rbl bank ltd Management discussions
1. ECONOMIC OVERVIEW
1.1 Global backdrop:
The global backdrop saw the rates of inflation outstrip growth during the Calendar Year (CY) 2022. In February 2022, expectations of making a post-COVID economic recovery were upturned amid the Russia-Ukraine conflict. As commodity prices climbed along with mounting tensions, the worlds economies changed their fiscal and monetary policies.
Since March 2022, the US Federal Reserve raised the Federal Funds Rate by 475 bps, with the upper bound at 5.00% (as of mid-April 2023). Of this, 425 bps hike was front loaded in CY 2022 itself. The UK hiked the rates by 415 bps. As of mid-April 2023, their bank rate touched 4.25%, of which 300 bps hike came in CY 2022. Similarly, the European Central Bank (ECB) of the Euro Area hiked the policy rates by 350 bps to touch 3.50% (mid-April, 2023); of which, 250 bps hike was affected in CY 2022.
In a cascading effect, the emerging economies too have tightened their monetary policies.
The World Economic Outlook (WEO) by the International Monetary Fund (IMF) in April 2023 highlighted how the rapid tightening of monetary policy after years of low rates is testing the global financial system. Rising interest rates and the simultaneous economic slowdown are exposing the fault lines in the global banking ecosystem, creating pockets of severe banking crises in the US and the EU.
The IMFs Global Financial Stability Report highlighted the sudden failures of the Silicon Valley Bank and Signature Bank in the US, and the loss of market confidence in Credit Suisse, a Global Systemically Important Bank (GSIB) in Europe.
A forceful response from authorities to help control the fallout has so far helped reduce market anxiety. In the US, bank regulators took steps to guarantee uninsured deposits at the two failed institutions; provided liquidity through a new Bank Term Funding Programme to prevent further bank runs. In Switzerland, the Swiss National Bank provided emergency liquidity support to Credit Suisse, which was taken over by UBS later in a state-supported acquisition.
The global financial ecosystem continues to experience shocks directly affecting GDP growth across the world accompanied by widespread job losses, further impacting consumption growth. The baseline forecast is for global output growth to fall to 2.8% in 2023, 0.1% point lower than predicted in the January 2023 WEO Update. The world growth outlook is down by 10 bps to 2.8% for 2023 and most of it is due to downward revisions in Emerging Market economies (by 10 bps). Among these, India saw 20 bps downtick to 5.9%, followed by Brazil and Africa. In contrast, Saudi Arabia - the newest member in the USD 1 trillion club, saw 50 bps upward revision to 3.1% in 2023.
For advanced economies, the numbers were revised upwards by 10 bps to 1.3% vs 1.2% driven by: Robust US growth of 1.6% (20 bps revision); 10 bps upward revision to 0.8% for the Euro area; lesser contraction seen for the UK at 0.3%. Yet, WEO has warned that a severe flare-up of financial system turmoil could slash output to near recessionary levels.
1.2 Indian Economy:
Indian economy is backed by strong agricultural production, a post-pandemic bouncing back of demand, healthy rebound in bank credit, and a banking and financial system with strong fundamentals, and governments capital expenditure.
Indias capacity utilisation in the manufacturing sector surged past the pre-pandemic level of 69.9% to 74% during FY 2022-23. The PMI surveys for March 2023 exhibit optimistic outlook for the ongoing FY 2023-24. However, heat map studies show that companies making a majority of these gains are operating in cement, steel, electricity, refining and such sectors where the government is pushing efforts to increase spending.
Overall consumption scenario looks positive, however, with demand for passenger vehicles as well as rural demand indicators growing steadily. Credit card spending is on a high. Non-food bank credit was up 15.4% y-o-y as on March 24, 2023. The total flow of resources to the commercial sector increased by Rs 26.0 lakh crore during FY 2022-23 as against Rs 19.0 lakh crore in FY 2021-22. With general elections slated for Calendar Year 2024, economic activity is expected to remain resilient.
