7.

11 Bank’s Lending Policy in brief:

I. Objective: The broad objectives of Lending Policy are compliance of regulatory requirements [exposure
norms, sectoral limits, prudential norms, ALM guidelines, statutory restrictions, and other guidelines],
planned lending and healthy growth of loan portfolio and to achieve lending target as per Bank’s
Corporate Plan.

II. Credit Process: Guidelines on credit process include Borrower identification KYC guidelines,
specialized products, specialized branches, role of CPC in credit marketing and control [CM/AGM
headed branches- retail loans processing up to delegated powers, other than retail – up to 10 lakhs and
review/renewal within their delegated powers, beyond 10 lacs – CPC], Due Diligence of borrowers,
guarantors, and suppliers [ Pre-sanction visits by branch officials up to 5 crore exposure, beyond Rs 5
crore by CPC and branch jointly], Credit Risk Rating( CRR) procedure and committees at various levels
[CRR for all loans over Rs. 2 lakh except staff and schematic loans, Branch – upto Rs. 10 lakh, CPC –
upto Rs. 5 crore, and IRM, HO – validation beyond 5 cr ], guidelines regarding New Business Groups,
additional study(TEV) on NBG and flow of NBG proposals[ exposure above 20 crore], Credit Proposal
Trail Maintenance System on ULC portal of Bank [all loans except LAD], guidelines regarding Validity
of Sanction [ 6 months, real estate- 3months, short term loan for 180 days – one month], sectors where
specific prior approval is required, handling of high risk proposals ( below BB as per CRR), SMA
accounts[ above 5 crore], and other general guidelines on credit process have been prescribed.

III. Exposure Ceilings: Exposure guidelines: the definition of exposure [ credit , investment, Non funded,
Derivative products], definition of capital funds, exempted categories from exposure guidelines [ sick
units, food credit, govt guaranteed advances, loan against own term deposits ], exposure ceiling for
individual and group borrowers [ 15% and 40% of capital funds respectively] relaxations in case of
infrastructure, exposure ceiling in case of NBFCs, group definition, internal limit of exposure ceiling
[ single – 10% and group 25% of capital funds as of 31st March previous year], substantial exposure
definition and ceiling [10% of capital funds, ceiling- 7.5 times of banks capital funds], Entry level
exposure [ individual/proprietor – Rs 5 crore, partnership/company/consortium – 5% of net worth for
partnership and 10% for company – beyond this entry level – Very Large Exposure ], Sectoral ceilings,
industry ceilings[ capped as % of gross credit of prev quarter], exposure to JV/WOS [ 20% of capital
funds], Guidelines on Capital Market Exposure [ statutory limit- 30% of paid capital of company or 30%
of its own paid up capital whichever is less, Regulatory limit – aggregate exposure -40% of net worth as
of 31st March of previous year, direct exposure to capital market – 20% of net worth(investment and
loans against shares/bonds/debentures/units of EOF, VCF exposure), advances against shares to
individuals – ceiling 20 lakh for demat, 10 lakh for physical shares/ for IPOs, no loan for purchase of
own shares of bank, stock brokers – 50 lakh funded, 1.00 crore non funded, total exposure to stock
brokers ceiling – 15% of net worth], uniform margin -50% ( minimum cash margin 25% ), not for
arbitrage operations, stock brokers for margin trading at 50% margin, loan for meeting promoter’s
contribution- bank’s investment in shares ( 20% of net worth ceiling), loan to EO Mutual fund for
repurchase/redemption of units upto 20% of net asset of the scheme within capital market exposure
norms, guidelines for bridge loan ( no bridge loan against receivables from Government, only against
subsidy receivable –bridge loan to fertilizer industry under Retention Price Scheme are allowed), bridge
loan against equity flows only to highly meritorious proposals within HO approval route only, No loan
for buy-back facilities (safety net schemes) in respect of public issues, Limits on unsecured exposure
( excluding food credit and schematic advances) - 35% of total credit exposure. Bank will endeavor to
keep unsecured exposure below 25%.

