquired is amortised over the remaining period to maturity on a constant yield basis and straight line basis respectively. g. AFS and HFT securities are valued periodically as per RBI guidelines. Any premium over the face value of fixed rate and floating rate investments in government securities, classified as AFS, is amortised over the remaining period to maturity on constant yield basis and straight line basis respectively. Quoted investments are valued based on the closing quotes on the recognised stock exchanges or prices declared by Primary Dealers Association of India (PDAI) jointly with Fixed Income Money Market and Derivatives Association (FIMMDA)/Financial Benchmark India Private Limited (FBIL), periodically. h. The market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio (SLR) securities included in the ‘AFS’ and ‘HFT’ categories is as per the rates published by FBIL and for unquoted corporate bonds, security level valuation (SLV) published by FIMMDA. The valuation of other unquoted fixed income securities, including Pass Through Certificates, wherever linked to the Yield-to-Maturity (YTM) rates, is computed with a mark-up (reflecting associated credit risk) over the YTM rates for government securities published by FIMMDA. The sovereign foreign securities and non-INR India linked bonds are valued on the basis of prices published by the sovereign regulator or counterparty quotes. i. Treasury bills, commercial papers and certificate of deposits being discounted instruments, are valued at carrying cost. j. The units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund. Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available, or at ₹1, as per RBI guidelines. k. Investments in units of Venture Capital Funds (VCFs)/Alternative Investment Funds (AIFs) are categorised under HTM category for an initial period of three years and valued at cost. The units of VCFs/AIFs categorised under AFS are valued at the net asset value (NAV) declared by the VCFs/AIFs respectively. If the latest NAV is not available continuously for more than 18 months, the units of VCFs/AIFs are valued at Rs. 1, as per RBI guidelines. l. The units of Infrastructure Investment Trust (InvIT) are valued as per the quoted price available on the exchange. m. At the end of each reporting period, security receipts issued by the asset reconstruction companies are valued in accordance with the guidelines applicable to such instruments, prescribed by RBI from time to time. Accordingly, in cases where the cash flows from security receipts issued by the asset reconstruction companies are limited to the actual F-35 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) realisation of the financial assets assigned to the instruments in the concerned scheme, the Bank reckons the net asset value obtained from the asset reconstruction company from time to time, for valuation of such investments at each reporting period end. The Bank makes additional provisions on the security receipts based on the remaining period to end. The security receipts which are outstanding and not redeemed as at the end of the resolution period are treated as loss assets and are fully provided. n. Depreciation/provision on non-performing investments is made as per internal provisioning norms, subject to minimum provisioning requirements of RBI. o. Gain/loss on sale of investments is recognised in the profit and loss account. Cost of investments is computed based on the First-In-First-Out (FIFO) method. The profit from sale of investment under HTM category, net of taxes and transfer to statutory reserve is transferred to “Capital Reserve” in accordance with the RBI guidelines. p. The Bank undertakes short sale transactions in dated central government securities in accordance with RBI guidelines. The short positions are categorised under HFT category and are marked-to-market. The mark-to-market loss is charged to profit and loss account and gain, if any, is ignored as per RBI guidelines. q. Market repurchase, reverse repurchase and transactions with RBI under Liquidity Adjustment Facility (LAF)/Marginal Standing Facility (MSF) are accounted for as borrowing and lending transactions in accordance with the extant RBI guidelines. ii) The Bank’s consolidating venture capital fund carries investments at fair values, with unrealised gains and temporary losses on investments recognised as components of investors’ equity and accounted for in the unrealised investment reserve account. The realised gains and losses on investments and units in mutual funds and unrealised gains or losses on revaluation of units in mutual funds are accounted for in the profit and loss account. Provisions are made in respect of accrued income considered doubtful. Such provisions as well as any subsequent recoveries are recorded through the profit and loss account. Subscription to/purchase of investments are accounted at the cost of acquisition inclusive of brokerage, commission and stamp duty. iii) The Bank’s primary dealership and securities broking subsidiaries classify the securities held with the intention of holding for short-term and trading as stock-in-trade which are valued at lower of cost or market value. The securities classified by primary dealership subsidiary as held-to-maturity, as permitted by RBI, are carried at amortised cost. Appropriate provision is made for other than temporary diminution in the value of investments. Commission earned in respect of securities acquired upon devolvement is reduced from the cost of acquisition. iv) The Bank’s housing finance subsidiary classifies its investments as current investments and long-term investments. Investments that are readily realisable and intended to be held for not more than a year are classified as current investments, which are carried at the lower of cost and net realisable value. All other investments are classified as long-term investments, which are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. Any premium over the face value of the securities acquired is amortised over the remaining period to maturity on a constant yield basis. However, a provision for diminution in value is made to recognise any other than temporary decline in the value of such long-term investments. v) The Bank’s overseas banking subsidiaries account for unrealised gain/loss, net of tax, on investment in ‘AFS’/‘Fair Value Through Other Comprehensive Income’ (FVOCI) category directly in their reserves. Further unrealised gain/loss on investment in ‘HFT’/‘Fair Value F-36 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Through Profit and Loss’ (FVTPL) category is accounted directly in the profit and loss account. Investments in ‘HTM’/‘amortised cost’ category are carried at amortised cost. vi) In the case of life and general insurance businesses, investments are made in accordance with the Insurance Act, 1938 (amended by the Insurance Laws (Amendment) Act, 2015), the IRDA (Investment) Regulations, 2016, and various other circulars/notifications issued by the IRDAI in this context from time to time. In the case of life insurance business, valuation of investments (other than linked business) is done on the following basis: a. All debt securities including government securities and redeemable preference shares are considered as ‘held to maturity’ and stated at historical cost, subject to amortisation of premium or accretion of discount over the period of maturity/holding on a constant yield basis. b. Listed equity shares and equity exchange traded funds (ETF) are stated at fair value being the last quoted closing price on the National Stock Exchange (NSE) (or BSE, in case the investments are not listed on NSE). Unlisted equity shares are stated at acquisition cost less impairment, if any. Equity shares lent under the Securities Lending and Borrowing scheme (SLB) continue to be recognised in the Balance Sheet as the Company retains all the associated risks and rewards of these securities. Non-traded and thinly traded equity share are valued at last available price on NSE/BSE or the value derived using valuation principle of net worth per share, whichever is lower. c. Mutual fund units are valued based on the previous day’s net asset value. Unrealised gains/losses arising due to changes in the fair value of listed equity shares and mutual fund units are taken to ’Revenue and other reserves’ and ‘Liabilities on policies in force’ in the balance sheet for Shareholders’ fund and Policyholders’ fund respectively for life insurance business. In the case of general insurance business, valuation of investments is done on the following basis: d. All debt securities including government securities, money market instruments, non-convertible and redeemable preference shares and excluding Additional Tier-1 perpetual bonds are considered as ‘held to maturity’ and accordingly stated at amortised cost determined after amortisation of premium or accretion of discount over the holding/maturity period in accordance with income recognition policy. Additional Tier-1 perpetual bonds Additional Tier-1 perpetual bond investments are valued at fair value using market yield rates published by rating agency registered with the Securities and Exchange Board of India (SEBI). a. Listed equities and convertible preference shares at the balance sheet date are stated at fair value, being the last quoted closing price on the NSE and in case these are not listed on NSE, then based on the last quoted closing price on the BSE. b. Mutual fund investments (other than venture capital fund) are stated at fair value, being the closing net asset value at balance sheet date. F-37 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) c. Investments other than mentioned above are valued at cost. Unrealised gains/losses arising due to changes in the fair value of listed equity shares, convertible preference shares and mutual fund investments and Additional Tier-I perpetual bonds are taken to ‘Revenue and other reserves’ in the balance sheet for general insurance business. Insurance subsidiaries assess at each balance sheet date whether there is any indication that any investment may be impaired. If any such indication exists, the carrying value of such investment is reduced to its recoverable amount and the impairment loss is recognised in the revenue(s)/profit and loss account. The previously impaired loss is also reversed on disposal/realisation of securities and results thereon are recognised. The total proportion of investments for which subsidiaries have applied accounting policies different from the Bank as mentioned above, is approximately 25.57% of the total investments at March 31, 2024. 14. Loans and other credit facilities i) Loans and other credit facilities of the Bank are accounted for in accordance with the extant RBI guidelines as given below: The Bank classifies its loans and investments, including at overseas branches and overdues arising from crystallised derivative contracts, into performing and NPAs in accordance with RBI guidelines. Loans and advances held at the overseas branches that are identified as impaired as per host country regulations but which are standard as per the extant RBI guidelines, are classified as NPAs to the extent of amount outstanding in the respective host country. Further, NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. Interest on non-performing advances is transferred to an interest suspense account and not recognised in profit and loss account until received. The Bank considers an account as restructured, where for economic or legal reasons relating to the borrower’s financial difficulty, the Bank grants concessions to the borrower, that the Bank would not otherwise consider. The moratorium granted to the borrowers based on RBI guidelines is not accounted as restructuring of loan. Certain specified guidelines by RBI requires the asset classification to be maintained as ‘Standard’. Therefore, the borrowers where resolution plan was implemented under these guidelines are classified as standard restructured. In the case of corporate loans and advances, provisions are made for sub-standard and doubtful assets as per internal provisioning norms, subject to minimum provisioning requirements of RBI. Loss assets and the unsecured portion of doubtful assets are fully provided. For impaired loans and advances held in overseas branches, which are performing as per RBI guidelines, provisions are made as per the host country regulations. For loans and advances held in overseas branches, which are NPAs both as per RBI guidelines and host country guidelines, provisions are made at the higher of the provisions required as per internal provisioning norms and host country regulations. Provisions on homogeneous non-performing retail loans and advances, subject to minimum provisioning requirements of RBI, are made on the basis of the ageing of the loan. The specific provisions on non-performing retail loans and advances held by the Bank are higher than the minimum regulatory requirements. F-38 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) In respect of non-retail loans reported as fraud to RBI, the entire amount is provided over a period not exceeding four quarters starting from the quarter in which fraud has been detected. In respect of non-retail loans where there has been delay in reporting the fraud to the RBI or which are classified as loss accounts, the entire amount is provided immediately. In case of fraud in retail accounts, the entire amount is provided immediately. In respect of borrowers classified as non-cooperative borrowers or willful defaulters, the Bank makes accelerated provisions as per RBI guidelines. The Bank holds specific provisions against non-performing loans and advances, and against certain performing loans and advances in accordance with RBI directions. The Bank makes provision on restructured loans subject to minimum requirements as per RBI guidelines. Provision due to diminution in the fair value of restructured/rescheduled loans and advances is made in accordance with the applicable RBI guidelines. Non-performing and restructured loans are upgraded to standard as per the extant RBI guidelines or host country regulations, as applicable. In terms of RBI guideline, the NPAs are written-off in accordance with the Bank’s policy. Amounts recovered against bad debts written-off are recognised in the profit and loss account. The Bank maintains general provision on performing loans and advances in accordance with the RBI guidelines, including provisions on loans to borrowers having unhedged foreign currency exposure, provisions on loans to specific borrowers in specific stressed sector, provision on exposures to step-down subsidiaries of Indian companies and provision on incremental exposure to borrowers identified as per RBI’s large exposure framework. For performing loans and advances in overseas branches, the general provision is made at higher of aggregate provision required as per host country regulations and RBI requirement. In addition to the provisions required to be held according to the asset classification status, provisions are held for individual country exposures including indirect country risk (other than for home country exposure). The countries are categorised into seven risk categories namely insignificant, low, moderately low, moderate, moderately high, high and very high, and provisioning is made on exposures exceeding 180 days on a graded scale ranging from 0.25% to 25%. For exposures with contractual maturity of less than 180 days, provision is required to be held at 25% of the rates applicable to exposures exceeding 180 days. The indirect exposure is reckoned at 50% of the exposure. If the country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded assets, no provision is required on such country exposure. The Bank makes additional provisions as per RBI guidelines for the cases where viable resolution plan has not been implemented within the timelines prescribed by the RBI from the date of default. These additional provisions are written-back on satisfying the conditions for reversal as per RBI guidelines. The Bank, on prudent basis, has made contingency provision on certain loan portfolios, including borrowers who had taken moratorium at any time during FY2021 under the extant RBI guidelines related to Covid-19 regulatory package. The Bank also makes additional contingency provision on certain standard assets. The contingency provision is included in ‘Schedule 5 - Other Liabilities and Provisions’. F-39 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) The Bank has a Board approved policy for making floating provision, which is in addition to the specific and general provisions made by the Bank. The floating provision is utilised, with the approval of Board and RBI, in case of contingencies which do not arise in the normal course of business and are exceptional and non-recurring in nature and for making specific provision for impaired loans as per the requirement of extant RBI guidelines or any regulatory guidance/instructions. The floating provision is netted-off from advances. ii) In the case of the Bank’s housing finance subsidiary, loans and other credit facilities are classified as per the Master Directions – Non Banking Financial Company – Housing Finance Companies (Reserve Bank) Directions, 2021 issued by Reserve Bank of India (‘Master Direction’). Further, NPAs are classified into sub-standard, doubtful and loss assets based on criteria stipulated in the Master Direction. Additional provisions are made against specific non-performing assets over and above what is stated above, if in the opinion of management, increased provisions are necessary. General provision on restructured loans is made as per RBI guidelines. iii) In the case of the Bank’s UK subsidiary, loans are stated net of allowance for credit losses. Loans are classified as impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition on the loan (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the loans that can be reliably estimated. An allowance for impairment losses is maintained at a level that management considers adequate to absorb identified credit related losses as well as losses that have occurred but have not yet been identified. iv) The Bank’s Canadian subsidiary measures impairment loss on all financial assets using expected credit loss (ECL) model based on a three-stage approach. The ECL for financial assets that are not credit-impaired and for which there is no significant increase in credit risk since origination, is computed using 12-month probability of default (PD), and represents the lifetime cash shortfalls that will result if a default occurs in next 12 months. The ECL for financial assets, that are not credit-impaired but have experienced a significant increase in credit risk since origination, is computed using a life time PD, and represents lifetime cash shortfalls that will result if a default occurs during the expected life of financial assets. A financial asset is considered credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. The allowance for credit losses for impaired financial assets is computed based on individual assessment of expected cash flows from such assets. The total proportion of loans for which subsidiaries have applied accounting policies different from the Bank as mentioned above, is approximately 6.08% of the total loans at March 31, 2024. 15. Transfer and servicing of assets The Bank transfers commercial and consumer loans through securitisation transactions. The transferred loans are de-recognised and gains/losses are accounted, only if the Bank surrenders the rights to benefits specified in the underlying securitised loan contract. Recourse and servicing obligations are accounted for net of provisions. In accordance with the RBI guidelines for securitisation of standard assets, with effect from February 1, 2006, the profit/premium arising from securitisation is amortised over the life of the securities issued or to be issued by the special purpose vehicle to which the assets are sold. With effect from May 7, F-40 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) 2012, the RBI guidelines require the profit/premium arising from securitisation to be amortised based on the method prescribed in the guidelines. As per the RBI guidelines issued on September 24, 2021, gain realised at the time of securitisation of loans is accounted through profit and loss account on completion of transaction. The Bank accounts for any loss arising from securitisation immediately at the time of sale. The unrealised gains, associated with expected future margin income is recognised in profit and loss account on receipt of cash, after absorbing losses, if any. Net income arising from sale of loan assets through direct assignment with recourse obligation is amortised over the life of underlying assets sold and net income from sale of loan assets through direct assignment, without any recourse obligation, is recognised at the time of sale. Net loss arising on account of direct assignment of loan assets is recognised at the time of sale. As per the RBI guidelines issued on September 24, 2021, any loss or realised gain from sale of loan assets through direct assignment is accounted through profit and loss account on completion of transaction. The acquired loans is carried at acquisition cost. In case premium is paid on a loan acquired, premium is amortised over the loan tenure. In accordance with RBI guidelines, in case of non-performing loans sold to Asset Reconstruction Companies (ARCs), the Bank reverses the excess provision in profit and loss account in the year in which amounts are received. Any shortfall of sale value over the net book value on sale of such assets is recognised by the Bank in the year in which the loan is sold. The Canadian subsidiary has entered into securitisation arrangements in respect of its originated and purchased mortgages. ICICI Bank Canada either retains substantially all the risk and rewards or retains control over these mortgages, hence these arrangements do not qualify for de-recognition accounting under their local accounting standards. It continues to recognise the mortgages securitised as “Loans and Advances” and the amounts received through securitisation are recognised as “Other borrowings”. 16. Fixed assets (Property, Plant and Equipment) Fixed assets, other than premises of the Bank and its housing finance subsidiary are carried at cost less accumulated depreciation and impairment, if any. In case of the Bank and its housing finance subsidiary, premises are carried at revalued amount, being fair value at the date of revaluation less accumulated depreciation. Cost includes freight, duties, taxes and incidental expenses related to the acquisition and installation of the asset. Depreciation is charged over the estimated useful life of fixed assets on a straight-line basis. The useful life of the groups of fixed assets for domestic group companies is based on past experience and expectation of usage, which for some categories of fixed assets, is different from the useful life as prescribed in Schedule II to the Companies Act, 2013. Assets purchased/sold during the year are depreciated on a pro-rata basis for the actual number of days the asset has been capitalised. The Group assets individually costing up to ₹ 5,000/- are depreciated fully in the year of acquisition. Further, profit on sale of premises by the Bank is appropriated to capital reserve, net of transfer to Statutory Reserve and taxes, in accordance with RBI guidelines. In case of revalued/impaired assets, depreciation is provided over the remaining useful life of the assets with reference to revised asset values. In case of premises, which are carried at revalued amounts, the depreciation on the excess of revalued amount over historical cost is transferred from Revaluation Reserve to General Reserve annually. F-41 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Non-banking assets Non-banking assets (NBAs) acquired in satisfaction of claims are valued at the market value on a distress sale basis or value of loan, whichever is lower. Further, the Bank creates provision on these assets as per the extant RBI guidelines or specific RBI directions. 17. Foreign exchange and derivative contracts Derivative transactions comprises of forward contracts, futures, swaps and options. The Group undertakes derivative transactions for trading and hedging balance sheet assets and liabilities. The forward exchange contracts that are not intended for trading and are entered into to establish the amount of reporting currency required or available at the settlement date of a transaction are effectively valued at closing spot rate. The premium or discount arising on inception of such forward exchange contracts is amortised over the life of the contract as interest income/expense. All other outstanding forward exchange contracts are revalued based on the exchange rates notified by FEDAI for specified maturities and at interpolated rates for contracts of interim maturities. The contracts of longer maturities where exchange rates are not notified by FEDAI are revalued based on the forward exchange rates implied by the swap curves in respective currencies. The resultant gains or losses are recognised in the profit and loss account. The swap contracts entered to hedge on-balance sheet assets and liabilities are structured such that they bear an opposite and offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments is correlated with the movement of underlying assets and liabilities and accounted pursuant to the principles of hedge accounting. The Group identifies the hedged item (asset or liability) at the inception of the transaction itself. Hedge effectiveness is ascertained at the time of the inception of the hedge and periodically thereafter. Based on RBI circular issued on June 26, 2019, the accounting of hedge relationships established after June 26, 2019 is in accordance with the Guidance note on Accounting for Derivative Contracts issued by ICAI. The swaps under hedge relationships established prior to that date are accounted for on an accrual basis and are not marked to market unless their underlying transaction is marked-to-market. Gains or losses arising from hedge ineffectiveness, if any, are recognised in the profit and loss account except in the case of the Bank’s overseas banking subsidiaries. In overseas subsidiaries, in case of fair value hedge, the hedging transactions and the hedged items (for the risks being hedged) are measured at fair value with changes recognised in the profit and loss account and in case of cash flow hedges, changes in the fair value of effective portion of the cash flow hedge are taken to ‘Revenue and other reserves’ and ineffective portion, if any, are recognised in the profit and loss account. The derivative contracts entered into for trading purposes are marked to market and the resulting gain or loss is accounted for in the profit and loss account. Marked to market values of such derivatives are classified as assets when the fair value is positive or as liabilities when the fair value is negative. Premium for Foreign currency/ Indian rupees option transaction is recognised as income/expense on expiry or early termination of the transaction. Mark to market gain/loss (adjusted for premium received/paid on options contracts) is recorded in the profit and loss account. The gain or loss arising on unwinding or termination of the contracts, is accounted for in the Profit and Loss account. Currency futures contracts are marked to market using daily settlement price on a trading day, which is the closing price of the respective futures contracts on that day. Pursuant to RBI guidelines, any receivables under derivative contracts which remain overdue for more than 90 days and mark-to-market gains on other derivative contracts with the same counter-parties are reversed through the profit and loss account. F-42 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) 18. Impairment of assets The immovable fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is treated as impaired when its carrying amount exceeds its recoverable amount. The impairment is recognised by debiting the profit and loss account and is measured as the amount by which the carrying amount of the impaired assets exceeds their recoverable value. The Bank and its housing finance subsidiary follows revaluation model of accounting for its premises and the recoverable amount of the revalued assets is considered to be close to its revalued amount. Accordingly, separate assessment for impairment of premises is not required. For assets other than premises, the Group assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the profit and loss account to the extent the carrying amount of assets exceeds their estimated recoverable amount. 19. Lease transactions Lease payments including cost escalations for assets taken on operating lease are recognised as an expense in the profit and loss account over the lease term on straight line basis. The leases of property, plant and equipment, where substantially all of the risks and rewards of ownership are transferred to the Bank are classified as finance lease. Minimum lease payments under finance lease are apportioned between the finance costs and outstanding liability. 20. Earnings per share Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding for the year. Diluted earnings per share reflect the potential dilution that could occur if contracts to issue equity shares were exercised or converted during the year. Diluted earnings per equity share is computed using the weighted average number of equity shares and dilutive potential equity shares issued by the group outstanding during the year, except where the results are anti-dilutive. 21. Bullion transaction The Bank deals in bullion business on a consignment basis. The bullion is priced to the customers based on the price quoted by the supplier. The difference between price recovered from customers and cost of bullion is accounted for as commission at the time of sales to the customers. The Bank also deals in bullion on a borrowing and lending basis and the interest expense/income is accounted on accrual basis. 22. Share issue expenses Share issue expenses are deducted from Securities Premium Account in terms of Section 52 of the Companies Act, 2013. 23. Segment Reporting The disclosure related to segment information is in accordance with AS-17, Segment Reporting and as per guidelines issued by RBI. F-43 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) SCHEDULE 18: NOTES FORMING PART OF THE ACCOUNTS A. The following additional disclosures have been made taking into account the requirements of Accounting Standards (ASs) and Reserve Bank of India (RBI) guidelines. 1. Earnings per share Basic and diluted earnings per equity share are computed in accordance with AS 20 - Earnings per share. Basic earnings per equity share is computed by dividing net profit/(loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed using the weighted average number of equity shares and weighted average number of dilutive potential equity shares outstanding during the year. The following table sets forth, for the periods indicated, the computation of earnings per share. Rs. in million, except per share data Year ended March 31, 2024 Year ended March 31, 2023 Net profit/(loss) attributable to equity shareholders used in computation of Basic and Diluted EPS 442,563.7 340,366.4 Nominal value per share (Rs.) 2.00 2.00 Basic earnings per share (Rs.) 63.19 48.86 Effect of potential equity shares (Rs.) (1.23) (1.02) Diluted earnings per share (Rs.)1 61.96 47.84 Reconciliation between weighted shares used in computation of basic and diluted earnings per share Weighted average number of equity shares outstanding used in computation of Basic EPS 7,003,943,116 6,966,305,957 Add: Effect of potential equity shares 128,245,813 138,684,400 Weighted average number of equity shares outstanding used in computation of Diluted EPS 7,132,188,929 7,104,990,357 1.The dilutive impact is due to options granted to employees by the Group. F-44 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) 2. Related party transactions The Group has transactions with its related parties comprising associates/other related entities and key management personnel and relatives of key management personnel. I. Related parties Associates/other related entities Sr. no. Name of the entity Nature of relationship 1. ICICI Lombard General Insurance Company Limited Associate1 2. Arteria Technologies Private Limited Associate 3. India Advantage Fund-III Associate 4. India Advantage Fund-IV Associate 5. India Infradebt Limited Associate 6. ICICI Merchant Services Private Limited Associate 7. I-Process Services (India) Private Limited Associate2 8. NIIT Institute of Finance, Banking and Insurance Training Limited Associate 9. Comm Trade Services Limited Other related entity 10. ICICI Foundation for Inclusive Growth Other related entity 11. Cheryl Advisory Private Limited Other related entity 1. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. 2. I-Process Services (India) Private Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. March 20, 2024 and became a wholly owned subsidiary of the Bank w.e.f March 22, 2024. Key management personnel Sr. no. Name of the Key management personnel Relatives of the Key management personnel 1. Mr. Sandeep Bakhshi · Ms. Mona Bakhshi · Mr. Shivam Bakhshi · Ms. Aishwarya Bakshi · Ms. Esha Bakhshi · Ms. Minal Bakhshi · Mr. Sameer Bakhshi · Mr. Ritwik Thakurta · Mr. Ashwin Pradhan · Ms. Radhika Bakhshi 2. Mr. Anup Bagchi (up to April 30, 2023) · Ms. Mitul Bagchi · Mr. Aditya Bagchi · Mr. Shishir Bagchi · Mr. Arun Bagchi 3. Mr. Sandeep Batra · Mr. Pranav Batra · Ms. Arushi Batra · Mr. Vivek Batra · Ms. Veena Batra 4. Mr. Rakesh Jha (w.e.f September 2, 2022) · Mr. Narendra Kumar Jha · Mr. Navin Ahuja F-45 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Sr. no. Name of the Key management personnel Relatives of the Key management personnel · Mr. Sharad Bansal · Ms. Aparna Ahuja · Ms. Apoorva Jha Bansal · Ms. Pushpa Jha · Ms. Sanjali Jha · Ms. Swati Jha 5. Ms. Vishakha Mulye (up to May 31, 2022) · Mr. Vivek Mulye · Ms. Vriddhi Mulye · Mr. Vighnesh Mulye · Dr. Gauresh Palekar · Ms. Shalaka Gadekar · Dr. Nivedita Palekar 6. Mr. Ajay Kumar Gupta (w.e.f March 15, 2024) · Dr. Shabnam Gupta · Mr. Akhil Gupta · Mr. Aneesh Gupta · Mr. Ashok Gupta · Mr. Vinay Gupta · Ms. Aparna Gupta · Ms. Madhu Gupta · Ms. Rita Agarwal · Ms. Shanti Gupta · Shyam Lall Gupta HUF II. Transactions with related parties The following table sets forth, for the periods indicated, the significant transactions between the Group and its related parties. Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Interest income 380.2 438.0 Associates/others 379.3 434.8 Key management personnel 0.9 3.2 Income from services rendered 1,589.2 1,422.7 Associates/others 1,588.4 1,419.9 Key management personnel 0.6 0.9 Relatives of key management personnel 0.2 1.9 Gain/(loss) on forex and derivative transactions (net) 61.6 50.8 Associates/others 61.6 50.8 Income from shared services 243.4 326.5 Associates/others 243.4 326.5 Dividend income 2,582.9 2,347.1 Associates/others 2,582.9 2,347.1 F-46 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Particulars Year ended March 31, 2024 Year ended March 31, 2023 Insurance claims received 40.1 163.0 Associates/others 40.1 163.0 Interest expense 218.0 225.7 Associates/others 193.8 205.2 Key management personnel 14.4 15.3 Relatives of key management personnel 9.8 5.2 Expenses for services received 13,043.6 15,702.6 Associates/others 13,043.6 15,702.6 Insurance premium paid 3,288.0 3,544.6 Associates/others 3,288.0 3,544.6 Expenses for shared services and other payments 5.0 0.8 Associates/others 5.0 0.8 Insurance claims, surrenders and annuities paid 44.1 19.0 Associates/others 43.6 18.5 Key management personnel 0.5 0.5 CSR related reimbursement of expenses 5,170.0 4,441.1 Associates/others 5,170.0 4,441.1 Donation given 712.3 564.5 Associates/others 712.3 564.5 Volume of fixed deposits placed 11,834.1 7,076.0 Associates/others 11,718.6 6,916.7 Key management personnel 84.9 133.5 Relatives of key management personnel 30.6 25.8 Purchase of investments 3,904.1 1,634.0 Associates/others 3,904.1 1,634.0 Sale of Investments 23,777.9 31,667.3 Associates/others 23,777.9 31,667.3 Investments in the securities issued by related parties 20,937.8 1,850.0 Associates/others 20,937.8 1,850.0 Issuance of securities to related parties .. 1,000.0 Associates/others .. 1,000.0 Redemption/buyback of Investments by related parties 2,500.0 1,615.5 F-47 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Particulars Year ended March 31, 2024 Year ended March 31, 2023 Associates/others 2,500.0 1,615.5 Purchase of fixed assets 1.7 3.4 Associates/others 1.7 3.4 Forex/swaps/derivatives and forwards transactions entered (notional value) 6,939.8 6,619.8 Associates/others 6,939.8 6,619.8 Guarantees/letters of credit given by the Group 0.1 5.0 Associates/others 0.1 5.0 Insurance premium received 49.4 58.7 Associates/others 48.7 55.3 Key management personnel 0.3 2.6 Relatives of key management personnel 0.4 0.8 Remuneration to wholetime directors1 287.0 336.6 Key management personnel 287.0 336.6 Dividend paid 5.2 3.9 Key management personnel 4.3 3.2 Relatives of key management personnel 0.9 0.7 Value of ESOPs exercised 86.3 306.2 Key management personnel 86.3 306.2 Sale of fixed assets .. 0.2 Key management personnel .. 0.2 1. Excludes the perquisite value on employee stock options exercised and includes performance bonus paid during the period. III. Material transactions with related parties The following table sets forth, for the periods indicated, the material transactions between the Group and its related parties. A specific related party transaction is disclosed as a material related party transaction wherever it exceeds 10% of all related party transactions in that category. Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Interest income 1 India Infradebt Limited 365.5 421.2 Income from services rendered 1 ICICI Lombard General Insurance Company Limited 1,445.6 1,267.5 Gain/(loss) on forex and derivative transactions (net) 1 ICICI Lombard General Insurance Company Limited 61.6 50.8 Income from shared services F-48 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 1 ICICI Lombard General Insurance Company Limited 169.6 262.0 2 I-Process Services (India) Private Limited 27.0 27.2 3 ICICI Foundation for Inclusive Growth 36.6 37.2 Dividend income 1 ICICI Lombard General Insurance Company Limited 2,476.4 2,240.5 Insurance claims received 1 ICICI Lombard General Insurance Company Limited 40.1 163.0 Interest expense 1 ICICI Lombard General Insurance Company Limited 116.5 140.5 2 ICICI Merchant Services Private Limited 17.9 25.9 Expenses for services received 1 I-Process Services (India) Private Limited 10,885.4 10,406.6 2 ICICI Merchant Services Private Limited 2,085.4 5,226.6 Insurance Premium paid 1 ICICI Lombard General Insurance Company Limited 3,288.0 3,544.6 Expenses for shared services and other payments 1 ICICI Lombard General Insurance Company Limited 5.0 0.8 Insurance claims paid 1 ICICI Lombard General Insurance Company Limited 42.5 16.2 2 ICICI Foundation for Inclusive Growth 1.1 2.3 CSR related reimbursement of expenses 1 ICICI Foundation for Inclusive Growth 5,170.0 4,441.1 Donation given 1 ICICI Foundation for Inclusive Growth 712.3 564.5 Volume of fixed deposits placed 1 I-Process Services (India) Private Limited 5,952.9 4,548.7 2 ICICI Merchant Services Private Limited 5,330.0 2,000.0 Purchase of investments 1 ICICI Lombard General Insurance Company Limited 3,904.1 1,634.0 Sale of Investments 1 ICICI Lombard General Insurance Company Limited 16,160.8 24,647.6 2 India Infradebt Limited 7,617.1 7,019.7 Investments in the securities issued by related parties 1 India Infradebt Limited 20,937.8 1,850.0 Issuance of securities to related parties 1 ICICI Lombard General Insurance Company Limited .. 1,000.0 Redemption/buyback of investments by related parties 1 India Infradebt Limited 2,500.0 .. F-49 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 2 ICICI Lombard General Insurance Company Limited .. 1,615.5 Purchase of fixed assets 1 Arteria Technologies Private Limited 1.7 3.2 Forex/swaps/derivatives and forwards transactions entered (notional value) 1 ICICI Lombard General Insurance Company Limited 6,289.9 5,933.3 Guarantees/letters of credit given by the Group 1 NIIT Institute of Finance, Banking and Insurance Training Limited 0.1 2.3 2 Arteria Technologies Private Limited .. 2.7 Insurance premium received 1 ICICI Lombard General Insurance Company Limited 47.2 54.1 Remuneration to wholetime directors 1 Mr. Sandeep Bakhshi 99.7 95.7 2 Mr. Sandeep Batra 86.7 85.3 3 Mr. Rakesh Jha 84.0 45.9 4 Mr. Anup Bagchi 13.7 86.5 5 Mr. Ajay Kumar Gupta 2.9 N.A. 6 Ms. Vishakha Mulye N.A 23.2 Dividend paid 1 Mr. Sandeep Bakhshi 2.2 1.8 2 Mr. Sandeep Batra 1.4 0.6 3 Mr. Rakesh Jha 0.7 0.7 4 Mr. Anup Bagchi .. 0.0 5 Mr. Shivam Bakhshi 0.3 0.4 Value of ESOPs exercised 1 Mr. Sandeep Bakhshi 34.5 27.2 2 Mr. Sandeep Batra 13.3 22.0 3 Mr. Rakesh Jha 38.5 .. 4 Mr. Anup Bagchi .. 183.2 5 Ms. Vishakha Mulye N.A 73.8 Sale of fixed assets 1 Mr. Rakesh Jha .. 0.1 2 Ms. Vishakha Mulye N.A 0.1 1. 0.0 represents insignificant amount. IV. Related party outstanding balances The following table sets forth, for the periods indicated, the outstanding balances payable to/receivable from related parties. Rs. in million Items At March 31, 2024 At March 31, 2023 Deposits accepted 2,518.0 2,960.0 Associates/others 2,023.1 2,603.0 F-50 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Items At March 31, 2024 At March 31, 2023 Key management personnel 350.8 260.7 Relatives of key management personnel 144.1 96.3 Payables 3,159.4 3,718.3 Associates/others 3,158.4 3,716.9 Key management personnel 0.2 0.4 Relatives of key management personnel 0.8 1.0 Investments of the Group 11,736.7 24,863.5 Associates/others 11,736.7 24,863.5 Investments of related parties in the Group 8.5 1,601.3 Associates/others .. 1,600.0 Key management personnel 2.5 1.1 Relatives of key management personnel 6.0 0.2 Advances by the Group 192.6 277.4 Associates/others 123.0 191.3 Key management personnel 68.8 85.7 Relatives of key management personnel 0.8 0.4 Receivables 238.6 1,538.9 Associates/others 238.6 1,538.9 Relatives of key management personnel 0.0 .. Guarantees issued by the Group 60.2 63.1 Associates/others 60.2 63.1 1. 0.0 represents insignificant amount. V. Related party maximum balances The following table sets forth, for the periods indicated, the maximum balances payable to/receivable from related parties. Rs. in million Items Year ended March 31, 2024 Year ended March 31, 2023 Deposits accepted Key management personnel 351.2 420.7 Relatives of key management personnel 144.1 266.6 Payables2 Key management personnel 1.5 0.4 Relatives of key management personnel 0.9 1.0 Investments of related parties in the Group2 Key management personnel 2.5 1.9 Relatives of key management personnel 6.0 0.3 Advances by the Group Key management personnel 85.7 139.2 Relatives of key management personnel 2.5 2.3 F-51 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Items Year ended March 31, 2024 Year ended March 31, 2023 Receivables2 Relatives of key management personnel 0.0 .. 1. 0.0 represents insignificant amount. 