However, Indias projected GDP growth at 6.0% for FY 2023-24 and FY 2024-25 is lower than what it witnessed even two years prior to COVID-19 pandemic. Given the state of the
In FY 2023-24, the pace of disinflation may be the key metric to track
global economy, these figures are promising. The RBI has marginally revised projections upwards by ~10 bps to 6.5% (YoY) compared to the 7.0% provided by the governments First Advance Estimates for FY 2022-23.
The Union Budget for FY 2022-23-24 sees capital expenditure as the key driver of economic growth backed by moderating of public debt. It is pushing for infrastructure growth, digitalisation, green economy, and empowerment of youth. Yet, Indias biggest bugbear during this period remains rising inflation.
For FY 2022-23, Consumer Price Inflation (CPI) inflation has averaged to 6.66% y-o-y as compared to 5.51% seen in FY 2021-22. Food inflation spiked to 6.6% (YoY) from 3.8% in FY 2021-22. Core CPI inflation staying at 6.06% (YoY) as against 5.98% in FY 2021-22, coupled with fuel inflation at 10.3% and 11.3% during FY 2022-23 and FY 2021-22, respectively, has meant the headline inflation being pushed to highs from which it has been difficult to climb down.
The Monetary Policy Committee (MPC) forecasts inflation rate at 5.2% for FY 2023-24 while the IMF predicted Indias inflation rate at 4.90% for CY 2023. Thus, it may be reasonable to expect inflation rate within 5.0-5.5% range. In FY 2023-24, the pace of may be the key metric to track here considering that India saw a nine-year high inflation rate of 6.6% in the aftermath of the Russia-Ukraine war.
2. INDIAN BANKING SECTOR OVERVIEW
2.1 Focus on retail growth:
FY 2022-23 witnessed a marked recovery in the domestic financial market, especially during the second-half. Changes in the external benchmark regime for loans, moderation in surplus liquidity and persistence of credit growth over deposit growth strengthened the pace of transmission of policy repo rate hikes to deposit and lending rate of the banks.
Banks revised upwards their external benchmark-based lending rates (EBLRs) by 250 bps during the period from May 2022 to March 2023. The marginal cost of funds-based lending rate (MCLR) - the internal benchmark for loan pricing - rose 140 bps over the same period. The weighted average lending rate (WALR) on sanctioned fresh Rupee loans increased by 173 bps and that on outstanding rupee loans by 95 bps during the period from May 2022 to February 2023.
The transmission to retail deposit rates also gathered pace during H2 FY 2022-23 as banks intensified their efforts to garner retail deposits to fund credit growth. The weighted average domestic term deposit rate (WADTDR) on fresh deposits (including retail and bulk) increased by 222 bps during the period from May 2022 to February 2023. During the second-half of FY 2022-23, the banks reversed their policy of mobilising bulk deposits and instead increased fresh retail deposit rates (122 bps), which outpaced fresh bulk deposit rates at 77 bps.
2.2 A Look At The Major Sectors
Agriculture credit grew 14.9% (y-o-y) in February 2023, from 10.3% the year before. Bank credit to industry rose 7.0% in February 2023, as compared to 6.7% the year before. This was driven largely by industries such as metals, petroleum, and chemicals. Infrastructure sector credit growth reduced due to decline in credit to the telecom sector while MSME credit growth remained high, aided by the extension of Emergency Line Guarantee Scheme (ECLGS) till March 2023.
With wholesale and retail trade included under the MSME category and easier access to loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), credit to the trade sector also grew during H2 FY 2022-23. The services sector credit also gained traction during the same period, propelled by flows to NBFCs, including housing finance companies. Retail loans remained prime contributor to overall credit increase (Y-o-Y) in FY 2022-23. Credit to the housing sector and vehicle loans grew consistently. Credit card loan growth persisted in high double-digits throughout FY 2022-23.
