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Concentrations of credit risk | 12 Months Ended
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Mar. 31, 2022
Concentrations of credit risk | 10. Concentrations of credit risk Concentrations of credit risk exist when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is material in relation to the Bank’s total credit exposure. The Bank manages its credit risk collectively for its loan portfolio and credit substitute securities as these instruments are invested in as part of an overall lending program for corporate customers; accordingly, information on concentrations of credit risk has been provided for these exposures together. In the case of wholesale loans, while the Bank generally lends on a cash-flow basis, it also requires collateral which consists of liens on inventory, receivables and other current assets, and in some cases, charges on fixed assets, such as property, movable assets (such as vehicles) and financial assets (such as marketable securities) from a large number of the Bank’s borrowers. The Bank’s retail loans are generally secured by a charge on the asset financed (vehicle loans, property loans and loans against gold and securities). Retail business banking loans are secured with current assets as well as immovable property and fixed assets in some cases. However, collateral securing each individual loan may not be adequate in relation to the value of the loan. If the customer fails to pay, the Bank would, as applicable, liquidate collateral and/or set off accounts. The maximum estimated loss that would be incurred under severe, hypothetical circumstances, for which the Bank believes the possibility is extremely remote, such as where the value of the Bank’s interests and any associated collateral declines to zero, without any consideration of recovery or offset is determined as the carrying values of the instruments as given in the below table. The Bank’s portfolio of loans, credit substitute securities and non-funded exposure (including derivatives) is broadly diversified along industry and product lines, and as of March 31, 2021 and March 31, 2022 the exposures are as set forth below.
|  | As of March 31, 2021 |
Category |  | Gross loans |  |  | Fair value of credit substitutes |  |  | Non-funded exposure |  |  | Total |  |  | % |
|  | (In millions, except percentages) |
Consumer Loans |  | Rs. | 3,241,292.9 |  |  | Rs. | — |  |  | Rs. | 2,578.6 |  |  | Rs. | 3,243,871.5 |  |  |  | 23.5 |
Power |  |  | 630,189.4 |  |  |  | 76,449.1 |  |  |  | 30,299.7 |  |  |  | 736,938.2 |  |  |  | 5.3 |
Retail Trade |  |  | 540,350.3 |  |  |  | — |  |  |  | 21,747.7 |  |  |  | 562,098.0 |  |  |  | 4.1 |
NBFC |  |  | 415,787.6 |  |  |  | 83,596.5 |  |  |  | 2,789.6 |  |  |  | 502,173.7 |  |  |  | 3.6 |
Financial Institutions |  |  | 443,257.3 |  |  |  | 21,147.1 |  |  |  | 3.7 |  |  |  | 464,408.1 |  |  |  | 3.4 |
Consumer Services |  |  | 424,765.4 |  |  |  | 2,048.0 |  |  |  | 17,743.6 |  |  |  | 444,557.0 |  |  |  | 3.2 |
Automobile & Auto Ancillary |  |  | 381,562.7 |  |  |  | 18,556.9 |  |  |  | 35,757.0 |  |  |  | 435,876.6 |  |  |  | 3.2 |
Coal & Petroleum Products |  |  | 172,989.4 |  |  |  | 190,457.8 |  |  |  | 59,803.5 |  |  |  | 423,250.7 |  |  |  | 3.1 |