2. Maximum balance is determined based on comparison of the total outstanding balances at each quarter end during the financial year. 3. Employee Stock Option Scheme (ESOS)/ Employees Stock Unit Scheme - 2022 (ESUS 2022) ICICI Bank: In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of all such options granted to the eligible employees shall not exceed 10.0% of the aggregate number of the issued equity shares of the Bank on the date(s) of the grant of options in line with SEBI Regulations. Under the stock option scheme, eligible employees are entitled to apply for equity shares. In April 2016, exercise period was modified from 10 years from the date of grant or five years from the date of vesting, whichever is later, to 10 years from the date of vesting. In June 2017, exercise period was further modified to not exceed 10 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee to be applicable for future grants. In May 2018, exercise period was further modified to not exceed five years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee to be applicable for future grants. Options granted after March 2014 vest in a graded manner over a three-year period with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 12 months from the date of grant other than certain options granted in April 2014 which vested to the extent of 50% on April 30, 2017 and the balance on April 30, 2018 and option granted in September 2015 which vested to the extent of 50% on April 30, 2018 and balance 50% vested on April 30, 2019. Options granted in January 2018 vested at the end of four years from the date of grant. Certain options granted on May 2018, vested to the extent of 50% on May 2021 and balance 50% on May 2022. Options granted prior to March 2014 except mentioned below, vested in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the grants vesting in each year, commencing from the end of 12 months from the date of grant. Options granted in April 2009 vested in a graded manner over a five-year period with 20%, 20%, 30% and 30% of grant vesting each year, commencing from the end of 24 months from the date of grant. Options granted in September 2011 vested in a graded manner over a five-year period with 15%, 20%, 20% and 45% of grant vesting each year, commencing from the end of 24 months from the date of the grant. The exercise price of the Bank’s options, except mentioned below, is the last closing price on the stock exchange, which recorded highest trading volume preceding the date of grant of options. In February 2011, the Bank granted 16,692,500 options to eligible employees and whole-time Directors of the Bank and certain of its subsidiaries at an exercise price of Rs. 175.82. This exercise price was the average closing price on the stock exchange during the six months ended October 28, 2010. Of these options granted, 50% vested on April 30, 2014 and the balance 50% vested on April 30, 2015. The Board of Directors of the Bank at its Meeting held on June 28, 2022, approved the adoption of Employees Stock Unit Scheme - 2022 (Scheme 2022), which was subsequently approved by the shareholders at the Annual General Meeting held on August 30, 2022. F-52 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) As per the Scheme, maximum of 100,000,000 Units, shall be granted in one or more tranches over a period of seven years from the date of approval of the Scheme 2022 by the shareholders. The maximum number of Units granted to any eligible employee shall not exceed 20,000 units in any financial year and 0.14% of the total units available for grant over a period of seven years from the date of approval of the Unit Scheme by the shareholders. Units granted under the Scheme 2022 shall vest not later than the maximum vesting period of four years. Exercise price shall be the face value of equity shares of the Bank i.e., Rs. 2 for each unit (as adjusted for any changes in capital structure of the Bank). Units granted under the scheme vest in a graded manner over a three-year period with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 13 months from the date of grant. Exercise period of units is five years from the date of vesting, or such shorter period as may be determined by the Board Governance, Remuneration & Nomination Committee for each grant. The weighted average fair value, based on Black-Scholes model, of options granted during the year ended March 31, 2024 was Rs. 340.59 (year ended March 31, 2023: Rs. 291.15) and of units granted during the year ended March 31, 2024 was ₹ 879.43. The following table sets forth, for the periods indicated, the key assumptions used to estimate the fair value of options granted. Particulars Year ended March 31, 2024 Year ended March 31, 2023 Risk-free interest rate 6.88% to 7.32% 5.99% to 7.37% Expected term 3.23 to 5.23 years 3.23 to 5.23 years Expected volatility 24.78% to 37.41% 34.79% to 38.98% Expected dividend yield 0.56% to 0.85% 0.27% to 0.72% The following table sets forth, for the periods indicated, the key assumptions used to estimate the fair value of units granted. Particulars Year ended March 31, 2024 Risk-free interest rate 6.82% to 6.94% Expected term 1.58 to 3.58 years Expected volatility 23.63% to 36.56% Expected dividend yield 0.56% Risk-free interest rates over the expected term of the option/units are based on the government securities yield in effect at the time of the grant. The expected term of an option/units is estimated based on the vesting term as well as expected exercise behavior of the employees who receive the option/units. Expected exercise behavior is estimated based on the historical stock option exercise pattern of the Bank. Expected volatility during the estimated expected term of the option/units is based on historical volatility determined based on observed market prices of the Bank’s publicly traded equity shares. Expected dividends during the estimated expected term of the option/units are based on recent dividend activity. The following table sets forth, for the periods indicated, the summary of the status of the Bank’s stock option plan. F-53 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. except number of options Particulars Stock options outstanding Year ended March 31, 2024 Year ended March 31, 2023 Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at the beginning of the year 225,025,803 361.60 237,197,999 310.82 Add: Granted during the year 14,635,600 894.95 25,793,500 747.92 Less: Lapsed during the year, net of re-issuance 1,410,025 728.44 3,921,340 568.36 Less: Exercised during the year 39,519,912 296.27 34,044,356 276.72 Outstanding at the end of the year 198,731,466 411.26 225,025,803 361.60 Options exercisable 159,296,026 324.55 172,938,533 289.69 The following table sets forth, the summary of stock options outstanding at March 31, 2024. Range of exercise price (Rs. per share) Number of shares arising out of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (Number of years) 60-199 4,012,005 161.88 1.25 200-399 115,605,713 267.72 3.54 400-599 42,086,634 483.18 3.22 600-799 22,668,214 747.64 5.20 800-899 14,358,900 894.81 6.16 The following table sets forth, the summary of stock options outstanding at March 31, 2023. Range of exercise price (Rs. per share) Number of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (Number of years) 60-199 7,202,993 160.84 1.85 200-399 145,129,078 267.52 4.37 400-599 48,347,432 479.32 4.15 600-799 24,274,900 747.62 6.17 800-899 71,400 862.88 6.58 The following table sets forth, for the periods indicated, the summary of the status of the Bank’s stock unit plan. F-54 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. except number of options Particulars Stock units outstanding Year ended March 31, 2024 Year ended March 31, 2023 Number of units Weighted average exercise price Number of units Weighted average exercise price Outstanding at the beginning of the year .. .. .. .. Add: Granted during the year 4,419,670 2.00 .. .. Less: Lapsed during the year, net of re-issuance 228,860 2.00 .. .. Less: Exercised during the year .. .. .. .. Outstanding at the end of the year 4,190,810 2.00 .. .. Units exercisable 2,700 2.00 .. .. At March 31, 2024, the weighted average remaining contractual life of stock units outstanding was 6.24 years. The options were exercised regularly throughout the period and weighted average share price as per National Stock Exchange price volume data during the year ended March 31, 2024 was Rs. 972.60 (Year ended March 31, 2023: Rs. 832.00). ICICI Life: ICICI Prudential Life Insurance Company Limited has formulated ESOS for their employees. There was no compensation cost for the year ended March 31, 2024 based on the intrinsic value of options. The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI Prudential Life Insurance Company Limited. Rs. except number of options Particulars Stock options outstanding Year ended March 31, 2024 Year ended March 31, 2023 Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at the beginning of the year 23,942,115 435.18 20,184,630 404.87 Add: Granted during the year 7,215,300 448.95 5,227,730 541.00 Less: Forfeited/lapsed during the year 613,390 485.02 199,690 461.18 Less: Exercised during the year 2,094,015 394.28 1,270,555 384.94 Outstanding at the end of the year 28,450,010 440.61 23,942,115 435.18 Options exercisable 16,332,549 415.08 13,559,815 395.34 F-55 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) The following table sets forth, summary of stock options outstanding of ICICI Prudential Life Insurance Company Limited at March 31, 2024. Range of exercise price (Rs. per share) Number of shares arising out of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (number of years) 300-399 7,363,410 379.67 2.36 400-499 15,904,970 435.91 5.09 500-599 5,127,130 540.79 5.12 600-699 54,500 619.43 4.87 The following table sets forth, summary of stock options outstanding of ICICI Prudential Life Insurance Company Limited at March 31, 2023. Range of exercise price (Rs. per share) Number of shares arising out of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (number of years) 300-399 8,825,615 379.70 3.20 400-499 9,896,370 428.41 5.27 500-599 5,165,630 541.00 6.10 600-699 54,500 619.43 5.06 ICICI General1: ICICI Lombard General Insurance Company Limited has formulated ESOS for their employees. There was no compensation cost for the year ended March 31, 2024 based on the intrinsic value of options. The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI Lombard General Insurance Company Limited. Rs. except number of options Particulars Stock options outstanding Year ended March 31, 2024 Number of options Weighted average exercise price Outstanding at the beginning of the year 12,646,890 1,398.39 Add: Granted during the year 4,527,220 1,115.92 Less: Forfeited/lapsed during the year 1,074,224 1,276.98 Less: Exercised during the year 1,563,002 1,055.30 Outstanding at the end of the year 14,536,884 1,074.44 Options exercisable 5,497,000 888.94 The following table sets forth, summary of stock options outstanding of ICICI Lombard General Insurance Company Limited at March 31, 2024. F-56 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Range of exercise price (Rs. per share) Number of shares arising out of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (number of years) 700-800 1,105,080 715.15 2.45 800-1100 1,540,310 1,086.85 2.05 1100-1200 4,038,370 1,104.10 6.05 1200-1300 1,924,840 1,235.15 3.11 1300-1400 3,439,304 1,363.10 5.41 1400-1500 2,348,980 1,417.15 4.05 1500-1600 40,000 1,589.70 5.10 1600-1700 100,000 1,639.25 6.90 1. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. ICICI Securities: ICICI Securities Limited has formulated ESOS and ESUS 2022 for their employees. There was no compensation cost for the year ended March 31, 2024 based on the intrinsic value of options. The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI Securities Limited. Rs. except number of options Particulars Stock options outstanding Year ended March 31, 2024 Year ended March 31, 2023 Number of options Weighted average exercise price (Rs. per share) Number of options Weighted average exercise price (Rs. per share) Outstanding at the beginning of the year 4,146,544 445.94 2,939,279 342.43 Add: Granted during the year 2,568,250 473.28 1,657,700 624.68 Less: Forfeited/lapsed during the year 165,680 544.97 263,980 514.77 Less: Exercised during the year 489,029 349.77 186,455 305.89 Outstanding at the end of the year 6,060,085 462.58 4,146,544 445.94 Options exercisable 2,266,545 382.85 1,588,294 306.03 The following table sets forth, summary of stock options outstanding of ICICI Securities Limited at March 31, 2024. Range of exercise price (Rs. per share) Number of shares arising out of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (number of years) 200-249 505,550 221.45 2.06 F-57 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) 250-299 37,730 256.55 1.55 350-399 994,940 361.00 3.10 400-449 625,410 424.60 4.05 450-499 2,362,550 465.10 6.05 500-549 4,700 512.10 5.80 600-649 1,529,205 624.94 5.17 The following table sets forth, summary of stock options outstanding of ICICI Securities Limited at March 31, 2023. Range of exercise price (Rs. per share) Number of shares arising out of options Weighted average exercise price (Rs. per share) Weighted average remaining contractual life (number of years) 200-249 696,230 221.45 3.10 250-299 37,730 256.55 2.98 350-399 1,127,904 361.00 4.13 400-449 749,880 424.60 5.10 500-549 4,700 512.10 6.81 600-649 1,523,800 625.00 6.05 750-799 6,300 774.60 5.30 The following table sets forth, for the periods indicated, a summary of the status of the stock unit plan of ICICI Securities Limited. Rs. except number of options Particulars Stock options outstanding Year ended March 31, 2024 Year ended March 31, 2023 Number of units Weighted average exercise price (Rs. per share) Number of units Weighted average exercise price (Rs. per share) Outstanding at the beginning of the year .. .. .. .. Add: Granted during the year 800,990 5.00 .. .. Less: Lapsed during the year, net of re-issuance 92,770 5.00 .. .. Less: Exercised during the year .. .. .. .. Outstanding at the end of the year 708,220 5.00 .. .. Options exercisable .. .. .. .. At March 31, 2024, the weighted average remaining contractual life of stock units outstanding was 6.13 years. 4. Fixed assets The following table sets forth, for the periods indicated, the movement in software acquired by the Group, as included in fixed assets. F-58 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars At March 31, 2024 At March 31, 2023 At cost at March 31 of preceding year 36,232.4 33,010.5 Add: Adjustments1,2 8,307.6 .. Adjusted cost at March 31 44,540.0 33,010.5 Additions during the year 7,555.5 5,480.1 Deductions during the year (876.3) (2,258.2) Depreciation to date (37,492.7) (26,065.1) Net block 13,726.5 10,167.3 1. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. 2. I-Process Services (India) Private Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. March 20, 2024 and became a wholly owned subsidiary of the Bank w.e.f. March 22, 2024. 5. Assets on lease 5.1 Assets taken under operating lease Operating leases primarily comprise office premises which are renewable at the option of the Group. (i) The following table sets forth, for the periods indicated, the details of liability for premises taken on non-cancellable operating leases. Rs. in million Particulars At March 31, 2024 At March 31, 2023 Not later than one year 992.7 924.1 Later than one year and not later than five years 2,462.6 1,443.2 Later than five years 2,375.1 396.2 Total 5,830.4 2,763.5 (ii) Total of non-cancellable lease payments recognised in the profit and loss account for the year ended March 31, 2024 is Rs. 1,540.5 million (year ended March 31, 2023 Rs. 1,064.3 million). 5.2 Assets taken under finance lease The following table sets forth, for the periods indicated, the details of assets taken on finance leases. Rs. in million Particulars At March 31, 2024 At March 31, 2023 A. Total minimum lease payments outstanding Not later than one year 249.8 271.3 Later than one year and not later than five years 359.9 596.1 Later than five years 0.2 14.9 Total 609.9 882.3 B. Interest cost payable Not later than one year 42.6 70.0 Later than one year and not later than five years 41.1 83.3 Later than five years .. 0.5 F-59 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars At March 31, 2024 At March 31, 2023 Total 83.7 153.8 C. Present value of minimum lease payments payable (A-B) Not later than one year 207.2 201.3 Later than one year and not later than five years 318.8 512.8 Later than five years 0.2 14.4 Total 526.2 728.5 5.3 Assets given under finance lease The following table sets forth, for the periods indicated, the details of finance leases. Rs. in million Particulars At March 31, 2024 At March 31, 2023 Future minimum lease receipts Present value of lease receipts 34.3 50.2 Unmatured finance charges 0.8 2.0 Sub total 35.1 52.2 Less: collective provision (0.1) (0.2) Total 35.0 52.0 Maturity profile of future minimum lease receipts - Not later than one year 35.1 19.0 - Later than one year and not later than five years 0.0 33.2 - Later than five years .. .. Total 35.1 52.2 Less: collective provision (0.1) (0.2) Total 35.0 52.0 Maturity profile of present value of lease rentals The following table sets forth, for the periods indicated, the details of maturity profile of present value of finance lease receipts. Rs. in million Particulars At March 31, 2024 At March 31, 2023 Maturity profile of future present value of finance lease receipts - Not later than one year 34.3 17.7 - Later than one year and not later than five years .. 32.5 - Later than five years .. .. Total 34.3 50.2 Less: collective provision (0.1) (0.2) Total 34.2 50.0 F-60 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) 6. Provisions and contingencies The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in the profit and loss account. Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Provision for depreciation of investments1 7,049.6 13,917.0 Provision towards non-performing and other assets 9,635.7 (3,653.5) Provision towards income tax a) Current 136,933.0 114,564.4 b) Deferred 17,343.2 3,370.0 Other provisions and contingencies2,3 20,438.8 59,135.7 Total provisions and contingencies 191,400.3 187,333.6 1. During the year ended March 31, 2024, the Group made a provision of Rs. 5,105.0 million against its investments in Alternative Investment Funds (AIFs) as per RBI circular dated December 19, 2023. 2. No contingency provision was made by the Bank during year ended March 31, 2024 (year ended March 31, 2023: Rs. 56,500.0 million). 3. Includes general provision made towards standard assets, provision made on fixed assets acquired under debt-asset swap and non-fund based facilities. The Group has assessed its obligations arising in the normal course of business, including pending litigations, proceedings pending with tax authorities and other contracts including derivative and long-term contracts. In accordance with the provisions of Accounting Standard - 29 on ‘Provisions, Contingent Liabilities and Contingent Assets’, the Group recognises a provision for material foreseeable losses when it has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. In cases where the available information indicates that the loss on the contingency is reasonably possible or the amount of loss cannot be reasonably estimated, a disclosure to this effect is made as contingent liabilities in the financial statements. The Group does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. For insurance contracts booked in its life insurance subsidiary, reliance has been placed on the Appointed Actuary for actuarial valuation of ‘liabilities for policies in force’. The Appointed Actuary has confirmed that the assumptions used in valuation of liabilities for policies in force are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. 7. Employee benefits Pension The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for pension benefits. Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Opening obligations 18,429.1 18,661.0 F-61 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Service cost 114.8 151.7 Interest cost 1,314.0 1,150.6 Actuarial (gain)/loss (11.5) 758.2 Past service cost 306.91 .. Liabilities extinguished on settlement (2,137.9) (2,192.6) Benefits paid (95.5) (99.8) Obligations at the end of year 17,919.9 18,429.1 Opening plan assets, at fair value 18,190.2 19,843.3 Expected return on plan assets 1,361.0 1,522.0 Actuarial gain/(loss) 439.5 (682.0) Assets distributed on settlement (2,375.4) (2,436.2) Contributions 401.7 42.9 Benefits paid (95.5) (99.8) Closing plan assets, at fair value 17,921.5 18,190.2 Fair value of plan assets at the end of the year 17,921.5 18,190.2 Present value of the defined benefit obligations at the end of the year (17,919.9) (18,429.1) Amount not recognised as an asset (limit in Para 59(b) of AS 15 on ‘employee benefits’) .. .. Asset/(liability) 1.6 (238.9) Cost2 Service cost 114.8 151.7 Interest cost 1,314.0 1,150.6 Expected return on plan assets (1,361.0) (1,522.0) Actuarial (gain)/loss (451.0) 1,440.2 Past service cost 306.91 .. Curtailments & settlements (gain)/loss 237.5 243.6 Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ .. (401.9) Net cost 161.2 1,062.2 Actual return on plan assets 1,800.5 840.0 Expected employer’s contribution next year 400.0 1,000.0 Investment details of plan assets Government of India securities 41.46% 41.74% Corporate bonds 46.59% 48.30% Equity securities in listed companies 9.35% 7.08% Others 2.60% 2.88% Assumptions F-62 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Discount rate 7.20% 7.30% Salary escalation rate: On Basic pay 1.50% 1.50% On Dearness relief 8.00% 8.00% Estimated rate of return on plan assets 7.50% 7.50% 1. Represents impact towards dearness allowance neutralization as per IBA notification dated October 16, 2023. 2. Included in line item ‘Payments to and provision for employees’ of Schedule 16 - Operating expenses. Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations. Experience adjustment Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Year ended March 31, 2022 Year ended March 31, 2021 Year ended March 31, 2020 Fair value of plan assets 17,921.5 18,190.2 19,843.3 21,162.2 16,972.1 Defined benefit obligations (17,919.9) (18,429.1) (18,661.0) (20,265.6) (19,914.3) Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) .. .. (401.9) (304.8) .. Surplus/(deficit) 1.6 (238.9) 780.4 591.8 (2,942.2) Experience adjustment on plan assets 439.5 (682.0) (331.9) 521.9 741.1 Experience adjustment on plan liabilities (227.0) 805.8 809.0 613.4 2,186.1 Gratuity The following table sets forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for gratuity benefits of the Group. Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Opening obligations 18,896.8 16,895.1 Add: Adjustment for exchange fluctuation on opening obligation 2.4 12.2 Add: Adjustment1,2 1,695.1 .. Adjusted obligations 20,594.3 16,907.3 Service cost 1,915.7 1,643.8 Interest cost 1,435.5 1,166.7 F-63 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Actuarial (gain)/loss 1,246.5 1,108.1 Past service cost .. (72.2) Liability transferred from/to other companies 13.9 20.9 Benefits paid (1,785.0) (1,877.8) Obligations at the end of the year 23,420.9 18,896.8 Opening plan assets, at fair value 17,061.6 16,738.3 Add: Adjustment1,2 1,608.9 .. Adjusted plan assets at fair value 18,670.5 16,738.3 Expected return on plan assets 1,238.9 1,197.7 Actuarial gain/(loss) 870.5 (577.3) Contributions 3,932.8 1,544.4 Assets transferred from/to other companies 13.9 36.5 Benefits paid (1,778.1) (1,877.8) Closing plan assets, at fair value 22,948.5 17,061.6 Fair value of plan assets at the end of the year 22,948.5 17,061.6 Present value of the defined benefit obligations at the end of the year (23,420.9) (18,896.8) Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) .. .. Asset/(liability) (472.4) (1,835.2) Cost3 Service cost 1,915.7 1,643.8 Interest cost 1,435.5 1,166.7 Expected return on plan assets (1,238.9) (1,197.7) Actuarial (gain)/loss 376.1 1,685.4 Past service cost .. (72.2) Exchange fluctuation loss/(gain) 2.4 12.2 Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ .. .. Net cost 2,490.8 3,238.2 Actual return on plan assets 2,109.3 620.4 Expected employer’s contribution next year 1,731.0 1,731.0 Investment details of plan assets Insurer managed funds 21.85% 9.97% Government of India securities 30.73% 30.07% Corporate bonds 34.90% 42.87% Equity 11.23% 15.04% Others 1.29% 2.05% Assumptions Discount rate 7.15%-7.25% 7.30%-7.50% Salary escalation rate 7.00%-10.00% 7.00%-10.00% F-64 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Estimated rate of return on plan assets 7.00%-7.50% 7.00%-8.00% 1. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. 2. I-Process Services (India) Private Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. March 20, 2024 and became a wholly owned subsidiary of the Bank w.e.f. March 22, 2024. 3. Included in line item ‘Payments to and provision for employees’ of Schedule 16 - Operating expenses. Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations. Experience adjustment Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Year ended March 31, 2022 Year ended March 31, 2021 Year ended March 31, 2020 Fair value of plan assets 22,948.5 17,061.6 16,738.3 16,541.6 13,636.8 Defined benefit obligations (23,420.9) (18,896.8) (16,895.1) (16,954.5) (15,743.6) Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) .. .. .. .. .. Surplus/(deficit) (472.4) (1,835.2) (156.8) (412.9) (2,106.8) Experience adjustment on plan assets 870.5 (577.3) (33.1) 892.1 (167.4) Experience adjustment on plan liabilities 1,211.4 869.4 464.7 (548.2) 253.6 The estimates of future salary increases, considered in actuarial valuation, take into consideration inflation, seniority, promotion and other relevant factors. Provident Fund (PF) The Group does not have any liability towards interest rate guarantee on exempt provident fund on the basis of actuarial valuation, the Group has not made any provision for the year ended March 31, 2024 (year ended March 31, 2023: Nil). The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for provident fund of the Group. F-65 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Opening obligations 55,367.7 49,411.5 Less: Adjustments1 .. (655.3) Adjusted balance 55,367.7 48,756.2 Service cost 3,381.8 2,747.6 Interest cost 4,237.9 3,367.1 Actuarial (gain)/loss 919.2 1,032.8 Employees contribution 5,726.7 4,707.4 Liability transferred from/to other companies 1,169.0 805.2 Benefits paid (5,782.3) (6,048.6) Obligations at end of the year 65,020.0 55,367.7 Opening plan assets, at fair value 56,128.1 50,656.3 Less: Adjustments1 .. (407.5) Adjusted balance 56,128.1 50,248.8 Expected return on plan assets 4,613.3 4,100.3 Actuarial gain/(loss) 1,400.7 (432.8) Employer contributions 3,381.8 2,747.6 Employees contributions 5,726.6 4,707.4 Assets transfer from/to other companies 1,169.0 805.4 Benefits paid (5,782.3) (6,048.6) Closing plan assets, at fair value 66,637.2 56,128.1 Plan assets at the end of the year 66,637.2 56,128.1 Present value of the defined benefit obligations at the end of the year (65,020.0) (55,367.7) Amount not recognised as an asset (Limit in para 59(b) of AS-15 on ‘employee benefits’)2 (1,617.2) (760.4) Asset/(liability) .. .. Cost3 Service cost 3,381.8 2,747.6 Interest cost 4,237.9 3,367.1 Expected return on plan assets (4,613.3) (4,100.3) Actuarial (gain)/loss (481.6) 1,465.6 Effect of limit in para 59(b)2 856.9 (732.4) Net cost 3,381.7 2,747.6 Actual return on plan assets 6,014.0 3,667.5 Expected employer’s contribution next year 3,650.8 2,965.9 F-66 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Investment details of plan assets Government of India securities 54.37% 55.20% Corporate Bonds 33.57% 34.83% Special deposit scheme 0.81% 0.96% Others 11.25% 9.01% Assumptions Discount rate 7.15%-7.20% 7.35%-7.40% Expected rate of return on assets 7.84%-8.43% 7.97%-8.76% Discount rate for the remaining term to maturity of investments 7.20%-7.25% 7.40%-7.60% Average historic yield on the investment 7.84%-8.53% 8.01%-8.96% Guaranteed rate of return 8.25%-8.25% 8.15%-8.15% 1. During the year ended March 31, 2023, ICICI Home Finance Company Limited realised and transferred assets and liabilities of Employee Provident Fund Trust to Central Provident Fund. 2. Pursuant to revised Guidance Note 29 on “Valuation of Interest Rate Guarantees on Exempt Provident Funds under AS 15 (Revised)” issued by the Institute of Actuaries of India on February 16, 2022, plan assets held by the PF Trust have been fair valued. The amount represents the fair value gain on plan assets. 3. Included in line item ‘Payments to and provision for employees’ of Schedule 16 - Operating expenses. Experience adjustment Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Year ended March 31, 2022 Year ended March 31, 2021 Year ended March 31, 2020 Fair value of plan assets 66,637.2 56,128.1 50,656.3 45,615.2 38,682.6 Defined benefit obligations (65,020.0) (55,367.7) (49,411.5) (45,617.9) (38,703.4) Amount not recognised as an asset (limit in para 59(b)) AS 15 on ‘employee benefits’)1 (1,617.2) (760.4) (1,244.8) .. .. Surplus/(deficit) .. .. .. (2.7) (20.8) Experience adjustment on plan assets 1,400.7 (432.8) 415.1 663.8 (662.0) Experience adjustment on plan liabilities 445.6 753.2 (684.8) 1,703.3 (129.9) 1. Pursuant to revised Guidance Note 29 on “Valuation of Interest Rate Guarantees on Exempt Provident Funds under AS 15 (Revised)” issued by ‘Institute of Actuaries of India on February 16, 2022, plan assets held by PF Trust have been fair valued. The amount represents the fair value gain on plan assets. The Group has contributed Rs. 5,861.0 million to provident fund including Government of India managed employees provident fund for the year ended March 31, 2024 (year ended March 31, 2023: Rs. 4,344.2 million), which includes compulsory contribution made towards employee pension scheme under Employees Provident Fund and Miscellaneous Provisions Act, 1952. F-67 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Superannuation Fund The Group has contributed Rs. 355.1 million for the year ended March 31, 2024 (year ended March 31, 2023: Rs. 321.8 million) to Superannuation Fund for employees who had opted for the scheme. National Pension Scheme (NPS) The Group has contributed Rs. 452.2 million for the year ended March 31, 2024 (year ended March 31, 2023: Rs. 361.1 million) to NPS for employees who had opted for the scheme. Compensated absence The following table sets forth, for the periods indicated, movement in provision for compensated absence. Rs. in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Total actuarial liability 5,436.0 3,629.6 Cost1 1,702.2 884.9 Assumptions Discount rate 7.12%-7.25% 7.30%-7.55% Salary escalation rate 5.96%-10.00% 7.00%-10.00% 1. Included in line item ‘Payments to and provision for employees’ of Schedule 16 - Operating expenses. 8. Provision for income tax The provision for income tax (including deferred tax) for the year ended March 31, 2024 amounted to Rs. 154,276.2 million (year ended March 31, 2023: Rs. 117,934.4 million). The Group has a comprehensive system of maintenance of information and documents required by transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. The management is of the opinion that all transactions with international related parties and specified transactions with domestic related parties are primarily at arm’s length so that the above legislation does not have material impact on the financial statements. 9. Deferred tax At March 31, 2024, the Group has recorded net deferred tax asset of Rs. 63,115.8 million (March 31, 2023: Rs. 76,194.4 million), which has been included in other assets. The following table sets forth, for the periods indicated, the break-up of deferred tax assets and liabilities into major items. Rs. in million Particulars At March 31, 2024 At March 31, 2023 Deferred tax assets Provision for bad and doubtful debts 95,145.6 104,780.1 Provision for operating expenses 4,026.9 4,026.9 F-68 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) Particulars At March 31, 2024 At March 31, 2023 Provision/MTM on investment 6,774.4 5,404.1 Provision for expense allowed on payment basis 5,175.4 4,870.3 Unexpired risk reserve 1,486.5 .. Foreign currency translation reserve1 148.0 (615.0) Others2 2,213.2 822.0 Total deferred tax assets 114,970.0 119,288.4 Deferred tax liabilities Special reserve deduction 45,489.3 37,695.4 Mark-to-market gains1 620.6 490.0 Depreciation on fixed assets 5,074.3 4,476.7 Interest on refund of taxes1 441.9 206.2 Others 228.1 225.7 Total deferred tax liabilities 51,854.2 43,094.0 Total net deferred tax assets/(liabilities) 63,115.8 76,194.4 1. These items are considered in accordance with the requirements of Income Computation and Disclosure Standards (ICDS). 2. Includes deferred tax assets created primarily on operating loss, interest on credit impaired loans and provision for diminution in value of investments. 10. Information about business and geographical segments A. Business Segments Pursuant to the guidelines issued by RBI on AS 17 – Segment Reporting, the following business segments of the Group have been reported. i. Retail banking includes exposures of the Bank which satisfy the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures laid down in Basel Committee on Banking Supervision (BCBS) document “International Convergence of Capital Measurement and Capital Standards: A Revised Framework”. This segment also includes income from credit cards, debit cards, third-party product distribution and the associated costs. ii. Wholesale banking includes all advances to trusts, partnership firms, companies and statutory bodies, by the Bank which are not included under Retail banking. iii. Treasury primarily includes the entire investment and derivative portfolio of the Bank. iv. Other banking includes leasing operations and other items not attributable to any particular business segment of the Bank. Further, it includes the Bank’s banking subsidiaries i.e., ICICI Bank UK PLC and ICICI Bank Canada. v. Life insurance represents results of ICICI Prudential Life Insurance Company Limited. F-69 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated profit and loss account (Continued) vi. Others includes ICICI Lombard General Insurance Company Limited, ICICI Home Finance Company Limited, ICICI Venture Funds Management Company Limited, ICICI International Limited, ICICI Securities Primary Dealership Limited, ICICI Securities Limited, ICICI Securities Holdings Inc., ICICI Securities Inc., ICICI Prudential Asset Management Company Limited, ICICI Prudential Trust Limited, ICICI Investment Management Company Limited, ICICI Trusteeship Services Limited, ICICI Prudential Pension Funds Management Company Limited and I-Process Services (India) Private Limited. vii. Unallocated includes items such as tax paid in advance net of provision, deferred tax and provisions to the extent reckoned at the entity level. Income, expenses, assets and liabilities are either specifically identified with individual segments or are allocated to segments on a systematic basis. All liabilities of the Bank are transfer priced to a central treasury unit, which pools all funds and lends to the business units at appropriate rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve requirements. The transfer pricing mechanism of the Bank is periodically reviewed. The segment results are determined based on the transfer pricing mechanism prevailing for the respective reporting periods. The results of reported segments for the year ended March 31, 2024 are not comparable with that of reported segments for the year ended March 31, 2023 to the extent new entities have been consolidated and entities that have been discontinued from consolidation. F-70 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, the business segment results for the year ended March 31, 2024. Rs. in million Sr. no. Particulars Retail banking Wholesale banking Treasury Other banking business Life insurance Others Inter- segment adjustments Total 1 Revenue 1,345,475.7 717,802.2 1,137,018.3 64,034.0 542,361.3 159,326.8 (1,605,641.1) 2,360,377.2 2 Segment results1 188,491.7 199,717.1 146,408.8 16,384.0 9,232.3 62,301.7 (18,192.0) 604,343.6 3 Unallocated expenses .. 4 Share of profit from associates 10,737.7 5 Operating profit (2) – (3)+(4)1 615,081.3 6 Income tax expenses (net)/(net deferred tax credit) 154,276.2 7 Net profit2 (5) – (6) 460,805.1 Other information .. 8 Segment assets 7,193,136.2 4,824,561.0 6,340,548.0 893,056.2 2,987,952.9 1,508,283.1 (182,618.8) 23,564,918.6 9 Unallocated assets 75,711.7 10 Total assets (8) + (9) 23,640,630.3 11 Segment liabilities 10,198,454.9 4,565,715.3 3,815,846.83 607,215.63 2,989,997.03 1,515,019.53 (182,618.8)3 23,509,630.3 12 Unallocated liabilities 131,000.0 13 Total liabilities (11) + (12) 23,640,630.3 14 Capital expenditure 19,984.4 7,806.3 1,390.0 598.4 3,128.9 3,669.0 .. 36,577.0 15 Depreciation 10,978.1 4,596.4 788.2 444.8 1,129.0 1,432.0 (16.4) 19,352.1 1. Profit before tax and minority interest. 2. Includes share of net profit of minority shareholders. 3. Includes share capital and reserves and surplus. F-71 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, the business segment results for the year ended March 31, 2023. Rs. in million Sr. no. Particulars Retail banking Wholesale banking Treasury Other banking business Life insurance Others Inter- segment adjustments Total 1 Revenue 1,037,753.4 506,148.5 845,369.2 44,640.0 479,301.7 97,259.8 (1,148,684.6) 1,861,788.0 2 Segment results1 175,336.8 157,857.8 140,372.1 10,014.5 8,968.9 42,023.7 (15,509.2) 519,064.6 3 Unallocated expenses 56,500.0 4 Share of profit from associates 9,982.9 5 Operating profit (2) – (3)+(4)1 472,547.5 6 Income tax expenses (net)/(net deferred tax credit) 117,934.4 7 Net profit2 (5) – (6) 354,613.1 Other information 8 Segment assets 6,039,593.7 4,328,743.5 5,129,405.0 836,960.5 2,556,899.0 711,348.4 (114,612.3) 19,488,337.8 9 Unallocated assets 96,567.2 10 Total assets (8) + (9) 19,584,905.0 11 Segment liabilities 8,913,545.4 3,472,764.9 3,344,275.63 564,779.63 2,558,472.03 714,679.83 (114,612.3)3 19,453,905.0 12 Unallocated liabilities 131,000.0 13 Total liabilities (11) + (12) 19,584,905.0 14 Capital expenditure 11,682.9 5,251.8 610.6 455.2 1,357.0 1,884.8 .. 21,242.3 15 Depreciation 9,274.5 3,427.2 335.8 405.2 835.1 884.2 (16.4) 15,145.6 1. Profit before tax and minority interest. 2. Includes share of net profit of minority shareholders. 3. Includes share capital and reserves and surplus. F-72 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) B. Geographical segments The Group reports its operations under the following geographical segments. · Domestic operations comprise branches and subsidiaries/joint ventures in India. · Foreign operations comprise branches and subsidiaries/joint ventures outside India and offshore banking units in India. The Group conducts transactions with its customers on a global basis in accordance with their business requirements, which may span across various geographies. The following tables set forth, for the periods indicated, the geographical segment results. Rs. in million Revenue Year ended March 31, 2024 Year ended March 31, 2023 Domestic operations1 2,296,083.0 1,819,445.3 Foreign operations 75,031.9 52,325.6 Total 2,371,114.9 1,871,770.9 1. Includes share of profit from associates of Rs. 10,737.7 million (March 31, 2023: Rs. 9,982.9 million). Rs. in million Assets Year ended March 31, 2024 Year ended March 31, 2023 Domestic operations 22,366,146.4 18,242,212.3 Foreign operations 1,198,772.2 1,246,125.5 Total 23,564,918.6 19,488,337.8 1. Segment assets do not include tax paid in advance/tax deducted at source (net) and deferred tax assets (net). The following table sets forth, for the periods indicated, capital expenditure and depreciation thereon for the geographical segments. Rs. in million Capital expenditure incurred during the Depreciation provided during the Year ended March 31, 2024 Year ended March 31, 2023 Year ended March 31, 2024 Year ended March 31, 2023 Domestic operations 36,299.6 20,914.1 19,081.8 14,867.2 Foreign operations 277.4 328.2 270.4 278.4 Total 36,577.0 21,242.3 19,352.2 15,145.6 11. Penalties/fines imposed by banking regulatory bodies RBI imposed a penalty of Rs. 121.9 million on October 17, 2023 based on the deficiency observed in regulatory compliance with the Banking Regulation Act, during Statutory Inspections for supervisory evaluation (ISE 2020 and ISE 2021) of the Bank conducted by RBI (year ended March 31, 2023: Nil). F-73 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 12. Additional information to consolidated accounts Additional information to consolidated accounts at March 31, 2024 (Pursuant to Schedule III of the Companies Act, 2013) Rs. in million Name of the entity Net assets2 Share in profit or loss % of total net assets Amount % of total net profit Amount Parent ICICI Bank Limited 93.1% 2,383,993.2 92.4% 408,882.7 Subsidiaries Indian ICICI Securities Primary Dealership Limited 0.7% 18,288.0 0.9% 4,139.1 ICICI Securities Limited 1.5% 38,825.6 3.9% 17,305.9 ICICI Home Finance Company Limited 1.1% 28,029.3 1.2% 5,316.0 ICICI Trusteeship Services Limited 0.0% 9.7 0.0% 1.1 ICICI Investment Management Company Limited 0.0% 129.5 (0.0%) (57.6) ICICI Venture Funds Management Company Limited 0.1% 2,483.4 0.0% 110.2 ICICI Prudential Life Insurance Company Limited 4.3% 110,082.3 1.9% 8,523.9 ICICI Lombard General Insurance Company Limited3 5.1% 129,493.3 0.3% 1,543.9 ICICI Prudential Trust Limited 0.0% 19.8 0.0% 4.7 ICICI Prudential Asset Management Company Limited 1.0% 24,849.0 4.1% 18,145.0 ICICI Prudential Pension Funds Management Company Limited 0.0% 560.2 (0.0%) (17.2) I-Process Services (India) Private Limited4 0.0% 619.8 0.0% 15.6 Foreign ICICI Bank UK PLC 1.1% 28,146.7 0.5% 2,277.8 ICICI Bank Canada 1.1% 28,043.6 1.0% 4,500.7 ICICI International Limited 0.0% 130.6 0.0% 6.7 ICICI Securities Holdings Inc. 0.0% 131.9 (0.0%) (1.0) ICICI Securities Inc. 0.0% 396.5 0.0% 25.6 Other consolidated entities Indian ICICI Strategic Investments Fund 0.0% 129.8 0.0% 7.6 Foreign NIL .. .. .. .. F-74 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rs. in million Name of the entity Net assets2 Share in profit or loss % of total net assets Amount % of total net profit Amount Minority Interests (5.4%) (138,884.2) (4.1%) (18,241.4) Associates Indian ICICI Lombard General Insurance Company Limited3 1.9% 8,452.0 I-Process Services (India) Private Limited4 0.0% 25.4 NIIT Institute of Finance Banking and Insurance Training Limited .. .. 0.0% 10.7 ICICI Merchant Services Private Limited .. .. 0.0% 215.8 India Infradebt Limited .. .. 0.4% 1,869.7 India Advantage Fund III .. .. 0.0% 60.6 India Advantage Fund IV .. .. 0.0% 85.7 Arteria Technologies Private Limited .. .. 0.0% 17.9 Foreign NIL .. .. .. .. Joint Ventures NIL .. .. .. .. Inter-company adjustments (3.7%) (94,039.7) (4.7%) (20,663.4) TOTAL 100.0% 2,561,438.3 100.0% 442,563.7 1. 0.0 represents insignificant amount. 2. Total assets minus total liabilities. 3. ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. 4. I-Process Services (India) Private Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. March 20, 2024 and became a wholly owned subsidiary of the Bank w.e.f. March 22, 2024. Additional information to consolidated accounts at March 31, 2023 (Pursuant to Schedule III of the Companies Act, 2013) Rs. in million Name of the entity Net assets2 Share in profit or loss % of total net assets Amount % of total net profit Amount Parent ICICI Bank Limited 93.6% 2,007,153.8 93.7% 318,965.0 Subsidiaries Indian F-75 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rs. in million Name of the entity Net assets2 Share in profit or loss % of total net assets Amount % of total net profit Amount ICICI Securities Primary Dealership Limited 0.7% 15,815.5 0.4% 1,277.8 ICICI Securities Limited 1.3% 28,219.2 3.3% 11,334.7 ICICI Home Finance Company Limited 1.1% 22,998.6 1.1% 3,653.1 ICICI Trusteeship Services Limited 0.0% 8.7 0.0% 0.1 ICICI Investment Management Company Limited 0.0% 187.0 (0.0%) (58.7) ICICI Venture Funds Management Company Limited 0.1% 2,473.3 0.0% 61.9 ICICI Prudential Life Insurance Company Limited 4.7% 100,915.8 2.4% 8,106.6 ICICI Prudential Trust Limited 0.0% 16.9 0.0% 2.2 ICICI Prudential Asset Management Company Limited 1.0% 21,478.8 4.4% 15,077.0 ICICI Prudential Pension Funds Management Company Limited 0.0% 577.5 0.0% 28.3 Foreign ICICI Bank UK PLC 1.2% 26,158.3 0.3% 1,045.9 ICICI Bank Canada 1.2% 25,256.2 0.8% 2,818.9 ICICI International Limited 0.0% 122.0 0.0% 8.9 ICICI Securities Holdings Inc. 0.0% 132.7 0.0% 2.0 ICICI Securities Inc. 0.0% 364.8 0.0% 58.3 Other consolidated entities Indian ICICI Strategic Investments Fund 0.0% 119.4 0.0% 3.7 Foreign NIL .. .. .. .. Minority interests (3.1%) (66,867.5) (4.2%) (14,246.7) Associates Indian ICICI Lombard General Insurance Company Limited .. .. 2.4% 8,303.1 I-Process Services (India) Private Limited .. .. 0.0% 37.7 NIIT Institute of Finance Banking and Insurance Training Limited .. .. 0.0% 3.3 ICICI Merchant Services Private Limited .. .. 0.0% 63.0 India Infradebt Limited .. .. 0.5% 1,560.2 India Advantage Fund III .. .. 0.0% 0.0 India Advantage Fund IV .. .. (0.0%) (0.2) Arteria Technologies Private Limited .. .. 0.0% 15.7 F-76 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rs. in million Name of the entity Net assets2 Share in profit or loss % of total net assets Amount % of total net profit Amount Foreign NIL .. .. .. .. Joint Ventures NIL .. .. .. .. Inter-company adjustments (1.8%) (40,153.1) (5.1%) (17,755.4) TOTAL 100.0% 2,144,977.9 100.0% 340,366.4 1. 0.0 represents insignificant amount. 2. Total assets minus total liabilities 13. Revaluation of fixed assets The Bank and its housing finance subsidiary follows the revaluation model for their premises (land and buildings) other than improvements to leasehold property as per AS 10 – ‘Property, Plant and Equipment’. In accordance with the policy, annual revaluation is carried out through external valuers, using methodologies such as direct sales comparison method and income capitalisation method and the incremental amount has been taken to revaluation reserve. The revalued amount at March 31, 2024 was Rs. 55,184.5 million (March 31, 2023: Rs. 55,500.0 million) as compared to the historical cost less accumulated depreciation of Rs. 24,062.4 million (March 31, 2023: Rs. 24,581.6 million). The revaluation reserve is not available for distribution of dividend. 14. Proposed dividend on equity shares The Board of Directors at its meeting held on April 27, 2024 has recommended a dividend of Rs. 10 per equity share for the year ended March 31, 2024 (year ended March 31, 2023: Rs. 8.00 per equity share). The declaration and payment of dividend is subject to requisite approvals. 15. Divergence in asset classification and provisioning for NPAs In terms of the RBI circular no. //DOR.ACC.REC.No.74/21.04.018/2022-23 dated October 11, 2022, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI’s annual supervisory process in their notes to accounts to the financial statements, wherever either (a) the additional provisioning requirements assessed by RBI exceed 5% (10% till March 31, 2023) of the reported net profits before provisions and contingencies or (b) the additional gross NPAs identified by RBI exceed 5% (10% till March 31, 2023) of the published incremental gross NPAs for the reference period, or both. Based on the condition mentioned in RBI circular, 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, 2023 and for the year ended March 31, 2022. 16. Disclosure on lending and borrowing activities The Bank and other subsidiaries, as part of its normal banking business, grants loans and advances, makes investment, provides guarantees to and accept deposits and borrowings from its customers, other F-77 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) entities and persons. These transactions are part of Bank’s normal banking business, which is conducted ensuring adherence to all regulatory requirements. Other than the transactions described above, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank and other subsidiaries incorporated in India to or in any other persons or entities, including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Bank and other subsidiaries incorporated in India (Ultimate Beneficiaries). The Bank and other subsidiaries incorporated in India have also not received any fund from any parties (Funding Party) with the understanding that the Bank and other subsidiaries incorporated in India shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. 17. Acquisition of ICICI Lombard General Insurance Company Limited On May 28, 2023, the Board of Directors of the Bank approved to increase shareholding in ICICI Lombard General Insurance Company Limited in multiple tranches up to 4.0% additional shareholding, as permissible under applicable law, to ensure compliance with the Section 19(2) of the Banking Regulation Act, 1949 and make the Company, a subsidiary of the Bank, subject to receipt of necessary regulatory approval(s). On August 4, 2023, RBI vide letter CO.DOR.RAUG.AUT.No.S2656/24.01.002/2023-24, had conveyed the approval to the Bank for acquiring additional stake in ICICI Lombard General Insurance Company Limited. On September 1, 2023, IRDAI vide letter 733/F&I/ToS/ICICIL/FY24/1/59 had also conveyed the approval in connection to above. Accordingly, the Bank through stock exchange mechanism had acquired the additional stake in ICICI Lombard General Insurance Company Limited in multiple tranches, resulting into increase in shareholding of more than 50.0%. Consequently, ICICI Lombard General Insurance Company Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. February 29, 2024. Accordingly, goodwill of Rs. 23,728.3 million was recognised on purchase of additional stake in ICICI Lombard General Insurance Company Limited. 