IV. Statutory and other restrictions on Lending: Statutory restrictions [ advance against bank’s own
shares sec 20 BR Act 1949, Advance to bank’s directors and firms in which they hold substantial
interest [ director, managing agent, manager, employee or guarantor, partner ]– sec 20(1) of BR Act
1949 – exemptions : loan against Govt security/LIC policy/FD, loan to AFC, loan as employee of the
 bank, loan of personal nature like car loan,furniture, housing loan, festival loan , call loans to banking
companies, BP/BD, LC/BG, Line of credit to NSCCL/CCIL for settlement, etc with prior approval of
RBI, Restriction on power to give remission on debts due to it by any of its directors, Restrictions on
holding shares in companies[ 30% of paid up shares of any company/ or own company whichever is
less- sec 19(2) of BR Act 1949], Restriction on credit to companies for buy-back of their securities.
Regulatory Restrictions: Loans and advances to relatives of Directors- no loans and advances shall be
granted to relatives of Bank’s directors, directors of SCBs and their relatives etc. without prior approval
of Board or without knowledge of Board., [ upto Rs. 25 lakh by HLCC of head office, shall not include
personal loans and temporary small amount loans upto Rs. 25000/-.], Restrictions on loan and advances
to officers and relatives of senior officers ( Scale IV and above ) of Banks [ not includes personal loans
and small amount loans of temporary nature], loan to be sanctioned by higher authority than the
competent sanctioning authority, Restrictions on loans to Industries producting/consuming ODS-Ozone
Depleting substances as per Montreal Protocol like Foam products, Refrigerators and ACs, Aerosol
products, Fire extinguishers etc, Restrictions on advances against sensitive commodities( food grains,
major oil seeds, raw cotton, sugar/gur, cotton textiles of yarn, fibres ) under selective credit control
[ buffer stock of sugar with sugar mills and unlreased stock of sugar with mills of levy sugar and free
sale sugar, margin on buffer stock is 0% and margin on unreleased stock is 10%], No loan against FD
issued by other banks, No loan to agents on consideration of deposit mobilization, No loan against
Certificate of Deposits ( CDs), No loans against security of Indian Depository Receipts ( IDRs) ,
Restrictions for loans for NBFCs, selective restrictions for infrastructure/ housing projects, issuing Bank
guarantees favouring FIs/ other Banks/ Lending agencies- subject to exposure norms, and funded
exposure of atleast 10% of the exposure guaranteed, guidelines for finance for PSU disinvestments
subject to certain norms, Advance for purchase of gold, – no loan against bullion/primary gold, units of
gold ETF ( may grant loan against minted gold i.e. coins), ceiling for loan against jewellery – Rs. 10
lakh, LTV 75%, closing price of 22 carat gold for last 30 days quoted by IBJA Ltd, No loan of
purchasing KVPs, No loan for activities dealing in banned articles banned under Wild Life
Protection Act. Guidelines for Consortium Arrangement/ Multiple Banking Arrangement, Guidelines
for short term Lines of Credit to PSUs/ Central,State Govt bodies and AAA blue chip companies upto
10% of total exposure for creation of business assets at the time of assessment of regular limits. Load
factor on interest rate will be added. Margin 15 to 20%. Repayment not exceeding 7 years.

V. Important Policy Prescriptions: Fair Practice code for Lenders [Bank is BCSBI code compliant bank ,
shall follow the fair practice code for lenders ], RBI Defaulter List/ CIBIL List ( before
processing/sanction/enhancement reference to RBI defaulter/CIBIL defaulter list to be made and remark
to be made in the proposal note], Reference to lists of Credit information companies(CICs)/ SAL of
ECGC [ one of CICs- M/s Experian, Equifax, Highmark, CIBIL, Proposals for 1 crore and above
reports from min 2 CICs to be obtained, for export proposals, reference to SAL of ECGC to be made in
addition to above lists ], Delegation of Powers: [ lending powers of various functionaries/ committees as
updated, shall be adhered to, sanctioning powers for NPA and BIFR accounts will rest with one higher
authority, condition for “electronic payment” to staff, vendors, clients except of petty cash and receipt of
payment electronically except cheques drawn, guidelines for takeover/ transfer of accounts from other
banks [ standing of minimum 3 years, standard asset, not rephrased earlier, audited balance sheet data,
current ratio : 1.25:1, DSCR- 1.25:1 for completed fin year and 1.50:1 for residual tenor, TOL/TNW 4:1
( for exports 5:1), minimum CRR- BBB , not appearing in any default list of
RBI/ECGC/IBA/CIBIL/CIC, No security dilution from existing security, CR of transferring Bank, cap –
not beyond 25% of existing exposure, ROI- not lower than 1% below the existing ROI, pre-sanction
visit, in-principal approval from next higher authority than the sanctioning authority[ Housing loans ,
MSE loan against property , scheme for financing traders and MSE exempted ], Due diligence: third
party guarantee in case of third party securities to be obtained, Documentation standards: Loan above 5
crore- documents to be vetted by law officer/advocate on panel before disbursement, loan above 50 lakh
and less than 5 crore – scrutiny by advocate and vetting within 30 days from disbursement. Renewal
data updation in CBS. Vehicles hypothecated: update registration numbers, insurance policy particulars
 in CBS, apply to RTO for necessary details of vehicle, preserve record received from RTO with loan
documents, two valuation reports for fixed assets valued at 5 crore and above, CERSAI registration
mandatory for eligible cases, End Use certificate from borrowers for all loans upto Rs. 10.00 lakh.
Guidelines on review/renewal of accounts and restructuring of debts, CDR and rejection of credit
proposals.