Road Transportation |  |  | 368,388.5 |  |  |  | — |  |  |  | 8,572.3 |  |  |  | 376,960.8 |  |  |  | 2.7 |
Infrastructure Development |  |  | 167,416.1 |  |  |  | 15,879.7 |  |  |  | 190,154.9 |  |  |  | 373,450.7 |  |  |  | 2.7 |
Food and Beverage |  |  | 342,573.5 |  |  |  | 240.4 |  |  |  | 29,321.5 |  |  |  | 372,135.4 |  |  |  | 2.7 |
Real Estate & Property Services |  |  | 298,277.1 |  |  |  | 4,872.2 |  |  |  | 35,737.9 |  |  |  | 338,887.2 |  |  |  | 2.5 |
Agri Production — Food |  |  | 337,904.8 |  |  |  | — |  |  |  | 998.1 |  |  |  | 338,902.9 |  |  |  | 2.5 |
Wholesale Trade — Non Industrial |  |  | 301,508.2 |  |  |  | 2,065.6 |  |  |  | 17,816.8 |  |  |  | 321,390.6 |  |  |  | 2.3 |
Iron and Steel |  |  | 248,140.2 |  |  |  | 13,116.6 |  |  |  | 53,192.5 |  |  |  | 314,449.3 |  |  |  | 2.3 |
Wholesale Trade — Industrial |  |  | 258,854.1 |  |  |  | — |  |  |  | 51,891.6 |  |  |  | 310,745.7 |  |  |  | 2.3 |
Textiles & Garments |  |  | 257,577.9 |  |  |  | 6,882.2 |  |  |  | 27,498.8 |  |  |  | 291,958.9 |  |  |  | 2.1 |
Engineering |  |  | 189,952.7 |  |  |  | 6,448.4 |  |  |  | 92,218.6 |  |  |  | 288,619.7 |  |  |  | 2.1 |
Others (none greater than 2%) |  |  | 3,022,929.8 |  |  |  | 105,516.4 |  |  |  | 538,019.5 |  |  |  | 3,666,465.7 |  |  |  | 26.4 |
Total |  | Rs. | 12,043,717.9 |  |  | Rs. | 547,276.9 |  |  | Rs. | 1,216,145.9 |  |  | Rs. | 13,807,140.7 |  |  |  | 100.0 |
|  | As of March 31, 2022 |
Category |  | Gross loans |  |  | Fair value of credit substitutes |  |  | Non-funded exposure |  |  | Total |  |  | Total |  |  | % |
|  |  |  |  | (In millions, except percentages) |
Consumer Loans |  | Rs. | 3,746,781.7 |  |  | Rs. | — |  |  | Rs. | 3,035.7 |  |  | Rs. | 3,749,817.4 |  |  | US$ | 49,424.2 |  |  |  | 22.7 |
Power |  |  | 671,859.4 |  |  |  | 70,346.0 |  |  |  | 52,366.6 |  |  |  | 794,572.0 |  |  |  | 10,472.8 |  |  |  | 4.8 |
Financial Institutions |  |  | 618,494.1 |  |  |  | 51,844.1 |  |  |  | 13.1 |  |  |  | 670,351.3 |  |  |  | 8,835.5 |  |  |  | 4.1 |
NBFC |  |  | 509,445.4 |  |  |  | 106,764.5 |  |  |  | 5,818.5 |  |  |  | 622,028.4 |  |  |  | 8,198.6 |  |  |  | 3.8 |
Retail Trade |  |  | 589,947.3 |  |  |  | — |  |  |  | 28,857.8 |  |  |  | 618,805.1 |  |  |  | 8,156.1 |  |  |  | 3.7 |
Coal & Petroleum Products |  |  | 233,583.7 |  |  |  | 174,424.6 |  |  |  | 149,716.9 |  |  |  | 557,725.2 |  |  |  | 7,351.1 |  |  |  | 3.4 |
Infrastructure Development |  |  | 272,428.0 |  |  |  | 18,032.7 |  |  |  | 220,442.5 |  |  |  | 510,903.2 |  |  |  | 6,733.9 |  |  |  | 3.1 |
Automobile & Auto Ancillary |  |  | 443,538.7 |  |  |  | 19,768.7 |  |  |  | 36,999.9 |  |  |  | 500,307.3 |  |  |  | 6,594.3 |  |  |  | 3.0 |
Consumer Services |  |  | 465,465.8 |  |  |  | — |  |  |  | 28,102.4 |  |  |  | 493,568.2 |  |  |  | 6,505.4 |  |  |  | 3.0 |
Food and Beverage |  |  | 433,042.2 |  |  |  | — |  |  |  | 39,007.2 |  |  |  | 472,049.4 |  |  |  | 6,221.8 |  |  |  | 2.9 |
Wholesale Trade—Non Industrial |  |  | 417,954.8 |  |  |  | — |  |  |  | 26,147.5 |  |  |  | 444,102.3 |  |  |  | 5,853.5 |  |  |  | 2.7 |
Real Estate & Property Services |  |  | 383,765.5 |  |  |  | 4,792.6 |  |  |  | 40,694.4 |  |  |  | 429,252.5 |  |  |  | 5,657.7 |  |  |  | 2.6 |
Wholesale Trade—Industrial |  |  | 347,202.9 |  |  |  | — |  |  |  | 73,867.5 |  |  |  | 421,070.4 |  |  |  | 5,549.9 |  |  |  | 2.5 |
