ICICI BANK LTD

In particular, an advance is classified as 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 and 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. A credit card transaction is classified as a non-performing asset where 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

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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.

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 conducts a risk-based supervisory assessment of banks on an annual basis. As a part of this assessment, it separately reviews how banks classify assets and provisioning of credit facilities given by banks to its borrowers. This assessment is initiated after the completion of the annual audit and the publication of audited financial statements for the given financial year. Any differences between how a bank and the Reserve Bank of India classify assets or account for the provisioning of credit facilities are disclosed in subsequent financial statements if the difference for a given reference period accounts for either of 5.0% of profits before provisions and contingencies or 5.0% of gross non-performing assets. The Reserve Bank of India’s assessments of divergence in asset classification and provisioning for ICICI Bank did not require additional disclosures in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024 and fiscal 2025.

In April 2026, the Reserve Bank of India issued ‘Reserve Bank of India (Commercial Banks - Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2026’. These Directions introduce a forward-looking expected credit loss framework for provisioning on advances, replacing the existing incurred-loss approach, while retaining the extant 90-day norms for classification of non-performing assets. Financial assets are assigned to one of three stages based on changes in credit risk since initial recognition, with 12-month expected credit losses recognized for Stage 1 assets and lifetime expected credit losses for Stage 2 and Stage 3 assets. These directions also introduce the effective interest rate framework for income recognition on financial assets. The Directions will come into force on April 1, 2027.