VI. Prescribed parameters for sanctioning of credit facilities: Guidelines regarding Audit of accounts
[audited financial statements and provisional results for completed quarter/half year where exposure is
Rs. 50 lakh and above and for all non-corporate borrowers of loan limits of Rs. 10 lakh and above.
Statutory Declarations : [ no relationship with director/partner/proprietor of borrowing entity of any
directors / senior officials of the bank, proposed exposure within prudential limits, undertaking from
guarantor-no consideration received for giving guarantee, no objection for disclosure to RBI/CIBIL as
per requirements, balance sheet of sister concern of a common date[ for interlocking /diversion of
funds], declaration pertaining litigations against borrower/guarantor/partner to incorporated in appraisal
note, certificate of details of accounts with other banks. Credit delivery –Term Loan: [
consortium/participation of other banks in case of sizeable/substantial exposure, DSCR – 1.5, borrower’s
contribution- 25% ( agriculture- 15 to 25% of project cost), repayment not exceeding 7 years( renewable
energy – 15 years, large infrastructure project over 1000 crore, repayment as per 5/25 scheme). Loan
delivery system: Working capital 10 crores and above – 80% loan, 20% working capital. For less than
10 crore also, loan system may be settled. Credit Delivery- Working Capital : [ Turnover method- SSI
upto 5 crore, other category- 2 crore, Project Working Capital Gap method(PWCG) – for other
borrowers not included under turnover method, Cash budget method – for seasonal industries(sugar,tea),
software industry, sick units, construction/contractors/developers. Separate peak and non peak level
limits. Benchmark ratios-current ratio- 1.25, TOL/TNW- Max. 4:1 ( 5:1 for export, 10:1 –NBFC),
DSCR – 1.5 for term loans. Sanctioning LC/BG facilities:[ TOL/TNW- 3 to 4 for mfg units and 5 to 6
for trade/service units. Working capital funding covering LCs( ILC&FLC), BGs,PBGs. Buyers credit to
be factored while assessing above limits. Guarantee amount not higher than contract value. PBF: LC &
FBGs related to working capital requirement should not be given outside working capital limits as
MPBF. Margin should not be funded through Working capital limits. Bid-bond, performance guarantee,
separate margin/security should be evaluated. Such facilities not to be given- who are not enjoying
working capital limits., stocks/debtors/creditors on such sotcks should be excluded while calculating DP,
pre-sanction: should be conducted to cover organizational structure, board governace, internal
control/audit system, stock/debtor verification. Treasury and forex hedging system should be ensured for
FLCs. Entire assets of company to be insured. Guidelines for Bill Discounting:
purchase/discount/negotiation under LC in respect of genuine commercial and trade transactions of
borrower constituents having external credit rating A and above who have been sanctioned regular credit
facilities by bank. In absence of external rating, internal rating may be referred. No such facilities to
non-constituent borrower except where negotiation is restricted to the bank. LC/BG to clients of
cooperative banks against counter guarantee of cooperative banks. Genuine-ness of LC issued through
SFMS/physical mode may be verified. Documents of shipment must be obtained and verified. Without
recourse bills not to be negotiated. Service units – ensure that services have actually been rendered. No
fresh discounting, in case earlier bills are overdue. Guidelines for Rediscounting bills [ for usance bills
held by other banks, no rediscounting facility to financing companies, no facility to NBFC except bill
from sale of light commercial vehicles and 2/3 wheelers, service sector not eligible for rediscounting
facility. Consortium /Multiple/Syndicated Lending guidelines: Existing consortium arrangements shall
continue, prefer to have pro-rata share of non-fund business in line with fund based share in consortium,
Loan syndicator, if borrower request for same, while entering consortium or renewal stage, separate
independent assessment shall be done(in addition to lead bank’s assessment), minimum share of bank –
Rs. 50 crore. Granting of sub limits: assessment at main branch, permission for disburse part of
sanctioned limit at other branch(es) shall be granted by sanctioning authority, documentation at main
branch(certificate to branch having sub limits regarding documentation at main branch), no overdraft by
branch having sub limits, parent branch to calculate and communicate DP ( reduce DP limit at their end
 only). Project Financing: [ track record and capabilities of promoters/sponsers/sister concerns/ connected
players (suppliers, Govt support etc). Independent appraisal for financial viability. Comments on
technical viability. TEV study reports from FI/Banks/other empanelled agencies for exposure above Rs.
10 crore or above/ or new line of industry irrespective of exposure. TEV valid for 1 year. Promoter plans
for meeting cost over-run/ shortfall in financial tie-up. Contribution: 25% of total PC (DER- 3:1).
Suitability, availability of raw material, water, power, transport, labour, skill, maintenance facilities,
acceptability at local level, environmental clearances, other clearances, reliability of cash flows,
agreement for raw material supply, project completion with EPC contractors, capital infusion in project,
off-take, concession from govt bodies should be in place. Cash budget method. DSCR 1.5. payback
period upto 7 years except ( housing loan, restructuring loans/infrastructure projects) Agri finance
projects repayment as per RBI/GOVT/NABARD. Insurance cover. Loan covenants and default
provision. Alternate arrangement in case of time/cost over-run. Promoters to bring equity upfront or
proportionately maintaining DER 3:1. Appraisal note to stipulate, commencement date, completion of
project, commencement of commercial production (DCCO). Advance to PSUs: [ loss making PSUs: no
cash losses for continuous 3 years, increasing trend in sales/profits, net worth erosion not more than
49%, current ratio 1:1, adequate cash flow. Finance of IT technology and software: [ margin 33% on
movables/hardware, furniture/fixture. DER- 3, DSCR-1.5. working capital upto 2 crore on turnover
method (20% of projected turnover). Current ratio 1.25. ECGC cover for export finance. collateral
security – 50% of proposed exposure. Personal guarantee of promoters. Guideliens for Exposure to real
estate sector, NBFCs, financing against shares to individuals and stock brokers, securitization of assets,
and finance to trust, merchant banking, money market mutual funds and factoring companies.