18. Acquisition of I-Process Services (India) Private Limited On February 17-18, 2023, the Board of Directors of the Bank approved to make I-Process Services (India) Private Limited a wholly owned subsidiary of the Bank, subject to receipt of requisite regulatory and statutory approvals. On September 8, 2023, RBI vide letter CO.DoR.RAUG.No.S3282/ 24.01.002/2023-24, had conveyed the approval to the Bank in connection to above. On January 30, 2024, the Bank entered into a share purchase agreement in relation to investment in equity shares of I-Process Services (India) Private Limited. Accordingly, the Bank purchased equity shares of the Company in off-market transactions. Consequently, I-Process Services (India) Private Limited ceased to be an associate and became a subsidiary of the Bank w.e.f. March 20, 2024. Subsequently, I-Process Services (India) Private Limited became a wholly owned subsidiary of the Bank w.e.f. March 22, 2024. Accordingly, capital reserve of Rs. 358.5 million was recognised on purchase of additional stake in I-Process Services (India) Private Limited. 19. De-listing of ICICI Securities Company Limited The Board of Directors of the Bank on June 29, 2023 approved the draft scheme of arrangement for delisting of equity shares of ICICI Securities Limited, subject to receipt of requisite approvals. Pursuant to the order of the Hon’ble National Company Law Tribunal, Ahmedabad Bench, a meeting of the F-78 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Equity Shareholders of the Bank was held on March 27, 2024, wherein the proposed Scheme was approved by the requisite majority of shareholders. The scheme is currently pending final approval of the Hon’ble National Company Law Tribunal, Ahmedabad Bench. 20. Additional disclosures Additional statutory information disclosed in the separate financial statements of the Bank and subsidiaries having no material bearing on the true and fair view on the consolidated financial statements and the information pertaining to the items which are not material have not been disclosed in the consolidated financial statements. 21. Comparative figures During FY2024, ICICI Lombard General Insurance Company Limited and I-Process Services (India) Private Limited has become subsidiaries due to increase in the Bank’s shareholding above 50.0%. Accordingly, the consolidated financial statements for FY2024 are not comparable with the previous year. Figures of the previous year have been re-grouped to conform to the current year presentation. F-79 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) B. Additional Notes 1. Reserves Statutory reserve: Represents reserve created as a percentage of the net profit before any other appropriation as required by the Banking Regulation Act, 1949. Every banking company in India is currently required to transfer not less than 25% of the net profit (before appropriations) to the “statutory reserve”. Special reserve: Represents reserve maintained under the Income Tax Act, 1961 to avail tax benefits. Securities premium: Represents amount of premium received on issue of share capital, net of expenses incurred on issue of shares. Investment reserve account: Represents provision for depreciation on available for sale and held for trading securities in excess of required amount which is credited to profit and loss account and appropriated to this reserve, net of tax and transfer to statutory reserve. Investment fluctuation reserve: Represents appropriation of net gains on sale of securities classified as available for sale and held for trading, or net profit after mandatory appropriations to other reserves, whichever is lower, until the amount of this reserve is at least 2% of held for trading and available for sale portfolio. Balance in investment fluctuation reserve in excess of 2% of held for trading and available for sale portfolio can be drawn down and transferred to balance in profit and loss account. Capital reserve: Represents amount of gains on sale of securities classified as held to maturity and gains on sale of land and building, net of tax and transfer to statutory reserve. Capital redemption reserve: Represents appropriations made from the surplus profit available for previous years on redemption of preference shares by the Bank, as required under the Companies Act, 2013. Foreign currency translation reserve: Represents cumulative exchange differences arising from translation of financial statements of non-integral foreign operations. Revaluation reserve: Represents reserve on revaluation of premises carried out by the Group. Revenue and other reserves: Represents reserves other than capital reserves and those separately classified. Balance in profit and loss account: Represents the balance of profit after appropriations. F-80 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 2. Deposits Deposits include current account deposits, which are non-interest bearing, savings account deposits and time deposits, which are interest bearing. The following table sets forth the residual contractual maturities of time deposits at March 31, 2024. Rupees in million Deposits maturing during the year ending March 31, 2025 6,268,361.3 2026 1,470,600.5 2027 253,363.8 2028 185,999.9 2029 135,687.3 Thereafter 72,714.6 Total time deposits 8,386,727.4 At March 31, 2024, the aggregate of time deposits with individual balances greater than Rs. 5.0 million was Rs. 4,306,516.1 million (March 31, 2023: Rs. 3,270,106.4 million). 3. Long-term debt Long-term debt represents debt with an original contractual maturity of greater than one year. Maturity distribution is based on contractual maturity or the date at which the debt is callable at the option of the holder, whichever is earlier. A portion of the long-term debt bears a fixed rate of interest. Interest rates on floating-rate debt are generally linked to the Secured Overnight Financing Rate or similar money market rates. The segregation between fixed-rate and floating-rate obligations is based on the contractual terms. The following table sets forth a listing of long-term debt at March 31, 2024, by maturity and interest rate profile. Rupees in million Fixed-rate obligations Floating-rate obligations Total Long-term debt maturing during the year ending March 31, 2025 322,599.5 28,982.5 351,582.0 2026 283,526.8 17,663.0 301,189.8 2027 179,222.4 20,589.0 199,811.4 2028 80,527.3 18,811.9 99,339.2 2029 95,949.1 5,085.5 101,034.6 Thereafter 258,261.3 6,110.1 264,371.4 Total 1,220,086.5 97,241.9 1,317,328.4 Less: Unamortized debt issue costs (780.2) Total 1,316,548.2 Long-term debt is denominated in various currencies. At March 31, 2024, long-term debt comprises Indian rupee debt of Rs. 1,042,058.9 million (March 31, 2023: Rs. 1,021,393.3 million) and foreign currency debt of Rs. 274,489.3 million (March 31, 2023: Rs. 291,003.2 million). F-81 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Indian rupee debt The following tables set forth, for the periods indicated, a listing of major categories of Indian rupee debt. Rupees in million Category At March 31, 2024 Amount Weighted average interest rate Range Weighted average residual maturity (in years) Bonds issued to institutional/individual investors 573,913.8 7.7% 5.9% to 13.1% 4.5 Refinance from financial institutions 383,877.0 6.8% 2.9% to 8.4% 1.4 Borrowings from other banks 47,036.8 8.2% 7.9% to 8.8% 6.0 Fixed deposits 37,231.3 7.3% 5.5% to 8.7% 2.7 Total 1,042,058.9 7.3% 3.4 Rupees in million Category At March 31, 2023 Amount Weighted average interest rate Range Weighted average residual maturity (in years) Bonds issued to institutional/individual investors 611,519.7 7.7% 5.1% to 14.1% 4.4 Refinance from financial institutions 337,330.8 5.9% 2.8% to 8.4% 1.2 Borrowings from other banks 40,505.5 8.1% 7.7% to 9.0% 6.2 Fixed deposits 32,037.3 6.9% 5.1% to 8.8% 2.9 Total 1,021,393.3 7.1% 3.4 Foreign currency debt The following tables set forth, for the periods indicated, a listing of major categories of foreign currency debt. Rupees in million Category At March 31, 2024 Amount Weighted average interest rate Range Weighted average residual maturity (in years) Bonds 137,508.1 4.2% 3.7% to 7.1% 2.3 Other borrowings 136,981.2 2.6% 0.6% to 6.9% 2.1 Total 274,489.3 3.4% 2.2 F-82 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Category At March 31, 2023 Amount Weighted average interest rate Range Weighted average residual maturity (in years) Bonds 139,381.7 4.2% 3.6% to 6.4% 3.1 Other borrowings 151,621.5 2.4% 0.0% to 6.6% 2.6 Total 291,003.2 3.3% 2.8 See note on “Schedule 18B-Additional note-19 Selected information from Indian GAAP financials” for assets pledged as securities for borrowings. 4. Cash and cash equivalents Banks in India are required to maintain with Reserve Bank of India, average daily balance of 4.5% of their net demand and time liabilities by way of cash reserve, for a fortnight period. The banks are allowed to maintain minimum cash reserve of not less than 90% of the required cash reserve on all days during the reporting fortnight, in such a manner that the average of cash reserve maintained daily shall not be less than the requirement prescribed by the Reserve Bank of India. The Bank’s minimum cash reserve requirements for the fortnight period of March 31, 2024 were Rs. 616,350.3 million (March 31, 2023: Rs. 513,102.5 million) which are subject to withdrawal and usage restrictions. Deposits maintained with the Reserve Bank of India were Rs. 625,010.3 million at March 31, 2024 (March 31, 2023: Rs. 480,251.3 million) towards the minimum cash reserve requirements. Deposits with other banks include Rs. 166,659.0 million (March 31, 2023: Rs. 65,115.4 million) in deposits, which have original maturities greater than 90 days. 5. Investments The following table sets forth, for the periods indicated, the portfolio of investments classified as held to maturity. Rupees in million At March 31, 2024 At March 31, 2023 Amortized cost/cost Gross unrealized gain Gross unrealized loss Fair value Amortized cost/cost Gross unrealized gain Gross unrealized loss Fair value Held to maturity Corporate debt securities 479,631.6 4,743.8 (3,567.9) 480,807.6 215,081.7 2,161.4 (4,373.0) 212,870.1 Government securities 3,949,704.1 40,373.9 (26,418.6) 3,963,659.3 3,139,362.1 12,022.6 (47,847.6) 3,103,537.1 Other debt securities1 10,704.8 6.8 (2.6) 10,709.0 7,800.4 .. .. 7,800.4 Total debt securities 4,440,040.5 45,124.5 (29,989.1) 4,455,175.9 3,362,244.2 14,184.0 (52,220.6) 3,324,207.6 Equity shares2 15.0 86.8 .. 101.8 50,905.5 228,560.2 .. 279,465.7 Other securities 2,573.0 8,595.5 (133.1) 11,035.4 4,937.8 2,529.5 (81.0) 7,386.2 Total 4,442,628.5 53,806.8 (30,122.2) 4,466,313.1 3,418,087.5 245,273.7 (52,301.6) 3,611,059.5 1. Includes certificate of deposit and commercial paper. 2. At March 31, 2023, Group’s investment in ICICI Lombard General Insurance Company Limited (ICICI General), being an associate, was classified as held-to-maturity. At March 31, 2024, being a subsidiary ICICI General was consolidated on a line-by-line basis and Group’s investment in ICICI General was eliminated at consolidated level. 3. Interest accrued on held-to-maturity securities amounted to Rs. 82,251.2 million at March 31, 2024 (March 31, 2023: Rs. 55,568.5 million). F-83 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, the portfolio of investments classified as available for sale. Rupees in million At March 31, 2024 At March 31, 2023 Amortized cost/cost Gross unrealized gain Gross unrealized loss Fair value Amortized cost/cost Gross unrealized gain Gross unrealized loss Fair value Available for sale Corporate debt securities 204,957.5 2,494.7 (1,238.9) 206,213.3 217,228.0 1,081.8 (2,100.0) 216,209.8 Government securities 671,364.8 1,061.3 (708.7) 671,717.4 624,808.4 1,146.7 (1,571.4) 624,383.7 Other debt securities1 194,459.6 4,696.8 (274.8) 198,881.7 126,326.0 1,202.5 (619.3) 126,909.2 Total debt securities 1,070,781.9 8,252.8 (2,222.4) 1,076,812.4 968,362.4 3,431.0 (4,290.7) 967,502.7 Equity shares 189,271.8 101,770.9 (10,438.8) 280,603.9 123,670.2 67,841.2 (13,965.5) 177,545.9 Other securities 43,383.1 12,238.4 (8,013.1) 47,608.4 39,049.5 6,186.1 (7,171.2) 38,064.4 Total 1,303,436.8 122,262.1 (20,674.3) 1,405,024.7 1,131,082.1 77,458.3 (25,427.4) 1,183,113.1 1. Includes pass through certificates, certificate of deposit, commercial paper and banker’s acceptance. 2. Interest accrued on available for sale securities amounted to Rs. 15,199.2 million at March 31, 2024 (March 31, 2023: Rs. 12,702.5 million). Income from securities available for sale The following table sets forth, for the periods indicated, a listing of income from securities classified as available for sale. Rupees in million Year ended March 31, 2024 2023 2022 Interest 86,421.6 56,073.0 41,719.0 Dividend 1,644.8 2,320.7 1,023.4 Total 88,066.4 58,393.7 42,742.4 Gross realized gain 34,847.3 19,961.4 22,227.6 Gross realized loss (4,090.7) (7,090.2) (1,772.1) Total 30,756.6 12,871.2 20,455.5 Income from securities held for trading The following table sets forth, for the periods indicated, a listing of income from securities classified as held for trading. Rupees in million Year ended March 31, 2024 2023 2022 Interest and dividend 31,690.9 16,416.4 11,713.9 Realized gain/(loss) on sale of trading portfolio 5,877.7 958.8 (648.7) Unrealized gain/(loss) on trading portfolio 19.3 133.8 1,952.6 Total 37,587.9 17,509.0 13,017.8 F-84 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Maturity profile of debt securities The following table sets forth a listing of each category of held to maturity debt securities at March 31, 2024, by maturity. Rupees in million Amortized cost Fair value Corporate debt securities Less than one year 36,585.4 37,115.7 One to five years 206,300.5 205,906.3 Five to ten years 195,272.5 196,809.6 Greater than ten years 41,473.2 40,976.0 Total corporate debt securities 479,631.6 480,807.6 Government securities Less than one year 70,482.0 70,469.6 One to five years 1,102,468.6 1,097,780.5 Five to ten years 1,791,055.0 1,802,766.9 Greater than ten years 985,698.5 992,642.3 Total government securities 3,949,704.1 3,963,659.3 Other debt securities Less than one year 10,704.8 10,709.0 One to five years .. .. Five to ten years .. .. Greater than ten years .. .. Total other debt securities 10,704.8 10,709.0 Total debt securities classified as held to maturity 4,440,040.5 4,455,175.9 The following table sets forth a listing of each category of available for sale debt securities at March 31, 2024, by maturity. Rupees in million Amortized cost Fair value Corporate debt securities Less than one year 101,845.2 101,812.3 One to five years 80,040.8 80,364.1 Five to ten years 22,606.8 22,884.6 Greater than ten years 464.7 1,152.3 Total corporate debt securities 204,957.5 206,213.3 Government securities Less than one year 394,598.6 394,674.3 One to five years 231,625.4 231,535.4 Five to ten years 6,613.6 6,645.1 Greater than ten years 38,527.2 38,862.6 Total Government securities 671,364.8 671,717.4 Other debt securities Less than one year 78,690.1 79,322.6 One to five years 74,159.9 75,423.5 Five to ten years 15,995.3 16,867.2 Greater than ten years 25,614.3 27,268.4 Total other debt securities 194,459.6 198,881.7 Total debt securities classified as available for sale 1,070,781.9 1,076,812.4 Credit rating profile of held-to-maturity debt securities The Group considers credit rating as credit quality indicators for the held-to-maturity debt securities. The credit rating of debt securities is issued by external credit rating agencies. F-85 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, held-to-maturity debt securities by external credit rating at March 31, 2024: Rupees in million AAA, AA+, AA, AA-, 1, 2A-C A+, A, A-, 3 A-C BBB+, BBB and BBB-, 4A-C Below investment grade Unrated Total Corporate debt securities 449,860.4 1,921.4 23,369.8 4,480.1 .. 479,631.6 Government securities 3,949,704.1 .. .. .. .. 3,949,704.1 Other debt securities 10,704.8 .. .. .. .. 10,704.8 Total Debt securities 4,410,269.3 1,921.4 23,369.8 4,480.1 .. 4,440,040.5 The following table sets forth, held-to-maturity debt securities by external credit rating at March 31, 2023: Rupees in million AAA, AA+, AA, AA-, 1, 2A-C A+, A, A-, 3 A-C BBB+, BBB and BBB-, 4A-C Below investment grade Unrated Total Corporate debt securities 195,528.8 .. 17,339.7 2,213.2 .. 215,081.7 Government securities 3,139,362.1 .. .. .. .. 3,139,362.1 Other debt securities 7,800.4 .. .. .. .. 7,800.4 Total Debt securities 3,342,691.3 .. 17,339.7 2,213.2 .. 3,362,244.2 There were no held-to-maturity debt securities that were past due (30 days overdue) at year ended March 31, 2024 and March 31, 2023. There were no held-to-maturity debt securities that were overdue for more than 90 days and still accruing at the year ended March 31, 2024 and March 31, 2023. 6. Repurchase transactions The Group undertakes repurchase and reverse repurchase transactions of Government securities and corporate bonds during the year. These transactions are generally of a very short tenure and are undertaken with the Reserve Bank of India, banks and other financial institutions as counterparties. At March 31, 2024, outstanding borrowings under repurchase transactions including Liquidity Adjustment Facility, Marginal Standing Facility and Standing liquidity facility offered by the Reserve Bank of India amounted to Rs. 286,293.8 million (March 31, 2023: Rs. 258,992.9 million) and the outstanding lendings under reverse repurchase transactions including Liquidity Adjustment Facility amounted to Rs. 180,376.8 million (March 31, 2023: Rs. 59,652.4 million). During fiscal 2024, average borrowings under repurchase transactions including Liquidity Adjustment Facility, Marginal Standing Facility and Standing liquidity facility amounted to Rs. 369,120.6 million (March 31, 2023: Rs. 286,800.5 million) and average lendings under reverse repurchase transactions including Liquidity Adjustment Facility amounted to Rs. 117,787.4 million (March 31, 2023: Rs. 175,385.7 million). F-86 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 7. Loans The following table sets forth, for the periods indicated, a listing of loans by category. Rupees in million At March 31, 2024 2023 Commercial loans 5,219,456.3 4,625,018.9 Term loans 2,155,071.1 2,058,261.1 Working capital facilities1 3,064,385.2 2,566,757.8 Consumer loans and credit card receivable 7,610,969.0 6,469,885.0 Mortgage loans 4,134,254.8 3,717,546.2 Other secured loans 1,707,890.9 1,422,524.2 Credit card receivables 523,037.0 384,163.8 Other unsecured loans 1,245,786.3 945,650.8 Lease financing2 34.3 50.2 Total gross advances 12,830,459.6 11,094,954.1 Provision for loan losses3 (222,697.6) (256,291.0) Total net advances 12,607,762.0 10,838,663.1 1. Includes bills purchased and discounted, overdrafts, cash credit and loans repayable on demand. 2. Lease financing activity includes leasing and hire purchase. 3. Excludes provision on performing loans. Commercial loans Commercial loans include term loans and working capital facilities extended to corporate and other business entities, including programme-based loans extended to small and medium enterprises such as proprietorship firms, partnership firms and private limited companies. Each commercial loan undergoes a detailed credit review process in accordance with the Bank’s credit policy or is evaluated in accordance with the programme parameters. After disbursement, commercial loans are individually monitored and reviewed for any possible deterioration in the borrower’s ability to repay the loan. Loans to small and medium enterprises under various lending programmes are generally monitored at programme level from the perspective of credit quality. Term loans are typically secured by a first lien on the borrower’s fixed assets, which normally consist of property, plants and equipment. Working capital facilities, which include bills purchased and discounted, overdrafts, cash credit and loans repayable on demand, are typically secured by a first lien on the borrower’s current assets, which normally consist of inventory and receivables. The overall economic conditions affecting businesses impact the Bank’s commercial loan portfolio. A prolonged slowdown in the Indian economy and significant movement in commodity prices could adversely affect borrowers’ abilities to repay loans. In light of increasing international trade linkages, borrowers’ abilities to repay loans may also be negatively affected by adverse economic developments in the United States and other major economies. Unfavorable exchange rate movements may also increase borrowers’ debt burden and adversely affect their abilities to repay loans. Borrowers’ ability to repay project finance term loans depends on the viability of the project financed which, in turn, depends on the timeliness of the project’s completion, the stability of government policies and changes in market demand. Consumer loans The Bank’s consumer loan portfolio includes both secured loans and unsecured loans. Secured consumer loans constitute a significant majority of the Bank’s total consumer loan portfolio. Though the loans in the Bank’s secured loan portfolio are secured by first and exclusive liens on the assets financed, recoveries in case of default may be subject of delays up to several years, due to the protracted F-87 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) legal process in India. To mitigate risk, the Bank obtains direct debit mandates or post-dated checks with pre-specified dates for repayment of consumer installment loans. Secured consumer loan portfolio The Bank’s secured loan portfolio consists of mortgage loans, automobile loans, commercial vehicle loans, jewel loans, farm equipment loans, kisan (farmer) credit cards and other secured loans. The Bank’s mortgage loan portfolio includes home loans made to individuals and business entities and loan against mortgage of property for any business or personal requirement. Typically, mortgage loans are secured by first and exclusive liens on the financed properties. Borrower default risk is mitigated by rigorous credit review procedures. The Bank’s mortgage loan portfolio risk is driven primarily by interest rate movement, the loan-to-value ratios of the loans in the portfolio changes in property price, the nature of the borrowers’ employment (e.g., salaried or self-employed) and the borrowers’ income levels. The Bank’s automobile loan and commercial vehicle loan portfolios are also secured by first liens on the assets financed by the loans. Major factors affecting the performance of the automobile loan portfolio include the nature of the borrowers’ employment, the borrowers’ income levels, the loan-to-value ratios of the loans in the portfolio and the nature of use of the financed vehicles. The Bank’s commercial vehicle loan portfolio risk is largely driven by borrowers’ characteristics, rate of economic activity and fuel price. The Bank extends kisan (farmer) credit card facility to farmers for meeting their cost of cultivation and other ancillary expenses. These loans are secured by hypothecation of crops and mortgage of the agricultural land. Unfavorable monsoon, natural calamities and announcement of farm loan waiver by state governments are among the key risk drivers of kisan (farmer) credit card portfolio. The Bank provides jewel loans against gold ornaments and gold coins. Key risks include volatility in gold price and authenticity (purity and weight) of the jewels. Borrowers’ abilities to repay farm equipment loans generally depend on the agriculture sector in India which, in turn, may depend on the monsoons. Unsecured consumer loan portfolio The Bank’s unsecured loan portfolio includes personal loans, credit cards and other unsecured loans. General economic conditions and other factors such as changes in unemployment rates, economic growth rates and borrowers’ income levels impact this portfolio. Standard restructured loans A loan is classified as restructuring, where a concessionary modification such as changes in repayment period, principal amount, repayment installment and rate of interest has been made by the Group, and downgraded to non-performing. The restructuring of loans in the event of a natural calamity, restructuring involving deferment of date of commencement of commercial operations for projects under implementation and restructuring for certain medium and small medium enterprises continue to be classified as standard restructured loans. Further, the Reserve Bank of India through its guideline on ‘Resolution Framework for COVID-19-related Stress’ dated August 6, 2020, provided a prudential framework to implement a resolution plan in respect of eligible borrowers and personal loans, while classifying such exposures as standard, subject to specified conditions. The loan accounts subjected to restructuring by the Bank are upgraded to the standard category from standard restructured category if the borrower has demonstrated, over a minimum period of one year, the ability to repay the loan in accordance with the contractual terms and the borrower has been F-88 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) reinstated to a normal level of general provisions for standard loans/risk weights for capital adequacy computations. The period of one year is from the commencement of the first payment of principal or interest whichever was later on the credit facility with the longest period of moratorium under the restructured terms. The restructured loans, classified as non-performing, can be upgraded only after satisfactory performance during the ‘specified period’, that is, the date by which at least a certain percentage of the outstanding principal debt as per the resolution plan and interest capitalization sanctioned as part of the restructuring, if any, is repaid or one year from the commencement of the first payment of interest or principal on the credit facility with the longest period of moratorium under the terms of the resolution plan, whichever is later. Further, large restructured accounts (accounts where the aggregate exposure of lenders is Rs. 1.00 billion and above) qualify for an upgrade if in addition to demonstration of satisfactory payment performance as mentioned above, the loan is rated at investment grade (BBB- equivalent or better) at the end of the ‘specified period’ by credit rating agencies accredited by the Reserve Bank of India. At March 31, 2024, the Group had committed to lend (including non-fund based facilities) Rs. 1,039.3 million (March 31, 2023: Rs. 970.0 million) to borrowers who are parties to standard restructurings. The following table sets forth, for the dates indicated, a listing of standard restructured loans. Rupees in million At March 31, 2024 2023 Commercial loans Term loans 4,381.0 6,946.3 Working capital facilities 1,775.8 2,016.3 Consumer loans Mortgage loans 24,072.0 32,993.9 Other secured loans 4,863.4 9,507.2 Credit card receivables 63.0 69.7 Other unsecured loans 525.1 980.6 Lease financing .. .. Total gross restructured loans2 35,680.3 52,514.0 Provision for loan losses3 (1,443.2) (1,778.6) Total net restructured loans 34,237.1 50,735.4 1. Represents entire borrower level outstanding of the restructured accounts. 2. At March 31, 2024, includes loans amounting to Rs. 26,271.1 million restructured under the Reserve Bank of India guidelines on ‘Resolution Framework for COVID-19-related Stress’ dated August 6, 2020. and May 05, 2021 (March 31, 2023: loans amounting to Rs. 35,864.6 million) 3. Represents provision due to diminution in the fair value of restructured/rescheduled loans in accordance with the applicable RBI guidelines. In addition, the Bank holds general provision amounting to Rs. 9,034.1 million at March 31, 2024 (March 31, 2023: Rs. 12,824.9 million) on these restructured accounts. Non-performing loans The Bank classifies all credit exposures at a borrower level, including overdues arising from crystallized derivative contracts, into performing and non-performing loans as per the Reserve Bank of India guidelines. Under the Reserve Bank of India guidelines, an asset is generally classified as non-performing if any amount of interest or principal remains overdue for more than 90 days (360 days for direct agriculture loans), in respect of term loans. In respect of overdraft or cash credit, an asset is classified as non-performing if the account remains out of order for a period of 90 days. An account is treated as ‘out of order’ if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90 days or where there are no credits continuously for 90 days or credits are not enough to cover the interest debited during the preceding 90 day period. In respect of bills, an asset is classified as non-performing if the account remains overdue for more than 90 days. The Bank also F-89 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) identifies non-performing loans based on a review of accounts selected on the basis of certain criteria, by evaluating additional information (other than that relating to the payment record). Advances held at the overseas branches that are identified as impaired as per host country regulations but which are standard as per the extant Reserve Bank of India guidelines, are identified as non-performing to the extent of amount outstanding in the host country. In case of the Bank’s housing finance subsidiary, loans and other credit facilities are classified into performing and non-performing loans as per Reserve Bank of India guidelines. Further, non-performing loans are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by Reserve Bank of India. Loans in the Bank’s United Kingdom subsidiary are classified as impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the loan (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the loans that can be reliably estimated. Loans in the Bank’s Canadian subsidiary are considered credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that loan have occurred. The following table sets forth, the nonaccrual status of the loans for the year ended March 31, 2024. Rupees in million Loans outstanding At the beginning of the year At the end of the year Loans which are overdue for more than 90 days but on accrual status Loans on non-accrual basis on which no provision is made Interest income recognized during the year on loans on non-accrual basis Commercial loans - Term loans 153,131.1 110,537.2 .. .. 2,403.9 - Working capital facilities 56,797.7 49,839.2 .. .. 1,645.5 Consumer loans - Mortgage loans 46,243.2 48,749.1 .. .. 2,492.8 - Other secured loans 40,187.5 46,047.9 40,927.4 .. 562.2 - Credit card receivables 5,836.4 9,841.9 .. .. 626.9 - Other unsecured loans 10,273.8 14,592.9 .. .. 483.2 Lease financing .. .. .. .. .. Total gross loans 312,469.7 279,608.2 40,927.4 .. 8,214.5 Provision for loan losses (254,507.1) (221,249.1) .. Total net loans 57,962.6 58,359.1 40,927.4 The following table sets forth, the nonaccrual status of the loans for the year ended March 31, 2023. Rupees in million Loans outstanding At the beginning of the year At the end of the year Loans which are overdue for more than 90 days but on accrual status Loans on non-accrual basis on which no provision is made Interest income recognized during the year on loans on non-accrual basis Commercial loans - Term loans 167,209.3 153,131.1 57.5 .. 3,505.3 - Working capital facilities 65,033.2 56,797.7 .. .. 1,811.6 Consumer loans - Mortgage loans 54,559.5 46,243.2 .. .. 2,425.5 - Other secured loans 44,822.2 40,187.5 35,527.8 .. 825.6 - Credit card receivables 3,864.6 5,836.4 .. .. 485.2 - Other unsecured loans 10,024.8 10,273.8 .. .. 471.1 Lease financing .. .. .. .. .. Total gross loans 345,513.6 312,469.7 35,585.3 .. 9,524.3 Provision for loan losses (269,105.3) (254,507.1) .. Total net loans 76,408.3 57,962.6 35,585.3 F-90 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Provision for loan losses Provisions are generally made by the Bank on non-performing loans as per internal provisioning norms, subject to minimum provisioning requirements of Reserve Bank of India. The Bank holds specific provisions against non-performing loans and a general provision against performing loans. The housing finance subsidiary of the Bank holds specific provisions against non-performing loans and general provisions against performing loans as per Reserve Bank of India requirements. The Bank’s United Kingdom subsidiary maintains provision for loan losses at a level that management considers adequate to absorb identified credit related losses as well as losses that have occurred but are not yet identifiable. The Bank’s Canadian subsidiary maintains provision for all financial assets using expected credit loss model. The expected credit loss for impaired financial assets is computed based on individual assessment of expected cash flows from such assets. The Bank makes provision on assets that are restructured/rescheduled subject to minimum requirements as per the Reserve Bank of India guidelines. The following table sets forth, for the periods indicated, the movement in the provision for loan losses on standard restructured loans. Rupees in million Year ended March 31, 2024 2023 2022 Provision for loan losses at the beginning of the year 1,778.6 2,914.3 896.6 Provision for loan losses made for new additions during the year 60.8 .. 2,329.7 Increase/(decrease) of provision for existing loan losses during the year (241.9) (328.4) (172.8) Reduction/write-back of provision on restructured loans due to: Upgrade to standard assets .. .. Downgrade to non-performing assets (154.3) (807.3) (139.2) Provision for loan losses at the end of the year 1,443.2 1,778.6 2,914.3 F-91 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth the movement in the provision for loan losses for the year ended March 31, 2024. Rupees in million Particulars Commercial loans Consumer loans Total Term loans Working capital facilities Mortgage loans Other secured loans Credit card receivables Other unsecured loans Lease financing Unallocated A. Non-performing loans Aggregate provision for loan losses at the beginning of the year 142,443.9 46,732.2 25,653.6 26,719.2 4,717.3 8,240.9 .. .. 254,507.1 Add: Provisions for loan losses 3,569.4 18,661.6 22,388.4 28,668.3 22,721.1 24,605.6 .. .. 120,614.4 Less: Utilized for write-off of loans (8,766.6) (7,656.7) (5,978.9) (13,086.9) (15,735.2) (15,072.9) .. .. (66,297.2) Less: Write back of excess provisions (29,871.9) (20,090.0) (16,465.3) (11,231.9) (3,686.8) (6,229.3) .. .. (87,575.2) Aggregate provision for loan losses at the end of the year for non-performing loans 107,374.8 37,647.1 25,597.8 31,068.7 8,016.4 11,544.3 .. .. 221,249.1 B. Aggregate provision for loan losses at the end of the year for performing loans including restructured loans 2,458.5 1,359.5 5,624.0 1,594.2 16.3 191.3 .. 192,602.11 203,845.9 C. Aggregate provision for loan losses at the end of the year (A) + (B) 109,833.3 39,006.6 31,221.8 32,662.9 8,032.7 11,735.6 .. 192,602.1 425,095.0 Closing balance of provision: individually evaluated for impairment 109,833.3 39,006.6 31,221.8 32,662.9 8,032.7 11,735.6 .. .. 232,492.9 Closing balance of provision: collectively evaluated for impairment .. .. .. .. .. .. .. 192,602.1 192,602.1 Closing balance of provision: loans acquired with deteriorated credit quality .. .. .. .. .. .. .. .. .. 1. At March 31, 2024, the Bank held contingency provisions of Rs. 131,000.0 million which is included in the above amount. F-92 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth the movement in the provision for loan losses for the year ended March 31, 2023. Rupees in million Particulars Commercial loans Consumer loans Term loans Working capital facilities Mortgage loans Other secured loans Credit card receivables Other unsecured loans Lease financing Unallocated Total A. Non-performing loans Aggregate provision for loan losses at the beginning of the year 152,200.1 50,822.8 28,852.5 26,173.8 3,119.1 7,937.0 .. .. 269,105.3 Add: Provisions for loan losses 17,713.5 23,605.3 21,198.2 28,722.4 12,155.9 15,672.9 .. .. 119,068.2 Less: Utilized for write-off of loans (4,428.6) (4,976.5) (6,469.7) (13,525.1) (7,576.9) (9,491.5) .. .. (46,468.3) Less: Write back of excess provisions (23,041.1) (22,719.4) (17,927.4) (14,651.9) (2,980.8) (5,877.5) .. .. (87,198.1) A. Aggregate provision for loan losses at the end of the year for non-performing loans 142,443.9 46,732.2 25,653.6 26,719.2 4,717.3 8,240.9 .. .. 254,507.1 B. Aggregate provision for loan losses at the end of the year for performing loans including restructured loans 4,243.4 1,492.1 7,750.8 2,849.7 18.0 376.8 .. 180,946.81 197,677.6 C. Aggregate provision for loan losses at the end of the year (A) + (B) 146,687.3 48,224.3 33,404.4 29,568.9 4,735.3 8,617.7 .. 180,946.8 452,184.7 Closing balance of provision: individually evaluated for impairment 146,687.3 48,224.3 33,404.4 29,568.9 4,735.3 8,617.7 .. .. 271,237.9 Closing balance of provision: collectively evaluated for impairment .. .. .. .. .. .. .. 180,946.8 180,946.8 Closing balance of provision: loans acquired with deteriorated credit quality .. .. .. .. .. .. .. .. .. 1. At March 31, 2023, the Bank held contingency provisions of Rs. 131,000.0 million which is included in the above amount. F-93 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth the movement in the provision for loan losses for the year ended March 31, 2022. Rupees in million Particulars Commercial loans Consumer loans Term loans Working capital facilities Mortgage loans Other secured loans Credit card receivables Other unsecured loans Lease financing Unallocated Total A. Non-performing loans Aggregate provision for loan losses at the beginning of the year 173,905.8 72,706.5 25,418.8 32,594.7 8,395.4 14,659.2 .. .. 327,680.4 Add: Provisions for loan losses 13,677.5 17,842.9 26,440.8 37,637.8 11,240.3 18,452.0 .. .. 125,291.3 Less: Utilized for write-off of loans (20,169.8) (26,607.9) (6,709.2) (23,824.4) (12,204.7) (18,485.5) .. .. (108,001.5) Less: Write back of excess provisions (15,213.4) (13,118.7) (16,297.9) (20,234.3) (4,311.9) (6,688.7) .. .. (75,864.9) A. Aggregate provision for loan losses at the end of the year for non-performing loans 152,200.1 50,822.8 28,852.5 26,173.8 3,119.1 7,937.0 .. .. 269,105.3 B. Aggregate provision for loan losses at the end of the year for performing loans including restructured loans 12,295.0 3,379.4 11,943.0 5,561.9 7.1 898.9 .. 118,124.21 152,209.5 C. Aggregate provision for loan losses at the end of the year (A) + (B) 164,495.1 54,202.2 40,795.5 31,735.7 3,126.2 8,835.9 .. 118,124.2 421,314.8 Closing balance of provision: individually evaluated for impairment 164,495.1 54,202.2 40,795.5 31,735.7 3,126.2 8,835.9 .. .. 303,190.6 Closing balance of provision: collectively evaluated for impairment .. .. .. .. .. .. .. 118,124.2 118,124.2 Closing balance of provision: loans acquired with deteriorated credit quality .. .. .. .. .. .. .. .. .. 1. At March 31, 2022, the Bank held Covid-19 related provisions of Rs. 74,500.0 million which is included in the above amount. While the Group assesses the incremental specific provisions after taking into consideration the existing specific provision held, the amounts recovered against debts written off in earlier years and provisions no longer considered necessary in the context of the current status of the borrower are recognized in the profit and loss account. The Bank’s Canadian subsidiary adopted IFRS 9 – Financial instruments from April 1, 2018 and measures impairment loss on all financial assets using expected credit loss model based on a three-stage approach. At March 31, 2024, the Bank’s Canadian subsidiary classified exposure of Rs. 102,418.0 million as Stage-2 (March 31, 2023: Rs. 63,524.7 million) (financial assets, that are not credit impaired, but which have experienced significant increase in credit risk since origination), with allowance for expected credit loss of Rs. 761.7 million (March 31, 2023: Rs. 882.70 million) in fiscal 2024. F-94 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Aging Analysis of Past Due Financing Receivable - Performing Loans Any amount due under a credit facility is considered as ‘past due’ if it remains unpaid for more than 30 days from the due date. The following table sets forth the aging analysis of past due performing loans at March 31, 2024. Rupees in million Particulars Current1 31 to 60 days 61 to 90 days Above 90 days2 Total past due3 Commercial loans Term loans 2,043,084.7 1,176.9 272.3 .. 1,449.2 Working capital facilities4 3,010,208.0 3,391.3 946.7 .. 4,338.0 Consumer loans Mortgage loans 4,058,348.7 20,825.5 6,331.5 .. 27,157.0 Other secured loans 1,599,903.2 14,903.1 6,109.3 40,927.4 61,939.8 Credit card receivables 502,173.1 7,306.5 3,715.5 .. 11,022.0 Other unsecured loans 1,221,632.8 7,000.7 2,559.9 .. 9,560.6 Lease financing 34.3 .. .. .. .. Total 12,435,384.8 54,604.0 19,935.2 40,927.4 115,466.6 1. Loans up to 30 days past due are considered current. 2. Primarily includes crop related agriculture loans overdue less than 360 days. 3. The amount disclosed represents the outstanding amount of the facility which has overdues, and not the borrower-level outstanding. 4. Includes bills purchased and discounted, overdrafts, cash credit and loans repayable on demand. The following table sets forth the aging analysis of past due performing loans at March 31, 2023. Rupees in million Particulars Current1 31 to 60 days 61 to 90 days Above 90 days2 Total past due3 Commercial loans Term loans 1,903,035.5 2,014.0 23.0 57.5 2,094.5 Working capital facilities4 2,504,446.0 4,700.1 814.0 .. 5,514.1 Consumer loans Mortgage loans 3,648,352.9 18,153.0 4,797.1 .. 22,950.1 Other secured loans 1,329,423.0 12,985.6 4,400.3 35,527.8 52,913.7 Credit card receivables 371,590.8 4,583.0 2,153.6 .. 6,736.6 Other unsecured loans 927,359.5 6,011.3 2,006.2 .. 8,017.5 Lease financing 50.2 .. .. .. .. Total 10,684,257.9 48,447.0 14,194.2 35,585.3 98,226.5 1. Loans up to 30 days past due are considered current. 2. Primarily includes crop related agriculture loans overdue less than 360 days. 3. The amount disclosed represents the outstanding amount of the facility which has overdues, and not the borrower-level outstanding. 4. Includes bills purchased and discounted, overdrafts, cash credit and loans repayable on demand. Credit quality indicators of loans The Group has a comprehensive framework for monitoring credit quality of its commercial loans based on internal ratings and of its consumer loans based on delinquency status. For the majority of the portfolio, the credit rating of every borrower/portfolio is reviewed at least annually. For the purpose of disclosure, the Group has used internal ratings as credit quality indicator for commercial loans, for consumer loans the Group has considered the delinquency status as a credit quality indicator. F-95 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth a description of internal rating grades linked to the likelihood of default associated with each rating grade: Grade Definition (I) Investment grade Entities/obligations are judged to offer moderate to high protection with regard to timely payment of financial obligations. AAA, AA+, AA, AA-, 1, 2A-C Entities/obligations are judged to offer high protection with regard to timely payment of financial obligations. A+, A, A-, 3A-C Entities/obligations are judged to offer an adequate degree of protection with regard to timely payment of financial obligations. BBB+, BBB and BBB-, 4A-C Entities/obligations are judged to offer moderate protection with regard to timely payment of financial obligations. (II) Below investment grade (BB and B, D, 5, 6, 7, 8) Entities/obligations are judged to offer inadequate protection with regard to timely payment of financial obligations. The following table sets forth, for the periods indicated, credit quality indicators of commercial loans at March 31, 2024. Rupees in million Non-revolving loans originated in Revolving loans1 Total loans Fiscal 2024 Fiscal 2023 Fiscal 2022 Fiscal 2021 Fiscal 2020 Prior to 2020 Rating grades Investment grade 738,901.8 525,293.0 238,169.3 214,059.9 35,932.3 146,206.1 3,061,161.6 4,959,724.0 AAA, AA+, AA, AA-, 1, 2A-C 82,547.9 149,635.0 111,517.8 159,183.5 4,027.9 42,694.8 1,536,636.0 2,086,242.9 A+, A, A-, 3 A-C 386,705.4 226,100.7 69,475.8 28,924.2 21,303.0 40,661.3 515,157.4 1,288,327.8 BBB+, BBB and BBB-, 4A-C 269,648.5 149,557.3 57,175.7 25,952.2 10,601.4 62,850.0 1,009,368.2 1,585,153.3 Below investment grade1 1,346.9 6,436.4 7,774.6 4,366.8 7,270.1 117,306.6 69,225.2 213,726.6 Unrated 9,774.7 2,885.9 1,483.1 923.3 189.0 43.1 30,740.9 46,040.0 Total Gross loans 750,023.4 534,615.3 247,427.0 219,350.0 43,391.4 263,555.8 3,161,127.7 5,219,490.6 Provisions (216.5) (87.4) (727.4) (3,220.6) (4,060.4) (101,345.6) (36,812.5) (146,470.4) Total net loans 749,806.9 534,527.9 246,699.6 216,129.4 39,331.0 162,210.2 3,124,315.2 5,073,020.2 Gross write-offs during Fiscal 2024 3.3 5.8 .. 691.5 300.7 8,310.0 4,683.7 13,995.0 1. Includes bills purchased and discounted, overdrafts, cash credit, credit cards and revolving demand loans. 2. Commercial loans also include small business loans which are generally rated at portfolio level. F-96 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, credit quality indicators of commercial loans at March 31, 2023. Rupees in million Non-revolving loans originated in Revolving loans1 Total loans Fiscal 2023 Fiscal 2022 Fiscal 2021 Fiscal 2020 Fiscal 2019 Prior to 2019 Rating grades Investment grade 659,545.2 411,265.7 462,604.6 95,575.0 136,339.4 87,951.8 2,465,344.3 4,318,626.0 AAA, AA+, AA, AA-, 1, 2A-C 167,007.1 168,070.2 319,275.2 26,165.5 49,785.4 7,605.0 1,269,312.1 2,007,220.5 A+, A, A-, 3 A-C 273,277.7 146,146.2 96,742.6 40,918.1 41,440.3 37,542.3 554,962.3 1,191,029.5 BBB+, BBB and BBB-, 4A-C 219,260.4 97,049.3 46,586.8 28,491.4 45,113.7 42,804.5 641,069.9 1,120,376.0 Below investment grade1 548.8 5,975.2 8,070.9 11,459.8 8,767.6 151,848.9 70,927.4 257,598.6 Unrated 2,228.4 1,992.3 1,069.6 93.4 83.1 128.4 43,249.3 48,844.5 Total Gross loans 662,322.4 419,233.2 471,745.1 107,128.2 145,190.1 239,929.1 2,579,521.0 4,625,069.1 Provision (27.6) (667.0) (3,628.2) (5,375.1) (4,403.0) (132,731.6) (44,127.5) (190,960.0) Total net loans 662,294.8 418,566.2 468,116.9 101,753.1 140,787.1 107,197.5 2,535,393.5 4,434,109.1 1. Includes bills purchased and discounted, overdrafts, cash credit, credit cards and revolving demand loans. 2. Commercial loans also include small business loans which are generally rated at portfolio level. F-97 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, credit quality indicators of consumer loans at March 31, 2024. Rupees in million Non-revolving loans originated in Revolving loans1 Total loans Fiscal 2024 Fiscal 2023 Fiscal 2022 Fiscal 2021 Fiscal 2020 Prior to 2020 Mortgage loans 1,058,359.7 944,437.2 741,506.4 462,162.0 298,995.5 628,794.0 .. 4,134,254.8 Current2 1,055,934.6 933,511.8 728,961.8 452,228.4 283,421.8 604,290.3 .. 4,058,348.7 Performing loans which are overdue3 912.3 4,061.5 4,205.4 3,352.7 5,400.7 9,224.4 .. 27,157.0 Non-performing loans 1,512.8 6,863.9 8,339.2 6,580.9 10,173.0 15,279.3 .. 