2.3 Key Performance Indicators Of The Economy
The asset quality of Scheduled Commercial Banks (SCBs) improved during FY 2022-23, with the overall non-performing assets (NPA) ratio declining to 4.5% in December 2022 from 6.5% the year before. Asset quality has improved across all major sectors.
The current account deficit (CAD) for the first three quarters of FY 2022-23 stood at 2.7% of GDP. In Q3, CAD narrowed significantly to 2.2% from 3.7% during Q2 on account of lower merchandise trade deficit and robust growth in services exports. During the months of January and February of FY 2022-23, Indias merchandise trade deficit narrowed on the back of a sustained decline in imports.
Strong software services export growth was witnessed across key verticals such as IT services, Business Process Management (BPM), and engineering research and design (ER&D), supported by a rise in global capability centres (GCCs). Inward gross remittances, which touched an all-time high of USD 107.5 billion during calendar year 2022, are expected to remain robust as Gulf Cooperation Council (GCC) countries are targeting high growth.
Foreign exchange reserves too rebounded from USD 524.5 billion on October 21, 2022, to being in excess of USD 600 billion taking into account our forward assets, as per RBIs monetary policy statement. Overall, there has been a significant improvement in the countrys external sector indicators.
3. FY 2022-23 AT RBL BANK
During FY 2022-23, the focus at RBL Bank was to drive a range of new initiatives aimed at steady business growth: Launching new product segments; consolidating and rationalising costs as well as partners and functions; driving sales growth through internal sourcing and cross-selling and focussing on asset quality and strengthening collections and recoveries.
Key measures taken during the year to improve performance:
Consolidation of the Banks microfinance business under RBL FinServe Limited, the wholly owned subsidiary of the Bank, to account for ~88% of the Banks total microfinance loan book.
Launch of new offerings such as financing for two-wheelers, used cars, and gold loans, and small business loans. Scale up of the new business segments of housing and rural vehicles to pursue retailisation of the advances portfolio and further strengthen relationships with existing, new and potential customers.
New lateral partnerships in the Cards business - having launched the LazyPay Credit Card in partnership with PayU and new variants with two existing partners BookMyShow and PaisaBazaar.
Strengthening of management depth by onboarding a new Chief Information Officer and Head of Corporate Centre.
4. REVIEW OF BUSINESS SEGMENTS AND OPERATIONS
RBL Banks operations span across various business segments. These are:
Corporate Banking comprising Corporate Banking offerings, Financial Institutions and Government Banking, Supply Chain, Inclusive Financial Institutions, Multinational and New economy relationships
Commercial Banking (CB)
Branch and Business Banking (BBB)
Retail Assets
Treasury and Financial Markets Operations
4.1 Corporate Banking
The Banks Corporate Banking segment serves large corporations with over Rs 1,500 crore annual turnover. It offers diverse services across different industries and geographies, primarily focussing on working capital and transactional businesses.
It includes sub-segments for financial institutions, government banking, multinational clients, and specialised industries like gems and jewellery, real estate, and infrastructure. It provides a range of fund-based and non-fund-based products, including current accounts, term deposits, loans, cash management, and treasury risk management solutions.
Corporate Banking also offers supply chain financing, structured advances, and deposit services; its branch in Gift City provides financing services to corporates operating outside India. Additionally, it cross-sells retail products and distributes insurance and mutual funds. The financial institutions team facilitates inter-bank dealings and trade support, while the government banking team focusses on liability building and digital banking channels.
Key highlights of FY 2022-23:
1. EXIM Bank TAP Programme: The Bank entered into a Trade Assistance Programme (TAP) agreement with EXIM Bank. Under TAP, India Exim Bank provides support through credit enhancement to trade instrument(s), thereby enhancing the capacity of commercial banks/financial institutions to support cross-border trade transactions involving markets where trade lines are constrained or where the potential has not been harnessed. This opens opportunities to support large number of RBL Banks export clients under the programme.