VII. Sectoral Lending: Agriculture: [target in respect of Agriculture lending to be achieved. Identified
agricultural activities : Production credit /short-term loan, Agri- credit portfolio - investment credit,
production credit under revised Kisan Credit Card Scheme, Loans to farmers for pre-harvest & post-
harvest activities viz. spraying, weeding, harvesting, sorting, grading & transportation of their own farm
produce. Farm mechanization like purchase of tractor unit, power tiller, combine harvester, thresher,
sprayer, duster, implements like iron plough, harrow, land levelers, mini trucks for transportation of agril
produce, jeep, pick up van etc., Minor Irrigation activities like digging of dug well, bore well, dug cum
bore well, tube well, repairing of old well, installation of pump set (oil engine, electric pump set, solar
pump set) laying of pipe line, purchase of sprinkler set & drip set, farm pond, purchase of generator set,
Lift Irrigation Scheme for Small and Marginal Farmers covering minimum of 3 acres and maximum of
10 acres of land. Allied Activities - in particular Dairy, Fishery, Poultry, Piggery, Goat rearing, Sheep
rearing, Bee keeping etc.Micro Credit through Self Help Groups (Including activities under other
priority sector).Stress shall be given on formation of groups of women. Efforts shall be made to see that
groups in existence for more than 6 months are linked to Bank Credit. Plantation & Horticulture – under
National Horticulture Board & National Horticulture Mission scheme shall be given priority.
Associating with Agro Export Zones. Linkages with co-operative sugar factories, wherever possible, be
explored for recovery of loans. Advances up to Rs. 50 lakh against pledge/ hypothecation of agricultural
produce (including warehouse receipts) for a period not exceeding 12 months irrespective of whether the
farmers were given crop loans for raising the produce or not. Loans for construction and running of
storage facilities (warehouse, market yards, godowns and silos) including cold storage units designed to
store own agriculture produce/products, irrespective of their location. Financing under Agri-clinic and
Agri-business be given priority, Export credit to farmers for exporting their own farm produce. Support
to branches: The Rural Development Centres (RDC) have a good database for various activities of
agriculture, export oriented agriculture and hi-tech agricultural sector. These centres shall continue to
assist branches for improving the quality of agriculture loan assets, increasing percentage of agriculture
lending to net credit as also in securing recovery. Hi-tech Agriculture accounts: Mushroom production -
Bank shall proceed cautiously while sanctioning advances to these types of activities. Imports and
Exports: to increase import business with the aim to increase non-interest income in addition to
exchange earnings. Import business matching with export business shall enable the Bank to quote
competitive rates to clients resulting in increase in exchange earnings and FEX turnover. Exploring for
 Import business, scout for export business from the same clients, wherever possible. Endeavour to
ensure that import business of all our export clients is routed through the Bank. Possibility of getting
pro-rata import business in consortium accounts. Focus on project exports in close interaction with
ECGC/EXIM Bank, L/C’s for import of Capital Goods shall be established only on confirming 100%
cash margin or long-term fund tie up for retirement of the Bills. MOU with EXIM Bank -to secure leads
for prospective clients. Canvass Import/remittances business from PSU/ Govt. owned enterprises. Thrust
on canvassing good export business. Bank to receive maximum share of export business in respect of
consortium accounts as also full utilization of export finance by clients. Marketing foreign currency-
lending scheme to Corporates. Extending line of credit for period beyond one year to exporters, as per
RBI guidelines. Obtain ECGC cover under WTPCGC and WTPSGC. Loans to Micro, Small and
Medium Enterprises (MSMEs): classified as Micro Small and Medium enterprises depending upon the
activity and investment in plant & machinery/equipment. Micro enterprise: where investment in plant
and machinery does not exceed Rs. 25 lakh; A small enterprise: where the investment in plant and
machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and A medium enterprise where the
investment in plant and machinery is more than Rs. 5 crore but does not exceed Rs. 10 crore. For
Service Enterprises: These will include small road & water transport operators, retail trade, small
business and professional & self-employed persons: (i) A micro service enterprise is an enterprise where
the investment in equipment is upto Rs.10 lakh; (ii) A small service enterprise - investment in equipment
is more than Rs.10 lakh but does not exceed Rs. 2 crore; and medium service enterprise - investment in
equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore. All the eligible cases up to Rs.50.00
lakh shall be covered under CGTMSE. The Bank’s lending to all medium enterprises under
manufacturing sector and exposure upto Rs.10.crore under service sector shall be included for the
purpose of reckoning under the priority sector.

