Page 126 - Demo

− The Bank also undertakes independent surveys and analysis to identify negative areas/No- go areas based on historical events. These surveys enable the Bank to discourage increasing business from these areas as identified above.
11. Table DF-7: SecuriTiSaTion exPoSureS: discLosure for standardised aPProach
11.1. Qualitative disclosure
There were no securitization exposures in the banking book and trading book as at March 31, 2020.
12. Table DF- 8: MarkeT riSk anD LiQuidity risk
12.1. Qualitative disclosures
the Bank has a well-defined Investment and Market Risk Management Policy. This policy covers all important areas of market risk identification, monitoring and measurement. The other policy which primarily deals with Liquidity Management is the Asset Liability Management (ALM) Policy. The policies set various prudential exposure limits and risk limits for ensuring that the operations are in line with the Bank’s expectations of return through proper Market Risk Management and Asset Liability Management.
the Bank defines Market Risk as the risk of loss in on- balance sheet and off-balance sheet positions arising from movements in market process, in particular, changes in interest rates, exchange rates and equity and commodity prices.
During the year, the Bank shifted G Sec of `6,500 Crores face value, from HtM to AFS during the financial year 2019-20. This shifting was done at the beginning of the year with the approval of the Board of Directors.
A comparative picture of the funding mix is given below:
1 Legacy 34,700
2 Refinance 372,000
3 Interbank 0
4 Deposits 561,300
5 CDs (< 3 Months) 77,500
6 CDs (> 3 Months) 22,500
7 NCDs 10,000
8 Securitization 9,100
9 IBPC 33,500
outstanding 1,120,600
26 Rounded to nearest hundred
12.1.1. Liquidity risk:
the average tenor of a microfinance loan is 18 months. the Bank has grown its portfolio of Affordable Housing and MSE portfolio, which are of longer tenor. Personal loans are for short dated tenors and the average tenor for loans to Financial Institutions did not exceed 24 months.
The ALM position for the Bank was well managed and regulatory thresholds complied with. The Bank has various avenues to leverage upon in mitigating any future liquidity shortfalls. Some of the measures include securitization, IBPC transactions, term loan facilities from Bank and utilizing lines of refinance from NABARD, NHB and SIDBI.
The share of legacy borrowings had reduced sharply to 0.75% as at March 31, 2020 as compared to 3.10% as at March 31, 2019. to effectively manage its AlM and also to diversify its funding sources, the Bank has also availed of refinance from SIDBI and nABARD which constituted 23.65% of the total funding mix. Other than it being cost effective and since there is no obligation to maintain Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on these borrowings, these provide the necessary cushion for ALM.
the reliance on Certificate of Deposits (CDs) had also reduced as at March 31, 2020 constituting 6.51% of the funding mix as compared to 8.92% in the corresponding period in the previous year. The Bank has fully repaid its Non-Convertible Debentures (NCDs).
Deposits (Retail and Institutional) had registered a robust increase in its share of funding mix. The share of deposits has increased from 50% in March 2019 to 64% as at March 2020. As part of its Contingency Funding Plan and also to diversify its funding sources, the Bank has been sanctioned a committed line of credit from a large private sector bank to the tune of `5,000 Lakhs. The accent on retail deposits will continue in the ensuing years with an objective to optimize cost of deposits.
` in Lakhs
sl. no
Particulars
March 201926
June 2019
september 2019
december 201920
March 2020
26,658
353,950
0
688,268
22,500
2,500
10,000
5,378
33,500
1,142,754
15,657
301,360
20,000
816,458
23,500
17,500
10,000
1,638
0
1,206,113
15,000
289,900
5,000
841,700
30,000
0
0
0
0
1,181,600
10,000
314,441
70,886
847,454
60,000
26,500
-
1,329,281
-
-
124 | AnnuAl RepoRt 2019-20