48,749.1 Other secured loans 767,285.7 351,286.0 158,656.6 69,620.7 29,365.0 18,026.4 313,650.5 1,707,890.9 Current2 761,825.0 337,644.1 150,158.8 64,520.2 25,642.2 13,468.0 246,644.9 1,599,903.2 Performing loans which are overdue3 3,180.5 8,376.2 4,929.6 2,792.9 1,736.6 960.8 39,963.2 61,939.8 Non-performing loans 2,280.2 5,265.7 3,568.2 2,307.6 1,986.2 3,597.6 27,042.4 46,047.9 Credit card receivables .. .. .. .. .. .. 523,037.0 523,037.0 Current2 .. .. .. .. .. .. 502,173.1 502,173.1 Performing loans which are overdue3 .. .. .. .. .. .. 11,022.0 11,022.0 Non-performing loans .. .. .. .. .. .. 9,841.9 9,841.9 Other unsecured loans 715,013.9 348,249.8 118,523.5 32,341.8 13,655.3 1,188.1 16,813.9 1,245,786.3 Current2 709,942.8 337,304.6 113,432.7 30,961.7 12,429.1 790.0 16,771.9 1,221,632.8 Performing loans which are overdue3 2,484.1 4,340.0 1,772.8 601.0 309.5 48.3 4.9 9,560.6 Non-performing loans 2,587.0 6,605.2 3,318.0 779.1 916.7 349.8 37.1 14,592.9 Total Gross loans 2,540,659.3 1,643,973.0 1,018,686.5 564,124.5 342,015.8 648,008.5 853,501.4 7,610,969.0 Provisons (3,597.3) (10,145.8) (8,141.5) (5,570.5) (8,076.3) (12,713.0) (27,982.8) (76,227.2) Total net loans 2,537,062.0 1,633,827.2 1,010,545.0 558,554.0 333,939.5 635,295.5 825,518.6 7,534,741.8 Gross write-offs during Fiscal 2024 908.4 8,952.2 6,649.4 3,963.8 4,688.0 5,321.3 15,850.1 46,333.2 1. Includes bills purchased and discounted, overdrafts, cash credit, credit cards and revolving demand loans. 2. Loans up to 30 days past due are considered current. 3. The amount disclosed represents the outstanding amount of the facility which has overdues, and not the borrower-level outstanding. F-98 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, credit quality indicators of consumer loans at March 31, 2023. Rupees in million Non-revolving loans originated in Revolving loans1 Total loans Fiscal 2023 Fiscal 2022 Fiscal 2021 Fiscal 2020 Fiscal 2019 Prior to 2019 Mortgage loans 1,023,647.7 905,818.5 584,310.6 377,770.5 268,411.7 557,587.2 .. 3,717,546.2 Current2 1,021,255.4 898,891.7 575,522.4 358,817.6 257,364.8 536,501.0 .. 3,648,352.9 Performing loans which are overdue3 1,116.9 2,370.2 3,217.2 6,185.6 3,834.1 6,226.1 .. 22,950.1 Non-performing loans 1,275.4 4,556.6 5,571.0 12,767.3 7,212.8 14,860.1 .. 46,243.2 Other secured loans 629,897.7 272,288.8 139,295.2 69,607.2 28,311.1 14,824.3 268,299.9 1,422,524.2 Current2 625,398.8 263,675.7 130,980.1 62,204.9 24,570.9 10,290.5 212,302.1 1,329,423.0 Performing loans which are overdue3 2,448.7 5,665.0 4,874.0 3,772.5 1,956.7 585.1 33,611.7 52,913.7 Non-performing loans 2,050.2 2,948.1 3,441.1 3,629.8 1,783.5 3,948.7 22,386.1 40,187.5 Credit card receivables .. .. .. .. .. .. 384,163.8 384,163.8 Current2 .. .. .. .. .. .. 371,590.8 371,590.8 Performing loans which are overdue3 .. .. .. .. .. .. 6,736.6 6,736.6 Non-performing loans .. .. .. .. .. .. 5,836.4 5,836.4 Other unsecured loans 574,768.1 224,726.6 73,289.6 39,214.0 9,758.0 1,953.6 21,940.9 945,650.8 Current2 570,345.3 219,149.6 70,453.9 37,104.4 8,929.9 435.7 20,940.7 927,359.5 Performing loans which are overdue3 2,279.0 2,233.9 1,087.5 921.3 231.7 1,226.7 37.4 8,017.5 Non-performing loans 2,143.8 3,343.1 1,748.2 1,188.3 596.4 291.2 962.8 10,273.8 Total Gross loans 2,228,313.5 1,402,833.9 796,895.4 486,591.7 306,480.8 574,365.1 674,404.6 6,469,885.0 Provisions (2,984.6) (5,665.2) (5,825.6) (11,205.2) (5,984.6) (11,983.6) (21,682.2) (65,331.0) Total net loans 2,225,328.9 1,397,168.7 791,069.8 475,386.5 300,496.2 562,381.5 652,722.4 6,404,554.0 1. Includes bills purchased and discounted, overdrafts, cash credit, credit cards and revolving demand loans. 2. Loans up to 30 days past due are considered current. 3. The amount disclosed represents the outstanding amount of the facility which has overdues, and not the borrower-level outstanding. F-99 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 8. Financial assets transferred during the year to securitization company/reconstruction company The Bank has transferred certain assets to securitization companies’/asset reconstruction companies in compliance with the terms of the guidelines issued by the Reserve Bank of India governing such transfer. The Bank transfers its non-performing assets to asset reconstruction companies primarily in exchange for receipt of cash or securities in the form of security receipts issued by such asset reconstruction companies, wherein payments to holders of securities are based on the actual realized cash flows from the transferred assets. In accordance with Reserve Bank of India guidelines, in case of non-performing loans sold to asset reconstruction companies, the Bank reverses the excess provision in profit and loss account in the year in which amounts are received. Any shortfall of sale value over the net book value on sale of such assets is recognized by the Bank in the year in which the assets are sold. For the purpose of the valuation of underlying security receipts issued by underlying trusts managed by asset reconstruction companies, the security receipts are valued at their respective net asset values as advised by the asset reconstruction companies. The following table sets forth, for the periods indicated, the details of the assets transferred. Rupees in million, except number of accounts Year ended March 31, 2024 2023 2022 Number of accounts1 212 2052 5612 Aggregate value (net of provisions) of accounts sold to securitization company/reconstruction company -2 286.32 630.52 Aggregate consideration 1,861.93 1,739.9 2,340.7 Aggregate gain/(loss) over net book value 1,861.9 1,453.6 1,710.2 Provision reversed to profit and loss account on account of sale of NPAs 626.4 1,453.6 1,710.2 1. Excludes accounts previously written-off. 2. Includes Nil consumer loans (Fiscal 2023: 196 consumer loans amounting to Rs. 162.5 million, Fiscal 2022: 557 consumer loans amounting to Rs. 385.7 million) 3. Includes consideration of Rs. 1,235.4 million in form of security receipts which are fully provided. F-100 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 9. Details of non-performing assets sold, excluding those sold to securitization company/reconstruction company The Bank sells certain non-performing assets to entities other than securitization company/reconstruction company in compliance with the terms of the guidelines issued by the Reserve Bank of India on such sale. During Fiscal 2024 the Bank has not sold any non-performing assets to entities other than securitization company/reconstruction company. The following table sets forth, for the periods indicated, the details of non-performing assets sold to entities, excluding those sold to securitization company/reconstruction company. Rupees in million, except number of accounts Year ended March 31, 2024 2023 2022 No. of accounts1 - 1 3 Aggregate value (net of provisions) of accounts sold, excluding those sold to securitization company/reconstruction company - .. 188.6 Aggregate consideration - 15.7 1,164.1 Aggregate gain/(loss) over net book value - 15.7 975.5 1. Represents corporate loans. 10. Concentration of credit risk Concentration of credit risk exists when changes in economic, industry or geographic factors affect groups of counter-parties whose aggregate credit exposure is material in relation to the Group’s total credit exposure. The Group’s portfolio of financial instruments is broadly diversified along industry, product and geographic lines primarily within India. The Group is subject to supervision guidelines issued by the Reserve Bank of India. The Group’s 20 largest exposures (non-bank) based on gross exposure (credit, derivative and investments), totaled to Rs. 2,004,067.8 million at March 31, 2024 which represented 96.2% of the capital funds (March 31, 2023: Rs. 1,741,788.4 million represented 96.3% of the capital funds). The single largest exposure (non-bank) at March 31, 2024 was Rs. 198,649.4 million, which was included in rating category “AAA, AA+, AA, AA-, 1, 2A-C”, represented 9.5% of the capital funds (March 31, 2023: Rs. 221,107.0 million represented 12.2% of the capital funds). The largest group of companies under the same management control accounted for 30.7% of the capital funds at March 31, 2024 (March 31, 2023: 25.9% of the capital funds). 11. Loan commitments The Group has outstanding undrawn commitments to provide loans and financing to customers. These loan commitments aggregated to Rs. 6,232,555.7 million (including fund based commitments fungible with non-fund based facilities) at March 31, 2024 (March 31, 2023: Rs. 4,992,056.3 million). The interest rate on a significant portion of these commitments is dependent on the lending rates prevailing on the date of the loan disbursement. Further, the commitments have fixed expiration dates and are generally contingent upon the borrower’s ability to maintain specific credit standards. F-101 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 12. Capital commitments The Group is obligated under a number of capital contracts. Capital contracts are job orders of a capital nature, which have been committed. The amounts of contracts remaining to be executed on capital account aggregated to Rs. 23,345.1 million at March 31, 2024 (March 31, 2023: Rs. 16,947.2 million). 13. Derivatives ICICI Bank is a participant in the financial derivatives market. The Bank deals in derivatives for balance sheet management, proprietary trading and market making purposes whereby the Bank offers derivative products to its customers, enabling them to hedge their risks. Dealing in derivatives is carried out by identified groups in the treasury of the Bank based on the purpose of the transaction. Derivative transactions are entered into by the treasury front office. The Bank’s Treasury and Securities Services Group conducts an independent check of the transactions entered into by the front office and also undertakes activities such as confirmation, settlement, accounting, and ensures compliance with various internal and regulatory guidelines. The Bank’s Treasury Monitoring and Reporting Group is responsible for reporting of performance of treasury groups (daily treasury reports), reports related to Liquidity and Interest rate risk in the banking book report and position & limit reporting (Value at Risk, Net Open Position and stop loss, etc.). The market making and the proprietary trading activities in derivatives are governed by the Investment Policy which include Derivative policy of the Bank, which lays down the position limits, stop loss limits as well as other risk limits. The Risk Management Group lays down the methodology for computation and monitoring of risk. The Risk Committee of the Board reviews the Bank’s risk management policy in relation to various risks including Credit and Recovery Policy, Investment Policy including Derivative Policy, Asset Liability Management Policy and Operational Risk Management Policy. The Risk Committee of the Board comprises independent directors and the Executive Director of the Bank. The Bank measures and monitors risk of its derivatives portfolio using risk metrics such as Value at Risk (VaR), stop loss limits and relevant greeks for options. Risk reporting on derivatives forms an integral part of the management information system. Over the counter derivative transactions are covered under International Swaps and Derivatives Association master agreements with the respective counter parties. The exposure on account of derivative transactions is computed as per RBI guidelines. The Board of Directors had authorised the Asset Liability Management Committee to review and approve matters, as applicable, pertaining to the London Inter-Bank Offer Rate transition to alternate risk free rates. The cessation of USD London Inter-Bank Offer Rate and INR Mumbai Interbank Forward Outright Rate indices occurred at the end of June 2023. The necessary changes were implemented in the treasury system of the Bank to handle the transition of existing trades of USD London Inter-Bank Offer Rate and INR Mumbai Interbank Forward Outright Rate to relevant approved benchmarks (USD Secured Overnight Financing Rate and INR Modified Mumbai Interbank Forward Outright Rate). The transition for USD London Inter-Bank Offer Rate and INR Mumbai Interbank Forward Outright Rate was carried out by June 30, 2023 within the Bank. The CAD Canadian Dollar Offered Rate is expected to be ceased at the end June 2024 and will be migrated to new benchmark index which is CAD Canadian Overnight Repo Rate Average. The use of derivatives for hedging purposes is governed by the hedge policy approved by the Asset Liability Management Committee. Subject to prevailing regulatory guidelines, the Group deals in derivatives for hedging fixed rate, floating rate or foreign currency assets/liabilities. Transactions for hedging and market making purposes are recorded separately. For hedge transactions, the Bank F-102 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) identifies the hedged item (asset or liability) at the inception of the hedge itself. The effectiveness is assessed at the time of inception of the hedge and periodically thereafter. Based on guidelines issued by Reserve Bank of India on June 26, 2019, the accounting of hedge relationships established after June 26, 2019 is in accordance with the Guidance Note on Accounting for Derivative Contracts issued by Institute of Chartered Accountants of India. Accordingly, for fair value hedges established after June 26, 2019, the hedging instruments and the hedged items (for the risks being hedged) are measured at fair value with changes recognized in the profit and loss account by the Bank. The swaps under hedge relationships established prior to that date are accounted for on an accrual basis and are not marked-to-market unless their underlying transaction is marked-to-market. The Group companies measure the hedging instruments and the hedged items (for the risks being hedged) at fair value with changes recognized in the profit and loss account for fair value hedge. To the extent a cash flow hedge is effective, the change in the fair value of the hedging instrument is recognized in cash flow hedge reserve. The ineffective portion of the hedge is accounted in the profit and loss account. The premium or discount arising on inception of forward exchange contracts, which are not hedging instruments and are not intended for trading purpose, is amortized over the life of the contract as interest income/expense. Credit exposure on interest rate and currency derivative transactions (both trading and hedging), is computed using the current exposure method according to the Reserve Bank of India guidelines, which is arrived at by adding up the positive mark-to-market values and the potential future exposure of these contracts. According to the Reserve Bank of India guidelines, the potential future exposure is determined by multiplying the notional principal amount of each of these contracts (irrespective of whether the mark-to-market value of these contracts is zero, positive or negative value) by the relevant add-on factor, ranging from 0.5% to 15%, according to the type of contract and residual maturity of the instrument. The credit exposure for equity futures is computed based on the market value and open quantity of the contracts at the balance sheet date and credit exposure for equity options is computed based on the price sensitivity of the option and open quantity of the contracts at the balance sheet date. The following table sets forth the details of the notional amounts, fair value, realized/unrealized gain and loss on derivatives and credit exposure of trading derivatives for the year ended March 31, 2024. Rupees in million Particulars Notional amount Gross positive fair value Gross negative fair value Gain/(loss) on derivatives4 Credit exposure3 Interest rate derivatives1 35,484,180.4 95,809.8 (86,808.5) (1,467.5) 404,958.4 Currency derivatives (including foreign exchange derivatives)2 19,114,977.5 53,486.3 (75,028.3) 36,210.5 484,773.6 Equity derivatives 2,519.9 7.5 .. 1,160.7 692.1 Un-funded credit derivatives .. .. .. .. .. 1. Includes foreign currency interest rate swaps, forward rate agreements and swap options. 2. Includes foreign currency options, cross currency interest rate swaps and foreign currency futures. 3. Credit exposure is computed as per Current Exposure Method (CEM) without bilateral netting. 4. The Bank has recovered Rs. 175.4 million from earlier recorded credit losses. The following table sets forth the details of the notional amounts, fair value, realized/unrealized gain and loss on derivatives and credit exposure of trading derivatives for the year ended March 31, 2023. F-103 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Particulars Notional amount Gross positive fair value Gross negative fair value Gain/(loss) on derivatives Credit exposure3 Interest rate derivatives1 30,733,301.9 99,901.1 (90,108.3) 19,050.3 365,955.3 Currency derivatives (including foreign exchange derivatives)2 17,100,573.5 64,120.8 (78,607.9) 25,220.1 501,130.1 Equity derivatives 9,629.1 4.3 (1.1) (602.0) 261.1 Un-funded credit derivatives .. .. .. .. .. 1. Includes foreign currency interest rate swaps, forward rate agreements and swap options. 2. Includes foreign currency options, cross currency interest rate swaps and foreign currency futures. 3. Credit exposure is computed as per Current Exposure Method (CEM) without bilateral netting. The following table sets forth the details of the notional amounts, marked-to-market position and credit exposure of hedging derivatives for the year ended March 31, 2024. Rupees in million Particulars Notional amount Gross positive fair value Gross negative fair value Credit exposure Interest rate derivatives1 457,611.8 1,374.1 (7,409.7) 4,115.5 Currency derivatives (including foreign exchange derivatives)2 .. .. .. .. 1. Includes foreign currency interest rate swaps, forward rate agreements and swap options. 2. Includes foreign currency options, cross currency interest rate swaps and foreign currency futures. The following table sets forth the details of the notional amounts, marked-to-market position and credit exposure of hedging derivatives for the year ended March 31, 2023. Rupees in million Particulars Notional amount Gross positive fair value Gross negative fair value Credit exposure Interest rate derivatives1 426,018.2 1,184.0 (7,409.0) 5,343.3 Currency derivatives (including foreign exchange derivatives)2 5,996.9 122.9 .. 119.9 1. Includes foreign currency interest rate swaps, forward rate agreements and swap options. 2. Includes foreign currency options, cross currency interest rate swaps and foreign currency futures. The gains/(losses) on hedged items arising from changes in fair value for fiscal 2024 and fiscal 2023 amounted to Rs. (24.2) million and Rs. 5,282.2 million respectively and gains/(losses) on corresponding hedging instruments arising from changes in fair value during fiscal 2024 and fiscal 2023 amounted to Rs. 442.7 million and Rs. (5,176.4) million respectively. The gains/(losses) on cash flow hedges recorded in cash flow hedge reserve for fiscal 2024 and fiscal 2023 amounted to Rs. 6,797.2 million and Rs. 981.2 million respectively. At year-end fiscal 2024, Nil loss (at year-end fiscal 2023: loss of Rs. 6.3 million) recorded in cash flow hedge reserve is expected to be reclassified into earnings during the next 12 months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations or the addition of other hedges subsequent to year-end fiscal 2024. During fiscal 2024 and fiscal 2023, there were no gains/(losses) reclassified from cash flow hedge reserve into earnings on account of discontinuance of cash flow hedges. At year-end fiscal 2024, the maximum length of time over which the Group was hedging its exposure to the variability in future cash flows was 120 months (year-end fiscal 2023: 129 months). At year-end fiscal 2024, accumulated cash flow hedge reserve was Rs. 7,319.6 million (year-end fiscal 2023: Rs. 544.4 million). During fiscal 2024, net amount of gain/(loss) reclassified from accumulated cash flow hedge reserve to earnings was Rs. (22.0) million (fiscal 2023: Rs. 15.1 million). F-104 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Additionally, the Group has also hedged the foreign currency exposure of its net investment in foreign operations through currency forward contracts of a notional amount of Rs. 47,989.3 million at March 31, 2024 (March 31, 2023: Rs. 47,036.0 million). The gross positive and negative fair values of these hedging instruments were Rs. 221.2 million (March 31, 2023: Rs. 354.6 million) and Rs. (31.3) million (March 31, 2023: Rs. (49.1) million) respectively and the credit exposure was Rs. 1,325.8 million at March 31, 2024 (March 31, 2023: Rs. 1,690.7 million). As per the Basel III Regulations, banks may adopt the comprehensive approach, which allows fuller offset of collateral against exposures, by effectively reducing the exposure amount by the value ascribed to the collateral. Therefore, mark-to-market receivable has been fully off-set against the collateral received from the counterparty and the excess collateral posted over the net mark-to-market payable is reckoned as exposure till fiscal 2023. Since the collateral received is counterparty wise and not product wise, the derivative exposure reported above has not been adjusted for the collateral received/posted. At March 31, 2024, collateral utilized against mark-to-market receivable of the Bank was Rs. 17,873.3 million (March 31, 2023: Rs. 11,775.9 million), excess collateral posted over net mark-to-market payable was Rs. 3,897.1 million (March 31, 2023: Rs. 1,118.2 million) and the net credit exposure post collateral netting on forex and derivatives was Rs. 771,291.1 million (March 31, 2023: Rs. 779,476.0 million). 14. Tax contingencies Various tax-related legal proceedings are pending against the Group at various levels of appeal either with the tax authorities or in the courts. Where, after considering all available information, a liability requires accrual in the opinion of management, the Group accrues such liability. Where such proceedings are sufficiently advanced to enable management to assess that a liability exists and are subject to reasonable estimation, management records its best estimate of such liability. The contested tax demands are adjusted by the tax authorities against refunds due to the Group on favorable resolution of other years’ appeals/completion of assessments or paid or kept in abeyance in accordance with the terms of the stay order. The payment/adjustment/stay does not prejudice the outcome of the appeals filed by the Group. The tax payments are recorded as tax paid under other assets. At March 31, 2024, the Group has assessed its contingent tax liability at an aggregate of Rs. 103,487.0 million (March 31, 2023: Rs. 82,515.2 million), mainly pertaining to income tax, service tax, goods and services tax and sales tax/ value added tax demands by the Indian tax authorities for past years. The Group has appealed each of these tax demands. Based on consultation with counsel and favorable decisions in the Group’s own or other similar cases as set out below, the Group’s management believes that the tax authorities are not likely to be able to substantiate their tax assessments and accordingly has not provided for these tax demands at March 31, 2024. Disputed tax issues that are classified as remote are not disclosed as contingent liabilities by the Group. The Group’s contingent liabilities on income tax and interest tax amounted to Rs. 83,170.4 million (March 31, 2023: Rs. 72,410.0 million) which include appeals filed by the Group or the tax authorities, where the Group is relying on favorable precedent decisions of the appellate authorities and counsel opinions. The key disputed liabilities are detailed below: Disallowance of expenses to earn tax-free income: Rs. 28,639.0 million (March 31, 2023: Rs. 29,002.9 million) mainly relates to whether interest expenses can be attributed to earning tax-free income. The Group believes that no interest can be allocated thereto as there are no borrowings earmarked for investments in shares/tax-free bonds and the interest free funds are sufficient to cover investments in the underlying tax-free securities. The Group relies on favorable opinion from counsel and past decisions by the appellate authorities in Group’s own cases and other similar cases. F-105 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Mark-to-market losses on derivatives: Rs. 15,625.9 million (March 31, 2023: Rs. 15,003.8 million) relates to the disallowance of mark-to-market losses on derivative transactions treated by the tax authorities as notional losses. The Group relies on favorable opinion from the counsel and past decision by the appellate authorities in Group’s own cases and other similar cases, which had allowed the deduction of mark-to-market losses from business income. Provision for operating expense: Rs. 6,950.5 million (March 31, 2023: Rs. 5,258.2 million) relates to disallowance of provision for operating expense by the tax authorities treating it as contingent in nature. The group relies on favorable opinion from counsel and past decisions by the appellate authorities in other similar cases. Interest on perpetual bonds: Rs 10,685.4 million (March 31, 2023: Rs. 5,145.6 million) relates to the disallowance of interest paid on perpetual bonds. The tax authorities do not deem these as borrowings and therefore the interest paid on these bonds has not been allowed as a deduction. The Group relies on favorable opinion from counsel and the past decision by the appellate authorities in the Group’s own case and other similar cases. Depreciation on leased assets: Rs. 6,303.5 million (March 31, 2023: Rs. 4,723.3 million) relates to the disallowance of depreciation claimed on leased assets due to treatment of the lease transactions as loan transactions by the tax authorities. The Group relies on favorable opinion from the counsel and past decisions by the appellate authorities in Group’s own case and other similar cases. Disallowance of write off in respect of credit cards: Rs. 3,993.2 million (March 31, 2023: Rs. 3,570.9 million) relates to the disallowance of written-off amount for credit cards for claiming bad debt write-offs. It was disallowed on the ground that the credit card business is not a banking business or pertaining to money lending and hence did not fulfill conditions for claim of bad debt write off. The Group has relied on the favorable opinion from counsel and past decision by the appellate authorities in Group’s own case and other similar cases. Interest on non-performing assets: Rs. 5,128.5 million (March 31, 2023: Rs. 3,410.4 million) relates to interest on non-performing assets de-recognized as per the Reserve Bank of India guidelines after 90 days. Interest income is assessed to tax on the ground that tax law has 180 days limit as against 90 days followed by the Bank. The Group has relied on favorable opinion from counsel and past decisions by the appellate authorities in Group’s own and other similar cases. Taxability under section 41(4A) of amounts withdrawn from Special Reserve created up to Assessment Year 1997-98: Rs. 1,030.6 million (March 31, 2023: Rs. 1,030.6 million) relates to two special reserve accounts maintained by the Group, which included a special reserve created up to assessment year 1997-98. Withdrawals from the account were assessed as taxable by the tax authorities for assessment years 1998-99 to 2000-01. The Group has received favorable orders in respect of these assessment years. However, the income tax authorities have preferred further appeal against the favorable orders. The Group’s contingent liabilities on service tax and goods and services tax amounted to Rs. 19,081.9 million (March 31, 2023: Rs. 8,888.4 million), which mainly pertain to the demands along with interest and penalty levied by the respective tax authorities. The key disputed liabilities are detailed below. Disallowance of CENVAT credit on interchange fees: Rs. 2,048.0 million (March 31, 2023: Rs. 2,048.0 million) relates to disallowance of CENVAT credit on ATM interchange fees paid to acquiring banks and switching fee paid to settlement agency on the basis of monthly statement and 100% penalty on the same. The Group has relied on a favorable opinion from counsel. F-106 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Service tax on interchange fees: Rs. 1,488.7 million (March 31, 2023: Rs. 1,488.7 million) relates to service tax and interest on interchange fees received by the Bank as an issuing bank. The Group has relied on a favorable opinion from counsel. Disallowance of CENVAT credit on Deposit Insurance and Credit Guarantee Corporation (DICGC) premium: Rs. 1,012.6 million (March 31, 2023: Rs. 982.6 million) relates to disallowance of CENVAT credit availed by the Bank on deposit insurance premium paid by the Bank to DICGC. The Group has relied on favorable opinion from counsel and past decision by appellate authorities in other similar cases. Service tax credit (CENVAT) denied: Rs. 3,805.2 million (March 31, 2023: Rs. 3,670.0 million) pertaining to ICICI Lombard General Insurance Company Limited relates to disallowance of CENVAT credit in respect of services of re-insurance of motor insurance policies and contesting the methodology of computation of CENVAT credit reversal. The Group has relied on favorable opinion from counsel and past decision by appellate authorities in other similar cases. Goods and Services Tax: Rs. 4,920.6 million (March 31, 2023: NIL) pertaining to ICICI Prudential Life Insurance Company Limited relates to show cause notice from DGGI (Directorate General of Goods and Services Tax Intelligence) towards denial of input tax credit availed and utilized on certain expenses pertaining to advertisement and manpower services. The Group has relied on favorable opinion from counsel. The Group’s contingent liabilities on sales tax/value added tax amounted to Rs. 1,234.7 million (March 31, 2023: Rs. 1,214.6 million) by various state government authorities. The matters mainly pertain to procedural issues like submission of statutory forms and adhoc additions in turnover. The Group has relied on favorable opinions from the counsels and decisions in own/other cases. Based on judicial precedents in the Group’s and other cases and upon consultation with the tax counsels, the management believes that it is more likely than not that the Group’s tax positions will be sustained. Accordingly, no provision has been made in the accounts. The above mentioned contingent liabilities do not include Rs. 141,164.0 million (March 31, 2023: Rs. 34,988.3 million) considered as remote. Of the total disputed tax demands classified as remote, Rs. 92,123.8 million pertains to the demand of inadvertently denied advance tax credit and incorrect tax rate considered by tax authorities for Fiscal 2021, Rs. 25,945.0 million (March 31, 2023: Rs. 30,493.8 million) mainly pertains to the deduction of bad debts, broken period interest, and levy of penalties, which are covered by favorable decisions by the Supreme Court of India in the Group’s own/other cases, Rs. 19,017.5 million pertains to non-payment of goods and services tax on co-insurance premium and re-insurance commission in case of ICICI Lombard General Insurance Company Limited and Rs. 4,077.7 million (March 31, 2023: Rs. 3,632.3 million) pertains to errors requiring rectification by tax authorities. Therefore, these are not required to be disclosed as contingent liability. 15. Litigation A number of litigations and claims against the Group (and its directors and officers) are pending in various forums. The claims on the Group (and its directors and officers) mainly arise in connection with civil cases involving allegations of service deficiencies, property or labor disputes, fraudulent transactions, economic offences and other cases filed in the normal course of business. The Group is also subject to counter-claims arising in connection with its enforcement of contracts and loans. A provision is created where an unfavorable outcome is deemed probable and in respect of which a reliable estimate can be made. In view of inherent unpredictability of litigation and cases where claims sought are substantial in value, actual cost of resolving litigations may be substantially different than the provision held or the contingent liability recognized. For cases where unfavorable outcome is deemed to be reasonably possible, it is not possible to make an estimate of the possible loss or range of F-107 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) possible losses though aggregate of such amounts are recognized as contingent liabilities. The total amount of claims against the Group where an unfavorable outcome is deemed ‘probable’ was Rs. 12,530.9 million against which provision of Rs. 7,500.6 million has been recognized. The total amount of claims where unfavorable outcome is deemed ‘possible’ was Rs. 7,288.1 million at March 31, 2024, which has been included under contingent liability of the Group. Based upon a review of open matters with its legal counsels including loss contingency on account of such litigation and claims, and classification of such contingency as 'probable', 'possible' or 'remote' and with due provisioning for the relevant litigation and claims, the management believes that the outcome of such matters will not have a material adverse effect on the Group's consolidated financial position, results of operations or cash flows. F-108 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 16. Segmental Information The following table sets forth the business segment results for the year ended March 31, 2024 prepared on the basis described in Schedule 18 note 10A. Rupees in million Sr. no. Particulars Retail banking Wholesale banking Treasury Other banking business Life insurance Others Inter- segment adjustments Total 1 Total income 1,345,475.7 717,802.2 1,137,018.3 64,034.0 542,361.3 159,326.8 (1,605,641.1) 2,360,377.2 External revenue 791,317.3 491,258.8 306,964.0 62,415.0 541,426.2 166,995.9 .. 2,360,377.2 Revenue from transfer pricing on external liabilities and other internal revenue 554,158.4 226,543.4 830,054.3 1,619.0 935.1 (7,669.1) (1,605,641.1) .. 2 Segment results1 188,491.7 199,717.1 146,408.8 16,384.0 9,232.3 62,301.7 (18,192.0) 604,343.6 3 Unallocated expenses .. 4 Share of profit from associates 10,737.7 5 Operating profit1 (2) – (3) + (4) 615,081.3 6 Income tax expenses (net)/(net deferred tax credit) 154,276.2 7 Net profit2 (5) – (6) 460,805.1 Other information 8 Segment assets 7,193,136.2 4,824,561.0 6,340,548.0 893,056.2 2,987,952.9 1,508,283.1 (182,618.8) 23,564,918.6 9 Unallocated assets 75,711.7 10 Total assets (8) + (9) 23,640,630.3 11 Segment liabilities 10,198,454.9 4,565,715.3 3,815,846.83 607,215.63 2,989,997.03 1,515,019.53 (182,618.8)3 23,509,630.3 12 Unallocated liabilities 131,000.0 13 Total capital and liabilities (11) + (12) 23,640,630.3 14 Capital expenditure 19,984.4 7,806.3 1,390.0 598.4 3,128.9 3,669.0 .. 36,577.0 15 Depreciation 10,978.1 4,596.4 788.2 444.8 1,129.0 1,432.0 (16.4) 19,352.1 1. Profit before tax and minority interest. 2. Includes share of net profit of minority shareholders. 3. Includes share capital and reserves and surplus. 4. The results of reported segments for the year ended March 31, 2024 are not comparable with that of reported segments for the year ended March 31, 2023 to the extent new entities have been consolidated and entities that have been discontinued from consolidation. F-109 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth the business segment results for the year ended March 31, 2023 prepared on the basis described in Schedule 18 note 10A. Rupees in million Sr. no. Particulars Retail banking Wholesale banking Treasury Other banking business Life insurance Others Inter- segment adjustments Total 1 Total income 1,037,753.4 506,148.5 845,369.2 44,640.0 479,301.7 97,259.8 (1,148,684.6) 1,861,788.0 External revenue 624,349.7 366,629.6 241,880.1 44,192.1 478,712.6 106,023.9 .. 1,861,788.0 Revenue from transfer pricing on external liabilities and other internal revenue 413,403.7 139,518.9 603,489.1 447.9 589.1 (8,764.1) (1,148,684.6) -- 2 Segment results1 175,336.8 157,857.8 140,372.1 10,014.5 8,968.9 42,023.7 (15,509.2) 519,064.6 3 Unallocated expenses `56,500.0 4 Share of profit from associates 9,982.9 5 Operating profit1 (2) – (3) + (4) 472,547.5 6 Income tax expenses (net)/(net deferred tax credit) 117,934.4 7 Net profit2 (5) – (6) 354,613.1 Other information 8 Segment assets 6,039,593.7 4,328,743.5 5,129,405.0 836,960.5 2,556,899.0 711,348.4 (114,612.3) 19,488,337.8 9 Unallocated assets 96,567.2 10 Total assets (8) + (9) 19,584,905.0 11 Segment liabilities 8,913,545.4 3,472,764.9 3,344,275.63 564,779.63 2,558,472.03 714,679.83 (114,612.3)3 19,453,905.0 12 Unallocated liabilities 131,000.0 13 Total capital and liabilities (11) + (12) 19,584,905.0 14 Capital expenditure 11,682.9 5,251.8 610.6 455.2 1,357.0 1,884.8 .. 21,242.3 15 Depreciation 9,274.5 3,427.2 335.8 405.2 835.1 884.2 (16.4) 15,145.6 1. Profit before tax and minority interest. 2. Includes share of net profit of minority shareholders. 3. Includes share capital and reserves and surplus. F-110 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, the business segment results for the year ended March 31, 2022 prepared on the basis described in Schedule 18 note 10A. Rupees in million Sr. no. Particulars Retail banking Wholesale banking Treasury Other banking business Life insurance Others Inter- segment adjustments Total 1 Total income 846,392.2 399,714.9 673,210.9 27,784.1 453,402.4 87,332.5 (912,473.8) 1,575,363.2 External revenue 483,837.6 289,280.0 229,049.3 27,291.1 452,258.2 93,647.0 .. 1,575,363.2 Revenue from transfer pricing on external liabilities and other internal revenue 362,554.6 110,434.9 444,161.6 493.0 1,144.2 (6,314.5) (912,473.8) .. 2 Segment results1 114,003.9 90,529.3 96,744.8 6,271.2 7,905.6 43,499.9 (16,792.0) 342,162.7 3 Unallocated expenses (250.0) 4 Share of profit from associates 7,544.3 5 Operating profit1 (2) – (3) + (4) 349,957.0 6 Income tax expenses (net)/(net deferred tax credit) 84,574.4 7 Net profit2 (5) – (6) 265,382.6 Other information 8 Segment assets 4,876,519.3 3,790,918.0 5,218,960.9 682,866.9 2,440,064.2 516,534.8 (105,216.9) 17,420,647.2 9 Unallocated assets 105,726.6 10 Total assets (8) + (9) 17,526,373.8 11 Segment liabilities 7,918,942.5 3,213,907.0 2,933,413.93 541,143.13 2,441,543.23 520,286.43 (105,216.9)3 17,464,019.2 12 Unallocated liabilities 62,354.6 13 Total capital and liabilities (11) + (12) 17,526,373.8 14 Capital expenditure 9,901.7 4,453.3 623.1 345.7 732.3 943.8 .. 16,999.9 15 Depreciation 8,068.8 3,130.8 399.6 321.9 669.1 726.3 (16.4) 13,300.1 1. Profit before tax and minority interest. 2. Includes share of net profit of minority shareholders. 3. Includes share capital and reserves and surplus. The Bank has pursued a conscious strategy of increasing the share of retail deposits and re-balancing the funding mix. Accordingly, retail deposits have been considerably higher than retail advances. Accordingly, segment liabilities of the retail business segment were higher as compared to segment assets for above periods. F-111 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 17. Revenue from contracts with customers The Group recognizes the revenue from contracts with customers primarily in the line item ‘commission, exchange and brokerage’ of ‘Schedule 14 - Other income’. The primary components of commission, exchange and brokerage are transaction banking fee, lending linked fee, fund management fee, commercial banking fee, securities brokerage income and third-party products distribution fee. The transaction banking fee primarily includes card related fee such as interchange fee, joining fee and annual fee, income on ATM transactions, deposit accounts related transaction charges and charges for normal transaction banking services and fee on cash management services, commission on bank guarantees, letters of credit and bills discounting. The lending linked fee primarily includes loan processing fee and fee on foreclosure/prepayment of loans. The fund management fee includes the income earned by the Bank’s asset management subsidiary on mutual fund schemes and by the private equity fund management subsidiary on private equity funds. The brokerage income earned by the Bank’s securities broking subsidiary on securities transactions by its customers is included in the securities brokerage income. The third-party products distribution fee primarily includes income earned on distribution of products such as mutual funds, insurance products and bonds. The revenue is recognized at the time when the performance obligation under the terms of contractual arrangement is completed. The Group generally recognizes the revenue either immediately upon completion of services or over time as the Group performs the services. In cases where the consideration is received in advance from customers by the Group, a liability is recorded and the same is subsequently recognized as revenue over the contract period or on completion of the performance obligation under the contract. The Group does not have any significant contract assets and contract liabilities at March 31, 2024 and March 31, 2023. The segment-wise breakup of the above components of the Group’s revenue for the year ended March 31, 2024 is given below. Rupees in million Sr. No. Nature Retail Banking Wholesale Banking Treasury Other banking business Life insurance Others Inter segment/ company adjustment Total 1 Transaction banking fee 87,607.1 27,779.2 .. 2,202.4 .. 55.1 (753.2) 116,890.6 2 Lending linked fee 25,325.3 14,033.5 .. 1,118.4 7.0 2,174.8 (474.6) 42,184.4 3 Fund management fee .. .. .. .. .. 34,890.6 (0.6) 34,890.0 4 Securities brokerage income .. .. .. .. .. 18,774.2 (65.8) 18,708.4 5 Third-party products distribution fee 9,709.6 .. .. 124.1 .. 6,846.6 (5,086.7) 11,593.6 6 Others 762.0 2,604.1 5.4 658.8 .. 8,676.8 (1,255.5) 11,451.7 Total 123,404.0 44,416.8 5.4 4,103.7 7.0 71,418.1 (7,636.4) 235,718.7 1. Out of the total revenue of Rs. 235,718.7 million, amount of revenue recognized point in time is Rs. 215,461.4 million and amount of revenue recognized over the period is Rs. 20,257.3 million. F-112 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The segment-wise breakup of the above components of the Group’s revenue for the year ended March 31, 2023 is given below. Rupees in million Sr. No. Nature Retail Banking Wholesale Banking Treasury Other banking business Life insurance Others Inter segment/ company adjustment Total 1 Transaction banking fee 75,390.4 22,871.7 .. 1,156.2 .. 37.5 (632.5) 98,823.3 2 Lending linked fee 23,659.0 13,403.0 .. 1,172.9 5.8 1,628.5 (253.8) 39,615.4 3 Fund management fee .. .. .. .. .. 27,550.4 (0.6) 27,549.8 4 Securities brokerage income .. .. .. .. .. 12,563.0 (6.8) 12,556.2 5 Third-party products distribution fee 9,390.9 .. .. 0.4 .. 6,532.1 (5,673.4) 10,250.0 6 Others 811.3 1,342.7 10.2 408.2 .. 5,348.1 (230.5) 7,690.0 Total 109,251.6 37,617.4 10.2 2,737.7 5.8 53,659.6 (6,797.6) 196,484.7 1. Out of the total revenue of Rs. 196,484.7 million, amount of revenue recognized point in time is Rs. 177,416.7 million and amount of revenue recognized over the period is Rs. 19,068.0 million The segment-wise breakup of the above components of the Group’s revenue for the year ended March 31, 2022 is given below. Rupees in million Sr. No. Nature Retail Banking Wholesale Banking Treasury Other banking business Life insurance Others Inter segment/ company adjustment Total 1 Transaction banking fee 59,375.0 19,482.6 .. 799.6 .. 23.5 (783.1) 78,897.6 2 Lending linked fee 20,290.7 11,551.6 .. 540.6 .. 932.0 (274.8) 33,040.1 3 Fund management fee .. .. .. 18.1 .. 24,634.3 (0.5) 24,651.9 4 Securities brokerage income .. .. .. .. .. 15,526.0 (6.8) 15,519.2 5 Third-party products distribution fee 11,166.9 .. .. 0.6 .. 