ICICI Bank 2015 Annual Report Download - page 131

129Annual Report 2014-2015
forming part of the Accounts (Contd.)
Schedules
Financial Statements of ICICI Bank Limited
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.
4. 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 for, 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
Bank accounts for any loss arising from securitisation immediately at the time of sale and 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, 2012, the RBI guidelines require the profit/premium arising from
securitisation to be amortised over the life of the transaction based on the method prescribed in the guidelines.
In the case of loans sold to an asset reconstruction company, the excess provision is not reversed but is utilised
to meet the shortfall/loss on account of sale of other financial assets to securitisation company (SC)/reconstruction
company (RC) in accordance with RBI guideline dated July 13, 2005. With effect from February 26, 2014, in accordance
with RBI guidelines, in case of non-performing loans sold to SCs/RCs, the Bank reverses the excess provision in profit
and loss account in the year in which amounts are received.
Further, the RBI circular dated March 11, 2015 has allowed banks to reverse the excess provision/reserve on account
of sale of NPAs to SCs/RCs prior to February 26, 2014 to profit and loss account.
5. Fixed assets and depreciation
Premises and other fixed assets are carried at cost less accumulated depreciation and impairment, if any. 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 a fixed asset on a straight-line basis. The useful lives of the groups of fixed
assets, are given below.
Asset Useful life
Premises owned by the Bank 60 years
Leased assets and improvements to leasehold premises 60 years or lease period whichever is lower
ATMs18 years
Plant and machinery1 (including office equipments) 10 years
Computers 3 years
Furniture and fixtures16 years, 8 months
Motor vehicles15 years
Others (including software and system development expenses)14 years
1. The useful life of assets is based on historical experience of the Bank, which is different from the useful life as prescribed in
Schedule II to the Companies Act, 2013.
a) Assets purchased/sold during the year are depreciated on a pro-rata basis for the actual number of days the asset
has been put to use.
b) Items costing upto ` 5,000/- are depreciated fully over a period of 12 months from the date of purchase.
c) Assets at residences of Bank’s employees are depreciated over the estimated useful life of 5 years.
d) In case of revalued/impaired assets, depreciation is provided over the remaining useful life of the assets with
reference to revised asset values.