Road Transportation |  |  | 406,376.4 |  |  |  | — |  |  |  | 10,269.5 |  |  |  | 416,645.9 |  |  |  | 5,491.6 |  |  |  | 2.5 |
Iron and Steel |  |  | 321,587.7 |  |  |  | 12,486.0 |  |  |  | 80,515.7 |  |  |  | 414,589.4 |  |  |  | 5,464.5 |  |  |  | 2.5 |
Telecom |  |  | 331,131.1 |  |  |  | 2,989.4 |  |  |  | 43,335.9 |  |  |  | 377,456.4 |  |  |  | 4,975.0 |  |  |  | 2.3 |
Textiles & Garments |  |  | 324,419.6 |  |  |  | 6,135.7 |  |  |  | 43,748.6 |  |  |  | 374,303.9 |  |  |  | 4,933.5 |  |  |  | 2.3 |
Engineering |  |  | 253,105.1 |  |  |  | 6,666.6 |  |  |  | 105,164.7 |  |  |  | 364,936.4 |  |  |  | 4,810.0 |  |  |  | 2.2 |
Agri Production—Food |  |  | 350,859.6 |  |  |  | — |  |  |  | 963.1 |  |  |  | 351,822.7 |  |  |  | 4,637.2 |  |  |  | 2.1 |
Others (none greater than 2%) |  |  | 3,288,555.0 |  |  |  | 108,769.3 |  |  |  | 546,407.8 |  |  |  | 3,943,732.1 |  |  |  | 51,980.1 |  |  |  | 23.8 |
Total |  | Rs. | 14,409,544.0 |  |  | Rs. | 583,020.2 |  |  | Rs. | 1,535,475.3 |  |  | Rs. | 16,528,039.5 |  |  | US$ | 217,846.7 |  |  |  | 100.0 |
The Bank’s ten largest exposures as of March 31, 2021 and March 31, 2022, based on the higher of the outstanding balance or the limit on loans, investments (including credit substitutes) and non-funded exposures (including derivatives), are as follows:
|  | As of March 31, 2021 |
|  | Funded Exposure |  |  | Non-Funded Exposure |  |  | Total Exposure |
|  | (In millions) |
Borrower 1 |  | Rs. | 302,918.5 |  |  | Rs. | 500.0 |  |  | Rs. | 303,418.5 |
Borrower 2 |  |  | 192,080.2 |  |  |  | 61,446.2 |  |  |  | 253,526.4 |
Borrower 3 |  |  | 195,480.0 |  |  |  | — |  |  |  | 195,480.0 |
Borrower 4 |  |  | 154,997.8 |  |  |  | 548.1 |  |  |  | 155,545.9 |
Borrower 5 |  |  | 150,000.0 |  |  |  | 489.2 |  |  |  | 150,489.2 |
Borrower 6 |  |  | 148,107.3 |  |  |  | — |  |  |  | 148,107.3 |
Borrower 7 |  |  | 3,830.9 |  |  |  | 100,477.6 |  |  |  | 104,308.5 |
Borrower 8 |  |  | 98,919.7 |  |  |  | 2,000.0 |  |  |  | 100,919.7 |
Borrower 9 |  |  | 75,437.8 |  |  |  | 22,268.4 |  |  |  | 97,706.2 |
Borrower 10 |  |  | 90,108.0 |  |  |  | — |  |  |  | 90,108.0 |
|  | As of March 31, 2022 |
|  | Funded Exposure |  |  | Non-Funded Exposure |  |  | Total Exposure |  |  | Total Exposure |
|  |  |  |  | (In millions) |  |  |  |
Borrower 1 |  | Rs. | 265,661.9 |  |  | Rs. | 500.0 |  |  | Rs. | 266,161.9 |  |  | US$ | 3,508.1 |
Borrower 2 |  |  | 245,435.0 |  |  |  | — |  |  |  | 245,435.0 |  |  |  | 3,234.9 |
Borrower 3 |  |  | 119,950.5 |  |  |  | 116,547.4 |  |  |  | 236,497.9 |  |  |  | 3,117.1 |
Borrower 4 |  |  | 150,283.8 |  |  |  | — |  |  |  | 150,283.8 |  |  |  | 1,980.8 |
Borrower 5 |  |  | 126,639.8 |  |  |  | 19,268.4 |  |  |  | 145,908.2 |  |  |  | 1,923.1 |
Borrower 6 |  |  | 142,600.0 |  |  |  | — |  |  |  | 142,600.0 |  |  |  | 1,879.5 |
Borrower 7 |  |  | 140,000.0 |  |  |  | 232.0 |  |  |  | 140,232.0 |  |  |  | 1,848.3 |
Borrower 8 |  |  | 137,700.0 |  |  |  | 199.2 |  |  |  | 137,899.2 |  |  |  | 1,817.6 |
Borrower 9 |  |  | 133,670.0 |  |  |  | — |  |  |  | 133,670.0 |  |  |  | 1,761.8 |
Borrower 10 |  |  | 108,591.5 |  |  |  | 17,855.7 |  |  |  | 126,447.2 |  |  |  | 1,666.6 |

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI https://asc.fasb.org/topic&trid=2134479 + Details
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