5,740.8 (7,506.0) 9,402.3 6 Others 2,754.7 1,576.0 13.8 455.1 4.6 6,576.4 (7.8) 11,372.8 Total 93,587.3 32,610.2 13.8 1,814.0 4.6 53,433.0 (8,579.0) 172,883.9 1. Out of the total revenue of Rs. 172,883.9 million, amount of revenue recognized point in time is Rs. 154,800.3 million and amount of revenue recognized over the period is Rs. 18,083.6 million. F-113 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 18. Employee Stock Option Scheme (ESOS)/ Employee Stock Unit Scheme (ESUS) The following table sets forth a summary of the Bank’s stock options outstanding at March 31, 2024. Number of options Weighted-average exercise price per share (Rs.) Weighted-average remaining contractual life (Number of years) Aggregate intrinsic value (Rs. in million) Outstanding at the beginning of the year 225,025,803 361.60 4.43 116,036.0 Add: Granted during the year 14,635,600 894.95 Less: Lapsed during the year, net of re-issuance 1,410,025 728.44 Less: Exercised during the year 39,519,912 296.27 Outstanding at the end of the year 198,731,466 411.26 3.81 135,542.5 Options exercisable 159,296,026 324.55 3.34 122,458.4 The following table sets forth a summary of the Bank’s stock options outstanding at March 31, 2023. Number of options Weighted-average exercise price per share (Rs.) Weighted-average remaining 5contractual life (Number of years) Aggregate intrinsic value (Rs. in million) Outstanding at the beginning of the year 237,197,999 310.82 5.12 99,501.6 Add: Granted during the year 25,793,500 747.92 Less: Lapsed during the year, net of re-issuance 3,921,340 568.36 Less: Exercised during the year 34,044,356 276.72 Outstanding at the end of the year 225,025,803 361.60 4.43 116,036.0 Options exercisable 172,938,533 289.69 4.03 101,611.0 The following table sets forth a summary of the Bank’s stock units outstanding at March 31, 2024. Number of options Weighted-average exercise price (Rs.) Weighted-average remaining contractual life (Number of years) Aggregate intrinsic value (Rs. in million) Outstanding at the beginning of the year .. .. .. .. Add: Granted during the year 4,419,670 2.00 Less: Lapsed during the year, net of re-issuance 228,860 2.00 Less: Exercised during the year .. .. Outstanding at the end of the year 4,190,810 2.00 6.24 4,573.4 Options exercisable 2,700 2.00 4.60 2.9 F-114 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Total fair value of options vested was Rs. 4,852.0 million for the year ended March 31, 2024, Rs. 4,630.2 million for the year ended March 31, 2023 and Rs. 4,145.3 million for the year ended March 31, 2022. Total fair value of units vested was Rs. 2.4 million for the year ended March 31, 2024. Total aggregate intrinsic value of options exercised was Rs. 26,462.2 million for the year ended March 31, 2024, Rs. 19,325.5 million for the year ended March 31, 2023 and Rs 15,094.0 million for the year ended March 31, 2022. The total compensation cost of options related to non-vested awards not yet recognized at March 31, 2024 and March 31, 2023 was Rs. 3,238.3 million and Rs. 4,062.2 million respectively and the weighted-average period over which it is expected to be recognized was 1.42 years and 1.51 years respectively. The total compensation cost of units related to non-vested awards not yet recognized at March 31, 2024 was Rs. 1,462.1 million and the weighted-average period over which it is expected to be recognized was 1.59 years. The following table sets forth a summary of stock options exercisable at March 31, 2024. Range of exercise price (Rupees per share) Number of options Weighted- average exercise price per share (Rs.) Weighted-average remaining contractual life (Number of years) Aggregate intrinsic value (Rs. in million) 60-199 4,012,005 161.88 1.25 3,736.9 200-399 115,605,713 267.72 3.54 95,442.1 400-599 33,285,234 460.23 2.73 21,071.8 600-799 6,371,084 747.64 4.07 2,202.2 800-999 21,990 849.11 4.57 5.4 The following table sets forth a summary of stock options exercisable at March 31, 2023. Range of exercise price (Rupees per share) Number of options Weighted- average exercise price per share (Rs.) Weighted-average remaining contractual life (Number of years) Aggregate intrinsic value (Rs. in million) 60-199 7,202,993 160.84 1.85 5,160.3 200-399 133,303,238 261.30 4.30 82,108.7 400-599 32,398,912 434.71 3.41 14,337.8 600-799 29,190 742.88 4.60 3.9 800-999 4,200 810.25 4.81 0.3 F-115 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth a summary of the Bank’s unvested stock options outstanding at March 31, 2024. Number of options Weighted-average fair value per share at grant date (Rupees) Unvested at April 1, 2023 52,087,270 237.58 Add: Granted during the year 14,635,600 340.59 Less: Vested during the year 25,931,860 187.11 Less: Forfeited during the year 1,355,570 299.92 Unvested at March 31, 2024 39,435,440 306.85 The following table sets forth a summary of the Bank’s unvested stock options outstanding at March 31, 2023. Number of options Weighted-average fair value per share at grant date (Rupees) Unvested at April 1, 2022 60,027,260 172.61 Add: Granted during the year. 25,793,500 291.15 Less: Vested during the year. 29,953,785 154.58 Less: Forfeited during the year 3,779,705 229.14 Unvested at March 31, 2023 52,087,270 237.58 The following table sets forth a summary of the Bank’s unvested stock units outstanding at March 31, 2024. Number of options Weighted-average fair value per share at grant date (Rupees) Unvested at April 1, 2023 .. .. Add: Granted during the year 4,419,670 879.43 Less: Vested during the year 2,700 879.43 Less: Forfeited during the year 228,860 879.43 Unvested at March 31, 2024 4,188,110 879.43 The following table sets forth for the periods indicated, the key assumptions used to estimate the fair value of options. Year ended March 31, 2024 2023 2022 Risk-free interest rate 6.88% to 7.32% 5.99% to 7.37% 5.34% to 6.53% Expected term 3.23 years to 5.23 years 3.23 years to 5.23 years 3.55 years to 5.55 years Expected volatility 24.78% to 37.41% 34.79% to 38.98% 35.38% to 39.41% Expected dividend yield 0.56% to 0.85% 0.27% to 0.72% 0.18% to 0.30% F-116 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth for the periods indicated, the key assumptions used to estimate the fair value of units. Year ended March 31, 2024 Risk-free interest rate 6.82% to 6.94% Expected term 1.58 years to 3.58 years Expected volatility 23.63% to 36.56% Expected dividend yield 0.56% Risk free interest rates over the expected term of the option/units are based on the government securities yield in effect at the time of the grant. The expected term of an option/units is estimated based on the vesting term as well as expected exercise behavior of the employees who receive the option/units. Expected exercise behavior is generally estimated based on the historical exercise pattern of the Bank. Expected volatility during the estimated expected term of the option/units is based on historical volatility determined based on observed market prices of the Bank’s publicly traded equity shares. Expected dividends during the estimated expected term of the option/units are based on recent dividend activity. 19. Selected information from Indian GAAP financials The following tables set forth, for the periods indicated, the income statement and balance sheet, by following the guidance of Regulation S-X. Rupees in million Year ended March 31, 2024 2023 2022 Interest income 1,595,159.2 1,210,668.1 954,068.7 Interest expense 741,081.6 505,433.9 411,666.7 Net interest income 854,077.6 705,234.2 542,402.0 Provision for loan losses & others 30,074.5 55,482.3 84,354.2 Provision for depreciation on investments 7,049.6 13,917.0 5,412.3 Net interest income after provision for loan losses and investments 816,953.5 635,834.9 452,635.5 Non-interest income 765,218.0 651,119.9 621,294.5 Non-interest expense 977,827.9 824,390.2 731,517.3 Income before income tax expense, minority interest and share of profit in associates 604,343.6 462,564.6 342,412.7 Income tax expense 154,276.2 117,934.4 84,574.4 Income before minority interest and share of profit in associates 450,067.4 344,630.2 257,838.3 Add: Share of profit in associates 10,737.7 9,982.9 7,544.3 Net profit for the year before minority interest 460,805.1 354,613.1 265,382.6 Less: Minority interest 18,241.4 14,246.7 14,281.6 Net income 442,563.7 340,366.4 251,101.0 Year ended March 31, 2024 2023 2022 Earnings per equity share: (Rs.) Basic 63.19 48.86 36.21 Diluted 61.96 47.84 35.44 Weighted average number of equity shares used in computing earnings per equity share (millions) Basic 7,004 6,966 6,934 Diluted 7,132 7,105 7,076 F-117 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million At March 31, 2024 2023 Assets Cash and cash equivalents 1,627,689.0 1,364,564.9 Investments1,2 8,271,625.1 6,395,519.7 Loans, net1,2 12,607,762.0 10,838,663.2 Property, plant and equipment 132,394.0 109,261.2 Goodwill 24,741.6 1,013.3 Deferred tax asset (net) 63,115.8 76,194.4 Interest accrued, outstanding fees and other income 219,934.8 161,497.2 Assets held for sale 8.8 428.8 Other assets 693,359.2 637,762.3 Total assets 23,640,630.3 19,584,905.0 Liabilities Interest-bearing deposits 12,448,353.8 10,450,599.7 Non-interest bearing deposits 1,987,445.7 1,657,721.8 Short-term borrowings and trading liabilities 757,731.8 578,221.6 Long-term debt 1,316,548.2 1,312,396.5 Other liabilities 4,430,228.2 3,374,119.9 Total liabilities 20,940,307.7 17,373,059.5 Minority interest 138,884.2 66,867.5 Stockholders’ equity 2,561,438.4 2,144,978.0 Total liabilities and stockholders’ equity 23,640,630.3 19,584,905.0 1. Includes investments and loans amounting to Rs. 290,271.3 million (March 31, 2023: Rs. 261,206.3 million) pledged as security towards short-term borrowings amounting to Rs. 286,293.8 million (March 31, 2023: Rs. 258,992.9 million). 2. Includes investments and loans amounting to Rs. 273,274.7 million (March 31, 2023: Rs. 246,812.5 million) pledged as security towards long-term borrowings amounting to Rs. 266,868.8 million (March 31, 2023: Rs. 239,969.1 million). The following tables set forth, for the periods indicated, the statement of stockholders’ equity. Rupees in million Equity share capital Employee stock options outstanding Securities premium Revenue and other reserves1 Other special reserves2 Balance at April 1, 2023 13,967.8 7,608.8 507,229.5 797,727.0 818,444.9 Proceeds from issue of share capital 79.0 .. 12,206.1 .. .. Additions during the year .. 7,028.43 0.84 249,252.85 149,601.66 Deductions during the year .. (584.0)7 .. (144.3) (980.1)8 Balance at March 31, 2024 14,046.8 14,053.2 519,436.4 1,046,835.5 967,066.4 1. Includes revenue and other reserves, unrealized investment reserve and balance in profit and loss account. 2. Includes statutory reserve, special reserve, capital reserve, foreign currency translation reserve, revaluation reserve, investment fluctuation reserve and capital redemption reserve. 3. Represents cost of employee stock options/units recognized during the year. 4. Represents the ESOP cost recognized by the overseas banking subsidiaries under fair value method. 5. Includes Rs. 4,308.9 million towards addition in fair value change account of insurance subsidiaries. 6. Includes transfer of accumulated translation loss of Rs. 3,396.6 million related to closure of Bank’s Offshore Banking Unit, SEEPZ Mumbai, to profit and loss account in terms of Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates. 7. Represents amount transferred to Securities Premium on account of exercise of employee stock options and to General Reserve on lapses of employee stock options. 8. Includes amount transferred from revaluation reserve to general reserve on account of incremental depreciation charge on revaluation and revaluation surplus on premises sold. Also includes the amount of loss on revaluation of certain assets which were held for sale. F-118 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Equity share capital Employee stock options outstanding Securities premium Revenue and other reserves1 Other special reserves2 Balance at April 1, 2022 13,899.7 2,664.1 497,645.1 597,585.8 708,730.2 Proceeds from issue of share capital 68.1 .. 9,576.3 .. .. Additions during the year .. 5,172.4 8.13 200,197.14 111,920.8 Deductions during the year .. (227.7)5 .. (55.9) (2,206.1)6 Balance at March 31, 2023 13,967.8 7,608.8 507,229.5 797,727.0 818,444.9 1. Includes revenue and other reserves, unrealized investment reserve and balance in profit and loss account. 2. Includes statutory reserve, special reserve, capital reserve, foreign currency translation reserve, revaluation reserve, investment fluctuation reserve and capital redemption reserve. 3. Represents the ESOP cost recognized by the overseas banking subsidiaries under fair value method. 4. Includes Rs. 1,482.1 million towards addition in fair value change account of ICICI Prudential Life Insurance Company Limited. 5. Represents amount transferred to Securities Premium on account of exercise of employee stock options and to General Reserve on lapses of employee stock options. 6. Includes amount transferred from revaluation reserve to general reserve on account of incremental depreciation charge on revaluation and, revaluation surplus on premises sold. . Also includes the amount of loss on revaluation of certain assets which were held for sale. Rupees in million Equity share capital Employee stock options outstanding Securities premium Revenue and other reserves1 Other special reserves2 Balance at April 1, 2021 13,834.1 31.0 489,694.7 456,597.0 615,718.2 Proceeds from issue of share capital 65.6 .. 7,923.3 .. .. Additions during the year .. 2,642.2 27.13 144,130.1 95,590.6 Deductions during the year .. (9.1)4 .. (3,141.3)5 (2,578.6)6 Balance at March 31, 2022 13,899.7 2,664.1 497,645.1 597,585.8 708,730.2 1. Includes revenue and other reserves, unrealized investment reserve and balance in profit and loss account. 2. Includes statutory reserve, special reserve, capital reserve, foreign currency translation reserve, revaluation reserve, investment fluctuation reserve and capital redemption reserve. 3. Represents the ESOP cost recognized by the overseas banking subsidiaries under fair value method. 4. Represents amount transferred to Securities Premium on account of exercise of employee stock options and to General Reserve on lapses of employee stock options. 5. Includes Rs. 2,471.4 million towards reduction in fair value change account of ICICI Prudential Life Insurance Company Limited. 6. Includes amount transferred from revaluation reserve to general reserve on account of incremental depreciation charge on revaluation and, revaluation surplus on premises sold. Also includes the amount of loss on revaluation of certain assets which were held for sale. The following table sets forth, for the periods indicated, the movement in profit and loss account. Rupees in million March 31, 2024 March 31, 2023 March 31, 2022 Balance at the beginning of the year 656,386.8 508,988.5 385,155.9 Additions during the year 442,563.7 340,366.4 251,101.0 Dividend (55,986.0) (34,794.5) (13,852.3) Deductions during the year1 (144,706.7) (158,173.6) (113,416.1)2 Balance at the end of the year 898,257.8 656,386.8 508,988.5 1. Includes appropriations/transfers to other reserves. 2. Also includes reduction due to discontinuation of ICICI Lombard General Insurance Company from consolidation during the fiscal 2022. F-119 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The cash flow statement is in compliance with the requirements of IAS 7 – Cash Flow Statements. The following table sets forth, for the periods indicated, the supplementary information to the cash flow statements. Rupees in million Year ended March 31, 2024 2023 2022 Conversions of loans to investments 3,912.2 7,003.4 204.3 Interest paid 735,486.2 499,568.0 408,972.7 Interest and dividend received 1,537,708.7 1,167,957.4 956,304.8 20. Estimated fair value of financial instruments The Group’s financial instruments include non-derivative financial assets and liabilities as well as derivative instruments. Fair value estimates are generally subjective in nature and are made at a specific point in time based on the characteristics of the financial instruments and relevant market information. Quoted market prices are used, wherever available. In other cases, fair values are based on estimates using present value or other valuation techniques. These techniques involve uncertainties and are significantly affected by the assumptions used and judgments made regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows and other factors. Changes in assumptions could significantly affect these estimates and the resulting fair values. Derived fair value estimates cannot necessarily be substantiated by comparison to independent markets and in many cases, may not be realized in an immediate sale of the instruments. Fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered as financial instruments. Disclosure of fair values is not required for certain items such as investments accounted for under the equity method of accounting, obligations for pension and other post-retirement benefits, income tax assets and liabilities, property and equipment, pre-paid expenses, insurance liabilities, core deposit intangibles and the value of customer relationships associated with certain types of consumer loans, particularly the credit card portfolio and other intangible assets. Accordingly, the aggregate fair value amount presented does not purport to represent and should not be considered representative of the underlying market or franchise value of the Group. In addition, because of differences in methodologies and assumptions used to estimate fair values, the Group’s fair values should not be compared to those of other financial institutions. The methods and assumptions used by the Group in estimating the fair values of financial instruments are described below. Cash and balances with banks and money at call and short notice The carrying amounts reported in the balance sheet approximate fair values because a substantial amount of the portfolio has maturities of less than three months. Investments The fair values of investments are generally determined based on quoted price or based on discounted cashflows. For certain debt and equity investments that do not trade on established exchanges and for which markets do not exist, estimates of fair value are based upon management’s review of the investee’s financial results, condition and prospects. F-120 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Advances The fair values of commercial and consumer loans are estimated by discounting the contractual cash flows using interest rates currently offered on various loan products. The carrying value of certain other loans approximate fair value due to the short-term nature of these loans. The advances are classified as Level 3 instruments in view of absence of any significant market observable data for valuation of these instruments. Deposits The carrying amount of deposits with no stated maturity is considered to be equal to their fair value. Fair value of fixed rate time deposits is estimated by discounting contractual cash flows using interest rates currently offered on the deposit products. Fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of alternative forms of funding (core deposit intangibles). The deposits are classified as Level 3 instruments in view of absence of any significant market observable data for valuation of these instruments. Borrowings The fair value of the Group’s debt is estimated by discounting future contractual cash flows using appropriate interest rates and credit spreads. The carrying value of certain other borrowings approximates fair value due to the short-term nature of these borrowings. The borrowings are classified as Level 2 instruments in view of the inputs used like interest rates, yield curves and credit spreads, which are available from public sources like Reuters, Bloomberg, Financial Benchmark India Private Limited and Fixed Income Money Markets & Derivatives Association of India. The following table sets forth, for the periods indicated, the listing of the fair value by category of financial assets and financial liabilities. Rupees in million At March 31, 2024 At March 31, 2023 Carrying value Estimated fair value Carrying value Estimated fair value Financial assets Cash and balances with Reserve Bank of India 899,430.2 899,430.2 686,489.4 686,489.4 Balances with banks and money at call and short notice 728,258.8 728,258.8 678,075.5 678,075.5 Investments 8,271,625.0 8,363,106.1 6,395,519.7 6,636,987.2 Advances 12,607,762.0 12,659,954.1 10,838,663.2 10,919,209.8 Other assets 879,686.9 879,686.9 760,213.7 760,213.7 Total 23,386,762.9 23,530,436.1 19,358,961.5 19,680,975.6 Financial liabilities Interest-bearing deposits 12,447,597.9 12,496,120.8 10,450,594.5 10,457,726.0 Non-interest-bearing deposits 1,988,201.6 1,988,201.6 1,657,727.0 1,657,727.0 Borrowings 2,074,280.0 2,052,397.9 1,890,618.1 1,863,193.1 Other liabilities and provisions 1,296,956.8 1,296,956.8 683,368.0 683,368.0 Total 17,807,036.3 17,833,677.1 14,682,307.6 14,662,014.1 F-121 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 21. Differences between Indian GAAP and U.S. GAAP The consolidated financial statements of the Group are prepared in accordance with Indian GAAP, which differs in certain significant aspects from U.S. GAAP. The following tables summarize the significant adjustments to consolidated net income and stockholders’ equity which would result from the application of U.S. GAAP. 1. Net income reconciliation Rupees in million Note Year ended March 31, 2024 2023 2022 Consolidated profit after tax as per Indian GAAP excluding minority interests1 442,563.7 340,366.4 251,101.0 Adjustments on account of: Allowance for credit losses (a) (53,217.1) 15,616.7 22,853.5 Business combinations (b) 140,326.1 177.6 (634.9) Consolidation (c) 20,829.1 (123,486.7) 248,275.4 Valuation of debt and equity securities (d) 33,270.6 (138.0) 10,930.7 Amortization of fees and costs (e) 5,306.0 6,525.7 3,925.8 Accounting for derivatives (f) (1,107.2) (825.7) 53.9 Accounting for compensation costs (g) (684.2) (1,246.8) (2,270.6) Accounting for securitization (h) 325.9 (24.0) (532.5) Income tax benefit/(expense) (i) 18,278.4 10,893.6 (21,701.9) Others (j) 7,872.2 2,134.9 (207.8) Total impact of all adjustments 171,199.8 (90,372.7) 260,691.6 Net income as per U.S. GAAP attributable to ICICI Bank stockholders 613,763.5 249,993.7 511,792.6 Net income as per U.S. GAAP attributable to non-controlling interests1 15,114.5 10,224.3 13,282.7 Total net income as per U.S. GAAP 628,878.0 260,218.0 525,075.3 Basic earnings per share (Rs.) Indian GAAP (consolidated) 63.19 48.86 36.21 U.S. GAAP (consolidated) 87.63 35.89 73.81 Diluted earnings per share (Rs.) Indian GAAP (consolidated) 61.96 47.84 35.44 U.S. GAAP (consolidated) 85.89 35.17 72.41 1. Profit attributable to minority interests as per Indian GAAP was Rs. 18,241.4 million (March 31, 2023: Rs. 14,246.7 million and March 31, 2022: Rs. 14,281.6 million). F-122 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 2. Stockholders’ equity reconciliation Rupees in million At March 31, Note 2024 2023 Consolidated net worth as per Indian GAAP excluding minority interests1 2,561,438.3 2,144,977.9 Adjustments on account of: Allowance for credit losses (a) (13,384.3 ) 38,841.3 Business combinations (b) 391,984.8 29,951.6 Consolidation (c) 55,158.7 218,840.2 Valuation of debt and equity securities (d) 50,772.1 (22,407.9 ) Amortization of fees and costs (e) 45,918.4 39,518.2 Accounting for derivatives (f) (52.1 ) 1,055.1 Accounting for compensation costs (g) .. .. Accounting for securitization (h) (855.3 ) (1,290.4 ) Income tax assets/(liabilities) (i) 20,560.4 31,921.9 Others (j) (1,640.0 ) (8,331.5 ) Total impact of all adjustments 548,462.7 328,098.5 ICICI Bank stockholders’ equity as per U.S. GAAP 3,109,901.0 2,473,076.4 Non-controlling interests1 422,442.7 18,836.5 Total equity as per U.S. GAAP 3,532,343.7 2,491,912.9 1. Net worth, representing capital and reserves and surplus, attributable to minority interests as per Indian GAAP was Rs. 138,884.2 million (March 31, 2023: Rs. 66,867.5 million). a) Allowance for credit losses The differences in the credit losses between Indian GAAP and U.S. GAAP are primarily on account of: i. Expected credit losses on commercial loans based on individual assessment, which do not share similar risk characteristics with other loans under U.S. GAAP as compared to provisions based on graded provisioning rates on non-performing loans, subject to minimum provisioning rates prescribed by the Reserve Bank of India guidelines under Indian GAAP for the Bank. ii. Expected credit losses on the loans sharing similar risk characteristics under U.S. GAAP as compared to prescriptive/graded provisioning, subject to minimum provisioning rate, as per the Reserve Bank of India guidelines under Indian GAAP for the Bank. iii. Expected credit losses on non-cancellable loan commitments, non-fund exposures and other financial assets under U.S. GAAP as compared to estimated provision on expected devolvement of guarantees on certain borrowers classified as non-performing under Indian GAAP for the Bank. F-123 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Credit losses on commercial loans which do not share similar risk characteristics These differences primarily relate to provisions on non-performing commercial loans under Indian GAAP and credit loss provisions on commercial loans which do not share similar risk characteristics under U.S. GAAP. This difference arises due to a difference in methodology applied to calculate the credit losses under U.S. GAAP and Indian GAAP. Under Indian GAAP, as per Reserve Bank of India guidelines, non-performing loans are classified into three categories: sub-standard assets, doubtful assets and loss assets. A loan is classified as sub-standard if interest payments or installments have remained overdue for more than 90 days. As per Reserve Bank of India guidelines, a provision of 15.0% is required for all sub-standard loans. An additional provision of 10.0% is required for accounts that are unsecured from the time of origination. A loan is classified as a doubtful loan if it has remained sub-standard for more than twelve months or if the value of security charged to the Bank has eroded and fallen below 50% of the outstanding loan. A 100% provision/write-off is required with respect to the unsecured portion of the doubtful loans. A 100% provision is required for the secured portion of loans classified as doubtful for more than three years and is recorded in a graded manner as the three-year period occurs. A loan is classified as a loss asset if the losses on it are identified or the loan is considered uncollectible. For loans classified as a loss, the entire loan is required to be provided for. Provisions are generally made by the Bank on non-performing loans as per internal provisioning norms, subject to minimum provisioning requirements of Reserve Bank of India. In accordance with regulatory package announced by the Reserve Bank of India, consequent to outbreak of Covid-19 pandemic, the Bank extended the option of payment of moratorium on loans to its borrowers. The moratorium period, wherever granted, was excluded from the determination of number of days past-due for the purpose of asset classification as per the Reserve Bank of India guidelines. Under Indian GAAP, certain loans restructured by the Bank (excluding loans given for implementation of projects in the infrastructure sector and non-infrastructure sector and which are delayed up to a specified period and certain other types of loans explained below) by re-scheduling principal repayments and/or the interest are classified as non-performing as per the Reserve Bank of India guidelines. Provisions as applicable to non-performing loans, are made on restructured loans. In addition to this, provision for the diminution in fair value of the restructured loans is also made by the Bank. The diminution in fair value is computed by discounting both sets of cash flows, based on interest rate prior to restructuring and post restructuring, at the existing rate of interest charged on the loan before the restructuring. Under U.S. GAAP, commercial loans representing significant individual credit exposures (both funded and non-funded), are individually evaluated to ascertain if they share similar risk characteristics, based on the ability of the borrower to repay the contractual amounts due to the Bank, including considerations of both quantitative and qualitative criteria such as the account conduct, future prospects, repayment history and financial performance. The credit losses for commercial loans, ascertained to not share the similar risk characteristics, are estimated on an individual basis and are based on either the present value of expected future cash flows or in case of a collateral dependent loan, the net realizable value of the collateral net of cost to sell, if any. Under Indian GAAP, the Bank holds specific provisions on certain performing commercial loans and advances based on the Reserve Bank of India guidelines/direction. Under Indian GAAP, accounts where the Bank had invoked/implemented strategic debt restructuring under the Reserve Bank of India guidelines were classified as non-performing. Under U.S. GAAP, the Bank opted for fair value option for accounting these loans at fair value through income statement under ASC Subtopic 825-10 “Financial Instruments”. See also– 22(b). Notes under U.S. GAAP – Fair value accounting of financial interests. F-124 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Under Indian GAAP, any contractual amount due from the counter-party under derivative contracts, if not collected within 90 days, is required to be reversed through income statement under the Reserve Bank of India guidelines. Under U.S. GAAP, these receivables are analyzed to identify the required credit losses in the same manner as individual credit exposures. The Bank transfers certain loans to borrower specific funds/trusts managed by asset reconstruction companies in exchange for security receipts issued by the funds/trusts, as part of the strategy for resolution of non-performing assets. The funds/trusts have been set up by the asset reconstruction companies under enacted debt recovery legislation in India and they aim to improve the recoveries of banks on non-performing assets by aggregating lender interests and speeding up the enforcement of security interests by lenders. While under Indian GAAP, such transfers are recognized as a sale, under U.S. GAAP these transfers are not recognized as a sale due to the following reasons: • Certain transfers do not qualify for sale accounting under FASB ASC Topic 860, “Transfers and servicing”, as the Bank retains the risks and rewards in such transfers. • Certain transfers were impacted by FASB ASC Subtopic 810-10, “Consolidation – overall”. The funds/trusts to which these loans have been transferred are variable interest entities within the definition contained in ASC Subtopic 810-10. As the Bank is the ‘Primary Beneficiary’ of certain of these funds/trusts, it is required under U.S. GAAP to consolidate these entities. Credit losses on loans sharing similar risk characteristics Commercial loans Credit losses on commercial loans sharing similar risk characteristics primarily relate to performing commercial loans. Under Indian GAAP, the allowances on the performing portfolios are based on guidelines issued by the Reserve Bank of India. The provisioning requirement is a uniform rate of 0.4% for all standard assets except – · Small and micro enterprise sectors, which attract a provisioning requirement of 0.25%, · Advances to commercial real estate residential and non-residential sectors which attract a provisioning requirement of 0.75% and 1.0% respectively. As per the guidelines issued by the Reserve Bank of India, additional general provision between 0.0%-0.8% is made on outstanding amounts to entities having unhedged foreign currency exposure. The provision range is based on percentage of likely loss due to unhedged foreign currency exposure to their earnings before interest, depreciation and lease rentals, if any. As per the guidelines issued by the Reserve Bank of India, the Bank also makes additional general provision on loans to specific borrowers in specific stressed sectors and on incremental exposure to borrowers identified as per the Reserve Bank of India’s large exposure framework. Under U.S. GAAP, credit losses on the commercial loans sharing similar risk characteristics are accounted on a collective basis. The segmentation for the commercial loans is based on risk characteristics such as customer type, risk rating and delinquency status. The collective assessment begins with a quantitative calculation that considers the likelihood of the borrower defaulting. The quantitative calculation covers expected credit losses over an instrument’s expected life and is estimated by applying probability of default and loss given default. Based on historical default rates, the probabilities of default are derived using a macro-economic scenario over a reasonable and supportable forecast period. The term structure for subsequent periods is built using single year reversion to the F-125 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) long run historical information. The forecasts take into consideration the Group’s economic outlook based on internal as well as external inputs and involve a governance process that incorporates feedback from senior management. Consumer loans Credit losses on consumer loans sharing similar risk characteristics primarily relate to homogenous small balance loans including both performing and non-performing consumer loans under Indian GAAP. Under Indian GAAP, the provision on non-performing consumer loans is made at a pre-determined rate, subject to minimum provision as required under the Reserve Bank of India guidelines. The provision on the performing portfolios are based on guidelines issued by the Reserve Bank of India. The provisioning requirement is a uniform rate of 0.4% for all standard assets except · Farm credit to agriculture and home loan upto a certain amount which attract a provisioning requirement of 0.25%, · Advances to commercial real estate residential and non-residential sectors which attract a provisioning requirement of 0.75% and 1.0% respectively. Under U.S. GAAP, credit losses on the consumer loans sharing similar risk characteristics are accounted for on collective basis. The segmentation for the consumer loans is based on risk characteristics such as product type, delinquency status, credit scores, and vintage. For agriculture loans, a further segmentation of risk characteristics is also carried out based on direct and indirect agriculture lending categories. The collective assessment begins with a quantitative calculation that considers the likelihood of the borrower defaulting. The quantitative calculation covers expected credit losses over an instrument’s expected life and is estimated by applying probability of default and loss given default. Based on historical default rates, the probabilities of default are derived using a macro-economic scenario over a reasonable and supportable forecast period. The term structure for subsequent periods is built using single year reversion to the long run historical information. The forecasts take into consideration the Group’s economic outlook based on internal as well as external inputs and involve a governance process that incorporates feedback from senior management. Under Indian GAAP, the Bank, on prudent basis, has made contingency provision due to the economic and geopolitical uncertainties. Under US GAAP, the Group makes adjustments to appropriately address these economic circumstances over and above the model output by increasing the probability of default estimates based on management judgement. Credit losses on undrawn commitments, non-fund exposures and other debt securities Under U.S. GAAP, the Bank records a liability for credit losses on non-cancellable undrawn commitments by the Group and non-fund exposures to its borrowers based on the life time expected losses. The credit losses are estimated in accordance with the ASC Topic 326, “Financial Instruments – Credit losses”. Under Indian GAAP, the Bank makes estimated provision on guarantees, above a certain threshold, to its borrowers classified as non-performing based on an assessment of expected devolvement. Under Indian GAAP, the Reserve Bank of India guidelines do not specify the conditions under which the assets may be written-off. The Bank has internal policies for charge-off of non-performing loans against loan loss allowances. Commercial loans, are generally charged off against allowances when, based on a borrower-specific evaluation of the possibility of further recovery, the Bank concludes F-126 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) that the balance cannot be collected. The Bank evaluates whether a balance can be collected based on the realizable value of collateral, the results of the Bank’s past recovery efforts, the possibility of recovery through legal recourse and the possibility of recovery through settlement. Small-balance homogenous loans are generally charged off against allowances after predefined periods of delinquency, as follows: • Mortgage loans: 3 years of continuous delinquency • Other consumer loans: 6 months of continuous delinquency The same criteria are used for charge-off of impaired loans under U.S. GAAP. The following table sets forth, for the periods indicated, the difference in aggregate expected credit losses between Indian GAAP and U.S. GAAP attributable to the above reconciling items. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Differences due to expected credit losses on commercial loans evaluated on individual basis. (12,392.8) (12,894.4) 2,889.3 Differences due to expected credit losses on loans evaluated on collective basis (39,472.4) 31,333.3 8,963.6 Differences due to expected credit losses on undrawn commitments, non-fund exposures and other financial assets (1,351.9) (2,822.2) 11,000.6 (53,217.1) 15,616.7 22,835.5 During fiscal 2024, the Bank implemented the ASU 2022-02: Troubled debt restructurings and vintage disclosures. The Bank adopted the guidance on the recognition and measurement of troubled debt restructured loans under the modified retrospective approach. Adoption of these amendments resulted in a decrease in allowance for credit losses by Rs. 999.4 million, the impact of the same was directly taken in the reserves on April 1, 2023. See note on 22 (f) Loans for detailed discussion on allowance for credit loss. See note on “Consolidated Financial Statements - Schedules to the consolidated financial statements - Schedule 9 - Advances” for Indian GAAP balance sheet presentation. b) Business combinations The differences arising due to business combinations are primarily on account of: i) Accounting for intangible assets and goodwill; and ii) Acquisition of control in former equity affiliates During fiscal 2011, ICICI Bank Limited acquired Bank of Rajasthan Limited through exchange of common stock. The acquisition of Bank of Rajasthan Limited was accounted for under Indian GAAP as per the Reserve Bank of India approved scheme of merger. Under Indian GAAP, the purchase F-127 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) consideration was determined based on the paid-up value of common stock issued. Under U.S. GAAP, the purchase consideration was determined as the fair value of total consideration transferred, based on ASC Topic 805, “Business Combinations”. The impact of this relating to the accounting of business combinations, resulted in an increase in reconciliation differences of Rs. 32,682.7 million in stockholders’ equity reconciliation in fiscal 2011. Under U.S. GAAP, goodwill of Rs. 27,120.9 million and definite life intangible assets of Rs.3,898.0 million were recorded as per ASC 805, “Business Combinations”, and FASB ASC Topic 350, “Intangibles – Goodwill and others”. Under Indian GAAP, no goodwill and intangible assets were recognized as per scheme of merger approved by the Reserve Bank of India. Intangibles recognized under U.S. GAAP due to the above business combinations have been fully amortized. ICICI Lombard General Insurance Company Limited, a general insurance company, was established as a joint venture, which allowed substantive participating rights to a minority shareholder. Under U.S. GAAP, the Bank had been accounting for its investment in ICICI Lombard General Insurance Company Limited as an equity affiliate. During fiscal 2018, the joint venture agreement was terminated, resulting in the Bank acquiring control in ICICI Lombard General Insurance Company Limited without transferring any additional consideration. Under U.S. GAAP, this transaction was accounted using acquisition method for business combination under “ASC Subtopic 805-10, Business Combination – Overall”. Under U.S. GAAP, goodwill was determined by deducting the fair value of net assets acquired from the fair value of equity interest held by the Bank and fair value of minority interest. Accordingly, goodwill of Rs. 142,896.9 million and intangibles of Rs. 15,553.0 million were recorded under U.S. GAAP. The goodwill was allocated to the General insurance segment of the Group. Under Indian GAAP, no specific accounting was required for termination of the above joint venture agreement. During fiscal 2022, the Bank’s holding in ICICI Lombard General Insurance Company Limited reduced below 50.0% and it ceased to be a subsidiary under ASC Topic 810-Consolidation. Accordingly, the goodwill and unamortized intangibles were de-recognized during fiscal 2022. Further, during fiscal 2024, the Bank re-acquired control in ICICI Lombard General Insurance Company Limited. Accordingly, the existing investments in ICICI Lombard General Insurance Company Limited were fair valued on the date of acquisition of control based on the closing market price of shares of ICICI Lombard General Insurance Company Limited. This resulted in a fair value gain amounting to Rs. 140,173.7 million which was recognized in the statement of net income. Under U.S. GAAP, goodwill was determined by deducting the fair value of net assets of ICICI Lombard General Insurance Company Limited from the fair value of equity interest held by the Bank and fair value of minority interest in ICICI Lombard General Insurance Company Limited. Accordingly, goodwill of Rs. 557,733.7 million and intangibles of Rs. 103,963.3 million were recorded under U.S. GAAP. The goodwill was allocated to the General insurance segment of the Group. The goodwill recognized is not available for amortization under tax laws. Further, during fiscal 2024, the Bank also acquired control in I-Process Services (India) Private Limited and has recognized a bargain purchase gain of Rs. 358.5 million. Further, for certain other acquisitions made by the Group, no goodwill and intangibles have been accounted for under Indian GAAP primarily due to accounting for the amalgamation by the pooling of interest method, determination of acquirer for accounting or as per scheme of merger approved by the Reserve Bank of India. However, under U.S. GAAP, goodwill has been accounted for in accordance with FASB ASC Topic 805, “Business Combinations”. Under U.S. GAAP in accordance with FASB ASC Topic 350, the Group does not amortize goodwill and intangibles with infinite life but instead tests the same for impairment at least annually. The annual impairment test under ASC Topic 350 does not indicate an impairment loss for fiscal 2024, 2023 and 2022. Under U.S. GAAP intangible assets with finite useful life are amortized over their estimated useful lives in proportion to the economic benefits consumed in each period. F-128 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, the differences in net income arising from accounting for business combinations under Indian GAAP and U.S. GAAP. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Gain on acquisition of General insurance subsidiary 140,173.7 .. .. Gain on bargain purchase of other subsidiary 358.5 .. .. Amortization of intangibles (307.6) .. (704.1) Others 101.5 177.6 69.2 Total difference in business combinations 140,326.1 177.6 (634.9) c) Consolidation The differences on account of consolidation are primarily on account of: 1. Consolidation of life insurance subsidiary; 2. Equity affiliates and majority owned subsidiaries; and 3. Consolidation of variable interest entities. Under Indian GAAP, consolidation is required only if there is ownership of more than one-half of the voting power of an enterprise or control of the composition of the Board of Directors in the case of a company or of the composition of the governing body in case of any other enterprise. Under Indian GAAP, our life insurance subsidiary (ICICI Prudential Life Insurance Company Limited) is consolidated on line-by-line basis. Under U.S. GAAP, ICICI Prudential Life Insurance Company Limited is accounted for by the equity method of accounting as the minority shareholders have substantive participating rights as defined in ASC Subtopic 810-10, “Consolidation – Overall”. In accordance with the Scheme of Arrangement between ICICI Lombard General Insurance Company Limited (ICICI General) and Bharti AXA General Insurance Company Limited, as approved by Insurance Regulatory and Development Authority of India (with effect from September 8, 2021), assets and liabilities of Bharti AXA’s general insurance business vested with ICICI General on the Appointed Date of April 1, 2020. ICICI General issued two fully paid up equity shares to the shareholders of Bharti AXA for every 115 fully paid up equity shares. Subsequent to issuance of equity shares to Bharti AXA shareholders, the Bank’s shareholding in ICICI General reduced to below 50.0%. Accordingly, the Bank has accounted its investment in ICICI General as an associate under Accounting Standard – 23 – “Accounting for Investments in Associates” in consolidated financial statements with effect from April 1, 2021 under Indian GAAP. Under U.S. GAAP, ICICI General was consolidated on line-by-line basis till September 7, 2021, and was accounted as an affiliate with effect from September 8, 2021, the date of loss of control. Under Indian GAAP, the retained interest in ICICI General was accounted at carrying value. Under U.S. GAAP, the retained interest in the ICICI General was fair valued on the date of loss of control based on the closing quoted price of the common stock of ICICI General in the stock exchange. This resulted in a gain of Rs. 254,998.1 million on deconsolidation. On the date of deconsolidation, in accordance with the requirements of FASB ASC Topics 323 and 805, the Bank carried out a preliminary purchase price allocation of carrying value of investment in ICICI General. During fiscal 2022, given the complexity involved in the identification and measurement of the intangibles, the determination of final values of intangibles was underway and was planned to be completed within the permitted measurement period as per the aforementioned requirements. The determination of final values of intangibles was concluded during fiscal 2023 (within the prescribed timelines), accordingly, the Bank’s share in identified intangibles was valued at Rs. 14,982.6 million and Goodwill amounted at Rs. 288,806.9 million. During fiscal 2023, considering the significant and continuous decline in market price of equity shares of ICICI General, the Bank has recognized an F-129 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) impairment loss of Rs. 122,012.3 million. Further, during fiscal 2024, the Bank re-acquired control in ICICI Lombard General Insurance Company Limited. The following table sets forth, for the periods indicated, the differences in net income arising from accounting for consolidation under Indian GAAP and U.S. GAAP. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Profit/(loss) as per U.S. GAAP for life insurance subsidiary 43,530.5 11,412.9 (1,758.2) Less: Profit/(loss) as per Indian GAAP for life insurance subsidiary 8,506.7 8,134.9 7,592.0 Net reconciliation difference for life insurance subsidiary1 35,023.8 3,278.0 (9,350.2) Profit/(loss) from life insurance subsidiary attributable to the Group2 17,965.5 1,700.2 (4,780.5) Profit on deconsolidation of former general insurance subsidiary .. .. 254,998.13 Profit/(loss) from equity affiliates and majority owned subsidiaries 2,869.54 (3,179.4)4 (1,932.8)4 Impairment loss on investment in equity affiliate .. (122,012.3) .. Profit/(loss) on consolidation of variable interest entities and special purpose entities (5.9) 4.8 (9.3) Total differences in consolidation 20,829.1 (123,486.7) 248,275.4 1. Represents total differences in profit/(loss) between Indian GAAP and U.S. GAAP for life insurance subsidiary. See also- 22. Notes under U.S. GAAP – Insurance entities. 2. Represents the Group’s share of profit/(loss) in “Net reconciliation difference for life insurance subsidiary” and excludes the share of non-controlling interest holders. The Group owns part, not all, of the life insurance subsidiary. As such, only a portion of “Net reconciliation difference for life insurance subsidiary” is attributable to the Group; the rest is attributable to non-controlling interest holders. The share attributable to the Group constitutes the “Profit/(loss) from life insurance subsidiary attributable to the Group.” Reconciling items pertaining to significant differences between Indian GAAP and U.S. GAAP for life insurance affiliate are discussed separately below. 3. Represents gain on fair valuation of retained investment in General insurance affiliate. 