VIII. Interest Rate Policy : MCLR from 1.4.2016 .Base rate w.e.f. 1.7.2010[ Exempted DRI loans, loan to
own employees, loan against deposits. No lending below base rate. Not considered violation of base rate
in case of - reduced rate due to subvention on crop loans, export credit, restructured loans, micro credit
scheme of National Scheduled tribes finance corporation, PACS,IREDA, NHB, etc. Floating rate:
benchmarked to base rate/ MCLR, reset with the change. Fixed rate loan on case to case to basis
approved by ALCO. Allowing reduction in applicable interest rate: HLCC of ED- 1.5% (2% for retail
loans, 1% loan against FD), HLCC OF GM- 1% (0.5% loan against FD), Risk based pricing – RBP-1
and RBP-2 models. SME advances 10 lakh and above – ZMs may reduce up to 0.5%. Penal rate –
maximum up to 2% p.a. (over the normal rate). No penal rate for PS advances up to 25,000/-.waiver of
penal interest vest with HLCC of GM. Interest at monthly rests from 1.4.2002. Interest not at monthly
rests for agriculture advances (compounding with crop seasons). Long duration crops: at annual rests.
Total interest not to exceed principal for short term advances to small and marginal farmers. Interest
clause “shall be subject to changes made by RBI from time to time”. Not to offer any “zero/low percent
interest rate on consumer loans” due to lack of transparency. Consortium loans: need not charge uniform
rate. Penalty for pre-payment: for loans above 1 crore. 1% of prepaid amount ( if not paid out of own
sources). Waiver HLCC(GM) upto 1 lakh, HLCC of ED – 10 lakh, CAC- full amount. No
foreclosure/pre-payment on home loans on floating rates from June 2012. Not applicable on term loans
sanctioned to individual borrowers on floating rates. Effective 1st April 2016, interest rates are
benchmarked to MCLR rate which is based on marginal cost of funds. [Base Rate was based on total
cost of funds]. MCLR rates for different tenors range from 8.10% to 8.65 varying by reset frequency of
the loan. MCLR rate revision on a monthly basis. Benchmark interest rates for home loan and other
loans to MCLR rates of different tenor. From 1st April 2018 - RBI mandated that base rates be linked to
MCLR rates. Any increase or decrease in MCLR rates will now automatically be applicable to pre 2016
loans that are benchmarked to base rates.

