Bank of baroda

4
Investment:
4.1
The Investment portfolio of the Parent and its domestic Subsidiaries is classified in accordance with Reserve
Bank of India guidelines into:
(a)
“Held to Maturity” comprising investments acquired with the intention to hold them till maturity.
(b)
“Held for Trading” comprising investments acquired with the intention to trade.
(c)
“Available for Sale” comprising investments not covered by (a) and (b) above i.e. those which are
acquired neither for trading purposes nor for being held till maturity.
4.2
Investments classified as “Held to Maturity” are carried at weighted average acquisition cost unless it is more
than the face value, in which case the premium is amortised over the period remaining to maturity.
Investments classified as “Held to Maturity” includes debentures / bonds which are deemed to be in the
nature of / treated as advances, for which provision is made by applying the Reserve Bank of India prudential
norms of assets classification and provisioning applicable to advances, and investments in Regional Rural
Banks, Treasury Bills, Commercial Papers, Indira Vikas Patras, Kisan Vikas Patras and Certificates of Deposit
which has been valued at carrying cost.

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BANK OF BARODA
4.3
Profit / Loss on sale of investments classified as “Held to Maturity” is recognised in the Profit & Loss account
based on the weighted average cost / book value of the related investments and an amount equivalent of the
profit on book value of the related investments in “Held to Maturity” classification is appropriated to Capital
Reserve Account.
4.4
Investments classified as “Held for Trading” are marked to market, scrip-wise and the resultant depreciation is
recognised in the Profit and Loss Account, while the appreciation, if any, is ignored.
4.5
Investments classified as “Available for Sale” are marked to market, scrip-wise and the resultant net depreciation,
if any, in each category disclosed in the balance sheet is provided, while net appreciation, if any, is ignored.
4.6
In respect of non-performing securities, income is not recognised and appropriate provision is made for
depreciation in the value of such securities as per Reserve Bank of India guidelines.
4.7
For the purpose of valuation of quoted investments in ”Held for Trading” and “Available for Sale” categories,
the market rates/quotes on the Stock exchanges, the rates declared by Primary Dealers Association of India
(PDAI) / Fixed Income Money Market and Derivatives Association (FIMMDA) are used.
Investments for which such rates / quotes are not available are valued as per norms laid down by Reserve
Bank of India (RBI).
4.8
Investments are net of securities lent and include securities borrowed under repo arrangements.
4.9
In respect of Investments at Overseas Branches, RBI guidelines or those of the host countries, whichever are
more stringent are followed. In case of those branches situated in countries where no guidelines are specified,
the guidelines of the Reserve Bank of India are followed.