4. Represents the Group’s share in difference in profit/(loss) between Indian GAAP and U.S. GAAP for General insurance affiliate and amortization of intangibles. See also- 22. Notes under U.S. GAAP – Insurance entities. Profit/(loss) on consolidation of Variable Interest Entities The Bank has consolidated certain qualified special purpose entities used for securitization transactions, effective April 1, 2010 on adoption of FAS 167 (codified within ASC 810-10). Upon consolidation, the assets of the qualifying special purpose entities were incorporated into the Bank’s loan portfolio and the amounts received from the investors were accounted for as borrowings. Under U.S. GAAP, the Bank accounts for the allowance for loan losses on these loans based on expected credit loss. Under Indian GAAP, securitized assets are derecognized from the Bank’s books. In accordance with the Reserve Bank of India guidelines for securitization, for securitization transactions entered into after February 1, 2006, the Bank accounted for any losses immediately at the time of securitization but amortized any profits over the life of the securities issued or to be issued by the qualifying special purpose entities. As per the Reserve Bank of India guidelines issued on September 24, 2021, gain realized at the time of securitization of loans is accounted through profit and loss account on completion of transaction. The unrealized gains, associated with expected future margin income is recognized in profit and loss account only when redeemed in cash, after absorbing losses, if any. The Bank also provides credit enhancement to the qualifying special purpose entities against delinquencies on securitized assets. Under Indian GAAP, the recognition of losses is based on the extent of utilization of credit enhancement extended to qualifying special purpose entities. F-130 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Due to these differences in the Bank’s accounting of securitization transactions, the timing of recognition of income and provision for loan losses differ under U.S. GAAP and Indian GAAP. d) Valuation of debt and equity securities Under Indian GAAP, the unrealized losses at category level under held for trading and available for sale securities are taken to profit and loss account, and unrealized gains are ignored. Under U.S. GAAP, unrealized gains or losses on trading debt securities are recognized in the profit and loss account and unrealized gains or losses on debt securities classified as ‘available for sale’, which include all securities classified as ‘held to maturity’ under Indian GAAP, are recognized in Other Comprehensive Income under stockholders’ equity except for the unrealized losses on securities identified as impaired which are recognized in profit and loss account. Under U.S. GAAP, unrealized gains or losses on equity securities are recognized in profit and loss account. Under Indian GAAP, the investments are initially measured at transaction cost, while under U.S. GAAP investments are initially measured at fair value. Under Indian GAAP, the impact of currency revaluation on debt securities denominated in foreign currency is taken to profit and loss account. Under U.S. GAAP, the impact of currency revaluation on non-hedged ‘available for sale’ debt securities denominated in foreign currency is taken to Other Comprehensive Income. Under Indian GAAP, premium over the face value of fixed rate and floating rate debt securities under held to maturity and government securities held under available for sale category is amortized over the remaining period to maturity on an constant yield basis and straight line basis respectively.. Under U.S. GAAP, premium/discount on the face value of fixed rate and floating rate debt securities I s amortized/accrued over the remaining period to maturity on an effective interest rate basis and straight line basis respectively. Under Indian GAAP, gain or loss on sale of equity stake in a subsidiary company is recognized in the income statement. Under U.S. GAAP, change in the parent’s ownership in the subsidiary company is accounted as an equity transaction, if the parent retains controlling financial interest in the subsidiary and accordingly gain or loss is not recognized in the income statement. In fiscal 2016, the Reserve Bank of India issued guidelines on strategic debt restructuring under which conversion of debt into equity and acquisition of ownership interests in the borrower by banks is allowed. The Reserve Bank of India has exempted banks from consolidation of these entities. Under U.S. GAAP, these entities were considered as equity affiliates. The Bank opted for fair value option of these equity affiliates under ASC Topic 825 “Financial Instruments”. Accordingly, fair value changes in the loans, guarantees and equity shares were accounted through income statement. While fair value impact on loans was recorded in the line item “Valuation of debt and equity securities”, the provisions made on these loans under Indian GAAP were reversed in the line item “Allowance for loan losses”. See also– 22. Notes under U.S. GAAP – Fair value accounting of financial interests. The following table sets forth, for the periods indicated, the differences in net income arising from accounting for valuation of debt and equity securities under Indian GAAP and U.S. GAAP. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Impact of differences in mark-to-market accounting for investment securities 24,088.3 7,917.9 9,323.9 Impairment allowance on AFS securities under U.S. GAAP (5,053.0) (2,291.6) (2,114.9) Impact of currency revaluation on non-hedged AFS debt securities denominated in foreign currency accounted for in profit and loss under Indian GAAP, which is accounted for in Other Comprehensive Income (436.6) (549.5) 176.0 F-131 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 under U.S. GAAP Impact of fair value accounting for financial interest in certain equity affiliates 12,105.3 (754.5) 5,156.8 Others1 2,566.6 (4,460.3) (1,611.1) Total 33,270.6 (138.0) 10,930.7 1. The difference is primarily due to premium/discount amortization on debt securities and difference in gain on debt securities sold during the year, between Indian GAAP and U.S. GAAP. Under U.S. GAAP, available for sale debt securities include all securities classified as ‘held to maturity’ under Indian GAAP. First-In-First-Out method of accounting is applied on aggregate ‘available for sale’ securities under U.S. GAAP, resulting in difference in realized gain/(loss) on sale of securities between Indian GAAP and U.S. GAAP. This difference in realized gain/(loss) amounted to an additional loss of Rs. 1,572.9 million for fiscal 2024 (for fiscal 2023 a loss of Rs. 5,104.8 million, for fiscal 2022, a loss of Rs. 3,637.2 million) See note on “Consolidated Financial Statements - Schedules to the consolidated financial statements - Schedule 8 - Investments” for Indian GAAP balance sheet presentation. e) Amortization of fees and costs Loan origination fees and costs Under U.S. GAAP, loan origination fees (net of certain costs) are amortized over the period of the loans as an adjustment to the yield on the loan. However, under Indian GAAP, loan origination fees are accounted for upfront. Also under Indian GAAP, loan origination costs, including commissions paid to direct marketing agents, are expensed in the year in which they are incurred. Retirement benefit cost Under Indian GAAP, all actuarial gains/losses are recognized on the balance sheet of the enterprise in the year in which they arise through suitable credit/debit in the profit and loss account of the year. Under U.S. GAAP, actuarial gains/losses are accounted in Other Comprehensive Income. Subsequently cumulative actuarial gain/loss lying in the Other Comprehensive Income which is over and above 10% corridor is amortized through profit and loss account. Further, discount rate for computing benefit obligation is linked to yield on high quality fixed income securities in U.S. GAAP as compared to yield on government securities under Indian GAAP. Reinsurance commission and deferred acquisition costs Under Indian GAAP, reinsurance commission on business ceded by general insurance subsidiary is recognized as income in the year of the ceding of the risk. Under U.S. GAAP, proceeds from reinsurance transactions that represent recovery of acquisition costs are reduced from acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense in proportion to net revenue recognized over the related policy period. Under Indian GAAP, acquisition costs for new and renewal of insurance contracts in general insurance subsidiary are charged as expense to the revenue account in the year in which these are incurred, whereas under U.S. GAAP, the same are capitalized and are amortized over the related policy period. The following table sets forth, for the periods indicated, the differences in net income arising from accounting for amortization of fees and costs under Indian GAAP and U.S. GAAP. F-132 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Loan origination fees and costs 5,803.9 5,382.0 6,425.0 Retirement benefit costs (1,097.3) 1,232.4 (2,021.2) Reinsurance commission and deferred acquisition costs 654.72 .. (319.7)3 Amortization of other costs (55.3) (88.7) (158.3) Total differences in amortization of fees and costs1 5,306.0 6,525.7 3,925.8 1. Does not include any amount that is attributable to non-controlling interest holders. 2. Represents difference in net income of General insurance subsidiary from the date of acquisition of control. 3. Represents difference in net income of ICICI general upto till the date of deconsolidation. The amortization of loan origination fees and costs resulted in higher income under U.S. GAAP as compared to Indian GAAP, primarily due to higher direct loan origination costs on consumer loans incurred during these years reflecting growth in consumer loans. While under Indian GAAP, actuarial gain or loss are recognized in profit and loss account, under U.S. GAAP, the actuarial gain/loss are recognized through other comprehensive income and thereafter amortized through profit and loss account. The actuarial gain for fiscal 2024 recognized through other comprehensive income were higher as compared to amortization of actuarial gains and losses for previous years from other comprehensive income under U.S. GAAP, resulting in retirement benefit costs being higher under U.S. GAAP in fiscal 2024 as compared to Indian GAAP. The actuarial loss for fiscal 2023 recognized through other comprehensive income were higher as compared to amortization of actuarial losses for previous years from other comprehensive income under U.S. GAAP, resulting in retirement benefit costs being lower under U.S. GAAP in fiscal 2023 as compared to Indian GAAP. During fiscal 2022, there was higher amortization of actuarial losses from other comprehensive income under U.S. GAAP, resulting in retirement benefit costs being higher under U.S. GAAP as compared to Indian GAAP. See note on “Consolidated Financial Statements - Schedules to the consolidated financial statements - Schedule 9 – Advances” for balance sheet presentation of amortization of loan processing fees and cost. f) Accounting for derivatives Under Indian GAAP, the Group hedges interest rate and exchange rate risks on some on-balance sheet assets and liabilities through swap contracts. The impact of such derivative instruments is correlated with the movement of underlying assets and liabilities and accounted pursuant to the principles of the hedge accounting. Under Indian GAAP, based on the Reserve Bank of India’s guidelines, accounting for hedge relationship established after June 26, 2019 by the Bank, is based on Guidance note on Accounting for Derivative Contracts issued by Institute of Chartered Accountant of India. The hedging instruments and the hedged items (for the risks being hedged) are measured at fair value with changes recognized in the profit and loss account. For hedge relationship established before June 26, 2019, the accounting is based on accrual basis. To the extent a cash flow hedge is effective, the change in the fair value of the hedging instrument is recognized in cash flow hedge reserve. The ineffective portion of hedge is accounted in profit and loss account. The premium/discount on certain foreign currency swaps, used for asset liability management purposes, is amortized over the life of the swap. All other outstanding forward exchange contracts are revalued and the resultant gains or losses are recognized in the profit and loss account. Under U.S. GAAP, the Group accounts for its derivative transactions in accordance with the provisions of FASB ASC Topic 815 “Derivatives and Hedging”. Accordingly, certain derivative F-133 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) contracts classified as hedges under Indian GAAP may not qualify as hedges under U.S. GAAP and are accounted for as trading derivatives with changes in fair value being recorded in the income statement. Under U.S. GAAP, the Group does not designate any derivative transaction as cash flow hedge. Under U.S. GAAP, the Group has designated certain derivatives as fair value hedges of certain interest bearing assets and liabilities under ASC Topic 815. At the inception of a hedge transaction, the Group formally documents the hedge relationship and the risk management objective and strategy for undertaking the hedge. This process includes identification of the hedging instrument, hedged item, risk being hedged and the methodology for assessing effectiveness and measuring ineffectiveness of hedge. In addition, the Group assesses both at the inception of the hedge and on an ongoing basis, whether the hedge instrument used in the hedging transaction is effective in offsetting changes in fair value of the hedged item, and whether the hedge is expected to continue to be highly effective. Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, along with the gain or loss on the hedged asset or liability are recorded in the income statement. The Group has also designated certain forward contracts as hedging instruments for its certain net investments in foreign operations which are accounted for in accordance with ASC Topic 815. g) Accounting for compensation cost FASB ASC Topic 718, “Compensation – stock compensation” requires all share-based payments to employees, including grants of employee stock options to be recognized in the income statement based on their fair values. Under Indian GAAP, till fiscal 2021, the Group followed the intrinsic value method to account for its stock-based employees’ compensation plans. Compensation cost was measured by the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date. In fiscal 2022, Reserve Bank of India, issued a clarification advising banks to recognize fair value of share-linked instruments granted subsequent to March 31, 2021 in income statement. Accordingly, from fiscal 2022 onwards, the Bank has started recognizing the fair value of stock options and units granted subsequent to March 31, 2021 in profit and loss account. The Group has not recognized an income tax benefit on employee stock options related compensation cost. h) Accounting for securitization Under U.S. GAAP, the Group accounts for gain on sale of loans securitized at the time of sale in accordance with FASB ASC Topic 860, “Transfers and Servicing”. As per ASC Topic 860, any gain or loss on the sale of the financial asset is accounted for in the income statement at the time of the sale. Under Indian GAAP, net income arising from securitization of loan assets is accounted for over the life of the securities issued or to be issued by the special purpose vehicle/special purpose entity to which the assets are sold. The profit/premium arising from securitization is amortized over the life of the transaction based on the method prescribed by Reserve Bank of India. As per the Reserve Bank of India guidelines issued on September 24, 2021, gain realized at the time of securitization of loans is accounted through profit and loss account on completion of transaction. The unrealized gains, associated with expected future margin income is recognized in profit and loss account only when redeemed in cash, after absorbing losses, if any. Net loss arising on account of the sell-down securitization of loan assets is recognized at the time of sale. Further, the securitization transactions of mortgage loans by the Bank’s Canadian subsidiary do not qualify as sale transactions as they do not meet the de-recognition criteria under Indian GAAP. Under U.S. GAAP, these securitization transactions have been accounted for as transfers as these satisfy the derecognition criteria under ASC Topic 860 “Transfers and Servicing”. Under ASC Topic 860 “Transfers and Servicing”, certain securitization transactions, which qualify as transfer under Indian GAAP, do not qualify as transfer under U.S. GAAP. See note 22 (a) on “Securitizations and variable interest entities”. F-134 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) i) Income taxes Deferred taxes are recognized on temporary differences related to investments in subsidiaries, branches and affiliates, subject to limited exceptions under U.S. GAAP while under Indian GAAP, no deferred taxes are recognized on temporary differences related to investments in subsidiaries, branches and affiliates. The Bank has recognized current tax expense or benefit and recognized deferred tax assets or liabilities on the foreign currency translation reserves pertaining to its overseas branches under Indian GAAP with these offsetting amounts allocated to net income. Under U.S. GAAP, no deferred tax assets or liabilities are recognized on undistributed earnings of overseas branches where current taxes have been incurred and the current tax expense or benefit incurred has been allocated to Other Comprehensive Income. Under Indian GAAP, deferred tax assets on unabsorbed depreciation or carried forward losses of domestic companies are recognized only if there is virtual certainty of realization of such assets, whereas under U.S. GAAP they are recognized based on a more-likely-than-not criteria. The Bank and its housing finance subsidiary create a Special Reserve through appropriation of profits from time to time and receive the current tax benefit as per the Income Tax Act, 1961 for the appropriation. If the funds are withdrawn from the Special Reserve in future periods, the amount withdrawn is taxable. Under Indian GAAP, a deferred tax liability has been recognized on such Special Reserve in accordance with the guidelines issued by Reserve Bank of India/National Housing Bank. Under U.S. GAAP, deferred taxes are recognized and measured based on the expected manner of recovery and deferred taxes are not recognized if the expected manner of recovery does not give rise to income tax consequences. Accordingly, a deferred tax liability was not recognized under U.S. GAAP on the Special Reserve based on the Group’s continuing intention to not withdraw or utilize such Special Reserve until a liquidation of the entity and on an opinion from the legal counsel about the non–taxability of such Special Reserve in the scenario of a liquidation. Under Indian GAAP, no deferred tax asset is recognized on land, which is not depreciable for income tax purposes. Under U.S. GAAP, a deferred tax asset is recognized for the temporary difference related to such assets including consideration of the indexation benefit available under tax laws. Deferred tax assets and liabilities are recognized for the income tax impact of the non-tax adjustments that result from the application of U.S. GAAP. The following table sets forth, for the periods indicated, the components of the adjustments to income tax (expense)/benefit in the net income reconciliation. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Deferred tax on temporary differences related to subsidiaries, branches and affiliates1,2 (10,739.1) (2,139.4) 9,340.1 Deferred tax on unabsorbed depreciation or carried forward losses 1,237.8 (2,007.0) 2,168.3 Deferred tax on Special Reserve 7,793.9 6,580.8 3,669.5 Deferred tax on temporary difference on property and equipment 13.3 (117.4) 48.4 Income tax impact of non-tax U.S. GAAP adjustments 19,972.5 8,576.6 (36,928.2) Total differences in income taxes benefit/(expense) 18,278.4 10,893.6 (21,701.9) 1. During fiscal 2024, the tax effects of temporary differences related to investments in ICICI General were reversed, as ICICI General ceased to be an associate and became a subsidiary and U.S GAAP prohibits the recognition of a deferred tax asset for investments in subsidiaries for which the temporary difference isn’t apparent to reverse in the foreseeable future. 2. For the year ended March 31, 2022, tax effect of Rs. 8,247.7 million was recognized for the existing deductible temporary difference for the Bank’s investment in ICICI General as it ceased to be a subsidiary and became an affiliate. F-135 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) At March 31, 2024, the stockholders’ equity was lower by Rs. 20,560.4 million (March 31, 2023: higher by Rs. 31,921.9 million), under U.S. GAAP as compared to Indian GAAP on account of income tax adjustments, of which Rs. 16,662.9 million (March 31, 2023: Rs. 31,987.1 million) was due to deferred tax on temporary differences related to branches and affiliates, Rs. (148.0) million (March 31, 2023: Rs. 615.1 million) was due to deferred taxes not being recognized under U.S. GAAP related to foreign currency translation reserves pertaining to overseas branches, Rs. 2,651.6 million (March 31, 2023: Rs. 1,413.8 million) was due to deferred tax on unabsorbed depreciation or carried forward losses, Rs. 44,659.0 million (March 31, 2023: Rs. 36,865.1 million) was due to deferred tax on Special Reserve, Rs. 513.5 million (March 31, 2023: Rs. 500.2 million) was due to deferred tax on temporary difference on property and equipment and Rs. (43,778.6) million (March 31, 2023: Rs. (39,459.3) million) was due to the income tax impact of non-tax U.S. GAAP adjustments. See note on “Consolidated Financial Statements - Schedules to the consolidated financial statements - Schedule 18A - Notes forming part of the accounts - 9. Deferred tax” for Indian GAAP presentation. j) Others Under Indian GAAP, the Bank and its housing finance subsidiary have revalued fixed assets and created a revaluation reserve amounting to Rs. 31,112.7 million at March 31, 2024 (March 31, 2023: Rs. 30,918.4 million). Under U.S. GAAP, fixed assets are recognized on cost basis, as per ASC Topic 360 – Property, Plant and Equipment. Further, additional depreciation has been charged to income statement on revalued amount under Indian GAAP, but not under U.S. GAAP, resulting in lower depreciation charge by Rs. 812.5 million under U.S. GAAP as compared to Indian GAAP for the year ended March 31, 2024 (Rs. 755.2 million for the year ended March 31, 2023 and Rs. 703.1 million for the year ended March 31, 2022). Under Indian GAAP, the Bank has made provisions on certain fixed assets acquired in debt asset swap arrangements as per the direction of Reserve Bank of India. Under U.S. GAAP, these fixed assets were carried at book value or fair value, whichever is lower. There was a higher profit of Rs. 7,095.1 million under U.S. GAAP as compared to Indian GAAP for the year ended March 31, 2024 (higher profit of Rs. 1,216.2 million for the year ended March 31, 2023 and lower profit of Rs. 1,476.8 million for the year ended March 31, 2022). 22. Notes under U.S. GAAP Additional information required under U.S. GAAP a) Securitizations and variable interest entities Overview The Bank and its subsidiaries are involved with several types of off-balance-sheet arrangements, including special purpose entities. Uses of Special Purpose Entities F-136 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The Group deals with some special purpose entities which were created to fulfill limited purposes as specified in their governing documents. The primary purpose of these special purpose entities is to receive contributions from investors for buying assets from the transferor, hold such purchased assets on behalf of the contributors to the trust and making regular payments to the investors from the proceeds of purchased assets. These special purpose entities have been organized mainly in the legal forms of trusts. In a securitization, the company transferring assets to a special purpose entity converts all (or a portion) of those assets into cash before they would have been realized in the normal course of business, through the special purpose entities issuance of debt and equity instruments, certificates, commercial paper and other notes of indebtedness, which are recorded on the balance sheet of the special purpose entity and not reflected in the transferring company’s balance sheet, assuming applicable accounting requirements are satisfied. Investors usually have recourse to the assets in the special purpose entity and often benefit from other credit enhancements, such as a collateral account or over-collateralization in the form of excess assets in the special purpose entity, a line of credit, or from a liquidity facility, such as liquidity put option or asset purchase agreement. In accordance with ASC 810-10, the Group consolidates these entities. Variable Interest Entities Variable interest entities are entities that have either a total equity investment that is not sufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest (i.e. power through voting rights or similar rights to direct the activities of a legal entity that most significantly impact the entity’s economic performance and right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity). Investors that finance the variable interest entity through debt or equity interests or other counterparties that provide other forms of support, such as guarantees, subordinated fee arrangements, or certain types of derivative contracts, are variable interest holders in the entity. The variable interest holder, if any, that has a controlling financial interest in a variable interest entity is deemed to be the primary beneficiary and must consolidate the variable interest entity. Accordingly, the Group has determined that it has a controlling financial interest because it is the primary beneficiary of certain trusts and entities, based on its determination that it has both, the power to direct activities of a variable interest entity that most significantly impact the entity’s economic performance, and obligation to absorb losses of the variable interest entity that could potentially be significant to the variable interest entity or the right to receive benefits from the variable interest entity that could potentially be significant to the variable interest entity. The following table sets forth the Group’s involvement with consolidated and unconsolidated variable interest entities in which the Group holds significant variable interests. Rupees in million Particulars Year ended March 31, 2024 Year ended March 31, 2023 Mortgaged backed securitizations (funded) Significant investment in unconsolidated variable interest entities .. .. Investment in consolidated variable interest entities 1,425.8 1,425.8 Total investment in variable interest entity assets (gross assets) 1,425.8 1,425.8 The asset balances for consolidated variable interest entities represent the carrying amounts of the assets consolidated by the Group. The carrying amount may represent the amortized cost or the current fair value of the assets depending on the legal form of the asset (e.g., loan or security) and the Group’s standard accounting policies for the asset type and line of business. The assets of variable interest entities can be utilized only for the settlement of the obligations of respective variable interest entities. F-137 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, the carrying amounts and classification of the consolidated assets and liabilities, in respect of variable interest entities and special purpose entities where the Group is primary beneficiary. The liabilities of the consolidated variable interest entities are to be met from the proceeds of the consolidated assets and other support provided by the Bank in the form of credit enhancements and liquidity facilities. The creditors of the consolidated variable interest entities do not have recourse to the general credit of the Group. Rupees in million Particulars At March 31, 2024 At March 31, 2023 Investments 199.9 228.8 Loans 1,788.3 1,537.8 Total assets 1,988.1 1,766.6 Borrowings 273.3 334.0 Total liabilities 273.3 334.0 The Bank invests in pass through certificates of securitization trusts with underlying retail loans originated by other entities. The carrying value of such investments was Rs. 186,345.5 million at March 31, 2024 (March 31, 2023: Rs. 98,737.3 million). The Bank is not the primary beneficiary of these trusts based on its assessment under ASC Subtopic 810-10 - Consolidation – overall. Further, neither was the Bank the transferor of assets to these variable interest entities, nor was the Bank involved in the design of these variable interest entities. The maximum exposure to loss from the Bank’s involvement in these trusts is the carrying value of the investments. b) Fair value accounting of financial interests In fiscal 2016, the Reserve Bank of India issued guidelines on strategic debt restructuring under which conversion of debt into equity and acquisition of ownership interests in the borrower entity by banks was allowed. The Bank, along with other lenders, converted a portion of its loans to certain entities into equity as per this guideline. Such conversion also allowed each lender, the right to nominate directors on the Board of the borrower entity. Although these entities were considered as equity affiliates under ASC Subtopic 323-10 because of deemed significant influence due to ownership interests and management rights, the intention of the Bank was to safeguard the debt recovery and not to get an economic benefit from the operations of these entities. Accordingly, the Bank opted for fair value option for accounting these affiliates and the loans, guarantees and equity share investments in these entities were fair valued through income statement under ASC Subtopic 825-10 “Financial Instruments”. The following table, for the periods indicated, provides details of fair value accounting of financial interests. Rupees in million Particulars At March 31, 2024 At March 31, 2023 Carrying value of loans and guarantees1 17,654.0 19,203.6 Fair value of loans and guarantees 11,795.1 6,973.2 Of which, fair value of loans outstanding for more than 90-days past due 722.1 6,304.2 Fair value loss on loans and guarantees 5,858.9 12,230.4 Of which, fair value loss on loans outstanding for more than 90-days due 4,408.5 10,912.1 Fair value loss on investment in these financial interests 12,967.0 6,627.2 1. The Bank has not recognized interest separately on these loans. The Group’s shareholding in these entities at March 31, 2024 is as below: F-138 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Sr. No. Name of the entity Ownership interest 1. Usher Agro Limited 10.88% 2. Gammon India Limited 10.63% 3. Jaiprakash Power Ventures Limited 10.13% 4. Unimark Remedies Limited 9.72% 5. GOL Offshore Limited 9.11% 6. Ballarpur Industries Limited 8.99% 7. IVRCL Limited 7.98% 8. Coastal Projects Limited 7.79% 9. GTL Infrastructure Limited 3.81% 10. Pratibha Industries Limited 3.01% 11. Adhunik Power and Natural Resources Limited 1.77% 12. Aster Private Limited 1.77% 13. Patel Engineering Limited 0.98% 14. Diamond Power Infrastructure Limited - 15. Vishwa Infrastructure and Services Private Limited - c) Investments The following table sets forth, for the periods indicated, the portfolio of investments classified as held for trading. Rupees in million Debt securities At March 31, 2024 At March 31, 2023 Government securities 525,348.3 287,473.6 Corporate debt securities 154,189.0 36,394.4 Other debt securities 168,983.3 76,524.7 Total 848,520.6 400,392.7 The following table sets forth, for the periods indicated, the portfolio of investments classified as available for sale. Rupees in million At March 31, 2023 Amortized cost/cost Gross Unrealized gain Gross Unrealized loss Fair value Available for sale Corporate debt securities 451,006.4 5,395.9 (1,620.2 ) 454,782.1 Government securities 3,814,979.1 26,591.7 (13,688.5 ) 3,827,882.3 Other debt securities 206,306.4 4,763.4 (351.2 ) 210,718.6 Total debt securities 4,472,291.9 36,751.0 (15,659.9 ) 4,493,383.0 Other securities .. .. .. .. Total 4,472,291.9 36,751.0 (15,659.9 ) 4,493,383.0 1. At March 31, 2024, ICICI Lombard General Insurance Company Limited being a subsidiary was consolidated on a line-by-line basis. Rupees in million At March 31, 2023 Amortized cost/cost Gross Unrealized gain Gross Unrealized loss Fair value Available for sale Corporate debt securities 254,220.6 1,499.6 (1,605.3 ) 254,114.9 Government securities 3,075,622.4 8,569.5 (28,659.8 ) 3,055,532.2 Other debt securities 129,371.2 1,272.7 (799.4 ) 129,844.5 F-139 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million At March 31, 2023 Amortized cost/cost Gross Unrealized gain Gross Unrealized loss Fair value Total debt securities 3,459,214.2 11,341.8 (31,064.5 ) 3,439,491.6 Other securities .. .. .. .. Total 3,459,214.2 11,341.8 (31,064.5 ) 3,439,491.6 The fair value of the Group’s investment in equity securities based on readily determinable fair value at March 31, 2024 was Rs. 151,708.7 million (at March 31, 2023: Rs. 53,533.0 million) primarily due to line-by-line consolidation of ICICI Lombard General Insurance Company Limited at March 31, 2024 and fair value of observable orderly transactions at March 31, 2024 was Rs.10,465.7 million (at March 31, 2023: Rs. 8,047.9 million). The Group recorded a gain of Rs. 4,045.9 million on securities fair valued based on observable price in orderly transactions during fiscal 2024 (fiscal 2023: gain of Rs. 1,897.7 million). Further, the Group’s investments portfolio also contains investments held by its venture capital subsidiary, investments in non-readily marketable securities and investments in affiliates. The fair value of investments held by the venture capital subsidiary was Rs.57.1 million at March 31, 2024 and Rs. 54.3 million at March 31, 2023. Non-readily marketable securities primarily represent investments in affiliates and securities acquired as a part of project financing activities, investment in start-up entities or conversion of loans in debt restructurings. The investments in non-readily marketable securities and investment in affiliates was Rs. 125,451.7 million at March 31, 2024 and Rs. 316,003.5 million at March 31, 2023. Of these, the carrying value of equity securities carried at cost less impairment was Nil at March 31, 2024 and Rs. 202,368.7 million at March 31, 2023 after recognizing Rs. 122,037.3 million impairment charge during fiscal 2023, which was primarily towards investments in ICICI General. Further, the fair value of certain investments, where Bank has opted for fair value accounting was Rs. 12,967.0 million at March 31, 2024 and Rs. 5,634.4 million at March 31, 2023 under ASC Subtopic 825-10 “Financial Instruments”. d) Fair value measurements The Group determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820. The standard describes three levels of inputs that may be used to measure fair value. Level 1 Valuation is based upon unadjusted quoted prices of identical instruments traded in active markets. The instruments that have been valued based upon such quoted prices include traded equity shares, mutual funds, government securities, corporate bonds, certificate of deposits, commercial papers, futures and forex spots. The Bank’s Canadian subsidiary has investments in bankers’ acceptances which are valued based on the quoted prices. During Fiscal 2024, the Bank has updated its policy on levelling for the purpose of fair value hierarchy. To this extent, the fair value hierarchy at March 31, 2024 is not comparable with the fair value hierarchy at March 31, 2023. Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, prices quoted by market participants and prices derived from valuation models which use significant inputs that are observable in active markets. Inputs used include interest rates, yield curves, volatilities, credit spreads, which are available from public sources like Reuters, Bloomberg, Foreign Exchange Dealers Association of India, Financial F-140 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Benchmark India Private Limited and Fixed Income Money Markets & Derivatives Association of India. The products include government securities, debentures and bonds, certificate of deposits, commercial papers, forex options, single currency interest rate derivatives, forwards, cross currency interest rate swaps, and Bond forward rate agreements. Level 3 Valuation is based on valuation techniques or models which use significant market unobservable inputs or assumptions. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable or when determination of the fair value requires significant management judgment or estimation. The valuation of certain interest rate options are done by sourcing counterparty quotes at month ends. India-linked non-Rupee denominated bonds price is valued by discounting cash flows using rates incorporating fair market spreads published by Bloomberg/Reuters corresponding to the international foreign currency ratings of the issuer (capped at international sovereign rating). The value of retained interest in securitizations in Bank’s Canadian subsidiary, largely representing the excess spread of mortgage interest over the rate of return on the mortgaged backed securities, is similarly impacted by the amount and timing of cash flows from the underlying mortgage assets. In case of private equity investments, the inputs used include the valuation multiples for comparable listed companies and adjustments for illiquidity and other factors. The valuation of Indian pass through certificates is dependent on the estimated cash flows that the underlying trust would pay out. The underlying trust/originator makes a number of assumptions with regard to various variables to arrive at the estimated flows. The cash flow schedule received from the trust is discounted at the base yield curve rates and credit spreads published by Financial Benchmark India Private Limited and Fixed Income Money Markets & Derivatives Association of India at month ends. Accordingly, these instruments are classified as Level 3 instruments. A reduction in the estimated cash flows of these instruments will adversely impact the value of these certificates. A change in the timing of these estimated cash flows will also impact the value of these certificates. Rupee swaptions and Rupee treasury bill interest rate swaps were valued using valuation model and discounted cash flow methodology respectively based on adjustments carried out on market observable proxy as one of the inputs is unobservable. The valuation of certain loans, which have been fair valued as per ASC Subtopic 825-10, is dependent on the estimated cash flows that the underlying borrowers would pay out. The Bank makes a number of assumptions with regard to various variables to arrive at the estimated cash flows. The cash flow schedule is discounted at the current interest rate, which the Bank is likely to offer for loan facilities to borrowers in the similar rating grades, which are not market observable. Accordingly, these loans are classified as Level 3 assets. The value of such loans will be impacted by changes in amount and timing of the estimated cash flows from the borrowers. Investments in venture fund units and security receipts for which fair value is measured using net asset value, as a practical expedient, are not included in fair value hierarchy. The following table sets forth the information about the Group’s assets and liabilities measured at fair value on a recurring basis at March 31, 2024 and the level of inputs used to measure those products. F-141 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Description Level 1 Level 2 Level 3 Total Investments Equity shares 112,750.5 .. 12,001.1 124,751.6 Government debt securities 3,631,749.0 721,481.6 .. 4,353,230.6 Corporate debt securities 416,148.8 190,261.5 3,554.3 609,964.6 Mortgage and other asset backed securities .. .. 192,871.3 192,871.3 Funded Credit Derivatives 185.0 .. .. 185.0 Others1 117,194.8 99,693.2 1,757.3 218,645.3 Sub-total 4,278,028.1 1,011,436.3 210,184.0 5,499,648.4 Security receipts2 .. Venture fund units2 17,453.9 Total investments 5,517,102.3 Derivatives (positive mark-to-market) Interest rate derivatives3 .. 93,191.9 3,167.3 96,359.2 Currency derivatives (including foreign exchange derivatives)4 807.5 52,915.6 .. 53,723.1 Equity derivatives 7.5 .. .. 7.5 Total positive mark-to-market 815.0 146,107.5 3,167.3 150,089.8 Derivatives (negative mark-to-market) Interest rate derivatives3 .. (92,556.2) (657.0) (93,213.2) Currency derivatives (including foreign exchange derivatives)4 (261.1) (74,883.9) .. (75,145.0) Equity derivatives .. .. .. .. Total negative mark-to-market (261.1) (167,440.1) (657.0) (168,358.2) Borrowings Bonds .. (360,136.8) .. (360,136.8) Total borrowings .. (360,136.8) .. (360,136.8) Loans Loans .. .. 11,795.1 11,795.1 Total loans .. .. 11,795.1 11,795.1 1. Includes primarily certificate of deposits, commercial paper and mutual funds. 2. Fair value for these investments has been estimated using net asset value per unit as declared by investee entities as per ASC Subtopic 820-10-35 – “Fair Value Measurements and Disclosures”. The fair value for these investments has not been categorized in the fair value hierarchy as per ASC Subtopic 820-10-35-54B. 3. Foreign currency interest rate swaps, forward rate agreements, swap options and exchange traded interest rate derivatives are included in interest rate derivatives. 4. Foreign currency options, cross currency interest rate swaps and foreign currency futures are included in currency derivatives. 5. At March 31, 2024, ICICI Lombard General Insurance Company Limited being a subsidiary was consolidated on a line-by-line basis. 6. During Fiscal 2024, the Bank has updated its policy on levelling for the purpose of fair value hierarchy. To this extent, the fair value hierarchy at March 31, 2024 is not comparable with the fair value hierarchy at March 31, 2023. The following table sets forth, the information about the Group’s assets and liabilities measured at fair value on a recurring basis at March 31, 2023 and the level of inputs used to measure those products. Rupees in million Description Level 1 Level 2 Level 3 Total Investments Equity shares 26,648.7 90.5 7,921.3 34,660.5 Government debt securities 672,451.5 2,670,554.2 .. 3,343,005.7 Corporate debt securities 88,804.1 200,584.0 2,048.4 291,436.5 Mortgage and other asset backed securities .. .. 101,578.7 101,578.7 Others1 43,725.9 81,487.2 217.5 125,430.6 Sub-total 831,630.2 2,952,715.9 111,765.9 3,896,112.0 Security receipts2 .. Venture fund units2 11,041.9 F-142 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Description Level 1 Level 2 Level 3 Total Total investments 3,907,153.9 Derivatives (positive mark-to-market) Interest rate derivatives3 .. 96,600.2 4,521.1 101,121.3 Currency derivatives (including foreign exchange derivatives)4 2,147.5 62,323.4 .. 64,470.9 Equity derivatives 4.3 .. .. 4.3 Total positive mark-to-market 2,151.8 158,923.6 4,521.1 165,596.5 Derivatives (negative mark-to-market) Interest rate derivatives3 .. (96,240.5) (917.8) (97,158.3) Currency derivatives (including foreign exchange derivatives)4 (429.9) (78,259.3) .. (78,689.2) Equity derivatives (1.1) .. .. (1.1) Total negative mark-to-market (431.0) (174,499.8) (917.8) (175,848.6) Borrowings Bonds .. (335,829.9) .. (335,829.9) Total borrowings .. (335,829.9) .. (335,829.9) Loans Loans .. .. 6,973.2 6,973.2 Total loans .. .. 6,973.2 6,973.2 1. Includes primarily certificate of deposits, commercial paper and mutual funds. 2. Fair value for these investments has been estimated using net asset value per unit as declared by investee entities as per ASC Subtopic 820-10-35 – “Fair Value Measurements and Disclosures”. The fair value for these investments has not been categorized in the fair value hierarchy based on the changes in ASC Subtopic 820-10-35-54B vide ASU No. 2015-07. 3. Foreign currency interest rate swaps, forward rate agreements, swap options and exchange traded interest rate derivatives are included in interest rate derivatives. 4. Foreign currency options, cross currency interest rate swaps and foreign currency futures are included in currency derivatives. The Group holds investments in certain venture capital funds and security receipts. The fair value of these investments has been estimated using the net asset value per unit as declared by such investee entities. The security receipts are issued by asset reconstruction companies with underlying mainly as non-performing loans with objectives of gains through improvement in recoveries on these assets. The venture capital fund units are issued by venture capital funds with underlying investment in equity shares and other instruments with the objective of generating long term returns. Some of the venture capital funds have focused investments in real estate and infrastructure sectors. The cash flow from these investments is expected to happen through distribution upon liquidation of the underlying assets by the asset reconstruction companies’/venture capital funds. A reduction in the estimated cash flows from the underlying assets or delays in collection of estimated cash flows will adversely impact the net asset values and therefore the fair value of these investments. Transfers in/out of Level 3 of the fair value hierarchy Equity shares of Rs. 69.8 million were transferred from Level 1 to Level 3 as the valuation of these securities was based on significant management estimation/unobservable market inputs at March 31, 2024 as compared to valuation based on unadjusted quoted prices at March 31, 2023. Equity shares of Rs. 49.8 million were transferred from Level 2 to Level 3 as the valuation of these securities was based on significant management estimation/unobservable market inputs at March 31, 2024 as compared to unadjusted quoted price at March 31, 2023. Equity shares of Rs. 13.0 million were transferred from Level 3 to Cost as the valuation of these securities was based on cost based valuation at March 31, 2024 as compared to prices from prior transactions or third-party pricing information without adjustment at March 31, 2023. F-143 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Equity shares of Rs. 726.2 million were transferred from Level 3 to Level 1 as the valuation of these securities was based on unadjusted quoted prices at March 31, 2024 as compared to prices from prior transactions or third-party pricing information without adjustment at March 31, 2023. Equity shares of Rs. 1,450.5 million were transferred from Cost to Level 3 as the valuation of these securities was based on prices from prior transactions or third-party pricing information without adjustment at March 31, 2024 as compared to cost based valuation at March 31, 2023. Corporate Debt securities of Rs. 882.9 million were transferred from Level 2 to Level 3 as the valuation of these securities was based on significant management estimation/unobservable market inputs at March 31, 2024. Preference Shares of Rs. 432.2 million were transferred from cost to Level 3 as the valuation of these securities was based on prices from prior transactions or third-party pricing information without adjustment at March 31, 2024 as compared to cost based valuation at March 31, 2023. Derivatives of Rs. 0.1 million were transferred from Level 3 to Level 2 as the valuation of these derivatives was based on valuation models at March 31, 2024 as compared to Counterparty quote based valuation at March 31, 2023. F-144 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth certain additional information about changes in the fair value of Level 3 assets for the year ended March 31, 2024. Rupees in million Description Investments Loans Equity shares Corporate debt securities Mortgage and other asset backed securities Others Total Beginning balance at April 1, 2023 7,921.4 2,048.4 101,578.7 217.5 111,766.0 6,973.2 Total gains or losses (realized/unrealized) .. .. .. .. .. .. -Translation adjustment 41.1 .. 