IX. Miscellaneous – Concessions/Relaxations: Refund of BG commission in case of return of BG before

maturity period: branch shall refund commission at half the rates originally charged after expired period
+ 3 months. Concession in processing fee/ BG commission / LC,Bills and other service charges: HLCC
 of GM – upto 25%, HLCC of ED – upto 50%, CAC-full waiver, MC- full waiver. Concession will
continue at the time of review/renewal. HLCC of GM and HLCC of ED may approve relaxations of in
the provisions of the lending policy viz. entry level exposure( exceeding 5 crore), repayment exceeding
7 years, minimum margin, other terms( except interest rate) , age, income, minimum service for retail
loans. Housing loan relaxation in age, income, deduction norms and minimum service may be approved
by ZLCC of ZM.

X. Joint Lending Arrangement: For borrowers with aggregate credit limits of Rs. 150 crore and and
non-investment grade borrowers. One published balance sheet of different division/product- treated as
single unit. Minimum sigze of a member in JLA 10% if Working capital(FB&NFB) is less than 1000
crore. For 1000 crore and above working capital limits minimum exposure atleast 100 crore. Appraisal
note of lead bank may be referred for joint financing. Member with maximum share- Lead Bank.
Exposure ceiling for single and group exposure will continue. Sub committee of members shall be
formed ( not less than 50% exposure) for deciding all matters relating to appraisal, sharing of income,
monitoring of the account etc. Decision by consensus. Inter-se agreement. Existing member may take
care of additional requirement or new lender may be inducted. Pricing: may not be uniform. Sharing of
NFB pro-rata. Processing/inspection charges as per respective schedule of fees. Common
Documentation, common asset classification. IBA approved JLA documents may be adopted.
Subcommittee may issue in-principle sanction, terms and conditions to the borrower and obtain
concurrence. Minimum Rs. 5 lakh for each modification to avoid frequent revision of terms. Without
concurrence of JLA, no outside bank to extend any banking facility. In case of disagreement, decision of
majority member banks having more than 50% exposure shall be binding. Existing member may exit
after two years, provided new/existing bank takes the share and the account is Standard. In NPA cases,
exit in exceptional cases with approval of JLA may only be allowed. Information sharing by periodical
submission of MSOD and FFR. Breach of stipulated covenants – treated as event of default.

XI. Unhedged Foreign Exchange Exposure: unhedged exposure can cause losses due to adverse exchange
rate movement and affect the capacity to service the loans taken from banks resulting in credit risk.
Incremental provisioning and capital requirements on the exposure to entities with unhedged Forex
exposure is required as per RBI guidelines. Monthly declaration on self-certification basis, giving details
of unhedged exposure to be obtained from borrowers with exposure of Rs. 10 crore and above.
Borrowers should be asked to hedge their unhedged forex exposure, Banks may reduce exposure to such
borrowers, pricing should incorporate cost of compliance. Ascertain Unhedged forex exposure(UFCE):
gross sum which will impact P&L due to movement of forex rates, maturing for the next five years.
Financial hedge( through forward cover) or natural hedge( cash flows from operations offsetting the risk
of forex)- offsetting exposure should be having cashflow /maturity within same accounting year. Loss
Estimation. Incremental provision and incremental capital requirement based on the estimation of likely
loss.