28.0 (2.4) 66.7 .. -Included in earnings 3,278.0 319.8 101.9 495.6 4,195.3 6,270.6 -Included in Other Comprehensive Income 10.8 1,038.1 4,003.4 0.1 5,052.4 .. Purchases/additions 57.8 .. 170,062.9 614.3 170,735.0 6.8 Sales .. (72.1) .. .. (72.1) .. Issuances .. .. 502.1 .. 502.1 .. Settlements (138.9) (662.8) (83,405.7) .. (84,207.4) (1,455.5) Transfers in Level 3 1,570.1 882.9 .. 432.2 2,885.2 .. Transfers out of Level 3 (739.2) .. .. .. (739.2) .. Foreign currency translation adjustment .. .. .. .. .. .. Ending balance at March 31, 2024 12,001.1 3,554.3 192,871.3 1,757.3 210,184.0 11,795.1 Total amount of gains or (losses) included in earnings attributable to change in unrealized gains or (losses) relating to assets still held at reporting date 3,278.0 264.9 100.2 495.6 4,138.7 5,416.1 Total amount of gains or (losses) included in other comprehensive income attributable to change in unrealized gains or (losses) relating to assets still held at reporting date 10.8 1,080.8 3,980.8 - 5,072.4 .. 1. Includes India-linked asset backed securities. F-145 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth certain additional information about changes in the fair value of Level 3 assets for the year ended March 31, 2023. Rupees in million Description Investments Loans Equity shares Corporate debt securities Mortgage and other asset backed securities Others Total Beginning balance at April 1, 2022 121.2 2,484.9 62,143.3 750.9 65,500.2 9,398.0 Total gains or losses (realized/unrealized) -Included in earnings 374.7 (382.5) 51.3 293.0 336.5 (948.0) -Included in Other Comprehensive Income (35.2) 282.3 219.1 (355.0) 111.2 .. Purchases/additions 1,306.0 27.5 87,155.9 .. 88,489.4 .. Sales .. .. .. .. .. .. Issuances .. .. 797.9 .. 797.9 .. Settlements .. (363.8) (48,798.9) (656.4) (49,819.1) (1,476.8) Transfers in Level 3 6,039.5 .. .. 185.0 6,224.5 .. Transfers out of Level 3 .. .. .. .. .. .. Foreign currency translation adjustment 115.2 .. 10.1 .. 125.3 .. Ending balance at March 31, 2023 7,921.4 2,048.4 101,578.7 217.5 111,766.0 6,973.2 Total amount of gains or (losses) included in earnings attributable to change in unrealized gains or (losses) relating to assets still held at reporting date 374.7 (513.3) 34.7 32.5 (71.4) (948.0) Total amount of gains or (losses) included in other comprehensive income attributable to change in unrealized gains or (losses) relating to assets still held at reporting date (35.2) 301.1 528.8 .. 794.7 .. 1. Includes India-linked asset backed securities. F-146 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth certain additional information about changes in the fair value of Level 3 derivatives for the year ended March 31, 2024. Rupees in million Description Derivatives Interest rate derivatives Currency derivatives (including foreign exchange derivatives) Equity derivatives Un-funded credit derivatives Total Beginning balance at April 1, 2023 3,603.3 .. .. .. 3,603.3 Total gains or losses(realized/unrealized) -Translation adjustment -Included in earnings (778.0) .. .. .. (778.0) -Included in Other Comprehensive Income .. .. .. .. .. Purchases .. .. .. .. .. Sales .. .. .. .. .. Issuances .. .. .. .. .. Settlements (315.1) .. .. .. (315.1) Transfers in Level 3 .. .. .. .. .. Transfers out of Level 3 0.1 .. .. .. 0.1 Foreign currency translation adjustment .. .. .. .. .. Reduction due to deconsolidation of entity .. .. .. .. .. Ending balance at March 31, 2024 2,510.3 2,510.3 Total amount of gains or (losses) included in earnings attributable to change in unrealized gains or (losses) relating to assets still held at reporting date (1,091.4) .. .. .. (1,091.4) F-147 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth certain additional information about changes in the fair value of Level 3 derivatives for the year ended March 31, 2023. Rupees in million Description Derivatives Interest rate derivatives Currency derivatives (including foreign exchange derivatives) Equity derivatives Un-funded credit derivatives Total Beginning balance at April 1, 2022 2,145.3 .. .. .. 2,145.3 Total gains or losses(realized/unrealized) -Included in earnings 1,307.7 .. .. .. 1,307.7 -Included in Other Comprehensive Income .. .. .. .. .. Purchases .. .. .. .. .. Sales .. .. .. .. .. Issuances .. .. .. .. .. Settlements 150.3 .. .. .. 150.3 Transfers in Level 3 .. .. .. .. .. Transfers out of Level 3 .. .. .. .. .. Foreign currency translation adjustment .. .. .. .. .. Ending balance at March 31, 2023 3,603.3 .. .. .. 3,603.3 Total amount of gains or (losses) included in earnings attributable to change in unrealized gains or (losses) relating to assets still held at reporting date 1,756.2 .. .. .. 1,756.2 F-148 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Quantitative information about unobservable inputs used in Level 3 fair value measurements The Group Level 3 instruments consist of investment, loans and derivatives. An asset is classified as Level 3 of the fair value hierarchy when one or more unobservable inputs are used that are considered significant to its valuation. The following table sets forth, significant unobservable inputs used in fair value measurement of Level 3 financial instruments at March 31, 2024. Sr. No. Product Fair value (Rs. in million) Principal Valuation techniques Unobservable inputs Units Range of input values Low High Weighted average 1 Loans 11,795.1 Discounted cash flow Discounting rate % 14.03% 48.26% 23.86% Loss Severity % 11.48% 100.00% 29.01% 2 Investment 2A Mortgage and other asset backed securities - India linked 190,765.6 Discounted cash flow Yield % 7.68% 12.81% 8.21% 2B Mortgage and other asset backed securities - Non India linked 2,105.7 Discounted cash flow Yield % 3.70% 5.53% 4.09% 2C Corporate Debt securities 3,554.3 Discounted cash flow Discounting rate % 6.86% 16.00% 13.55% Loss Severity % 0.00% 100.00% 68.32% 2D Equity shares - Non India Linked 45.1 Comparable analysis Listed price per share of the same issuer USD .. 279.08 279.08 Illiquidity and other discount % .. 50.00% 50.00% 2E Equity shares - India Linked 57.1 Net asset valuations Net asset value % 134.09% 331.47% 194.27% 3 Interest Rate derivatives - India linked 2,483.2 Discounted cash flow Markdown for the discount rate BPS 40.00 77.00 50.59 Interest Rate derivatives – Non India linked 27.2 Counterparty quote based - - - - - F-149 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth significant unobservable inputs used in fair value measurement of Level 3 financial instruments at March 31, 2023. Sr. No. Product Fair value (Rs. in million) Principal Valuation techniques Unobservable inputs Units Range of input values Low High Weighted average 1 Loans 6,973.2 Discounted cash flow Discounting rate % 44.08% 49.41% 47.15% Loss Severity % 21.09% 100% 61.40% 2 Investment 2A Mortgage and other asset backed securities - India linked 98,737.4 Discounted cash flow Yield % 7.43% 12.27% 8.34% Loss Severity % .. .. .. 2B Mortgage and other asset backed securities - Non India linked 2,841.3 Discounted cash flow Yield % 3.14% 4.90% 3.47% 2C Corporate Debt securities 2,048.4 Discounted cash flow Discounting rate % 8.50% 16.00% 14.27% Loss Severity % .. 100.00% 17.91% 2D Equity shares - Non India Linked 36.6 Comparable analysis Listed price per share of the same issuer USD .. 225.46 225.46 Illiquidity and other discount % .. 50.00% 50.00% 2E Equity shares - India Linked 54.3 Net asset valuations Net asset value % 132.97% 302.49% 184.66% 3 Interest Rate derivatives - India linked 3,524.7 Discounted cash flow marked down for illiquidity Illiquidity discount bps 40 77 52 Swaptions - India linked 27.6 Discounted cash flow marked down for volatility Volatility discount bps 96 96 96 Cap & Floors - India linked (1.5) Counterparty Quote .. .. .. .. .. Interest Rate derivatives – Non India linked 52.5 Counterparty quotes .. .. .. .. .. e) Investment securities in unrealized loss position The Group adopted ASU Topic 2016-13, “Financial Instruments—Credit Losses” effective April 1, 2020. The Group has determined that certain available for sale debt securities with unrealized losses do not have credit losses. The Group conducts a review each year to identify and evaluate investments that have indications of credit losses. Factors considered in determining whether a credit loss exists F-150 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) include the extent to which the fair value is less than the amortized cost of a security, credit rating and financial condition of the issuer. A credit loss is computed as difference between the amortized cost basis of the security and the present value of cash flows expected to be collected from a security, limited by the amount that the fair value is less than amortized cost basis. The Group considers whether the investments have been identified for sale or whether it is more likely than not that the Group will be required to sell the investment before recovery of its amortized cost basis. The Group does not recognize an allowance on accrued interest as the Group’s policy is to reverse uncollected accrued interest immediately after 90 days past due by derecognizing interest income. The following table sets forth, the fair value of the debt investments in available for sale debt securities and unrealized loss position, at March 31, 2024. Rupees in million Description of securities Less than 12 months 12 months or longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate debt securities 21,738.1 (143.2) 81,020.0 (1,477.0) 102,758.1 (1,620.2) Government securities 229,769.1 (882.9) 683,420.7 (12,805.6) 913,189.8 (13,688.5) Other debt securities 6,226.6 (7.8) 5,547.1 (343.3) 11,773.7 (351.1) Total debt securities 257,733.8 (1,033.9) 769,987.8 (14,625.9) 1,027,721.6 (15,659.8) The following table sets forth, the fair value of the debt investments in available for sale debt securities and unrealized loss position, at March 31, 2023. Rupees in million Description of securities Less than 12 months 12 months or longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate debt securities 26,848.6 (631.1) 14,338.1 (974.2) 41,186.7 (1,605.3) Government securities 594,925.7 (9,956.4) 777,128.1 (18,703.3) 1,372,053.8 (28,659.7) Other debt securities 16,018.7 (258.0) 7,299.2 (541.6) 23,317.9 (799.6) Total debt securities 637,793.0 (10,845.5) 798,765.4 (20,219.1) 1,436,558.4 (31,064.6) Certain investments in debt securities with unrealized losses are not classified as impaired, since the Group has assessed that the securities in an unrealized loss position have not been identified for sale and it is not more likely than not that the Group will be required to sell the securities before recovery of its amortized cost basis less any current period credit loss. The Group also holds certain debt investments with credit losses, which have not been identified for sale and it is not more likely than not that the Group will be required to sell the securities before an anticipated recovery in value other than credit losses, where the amount representing the credit losses is recognized in earnings and the amount of loss related to other factors is recognized in Other Comprehensive Income. The credit losses have been determined based on the difference of present value of expected future cash flows of the securities and the amortized cost basis of such securities. The Group bases its estimates of future cash flows on evaluation of the issuer’s overall financial condition, resources and payment record and the realizable value of any collateral, third-party guarantees or other credit enhancements. F-151 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, roll-forward of the allowance for credit losses for available for sale debt securities for March 31, 2024: Rupees in million Corporate debt securities Government securities Other debt securities Total allowance Allowance for credit losses at the beginning of the period 8,290.0 .. 535.0 8,825.0 Additions during the year for which credit losses were not previously recorded .. .. .. .. Additions to the allowance for credit losses arising from purchased financial assets with credit deterioration .. .. .. .. Reductions due to sale of securities during the year 433.4 .. .. 433.4 Reductions due to the Group intends to sale the securities or more likely than not will be required to sell the security before recovery of its amortized cost basis .. .. .. .. Additional increases or decreases during the year on securities that had an allowance recorded in a previous period 211.0 .. 2.5 213.5 Write-off during the period .. .. 101.1 101.1 Recoveries during the period 455.5 .. 69.3 524.8 Balance of the allowance for credit losses at the end of the period 7,612.1 .. 367.1 7,979.2 The following table sets forth roll-forward of the allowance for credit losses for available for sale debt securities for March 31, 2023: Rupees in million Corporate debt securities Government securities Other debt securities Total allowance Allowance for credit losses at the beginning of the period 7,881.6 .. 596.8 8,478.4 Additions during the year for which credit losses were not previously recorded .. .. .. .. Additions to the allowance for credit losses arising from purchased financial assets with credit deterioration .. .. .. .. Reductions due to sale of securities during the year .. .. .. .. Reductions due to the Group intends to sale the securities or more likely than not will be required to sell the security before recovery of its amortized cost basis .. .. .. .. Additional increases or decreases during the year on securities that had an allowance recorded in a previous period 597.1 .. 0.9 598.0 Write-off during the period .. .. 15.3 15.3 Recoveries during the period. 188.7 .. 47.4 236.1 Balance of the allowance for credit losses at the end of the period 8,290.0 .. 535.0 8,825.0 At March 31, 2024, the Group holds cost method equity investments amounting to Rs. 125,451.7 million (March 31, 2023: Rs. 315,919.2 million). The fair value for such securities has not been estimated in the absence of changes in circumstances that have a significant adverse effect on the fair value of the investments. F-152 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) f) Loans The Group follows the guidance provided in the FASB ASC topic 326: “Financial instruments – Credit Losses” for accounting and measurement of loan loss allowance. This guidance established a single allowance framework for all financial assets measured at amortized cost including unfunded credit facilities and loan commitments. This framework requires that management’s estimate reflects credit losses over the instrument’s remaining expected life and considers expected future changes in macroeconomic conditions. The Group’s allowance for credit losses primarily comprises allowance for loan losses, unfunded credit exposure and non-cancellable loan commitments. The Group does not classify its investment in debt securities as held-to-maturity. The Group does not recognize an allowance on accrued interest as the Group’s policy is to write-off uncollected accrued interest immediately after 90 days past due (based on crop cycle for certain agriculture based loans) by reversing interest income. Any changes in the allowance for credit losses is recognized in the income statement as allowance for credit losses. The estimation of the allowance for credit losses is complex and requires significant management judgment about the effect of certain matters that are inherently uncertain. The allowance for credit losses in future periods may be significantly different, considering the macro-economic conditions, forecasts and other factors then prevailing. The allowance for loan losses and allowance for lending-related commitments represents expected credit losses over the remaining expected life of retained loans and lending-related commitments that are in the nature of non-cancellable by the Group. The expected life of each instrument is determined by considering its contractual term and expected prepayments. When calculating the allowance for credit losses, the Group assesses whether exposures share similar risk characteristics. If similar risk characteristics exist, the Group estimates expected credit losses collectively, considering the risk associated with a particular segment and the probability that the exposures within the segment will default. The segmentation for the consumer loans and small business lending exposures is based on risk characteristics such as product type, delinquency status, credit scores, months on book, etc. For Agriculture loans, a further segmentation of risk characteristics is also carried out based on direct and indirect agriculture lending. The segmentation for commercial loans is based on risk characteristics such as customer type, risk rating assigned using internal rating models and delinquency status. The commercial loans are also considered as not sharing similar risk characteristics if principal or interest has remained overdue for more than 90 days or the borrower has undergone restructuring/likely to be restructured. The consumer loan, loan commitment and significant portion of commercial loans and unfunded credit exposure share similar risk characteristic with other credit exposures in the segment, and as a result are collectively assessed for credit loss. If an exposure for commercial loans does not share risk characteristics with other exposures, expected credit losses are estimated on an individual basis. The credit loss on individual basis is either estimated on basis of the present value of expected future cash flows or in case of a collateral dependent loan, the net realizable value of the collateral net of cost to sell, if any. The loans primarily have collateral in the form of business assets or real estate. The credit loss on collective basis is estimated using a current expected credit losses methodology which is based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the loan balances. The collective assessment begins with a quantitative calculation that considers the likelihood of the borrower defaulting. The quantitative calculation covers expected credit losses over an instrument’s expected life and is the result F-153 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) of multiplying the individual loan level exposure at default with the estimated probability of default and loss given default. The probabilities of default are derived using a macro-economic scenario over a reasonable and supportable forecast period. The term structure for subsequent periods is built using single year reversion to the long run historical information. The forecasts take into consideration the Group’s overarching economic outlook based on internal as well as external inputs and involve a governed process that incorporates feedback from senior management. The quantitative calculation is adjusted to take into consideration model imprecision not yet reflected in the calculation. The geopolitical uncertainties and macroeconomic environment including the outlook on growth across the world may have an impact on the results of the Bank and the Group. The Group makes adjustments to appropriately address these economic circumstances over and above the model output by increasing the probability of default estimates based on management judgement. Estimating the timing and amounts of future cash flows is highly judgmental as these cash flow projections rely upon estimates such as loss severities, asset valuations, default rates, the amounts and timing of interest or principal payments (including any expected prepayments) or other factors that are reflective of current and expected market conditions. These estimates are, in turn, dependent on factors such as uncertainty around geo-political situation, current overall economic conditions, portfolio or borrower-specific factors, the expected outcome of insolvency proceedings as well as, in certain circumstances, other economic factors. All of these estimates and assumptions require significant management judgment and certain assumptions are highly subjective. During fiscal 2024, the Bank implemented the ASU 2022-02: Troubled debt restructurings and vintage disclosures, since classification of TDR loans have removed, the disclosures for recorded investments in restructured loans have not been made at March 31, 2024. The following table sets forth the recorded investment in restructured loans at March 31, 2023. Rupees in million Total recorded investment in restructured loans with related allowance for credit losses Total allowances for credit losses Total recorded investment in restructured loans with no related allowance for credit losses Unpaid principal amount Commercial loans 147,724.0 106,616.1 20,230.2 167,954.2 Consumer loans 56,104.6 15,947.5 .. 56,104.6 Total 203,828.6 122,563.6 20,230.2 224,058.8 A loan is considered impaired when the Group believes it is probable that all amounts due according to the original contractual terms of the loan will not be collected. A loan is generally classified as impaired if any amount of interest or principal remains overdue for more than 90 days (360 days for direct agriculture loans). For large balance commercial loan, evaluation also includes assessment of individual loans based on borrower specific facts and circumstances, including financial performance, future prospects and repayment history of the borrower. The following table sets forth the recorded investment in impaired loans at March 31, 2024. F-154 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Total recorded investment in impaired loans with related allowance for credit losses Total allowances for credit losses Total recorded investment in impaired loans with no related allowance for credit losses Unpaid principal amount Commercial loans1 218,074.2 167,214.9 20,332.6 238,406.9 Consumer loans2 112,415.3 50,615.2 .. 112,415.3 Total 330,489.5 217,830.1 20,332.6 350,822.2 1. Primarily includes commercial loans assessed individually. 2. Includes consumer loans assessed collectively. 3. During fiscal 2024, the Bank implemented the ASU 2022-02: Troubled debt restructurings and vintage disclosures, accordingly, the above table includes the total impaired loans of the Bank at March 31, 2024. The following table sets forth the recorded investment in impaired loans at March 31, 2023. Rupees in million Total recorded investment in impaired loans with related allowance for credit losses Total allowances for credit losses Total recorded investment in impaired loans with no related allowance for credit losses Unpaid principal amount Commercial loans1 116,108.4 87,381.2 8,139.3 124,247.7 Consumer loans2 60,429.1 29,677.8 .. 60,429.1 Total 176,537.5 117,059.1 8,139.3 184,676.8 1. Primarily includes commercial loans assessed individually. 2. Includes consumer loans assessed collectively. The following table sets forth the closing balance of allowance for loan losses for restructured loans and recorded financing receivables at March 31, 2023. Rupees in million Particulars Commercial loans Consumer loans & credit card receivables Financial lease Total Allowance for loan losses Allowance for loan losses: individually evaluated for impairment 106,616.1 .. .. 106,616.1 Allowance for loan losses: collectively evaluated for impairment .. 15,947.5 .. 15,947.5 Total allowance for loan losses 106,616.1 15,947.5 .. 122,563.6 Recorded financing receivables Individually evaluated for impairment 167,954.2 .. .. 167,954.2 Collectively evaluated for impairment .. 56,104.6 .. 56,104.6 Total recorded financing receivables 167,954.2 56,104.6 .. 224,058.8 The following table sets forth the closing balance of allowance for loan losses for other loans and recorded financing receivables at March 31, 2024. F-155 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Particulars Commercial loans Consumer loans & credit card receivables Financial lease Total Allowance for loan losses Allowance for loan losses: individually evaluated for impairment 159,433.0 .. .. 159,433.0 Allowance for loan losses: collectively evaluated for impairment 53,561.0 274,186.9 .. 327,747.9 Total allowance for loan losses 212,994.0 274,186.9 .. 487,180.9 Recorded financing receivables Individually evaluated for impairment 219,632.6 .. .. 219,632.6 Collectively evaluated for impairment 4,863,244.9 7,672,968.1 34.3 12,536,247.4 Total recorded financing receivables 5,082,877.5 7,672,968.1 34.3 12,755,880.0 1. During fiscal 2024, the Bank implemented the ASU 2022-02: Troubled debt restructurings and vintage disclosures, accordingly, the above table includes the total impaired loans of the Bank at March 31, 2024. The following table sets forth the closing balance of allowance for loan losses for other loans and recorded financing receivables at March 31, 2023. Rupees in million Particulars Commercial loans Consumer loans & credit card receivables Financial lease Total Allowance for loan losses Allowance for loan losses: individually evaluated for impairment 78,406.5 .. .. 78,406.5 Allowance for loan losses: collectively evaluated for impairment 51,045.8 205,792.1 .. 256,837.9 Total allowance for loan losses 129,452.3 205,792.1 .. 335,244.5 Recorded financing receivables Individually evaluated for impairment 108,037.9 .. .. 108,037.9 Collectively evaluated for impairment 4,288,123.3 6,392,677.9 50.1 10,680,851.2 Total recorded financing receivables 4,396,161.2 6,392,677.9 50.1 10,788,889.2 The following table sets forth allowance of credit losses for the unfunded credit commitments for the period ended March 31, 2024: Rupees in million Particulars Fiscal 2024 Loan commitment Guarantees and Letter of Credit Total allowance Allowances at the beginning of fiscal. 5,520.3 27,893.6 33,414.0 Additions/(reductions) to allowances during the year 3,695.0 (16.3) 3,678.6 Allowances at the end of the fiscal 9,215.3 27,877.3 37,092.6 The following table sets forth allowance of credit losses for the unfunded credit commitments for the period ended March 31, 2023: F-156 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Particulars Fiscal 2023 Loan commitment Guarantees and Letter of Credit Total allowance Allowances at the beginning of fiscal 3,258.3 28,198.7 31,456.9 Additions/(reductions) to allowances during the year 2,262.0 (305.1) 1,957.0 Allowances at the end of the fiscal 5,520.3 27,893.6 33,414.0 The following table sets forth allowance of credit losses for the unfunded credit commitments for the period ended March 31, 2022: Rupees in million Particulars Fiscal 2022 Loan commitment Guarantees and Letter of Credit Total allowance Allowances at the beginning of fiscal 3,565.7 28,510.2 32,075.9 Add: Adjustment on transition to ASU Topic 2016-13 Allowance at April 1, 2020 Additions/(reductions) to allowances during the year (307.5) (311.5) (619.0) Allowances at the end of the fiscal 3,258.3 28,198.7 31,456.9 The following table sets forth loans with financial difficulty which were modified during the year ended March 31, 2024. Rupees in million Particulars Modified Loans with financial difficulty involving following Modifications: Amortised cost at March 31, 2024 Reduction in interest rates Extension of term of the loans Both Interest rate reduction and term extension % of total loans outstanding Weighted average reduction in interest rates Weighted average extension in term (in months) Commercial loans 693.7 .. 158.9 534.8 0.01% 7.15% 77 Consumer loans 1,105.3 .. 1,091.8 13.5 0.01% 0.48% 8 Total 1,798.9 .. 1,250.7 548.2 0.01% 1. In addition to above the total principal forgiveness offered by the Group to its borrowers amounted to Rs. 11,932.7 million. 2. Of the above loans modified during the year, commercial loans amounting to Rs. 549.9 million and consumer loans amounting to Rs. 97.9 million defaulted within the 12 months of modification. These defaulted commercial loans were offered both interest rate reduction and term extension and the defaulted consumer loans were offered the term extension at the time of modification. The following table sets forth the past due status at March 31, 2024 of loans with financial difficulty which were modified during the year ended March 31, 2024. Rupees in million Particulars Current Overdue for 31-60 days Overdue for 61-90 days Overdue for more than 90 days Total Commercial loans 137.0 .. 20.7 535.9 693.6 Consumer loans 1,025.3 13.9 1.8 64.2 1,105.2 Total 1,162.3 13.9 22.5 600.1 1,798.8 F-157 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) During fiscal 2024, the Bank implemented the ASU 2022-02: Troubled debt restructurings and vintage disclosures, accordingly, the disclosures for recorded investments in restructured loans have not been made at March 31, 2024. The following table sets forth loans restructured during the year ended March 31, 2023. Rupees in million Particulars Restructured loans involving changes in the amount and/or timing of Number of borrowers whose loans are classified as restructured Principal payments Interest payments Both principal and interest payments Provision/(write-back) through P&L Net restructured amount Commercial loans 21 726.4 .. 3,506.8 (422.9) 2,594.5 Consumer loans 13 .. .. 121.9 39.8 82.1 Total 34 726.4 .. 3,628.7 (383.1) 2,676.6 The following table sets forth restructured loans at March 31, 2023, as well as loans that were restructured during a fiscal year and defaulted within the same or next fiscal year: Rupees in million Particulars Balances at March 31, 2023 Payment default during the year ended March 31, 20231 Commercial loans 167,954.2 6,651.5 Consumer loans 56,104.6 7,755.0 Total 224,058.8 14,406.5 1. Default is defined as 90 days past due. Additionally, at March 31, 2024, the Bank has outstanding loans amounting to Rs. 16,615.5 million (March 31, 2023: Rs. 18,064.0 million) to equity affiliates, where the Bank has opted for fair value accounting under ASC Subtopic 825-10 “Financial Instruments”. See also 22. Notes under U.S. GAAP – Additional information required under U.S. GAAP – Fair value accounting of financial interests. g) Equity affiliates Under U.S. GAAP, the Group accounts for its ownership interest in ICICI Prudential Life Insurance Company Limited (ICICI Life) by the equity method of accounting. ICICI Life Implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts (“LDTI”) F-158 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) ICICI Life implemented Targeted improvements to the accounting for Long-Duration contracts with a transition date of April 1, 2023 (the “Transition date”). The standard allowed for a transition method election for Future policy benefit liabilities and deferred acquisition cost as well as other balances using appropriate methods. The financial statement for fiscal 2024 reflects the adoption of LDTI as prescribed under ASC 944 (ASU 2018-12). The following tables set forth, for the periods indicated, the summarized U.S. GAAP balance sheets and statements of operations of ICICI Life. Rupees in million At March 31, Balance sheet 2024 2023 Cash and cash equivalents 56,783.2 57,856.5 Securities 1,195,441.0 964,814.0 Assets held to cover linked liabilities 1,648,424.0 1,440,580.6 Other assets 178,954.9 139,349.3 Total assets 3,079,603.1 2,602,600.4 Provision for linked liabilities 1,648,424.0 1,440,580.6 Other liabilities 1,211,385.8 1,062,924.1 Stockholders’ equity 219,793.3 99,095.7 Total liabilities and stockholders’ equity 3,079,603.1 2,602,600.4 Under the ‘carryover basis’ transition approach, ICICI Life was required to establish LDTI compliant future policy benefits liabilities, deferred acquisition cost and related balances for the Transition Date opening balance sheet by considering March 31, 2023 balances with certain adjustments as described below. Rupees in million Shareholders’ Accumulated other Comprehensive income/(loss) (a) Retained earnings (b) Shareholders’ Equity (a+b) Other Liabilities Balance as reported at March 31, 2023 38,707.2 60,388.5 99,095.7 1,062,924.1 Cumulative effect of adopting LDTI (ASU 2018-12) - Net actuarial liabilities 50,983.7 50,553.0 101,536.8 (101,536.8) -Other balance sheet reclassifications and adjustments (11,077.6) (8,531.8) (19,609.4) 19,609.4 Balance as adjusted at April 1, 2023 78,613.3 102,409.7 181,023.1 980,996.7 F-159 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The Transition date impacts associated with the implementation of LDTI were applied as follows: US GAAP Standard ASC 944-40-65 provides guidance related to LDTI transition. The standard allows that companies can apply the ‘carryover basis’ transition approach (i.e., start with the carrying value of various actuarial balances at the transition date as the starting point and calculate amortization thereon). It also provides the option to use a ‘retrospective’ transition approach. ICICI Life used the carryover basis approach for determining US GAAP LDTI actuarial net liability balance as at the transition date of April 1, 2023, and then roll forward these balances from March 31, 2023 to March 31, 2024. The Bank accounted for its share in the transition adjustments of ICICI Life in the respective reserves. The following tables set forth, for the periods indicated, the summarized U.S. GAAP statements of operations of ICICI Life. Rupees in million Year ended March 31, 2024 2023 Interest income 117,129.2 101,212.1 Interest expense (995.7) (1,014.2) Net interest income 116,133.5 100,197.9 Insurance premium 432,356.4 399,327.8 Other non-interest income 369,251.3 (8,403.8) Non-interest expense (868,016.6) (477,926.2) Income tax (expense)/benefit (6,194.1) (1,782.8) Income/(loss), net 43,530.5 11,412.9 The income increased to Rs. 43,530.5 million in fiscal 2024 from an income of Rs. 11,412.9 million in fiscal 2023, primarily due to difference in policyholders’ liabilities and unallocated policyholders’ surplus , net of amortization of deferred acquisition cost and marked-to-market gain on trading portfolio and equity securities. The aggregate market value of the investment in shares of ICICI Life at March 31, 2024 based on quoted market prices was Rs. 448,943.6 million (At March 31, 2023: Rs. 321,374.7 million). h) Insurance entities Life insurance affiliate The significant differences between Indian GAAP and U.S. GAAP in case of the life insurance affiliate are primarily on account of: i) Difference in policyholders’ liability and unallocated policyholders’ surplus, net of amortization of deferred acquisition cost Policyholders’ liability Reserves under Indian GAAP are held as per the requirements of Insurance Act, 1938, regulations notified by the Insurance Regulatory and Development Authority of India and Actuarial Practice Standards of the Institute of Actuaries of India. Accordingly, the reserves are computed using the Gross Premium Method (reserves are computed as the present value of future benefits including future bonuses and the present value of expenses including overheads and are net of the present value of future F-160 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) total premiums, paid by policyholders). The discount rates used are set on a prudent basis, and are updated at every fiscal year end. The liability under U.S. GAAP is measured as per the valuation guidance provided by the U.S. GAAP principles codified under the Account Standards Codification (ASC) developed by the Financial Account Standards Board (FASB). The total liability under U.S. GAAP consists of two parts, viz., policy liability (consisting of the liability for future policy benefits, unearned revenue liability, sales inducement liability) and deferred profit liability. The liability for future policy benefits is computed as the present value of guaranteed benefits less the present value of net premiums that cover these benefits. The operating assumptions used are set on a best estimate basis and are updated at the end of each fiscal year. Such assumptions include mortality, morbidity, claims expenses, policy lapse and policy surrenders. The discount rate used for non-linked products represents the discount rates that were locked-in inception. The liability for future policy benefits is recalculated using the yields on upper medium grade fixed income corporate bond instruments and the difference in the liability is reflected in other comprehensive income. Deferred profit liability is held in accordance with ASC Topic 944-605-35 for the products for which the premium paying term is shorter than the policy term, to allow the emergence of the profits over the entire policy term. The deferred profit liability is calculated using the same assumptions as the liability for future policy benefits but is calculated only using locked-in discount rates. For Unit-Linked contracts, the account value is held as liability. The excess of total allocation charges in each valuation period over the ultimate allocation charges is held as unearned revenue liability and are amortized over time, in line with the amortization of deferred acquisition costs. An additional sales inducement liability is held in respect of loyalty additions payable on such contracts, which accrues over time to fund any future loyalty additions. The sales inducement liability is accrued based on the current best estimate operating and economic assumptions. Unallocated policyholders’ surplus Participating policyholders are entitled to 90% of the surplus generated in the fund, which is given in the form of a bonus. Under Indian GAAP, based on the recommendation of the Appointed Actuary, 1/9th of the bonus declared is transferred to the shareholders and remaining surplus after the transfer is held back as Fund for future appropriation. Under U.S. GAAP, 10% of the total surplus is transferred to shareholders and 90% is held back as unallocated policyholders’ surplus for participating policyholders. Deferred acquisition cost Under Indian GAAP, acquisition costs are charged to the revenue account in the year in which it is incurred whereas under U.S. GAAP, the acquisition costs, which are related directly to the successful acquisition of new or renewal insurance contracts, are deferred over the policy term. Under U.S GAAP, the deferred acquisition costs are those that vary with and are primarily related to the acquisition of new and renewal of existing insurance contracts. The deferrable acquisition cost asset is amortized over time on a constant-level basis. The amortization of deferrable acquisition costs over the accounting period is recognized as an expense in the income statement. The unamortized balance of deferrable acquisition cost is reflected as an asset on the balance sheet. The assumptions used to calculate amortization of deferrable acquisition costs are the same as those used to calculate policy liability. F-161 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) ii) Compensation costs Accounting for employee stock options Under Indian GAAP, stock compensation costs are accounted for using the intrinsic value method as compared to U.S. GAAP where stock compensation costs have been accounted for based on fair value method. Retirement benefit cost Under Indian GAAP, all actuarial gains/losses are recognized on the balance sheet in the year in which they arise through suitable credit/debit in the profit and loss account of the year. Under U.S. GAAP, actuarial gains/losses are accounted in Other Comprehensive Income. Subsequently cumulative actuarial gain/loss lying in the Other Comprehensive Income which is over and above the 10% corridor is amortized through profit and loss account. Further, discount rate for computing benefit obligation is linked to yield on high quality fixed income securities in U.S. GAAP as compared to yield on Government securities under Indian GAAP. iii) Unrealized gain/(loss) on trading portfolio and equity securities Under Indian GAAP, accounting for investments is in accordance with the guidelines issued by the Insurance Regulatory and Development Authority of India, which do not allow unrealized gain to be routed through the revenue account except in the case of linked business. A linked life insurance policy is a policy in which the cash value of the policy varies according to the net asset value of units (i.e., shares) in investment assets chosen by the policyholder. Under U.S. GAAP, unrealized gain/(loss) on investments classified as “held for trading” is taken to the profit and loss account. Under U.S. GAAP, unrealized gain/losses on equity securities are recognized in profit and loss account. iv) Income taxes The differences in the accounting for income taxes are primarily on account of the income tax impact of non-tax U.S. GAAP adjustments. v) Lease Under Indian GAAP, expenses towards operating lease are charged to profit and loss account on a straight-line basis. Under U.S. GAAP, a right to use asset and a lease liability is required to be recognized at the commencement of the lease for all lease on adoption of FASB ASC 842- “Leases” and a single leases cost is recognized, which is calculated such that the cost of the operating lease is allocated over the lease term on a generally straight-line basis. The following table sets forth, for the periods indicated, the significant differences between Indian GAAP and U.S. GAAP in case of the life insurance affiliate. Rupees in million Reconciling items Year ended March 31, 2024(1) 2023 2022 Profit as per Indian GAAP 8,506.7 8,134.9 7,592.0 Adjustments on account of Unrealized gain/(loss) on trading portfolio and equity securities 19,605.1 (4,532.8) (12,544.7) Difference in policyholders’ liabilities and unallocated policyholders’ surplus, net of amortization of deferred acquisition cost 27,111.0 8,502.5 1,479.4 Compensation costs (820.8) (692.1) (563.5) F-162 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Reconciling items Year ended March 31, 2024(1) 2023 2022 Deferred taxes benefit/(expense) (10,657.0) 160.4 2,140.4 Others (214.4) (160.0) 138.2 Profit/(loss) as per U.S. GAAP 43,530.5 11,412.9 (1,758.2) Net income/(loss) (net of tax) 43,530.5 11,412.9 (1,758.2) Other Comprehensive Income (net of taxes): Net unrealized gain/(loss) on securities, net of realization & others 21,003.9 (9,969.4) (15,190.7) Effect of remeasurement of future policy benefits to an upper-medium grade discount rate.. (26,565.6) .. - Accounting for post retirement employee benefits (10.5) (0.1) (24.6) Total comprehensive income/(loss) 37,958.3 1,443.4 (16,973.5) 1. Prepared in accordance with the LDTI guidelines as prescribed under ASC 944 (ASU 2018-12) The profit under Indian GAAP increased from Rs. 8,134.9 million in fiscal 2023 to Rs. 8,506.7 million in fiscal 2024, net income under U.S. GAAP increased from an income of Rs. 11,412.9 million in fiscal 2023 to an income of Rs. 43,530.5 million in fiscal 2024. In fiscal 2024, the total comprehensive income was Rs. 37,958.3 million as compared to total comprehensive income of Rs. 1,443.4 million in fiscal 2023. The unrealized gain on the trading portfolio and equity securities increased from a loss of Rs. 4,532.8 million in fiscal 2023 to a gain of Rs. 19,605.1 million in fiscal 2024. This increase was primarily due to marked-to-market gains in equity and debt securities. In fiscal 2024, the marked-to-market gain recognized on equity securities was Rs. 15,753.3 million (compared to a marked-to-market gain of Rs. 150.6 million in fiscal 2023). Furthermore, the marked-to-market gain recognized in net income on the debt securities in fiscal 2024 was Rs. 3,851.8 million (compared to a marked-to-market loss of Rs. 4,683.4 million in fiscal 2023). Out of the above, in fiscal 2024, the marked-to-market gain recognized on equity securities in respect of participating fund was Rs. 14,220.8 million (compared to a marked-to-market loss of Rs. 228.3 million in fiscal 2023). Furthermore, the marked-to-market gain recognized in net income on the debt securities in respect of participating fund in fiscal 2024 was Rs. 3,849.5 million (compared to a marked-to-market loss of Rs. 4,562.2 million in fiscal 2023). Under U.S. GAAP, the policyholders' liabilities and unallocated policyholders' surplus, net of amortization of deferred acquisition cost, were lower by Rs. 27,111.0 million in fiscal 2024 compared to Indian GAAP (compared to difference of Rs. 8,502.5 million in fiscal 2023). In fiscal 2024, difference in policyholder’s liabilities net of amortization of deferred acquisition cost is lower by Rs 56,319.2 million compared to Indian GAAP which is primarily due to increase in deferred acquisition cost resulting from higher commission cost, which was incurred for acquiring new insurance policies, on account of redesign of commission structure pursuant to the IRDAI (Payment of Commission) Regulations, 2023 issued on March 31, 2023, coupled with release of prudent margins held in the reserves under Indian GAAP pursuant to the adoption of LDTI (ASU 2018-12). In fiscal 2024, the liabilities recognized through the income statement towards unallocated policyholders' surplus under U.S. GAAP were higher by Rs. 29,208.2 million compared to Indian GAAP, primarily due to the marked-to-market gain on the equity & debt portfolio of participating funds. Other comprehensive income arising from policyholders’ assets classified as available for sale increased on account of unrealized gain (net of tax) of Rs. 21,003.9 million in fiscal 2024 (fiscal 2023: unrealized loss (net of tax) of Rs. 9,969.4 million). F-163 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Other comprehensive income includes charge (net of tax) of Rs. 26,565.6 million in fiscal 2024 arising from remeasurement of future policy benefits to an upper-medium grade discount rate pursuant to adoption of LDTI guidelines as prescribed under ASC 944 (ASU 2018-12). The following table sets forth, for the periods indicated, the components of income taxes in net income reconciliation of ICICI Life. Rupees in million Reconciling items Year ended March 31, 2024(1) 2023 2022 Income tax impact of U.S. GAAP adjustments (10,657.0) 160.4 2,140.4 Total differences in income taxes (10,657.0) 160.4 2,140.4 1. Prepared in accordance with the LDTI guidelines as prescribed under ASC 944 (ASU 2018-12) General insurance subsidiary The significant differences between Indian GAAP and U.S. GAAP in case of the general insurance subsidiary are primarily on account of: i) Provision for reinsurance commission Under Indian GAAP, reinsurance commission on business ceded is recognized as income in the year of the ceding of the risk. Under U.S. GAAP, proceeds from reinsurance transactions that represent recovery of acquisition costs are reduced from unamortized acquisition costs in such a manner that net acquisition costs are capitalized and amortized over the related policy period. ii) Amortization of deferred acquisition costs Under Indian GAAP, acquisition cost is charged as an expense to the revenue account in the year in which it is incurred whereas under U.S. GAAP, the same is deferred and amortized as an expense in as per ASC Topic 944 “Financial Services-Insurance”. Accordingly, certain acquisition costs have been deferred that are related directly to the successful acquisition of new or renewal insurance contracts. iii) Premium deficiency Under Indian GAAP, premium deficiency is recognized if the sum of the expected claims costs, related expenses and maintenance costs exceed related unearned premiums. Under Indian GAAP, for assessment of premium deficiency, line of business are segmented under “Fire”, “Marine”, “Miscellaneous” segments. Under U.S. GAAP premium deficiency is assessed for each line of business and recognized in the profit & loss account if the sum of expected claim costs and claims adjustment expenses, expected dividends to policyholders, un-amortized acquisition costs and maintenance costs exceed related unearned premiums. A premium deficiency is recognized by first charging acquisition costs to expense, to the extent required to eliminate the deficiency. If the premium deficiency is greater than un-amortized acquisition costs, a liability for the excess deficiency is required to be accrued. iv) Compensation costs Accounting for employee stock options Under Indian GAAP, stock compensation costs are accounted for by the intrinsic value method as compared to U.S. GAAP where the compensation costs have been accounted for at the fair value F-164 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) method in accordance with the requirement of FASB ASC Topic 718 “Compensation-Stock Compensation”. Retirement benefit cost Under Indian GAAP, all actuarial gains/losses are recognized on the balance sheet of the enterprise in the year in which they arise through suitable credit/debit in the profit and loss account of the year. Under U.S. GAAP, actuarial gains/losses are accounted in Other Comprehensive Income. Subsequently cumulative actuarial gain/loss lying in the Other Comprehensive Income which is over and above 10% corridor is amortized through profit and loss account. Further, discount rate for computing benefit obligation is linked to yield on high quality fixed income securities in U.S. GAAP as compared to yield on government securities under Indian GAAP. v) Mark to market on equity investments Under Indian GAAP, all unrealized gains/ (losses) on equity investments are recognized through reserves. Under U.S. GAAP, unrealized gains/ (losses) on equity investments are recognized through income statement. vi) Income taxes The differences in the accounting for income taxes are primarily on account of the income tax impact of non-tax U.S. GAAP adjustments. vii) Lease Under Indian GAAP, expenses towards operating lease is charged to profit and loss account on a straight line basis. Under U.S. GAAP, a right to use asset and a lease liability is required to be recognized at the commencement of the lease for all lease on adoption of FASB ASC 842- “Leases” and a single lease cost is recognized, which is calculated such that the cost of the operating lease is allocated over the lease term on a generally straight-line basis. viii) Business Combination During fiscal 2022, in accordance with the Scheme of Arrangement between ICICI Lombard General Insurance Company Limited and Bharti AXA General Insurance Company Limited, as approved by Insurance Regulatory and Development Authority of India with effect from September 8, 2021, assets and liabilities of Bharti AXA General Insurance Company Limited’s general insurance business vested with ICICI Lombard General Insurance Company Limited on the Appointed Date of April 1, 2020. ICICI Lombard General Insurance Company Limited issued two fully paid up equity shares to the shareholders of Bharti AXA General Insurance Company Limited for every 115 fully paid up equity shares. Under Indian GAAP the merger was accounted using the “Pooling of Interest Method” as prescribed in Accounting Standard 14 “Accounting for Amalgamations” where all the assets, liabilities and reserves of the Bharti AXA’s general insurance business were recorded in their existing form and at their carrying value and the excess of consideration paid over net assets taken-over was adjusted with the reserve and surplus account. Under US GAAP, the merger was accounted in accordance with ASC 805 – Business Combinations where all the assets and liabilities were measured at fair value on September 8, 2021 of merger. Goodwill was measured as excess of consideration paid over the net assets taken over. F-165 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Accordingly under US GAAP, ICICI Lombard General Insurance Company Limited recognized intangible assets of Rs. 1,230.0 million and goodwill of Rs. 46,454.5 million. The goodwill is tested for impairment on annual basis and intangible assets are amortized over the useful life. The following table sets forth, for the periods indicated, the details of the significant differences between Indian GAAP and U.S. GAAP for the general insurance subsidiary. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Profit as per Indian GAAP 19,185.9 17,290.5 12,710.1 Adjustments on account of Provision for reinsurance commission (2,175.8) (1,171.9) 1,511.7 Amortization of deferred acquisition costs 9,153.2 531.3 (125.0) Premium deficiency 0.0 11.9 (5.8) Compensation costs (1,118.7) (1,285.6) (981.3) Unrealized gain/(loss) on equity investments 7,258.0 (413.6) (2,791.4) Income tax benefit/(expense) (3,556.6) 296.4 607.2 Business Combination (123.0) (123.0) (508.2) Others 17.8 (12.2) (241.4) Profit/(Loss) as per U.S. GAAP 28,640.8 15,123.8 10,175.9 Other Comprehensive Income (net of taxes) MTM on Debt Securities 4,781.1 (6,010.8) (2,763.0) Compensation Cost 1,118.7 1,285.6 981.2 Actuarial Gain/(Loss) 18.6 14.4 0.6 Total Other Comprehensive Income 5,918.5 (4,710.8) (1,781.2) Total Comprehensive Income 34,559.2 10,413.0 8,394.7 The profit under Indian GAAP increased from Rs. 17,290.5 million in fiscal 2023 to Rs. 19,185.9 million in fiscal 2024, profit under U.S. GAAP increased from Rs. 15,123.8 million in fiscal 2023 to Rs. 28,640.8 million in fiscal 2024. Total comprehensive income under U.S. GAAP increased from Rs. 10,413.0 million in fiscal 2023 to Rs. 34,559.2 million in fiscal 2024. In fiscal 2023, there was unrealized loss on available for sale debt securities amounting to Rs. 6,010.8 million whereas in fiscal 2024 there is unrealized gain on available for sale debt securities amounting to Rs. 4,781.1 million. Reinsurance commission on premium ceded is recognized as income in the year of the ceding of the risk under Indian GAAP and recognized over the policy period under U.S. GAAP. Reinsurance commission income was lower by Rs. 2,175.8 million under U.S. GAAP as compared to Indian GAAP in fiscal 2024 (lower by Rs. 1,171.9 million in fiscal 2023). This decrease was primarily due to increase in reinsurance commission of health attachment business in fiscal 2024 resulting in higher deferral under U.S. GAAP, which was accounted as upfront under Indian GAAP in fiscal 2024. Deferred acquisition cost resulted in income of Rs. 9,153.2 million in fiscal 2024 (fiscal 2023: cost of Rs. 531.3 million) under U.S. GAAP as compared to Indian GAAP primarily due to flexibility given by the Regulator to the insurer with respect to expense management by removing cap on commission percentage. The authority in March 2023, issued regulations w.r.t. Expenses of management and commission payment, by prescribing an overall limit for the expenses of management w.e.f April 1, 2023. This resulted in higher acquisition costs booked under Indian GAAP during fiscal 2024 which were deferred under U.S. GAAP. In fiscal 2023, there was unrealized loss on equity investments amounting to Rs. 413.6 million whereas in fiscal 2024 there is unrealized gain on equity investments amounting to Rs. 7,258.0 millions. F-166 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) While, these gains/losses are accounted through fair value change account in balance sheet under Indian GAAP, under U.S. GAAP these gains/losses are accounted through net income. The following table sets forth, for the periods indicated, the components of income taxes in net income reconciliation of the general insurance subsidiary. Rupees in million Reconciling items Year ended March 31, 2024 2023 2022 Income tax impact of non-tax U.S. GAAP adjustments (3,556.6) 296.4 607.2 Total differences in income taxes (3,556.6) 296.4 607.2 i) Goodwill and intangible assets The following table sets forth, for the periods indicated, a listing of goodwill and intangible assets, by category under U.S. GAAP. Rupees in million Year ended March 31, 2024 2023 Goodwill 639,289.5 35,101.4 Charge off/write off (54.0) (54.0) Goodwill, net (A) 639,235.5 35,047.4 Asset management and advisory intangibles (B) 367.0 367.0 Customer-related intangibles 115,603.4 10,410.0 Accumulated amortization (11,316.6) (10,410.0) Customer-related intangibles net (C) 104,286.8 .. Goodwill and intangible assets, net(A+B+C) 743,889.3 35,414.4 1. See also “Schedule 18 -Fixed assets”. The following table sets forth, for the periods indicated, the changes in goodwill under U.S. GAAP. Rupees in million Year ended March 31, 2024 2023 Opening balance 35,047.4 35,047.4 Goodwill addition during the period 604,188.1 .. Goodwill disposed off during the period .. .. Closing balance 639,235.5 35,047.4 The following table sets forth, for the periods indicated, the changes in intangible assets under U.S. GAAP. Rupees in million Year ended March 31, 2024 2023 Opening balance .. .. Additions 104,875.6 .. Amortization (588.7) .. F-167 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Year ended March 31, 2024 2023 Disposal .. .. Closing balance 104,286.8 .. The following table sets forth, for the periods indicated, the estimated amortization schedule for intangible assets under U.S. GAAP, on a straight line basis, for the next five years. Rupees in million Year ended: Amount Fiscal 2025 7,187.8 Fiscal 2026 7,187.8 Fiscal 2027 7,187.8 Fiscal 2028 7,187.8 Fiscal 2029 7,187.8 Thereafter 68,347.8 Total 104,286.8 The Group has assigned goodwill to reporting units. The Group tests its goodwill for impairment on an annual basis at a reporting unit level. The fair value of the reporting units was assessed as per ASC topic 350-20-35-3 and determined that it was not more likely than not that the fair value of the reporting units was less than their carrying amounts and the quantitative goodwill impairment test was unnecessary at March 31, 2024. j) Employee benefits Gratuity In accordance with Indian regulations, the Group provides for gratuity, a defined benefit retirement plan covering all employees. The plan provides a lump sum payment to vested employees at retirement, death or termination of employment based on the respective employee’s salary and the years of employment with the Group. The gratuity benefit provided by the Group to its employees is equal to or greater than the statutory minimum. In respect of the parent company, the gratuity benefit is provided to the employee through a fund administered by a Board of Trustees and managed by ICICI Prudential Life Insurance Company Limited. The parent company is responsible for settling the gratuity obligation through contributions to the fund. In respect of the remaining entities within the Group, the gratuity benefit is provided through annual contributions to a fund administered and managed by Life Insurance Corporation of India (LIC) and ICICI Prudential Life Insurance Company Limited. Under this scheme, the settlement obligation and contribution to be paid remains with the Group, although LIC and ICICI Prudential Life Insurance Company Limited administer the scheme. The following table sets forth, for the periods indicated, the funded status of the plans and the amounts recognized in the financial statements. F-168 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Year ended March 31, 2024 2023 Change in benefit obligations Projected benefit obligations at the beginning of the year 16,797.8 15,469.9 Add: Addition due to acquisition of control in ICICI Lombard General Insurance Company Limited and I-Process Services (India) Private Limited during the year 1,651.8 .. Add: Adjustment for exchange fluctuation on opening obligations 2.4 12.2 Adjusted opening obligations 18,452.0 15,482.1 Service cost 1,737.7 1,526.2 Interest cost 1,345.5 1,063.6 Acquisition/(Divestitures) (27.9) 34.1 Benefits paid (1,576.7) (1,742.0) Unrecognized prior service cost .. .. Plan amendments .. (72.2) Actuarial (gain)/loss on obligations 1,010.1 506.0 Projected benefit obligations at the end of the year 20,940.7 16,797.8 Change in plan assets Fair value of plan assets at the beginning of the year 15,454.2 15,190.5 Add: Addition due to acquisition of control in ICICI Lombard General Insurance Company Limited and I-Process Services (India) Private Limited during the year 1,608.9 .. Adjusted opening plan assets 17,063.1 15,190.5 Acquisition/(Divestitures) (27.9) 50.8 Actual return on plan assets 1,919.6 551.6 Employer contributions 3,760.8 1,403.2 Benefits paid (1,569.6) (1,742.0) Plan assets at the end of the year 21,146.0 15,454.1 Funded status 205.3 (1,343.7) Amount recognized, net 205.3 (1,343.7) Accumulated benefit obligation at year-end 13,144.8 10,111.0 The following table sets forth, for the periods indicated, the components of the net gratuity cost. Rupees in million Year ended March 31, 2024 2023 2022 Service cost 1,737.8 1,526.2 1,435.9 Interest cost 1,345.5 1,063.6 984.5 Expected return on plan assets (1,129.7) (1,092.2) (1,019.5) Amortization of prior service cost (9.8) 8.3 8.3 Amortized actuarial (gain)/loss 127.5 10.2 16.2 Acquisition and divestiture (gain)/loss .. .. .. Exchange (gain)/loss 2.4 12.2 6.0 Gratuity cost, net 2,073.7 1,528.3 1,431.4 The discount rate for the corresponding tenure of obligations for gratuity is selected by reference to local government security yield with a premium added to reflect the additional risk for AAA rated corporate bonds. The following table sets forth, for the periods indicated, the weighted average assumptions used to determine net periodic benefit cost. Year ended March 31, 2024 2023 2022 Discount rate 7.7% 6.7% 6.6% Rate of increase in the compensation levels 8.0% 7.0% 7.1% Rate of return on plan assets 7.4% 7.5% 7.5% F-169 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, the weighted average assumptions used to determine benefit obligations. Year ended March 31, 2024 2023 Discount rate 7.7% 7.7% Rate of increase in the compensation levels 8.0% 8.0% Plan assets The Group determines its assumptions for the expected rate of return on plan assets based on the expected average long-term rate of return over the next 7 to 8 years. The following table sets forth, for the periods indicated, the Group’s asset allocation for gratuity by asset category based on fair values. Rupees in million At March 31, 2024 2023 Assets category Investment in schemes of ICICI Prudential Life Insurance Company Limited Group balance fund1 20,186.5 14,439.4 Group growth fund2 2.0 1.7 Group debt fund3 235.4 158.0 Group short-term debt fund4 32.6 101.3 Total investment in schemes of ICICI Prudential Life Insurance Company Limited 20,456.5 14,700.4 Investment in scheme of Life Insurance Corporation of India 393.4 425.4 Total assets managed by external entities 20,849.9 15,125.8 Special deposit with central government 290.0 290.0 Government debt securities .. 13.2 Balance with banks and others 6.1 25.1 Total 21,146.0 15,454.1 1. Objective of the scheme is to provide a balance between long-term capital appreciation and current income through investment in equity as well as fixed income instruments in appropriate proportions. At March 31, 2024, investment in government securities, corporate bonds, fixed deposits and equity were 47.58%, 36.05%, 0% and 16.37% respectively. 2. Objective of the scheme is to primarily generate long-term capital appreciation through investment in equity and equity related securities and complement it with current income through investment in fixed income instruments in appropriate proportions depending on market conditions prevalent from time to time. At March 31, 2024, investment in government securities, corporate bonds, fixed deposits and equity were 25.09%, 15.9%, 0% and 57.64% respectively, the rest is in current assets. 3. Objective of the scheme is to provide accumulation of income through investment in various fixed income securities. The Fund seeks to provide capital appreciation while maintaining suitable balance between return, safety and liquidity. At March 31, 2024, investment in government securities, corporate bonds, and fixed deposits were 50.49%, 47.11% and 0% respectively, the rest is in current assets. 4. Objective of the scheme is to provide suitable returns through low risk investments in debt and money market instruments while attempting to protect the capital deployed in the fund. At March 31, 2024, investment in government securities, corporate bonds and fixed deposits were 0%, 46.63% and 0% respectively, the rest is in money market instruments. The following table sets forth, for the periods indicated, the Group’s target asset allocation for gratuity by asset category. Description Target asset allocation at March 31, 2025 Target asset allocation at March 31, 2024 Funds managed by external entities1 98.7% 98% Special deposit with central government 1.3% 2% Debt securities 0% 0% Total 100% 100% 1. Targeted investment during fiscal 2025 of about 43% to 45% in Central Government securities, about 35% in corporate debt securities, about 5% in money market investment and about 15% to 17% in equity investment. F-170 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The plan assets primarily consist of investments made in funds managed by external entities, which are primarily in equity, money market instruments and debt instruments in different proportions depending on the objective of schemes. The value of the plan assets in funds managed by ICICI Prudential Life Insurance Company Limited has been arrived at based on the net asset value per unit of individual schemes. The value of plan assets in the form of investments in scheme of LIC and special deposit with the Central Government are recorded at carrying value. The value of plan assets in the form of debt securities is derived using Level 2 input. ICICI Prudential Life Insurance Company Limited administers the plan fund and it independently determines the target allocation by asset category. The investment strategy is to invest in a prudent manner for providing benefits to the participants of the scheme. The strategies are targeted to produce a return that, when combined with the Group’s contribution to the funds will maintain the fund’s ability to meet all required benefit obligations. ICICI Prudential Life Insurance Company Limited functions within the regulated investment norms. LIC administers the plan fund and it independently determines the target allocation by asset category. The selection of investments and the asset category is determined by LIC. The investment strategy is to invest in a prudent manner to produce a return that will enable the fund to meet the required benefit obligations. LIC, which is owned by Government of India, functions within regulated investment norms. The plan assets are mainly invested in various gratuity schemes of the insurance companies to limit the impact of individual investment. The Group’s entire investment of plan assets is in India and 95.1% of investment is in various gratuity schemes of ICICI Prudential Life Insurance Company Limited. Insurers managing the plan assets of the Group consider operational risk, performance risk, credit risk and equity risk in their investment policy as part of their risk management practices. The following table sets forth, the benefit expected to be paid in each of the next five fiscal years and thereafter. Rupees in million Amount Expected Group contributions to the fund during the year ending March 31, 2025 1,610.0 Expected benefit payments from the fund during year ending March 31, 2025 2,920.1 2026 2,796.1 2027 2,857.8 2028 3,181.7 2029 3,185.8 Thereafter upto 10 years 17,554.9 The expected benefits are based on the same assumptions as used to measure the Group’s benefit obligation at March 31, 2024. Pension The Group provides for pension, a deferred retirement plan covering certain employees. The plan provides for a pension payment on a monthly basis to these employees on their retirement based F-171 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) on the respective employee’s salary and years of employment with the Group. Employees covered by the pension plan are not eligible for benefits under the provident fund plan. The pension plan pertained to the employees of erstwhile Bank of Madura, erstwhile Sangli Bank and erstwhile Bank of Rajasthan which were acquired with effect from March 2001, April 2007 and August 2010 respectively. The Group makes contribution to a trust which administers the funds on its own account or through insurance companies. The following table sets forth, for the periods indicated, the funded status of the plan and the amounts recognized in the financial statements. Rupees in million Year ended March 31, 2024 2023 Change in benefit obligations Projected benefit obligations at beginning of the year 17,376.0 18,543.6 Service cost 108.2 150.8 Interest cost 1,321.4 1,152.3 Liability extinguished on settlement (2,137.9) (2,192.6) Benefits paid (95.5) (99.8) Plan Amendments 306.9 .. Actuarial (gain)/loss on obligations 112.9 (178.3) Projected benefit obligations at the end of the year 16,992.0 17,376.0 Change in plan assets Fair value of plan assets at beginning of the year 18,190.1 19,843.2 Actual return on plan assets 1,800.5 840.0 Assets distributed on settlement (2,375.4) (2,436.2) Employer contributions 401.7 42.9 Benefits paid (95.5) (99.8) Plan assets at the end of the year 17,921.4 18,190.1 Funded status 929.4 814.1 Net amount recognized 949.4 814.1 Accumulated benefit obligation at year end 16,499.4 16,819.6 The following table sets forth, for the periods indicated, the components of the net pension cost. Rupees in million Year ended March 31, 2024 2023 2022 Service cost 108.2 150.8 200.7 Interest cost 1,321.4 1,152.3 1,151.9 Expected return on assets (1,361.0) (1,522.1) (1,621.0) Curtailment and settlement (gain)/loss 237.5 243.6 254.4 Actuarial (gain)/loss 1,174.8 1,402.5 1,779.8 Net pension cost 1,480.9 1,427.1 1,765.8 The discount rate for the corresponding tenure of obligations for pension is selected by reference to government security yield with a premium added to reflect the additional risk corresponding to AAA rated corporate bonds. The following table sets forth, for the periods indicated, the weighted average assumptions used to determine net periodic benefit cost. F-172 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Year ended March 31, 2024 2023 2022 Discount rate 7.8% 6.4% 5.9% Rate of increase in the compensation levels On basic pay 1.5% 1.5% 1.5% On dearness relief 8.0% 7.0% 7.0% Rate of return on plan assets 7.5% 7.5% 7.5% Pension increases (applicable on basic pension) 8.0% 7.0% 7.0% The following table sets forth, for the periods indicated, the weighted average assumptions used to determine benefit obligations. Year ended March 31, 2024 2023 Discount rate 7.7% 7.8% Rate of increase in the compensation levels On basic pay 1.5% 1.5% On dearness relief 8.0% 8.0% Pension increases (applicable on basic pension) 8.0% 7.0% The compensation escalation rate eligible for pension was determined at the time of acquisition and the same escalation rate is consistently considered for computation of benefit obligations and periodic cost. Plan Assets The Group determines its assumptions for the expected rate of return on plan assets based on the expected average long-term rate of return over the next 7 to 8 years. The following table sets forth, for the periods indicated, the Group’s asset allocation and target asset allocation for pension by asset category based on fair values. Rupees in million Asset category Fair value at March 31, 2024 Fair value at March 31, 2023 Target asset allocation at March 31, 2025 Target asset allocation at March 31, 2024 Government debt securities 7,431.0 7,592.9 42% 42% Corporate debt securities 8,349.5 8,786.4 46% 48% Equity securities 1,675.6 1,288.2 9% 7% Balance with banks and others 465.2 522.6 3% 3% Total 17,921.3 18,190.1 100% 100% The valuation of the government and corporate securities is derived using Level 2 inputs. The Group’s entire investment of plan assets are in India and invested in government securities, corporate bonds, equity securities and equity traded funds. Trustees manage the plan assets of the Group by investing in above securities as per the investment pattern and guidelines prescribed under the Indian F-173 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) income tax law. Securities are purchased after considering credit rating, comparative yields and tenure of investment. The following table sets forth, the benefit expected to be paid in each of the next five fiscal years and thereafter. Rupees in million Amount Expected Group contributions to the fund during the year ending March 31, 2025 400.0 Expected benefit payments from the fund during the year ending March 31, 2025 779.5 2026 781.6 2027 921.7 2028 943.1 2029 1,104.0 Thereafter upto 10 years 7,406.2 The expected benefits are based on the same assumption as used to measure the Group’s benefit obligation at March 31, 2024. k) Lease The Group as lessee The Group has entered into lease arrangements primarily for the real estate office premises and for certain equipment used for the business purposes. For these lease arrangements, the Group is required to make fixed lease payments adjusted for escalation clauses for certain lease arrangements, except for certain assets where the variable lease payments are being made by the Group. The variable lease payments are determined primarily based on the usage of the asset by the Group. None of these lease arrangements impose any restriction on the Group in relation to dividend payments or incurring any additional financial obligations. The group has elected not to separate the lease and non-lease components of these arrangements. Operating lease Operating lease liabilities and right of use assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that represents the incremental borrowing rate for financing instruments of a similar term and are included in accounts payable and other liabilities. The operating lease right of use asset, included in premises and equipment, also includes any lease prepayments made, plus initial direct costs incurred, less any lease incentives received. Rental expense associated with operating leases is recognized on a straight-line basis over the lease term, and is included in the consolidated statements of income. The following table sets forth, the information related to the Group’s operating leases. Rupees in million Year ended March 31, 2024 Year ended March 31, 2023 Right-of-use assets at year end 61,977.9 52,069.1 Lease liability at year end 67,493.5 57,128.2 Cash paid for amounts included in the measurement of lease liabilities – operating cashflows from operating lease 12,662.1 11,139.4 F-174 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Year ended March 31, 2024 Year ended March 31, 2023 Non-cash investing and financing activities – additions to right-of-use asset obtained from new operating lease liabilities 21,456.4 17,268.7 Weighted average remaining lease term (in years) 8.1 years 8.0 years Weighted average discounting rate (in %) 6.6% 6.1% The following table sets forth, the future payments under operating leases as of March 31, 2024. Rupees in million Year ended March 31, 2024 Fiscal 2025 12,996.0 Fiscal 2026 12,097.8 Fiscal 2027 11,389.4 Fiscal 2028 10,633.8 Fiscal 2029 8,886.9 After Fiscal 2029 33,980.1 Total Lease payments 89,984.0 Less: Imputed interest 22,490.5 Lease liabilities at March 31, 2024 67,493.5 The Group does not have any other significant future commitments at the end of fiscal 2024. Finance lease Finance lease liabilities and right of use assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that represents the implicit rate in the lease. Rental expense associated with finance leases is recognized on a straight-line basis over the lease term, and is included in the consolidated statements of income. The following tables provide information related to the Bank’s finance leases: Rupees in million Year ended March 31, 2024 Year ended March 31, 2023 Right-of-use assets at year end 589.0 832.6 Lease liability at year end 684.7 929.3 Cash paid for amounts included in the measurement of lease liabilities a. finance cashflows from finance lease b. operating cashflows from finance lease 255.8 69.9 220.0 93.5 Non-cash investing and financing activities – additions to right-of-use asset obtained from new finance lease liabilities 0.5 11.7 Weighted average remaining lease term (in years) 4.0 years 4.1 years Weighted average discounting rate (in %) 9.6% 10.2% The following table sets forth, the future payments under finance leases as of March 31, 2024. F-175 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Year ended March 31, 2024 Fiscal 2025 306.1 Fiscal 2026 213.1 Fiscal 2027 180.0 Fiscal 2028 65.9 Fiscal 2029 15.0 After Fiscal 2029 0.2 Total Lease payments 780.2 Less: Imputed interest 95.4 Lease liabilities at March 31, 2024 684.7 Lease cost The Group’s lease cost recognized in profit and loss account during the fiscal year is as below. Rupees in million Year ended March 31, 2024 Year ended March 31, 2023 Finance lease cost Amortisation of right-to-use assets 242.5 240.1 Interest on lease liabilities 80.5 106.5 Operating lease cost 13,348.6 11,578.6 Short-term lease cost .. 3.9 Variable lease cost 4,550.7 4,658.9 Less: Sublease income (0.3) (12.8) Total lease cost 18,222.0 16,575.2 I) Income taxes Components of deferred tax balances The following table sets forth, for the periods indicated, components of the deferred tax balances. Rupees in million At March 31, 2024 2023 Deferred tax assets Allowance for credit losses 99,075.6 96,231.3 Debt and equity securities 29.4 3,138.4 Business and capital loss carry forwards 8,733.8 8,569.7 Financial instruments 383.7 2,843.0 Investments in affiliates 23,144.1 30,153.5 Lease liability 17,026.0 14,334.5 Others 10,500.9 7,036.4 Total deferred tax assets 158,893.5 162,306.8 Valuation allowance (2,171.8) (3,553.3) Total deferred tax assets (net of valuation allowance) 156,721.7 158,753.5 Deferred tax liabilities Debt and equity securities (11,040.8) .. F-176 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million At March 31, 2024 2023 Property, plant and equipment (5,706.8) (5,044.8) Investments in branches, subsidiaries and affiliates (6,629.2) (12,764.9) Amortization of fees and costs (11,052.5) (9,271.8) Intangible assets (26,017.3) .. Non-banking assets (7,980.0) (6,194.3) Right to use assets (15,637.6) (13,061.3) Reserve for unexpired risk (1,512.8) .. Others (4,254.9) (3,902.7) Total deferred tax liabilities (89,831.9) (50,239.8) Net deferred tax assets 66,889.8 108,513.7 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent on the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers carryback availability, the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes that it is more likely than not that the Group will realize the benefits of its deferred tax assets, net of the existing valuation allowances, at March 31, 2024 and 2023. The amount of deferred tax assets considered realizable, however could be reduced in the near term if estimates of future taxable income are reduced. The Indian statutory income tax rate, including surcharge and cess was 25.17% for the year ended March 31, 2024, 2023 and 2022. Reconciliation of income tax expense The following table sets forth, for the periods indicated, a reconciliation of expected income tax expense at the Indian statutory income tax rate, the income tax rate in our country of domicile, to reported income tax expense/(benefit). Rupees in million Year ended March 31, 2024 2023 2022 Income/(loss) before income tax expense from continuing operations In India 734,600.7 359,939.4 622,481.7 Outside India 29,779.1 6,381.2 5,922.9 Total 764,379.8 366,320.6 628,404.6 Statutory tax rate 25.17% 25.17% 25.17% Effective tax rate 17.75% 28.96% 16.86% Income tax expense/(benefit) at the statutory tax rate 192,379.1 92,195.6 158,156.9 Increases/(reductions) in taxes on account of: Special tax deductions available to financial institutions/insurance companies through appropriation of profits to a Special Reserve (7,793.9) (6,580.8) (3,669.5) Exempt interest and dividend income (794.0) (832.9) (964.7) F-177 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) Rupees in million Year ended March 31, 2024 2023 2022 Income charged at rates other than statutory tax rate1 (2,781.2) 15,997.8 (37,780.6) Expenses disallowed for income tax purposes 3,455.6 2,861.6 2,021.3 Tax on investment and undistributed earnings in subsidiaries, branches and affiliates2 10,739.1 2,139.4 (9,340.1) Change in valuation allowance (1,381.5) 2,675.1 (71.3) Tax adjustments in respect of prior year tax assessments (61.2) 276.2 (230.6) Others3 (58,260.3) (2,629.4) (2,144.3) Income tax expense/(benefit) reported 135,501.7 106,102.6 105,977.2 Current tax expense In India 132,989.2 111,869.8 73,064.0 Outside India 3,246.0 1,694.8 600.3 Total 136,235.2 113,564.6 73,664.3 Deferred tax (benefit)/expense In India4 (818.8) (7,517.5) 31,858.2 Outside India 85.3 55.5 454.7 Total (733.5) (7,462.0) 32,312.9 1. During fiscal 2022, includes tax effect of Rs. (35,006.1) million on gains due to remeasurement of equity interest in ICICI Lombard General Insurance Company Limited. 2. During fiscal 2022, the Bank had recognized a deferred tax asset amounting to Rs. 8,247.7 million on the investment in its equity affiliate (ICICI Lombard General Insurance Limited). During fiscal 2024, the Bank derecognized a deferred tax asset amounting to Rs. 7,857.3 million on the investment in its equity affiliate ICICI Lombard General Insurance Limited. 3. During fiscal 2024, includes tax effect of Rs. (35,278.9) million and Rs. (15,213.6) million on gains due to acquisition of control in ICICI Lombard General Insurance Company Limited and reversal of deferred tax liability created on deconsolidation of ICICI Lombard General Insurance Company Limited in fiscal 2022, respectively. 4. During fiscal 2023, includes income tax expense of Rs 2,683.1 million for an increase of a valuation allowance because of a change in judgment about the realizability of a beginning-of-the-year deferred tax assets for capital loss carryforwards of the Bank in future years. The following table sets forth the details of the amount and expiration dates of operating loss carry forwards at March 31, 2024. Rupees in million Expiry period Bank Subsidiaries Overseas branches Capital loss carry forwards April 1, 2024 to March 31, 2029 1,203.2 1,317.5 .. April 1, 2029 to March 31, 2034 27,353.3 88. 0 .. Total capital loss carry forwards 28,556.5 1,405.5 .. Business loss carry forwards April 1, 2024 to March 31, 2029 .. 909.8 April 1, 2029 to March 31, 2034 .. 534.2 April 1, 2034 to March 31, 2039 .. 28.4 5,885.3 Indefinite period .. 1,995.8 7,515.0 Total business loss carry forwards .. 3,468.2 13,400.3 Accounting for uncertainty in income taxes The Group has a policy to include interest and penalties on income taxes, if any, within interest expense or income and income tax expense respectively. However, no interest expense has been recognized in view of the adequate income taxes paid by the Group. No penalties have been accrued as F-178 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) of March 31, 2024 and 2023, as the Group believes that the tax positions taken have met the minimum statutory requirements to avoid payment of penalties. The Group has recognized income with respect to interest accrued or received on tax refunds due to the Group against favourable orders received from tax authorities amounting to Rs. 2,697.4 million, Rs. 1,149.5 million and Rs. 2,434.3 million during the year ended March 31, 2024, 2023 and 2022 respectively. Further, the Group does not recognize the interest income accrued on advance income taxes paid against various income tax matters until the related matter is resolved with the taxing authority. Unrecognized interest on such advance income taxes paid is Rs. 12,244.6 million and Rs. 13,866.7 million at March 31, 2024 and 2023 respectively. The following table sets forth, for the periods indicated, a reconciliation of the beginning and ending amount of unrecognized tax benefits. Rupees in million Year ended March 31, 2024 2023 2022 Beginning balance 40,142.8 36,271.5 35,856.2 Increases related to prior year tax positions – 41.8 .. Increases related to current year tax positions 7,314.9 5,462.6 4,116.5 Decreases related to prior year tax positions (6.7) (1,633.1) (3,701.2) Ending balance 47,451.0 40,142.8 36,271.5 The Group’s total unrecognized tax benefits, if recognized, would reduce income tax expense, as applicable, and thereby would affect the Group’s effective tax rate. The Group’s major tax jurisdiction is India and the assessments are not yet completed for fiscal 2023. However, appeals filed by the Group are pending with various local tax authorities in India from fiscal 1990 onwards. Significant changes in the amount of unrecognized tax benefits within the next 12 months cannot be reasonably estimated as the changes would depend upon the progress of tax examinations with various tax authorities. m) Earnings per share Basic earnings per share is net income per weighted average equity shares. Diluted earnings per share reflects the effect that existing options would have on the basic earnings per share if they were to be exercised, by increasing the number of equity shares. The basic and diluted earnings per share under U.S. GAAP differs to the extent that income under U.S. GAAP differs. F-179 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) The following table sets forth, for the periods indicated, the computation of earnings per share as per U.S. GAAP. Rupees in million, except per share data Year ended March 31, 2024 2023 2022 Basic Diluted Basic Diluted Basic Diluted Earnings Net income attributable to ICICI Bank stockholders (before dilutive impact) 613,763.5 613,763.5 249,993.7 249,993.7 511,792.6 511,792.6 Contingent issuances of subsidiaries/equity affiliates .. (1,170.5) .. (441.8) .. (224.1) 613,763.5 612,593.0 249,993.7 249,551.9 511,792.6 511,568.5 Common stock Weighted-average common stock outstanding 7,003.9 7,003.9 6,966.3 6,966.3 6,933.7 6,933.7 Dilutive effect of employee stock options .. 128.2 .. 130.0 .. 131.2 Total 7,003.9 7,132.2 6,966.3 7,096.3 6,933.7 7,064.9 Earnings per share (Rs.) 87.63 85.89 35.89 35.17 73.81 72.41 n) Comprehensive income The following table sets forth, for the periods indicated, details of comprehensive income. Rupees in million Year ended March 31, 2024 2023 2022 Net income/(loss) (net of tax) excluding non-controlling interest 613,763.5 249,993.7 511,792.6 Other Comprehensive Income: Net unrealized gain/(loss) on securities, net of realization & others (net of tax)1 29,597.6 (34,719.5) (33,087.7) Translation adjustments (net of tax)2 3,198.1 2,476.1 (838.1) Employee accounting for deferred benefit pensions and other post retirement benefits (net of tax)3 819.3 (61.3) 1,161.2 Comprehensive income attributable to ICICI Bank stockholders 647,378.5 217,689.0 479,028.0 Comprehensive income attributable to non-controlling interests 15,382.1 10,301.6 14,041.9 Total comprehensive income 662,760.6 227,990.6 493,069.9 1. Net of tax effect of Rs. 9,914.7 million, Rs. (10,211.3) million and Rs. (8,963.5) million for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 respectively. 2. Net of tax effect of Rs. 1,016.9 million, Rs. 630.5 million and Rs. (466.6) million for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 respectively. 3. Net of tax effect of Rs. 274.9 million, Rs. (14.4) million and Rs. 390.6 million for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 respectively. o) Guarantees As a part of its project financing and commercial banking activities, the Group has issued guarantees to enhance the credit standing of its customers. These generally represent irrevocable assurances that the Group will make payments in the event that the customer fails to fulfill its financial or performance obligations. Financial guarantees are obligations to pay a third-party beneficiary where F-180 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) a customer fails to make payment towards a specified financial obligation. Performance guarantees are obligations to pay a third-party beneficiary where a customer fails to perform a non-financial contractual obligation. The guarantees are generally for a period not exceeding 10 years. The credit risks associated with these products, as well as the operating risks, are similar to those relating to other types of financial instruments. The current carrying amount of the liability for the Group’s obligations under the guarantees at March 31, 2024 amounted to Rs. 8,613.4 million (March 31, 2023: Rs. 7,713.8 million). The following table sets forth, the details of guarantees outstanding at March 31, 2024. Rupees in million Nature of guarantee Maximum potential amount of future payments under guarantee Less than 1 year 1 - 3 years 3 - 5 years Over 5 years Total Financial guarantees 669,399.0 165,746.7 47,963.1 8,186.6 891,295.4 Performance guarantees 369,581.3 432,768.7 83,480.7 20,302.6 906,133.3 Total guarantees 1,038,980.3 598,515.4 131,443.8 28,489.2 1,797,428.7 The following table sets forth, the details of guarantees outstanding at March 31, 2023. Rupees in million Nature of guarantee Maximum potential amount of future payments under guarantee Less than 1 year 1 - 3 years 3 - 5 years Over 5 years Total Financial guarantees 460,062.6 194,977.2 29,149.4 11,423.1 695,612.3 Performance guarantees 343,517.9 352,135.4 69,022.1 19,491.4 784,166.8 Total guarantees 803,580.5 547,112.6 98,171.5 30,914.5 1,479,779.1 The Group has collateral available to reimburse potential losses on its guarantees. At March 31, 2024, margins in the form of cash and fixed deposit available to the Group to reimburse losses realized under guarantees amounted to Rs. 310,416.2 million (March 31, 2023: Rs. 243,659.2 million). Other property or security may also be available to the Group to cover losses under these guarantees. Performance risk For each corporate borrower, a credit rating is assigned at the time the exposure is being evaluated for approval and the rating is reviewed periodically thereafter. At the time of assigning a credit rating, the possibility of non-performance or non-payment is evaluated. Additionally, an assessment of the borrower's capacity to repay obligations in the event of invocation is also evaluated. Thus, a comprehensive risk assessment is undertaken at the time of sanctioning such exposures and reviewed periodically thereafter. 23. Regulatory matters Statutory liquidity requirement In accordance with the Banking Regulation Act, 1949, the Bank is required to maintain a specified percentage of its net demand and time liabilities by way of liquid unencumbered assets like cash, gold and approved securities. The amount of statutory liquidity requirement at March 31, 2024 F-181 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) was Rs. 2,471,830.1 million (March 31, 2023: Rs. 2,067,305.8 million), and the Bank complied with the requirement throughout the year. Capital Adequacy The Bank is subject to Basel III capital adequacy guidelines stipulated by the Reserve Bank of India with effect from April 1, 2013. As per the guidelines, the Tier-1 capital is made up of Common Equity Tier-1 and additional Tier-1. At March 31, 2024, the Bank was required to maintain minimum Common Equity Tier-1 capital ratio of 8.20%, minimum Tier-1 capital ratio of 9.70% and minimum total capital ratio of 11.70%. The minimum total capital requirement includes capital conservation buffer of 2.50% and additional Common Equity Tier-1 capital surcharge of 0.20% on account of the Bank being designated as a Domestic Systemically Important Bank. Under Pillar 1 of the Reserve Bank of India guidelines on Basel III, the Bank follows the standardized approach for measurement of credit risk, standardized duration method for measurement of market risk and basic indicator approach for measurement of operational risk. The total capital adequacy ratio of the Bank calculated in accordance with the Reserve Bank of India guidelines on Basel III at March 31, 2024 was 16.33% (March 31, 2023: 18.34%). These are based on unconsolidated financial statements as per Indian GAAP. F-182 Table of Contents ICICI Bank Limited and subsidiaries Schedules forming part of the Consolidated Financial Statements (Continued) 24. Impact of acquisition of ICICI General on previous period numbers From February 29, 2024, ICICI General was classified as a subsidiary and has been consolidated on a line-by-line basis in Consolidated Financial Statements under U.S. GAAP. Accordingly, the numbers for previous periods may not be comparable. For and on behalf of Board of Directors /s/ Sandeep Bakhshi Managing Director & CEO /s/ Sandeep Batra Executive Director /s/ Anindya Banerjee Group Chief Financial Officer /s/ Prachiti Lalingkar Company Secretary /s/ Laxminarayan Achar Chief Accountant Mumbai July 31, 2024 F-183