2. Tier 2 USD 100 million loan from USDFC: The Bank raised its first issuance of Basel III compliant unsecured and subordinated Tier 2 Notes aggregating to USD
The focus at RBL Bank has been to drive a range of new initiatives aimed at steady business growth
100 million with a tenure of 117 months to United States International Development Finance Corporation ("DFC"), the US Governments development finance institution. The investment augmented the Banks capital position as it seeks to continue expanding its geographic footprint and expansion in its chosen businesses. This was a first-of-its-kind by a Bank.
IFSC Banking Unit (IBU), GIFT City
The Banks International Financial Service Centre (IFSC) branch located at GIFT City, Gujarat, serves as an overseas branch within an overseas jurisdiction, enabling RBL Bank to explore international business opportunities in capital markets, NRI accounts, and more.
Regulated by the International Financial Services Centres Authority (IFSCA), the IBU raises foreign currency deposits and bank borrowings to provide funding, loans, bank guarantees, and trade finance to overseas corporate customers. Loans by the IBU adhere to the strict underwriting standards of the Bank.
It participates in foreign syndicated loans and extends credit facilities to customers through External Commercial Borrowings (ECB) and trade credit, as well as treasury services for currency and interest rate hedging.
4.2 Commercial Banking (CB)
RBL Banks Commercial Banking segment finances the business needs of Small & Medium Enterprises (with turnover ranging from Rs 50 crore to Rs 250 crore) and Mid-Market Enterprises (with turnover ranging from Rs 250 crore to Rs 1,500 crore), prioritising emerging, fast growing enterprises and newer businesses.
RBL Bank is becoming the ‘Bank of Choice for transaction banking, offering cash, trade and forex services. It partners MMEs/SMEs with support and flexible offerings to help grow their business to the next level.
Transaction Banking
The Bank has expanded its Transaction Banking (TB) with strong growth across multiple business segments. It is focussing on growing market share through offerings such as Business Current Accounts, Collection and Payments Solutions, Trade Services and Trade Remittances. Core fees from transaction banking grew 20% on a YoY basis in addition to benefits accruing from upsells and cross-sells.
During FY 2022-23, the TB business enhanced its technology stack and cash management services for corporate clients by launching additional modules on the TradeX platform, thus, growing adoption rates significantly from both wholesale and retail banking customers. Further, the launch of new e-SCF portal is aimed at boosting the Supply Chain Finance Business. Integrated solutions across collect (cheque, cash, API, NACH, UPI) and pay (RTGS, NEFT, IMPS, ACH, QR), continue to remain a key driver to the liability franchise.
During the year, the Bank launched ‘Customs Payments services, in line with the Central Government mandates. Similarly, several state government mandates are ready for rollout. The Banks offering around PFMS-SNA (Public Financial Management System-Single Nodal Agency) to manage Central and state government funds under various schemes is gaining momentum. The Bank is already supporting States implementing agencies with technology-led front-end solutions connected to PFMS offering by the Government of India.
Banking as a Service (BaaS) Digital Payments
RBL Bank has established itself in the rapidly evolving digital payments ecosystem through platforms powered by nimble operations and APIs. The focus is on building issuance, acquiring, channel, and open banking businesses.
The Bank has launched industry-specific solutions such as payment APIs, Domestic Money Transfer (DMT), Prepaid (Self Issuance, Partnership model & Escrow), Merchant Acquiring (Partnership Model), Collection platforms through Nodal accounts, Aadhaar-Enabled Payment System (AEPS) and Unified Payments Interface (UPI). Collaborations with fintech innovators have helped create an advanced digital ecosystem, with the Bank offering digital customised transaction flows in line with regulatory and information security protocols. Additionally, the Bank extensively leverages data analytics for deeper insights into customer behaviour and needs to create unique propositions for customer and partners.
The key pillars of RBL Banks digital channels are Enablement, Experience and Trust, underpinning its digital customer acquisition model ‘Abacus. Abacus 1.0, enabling seamless onboarding and data-driven customer journeys was upgraded to Abacus 2.0, which seamlessly integrates capabilities across various digital products, platforms, and channels to cater to B2B, B2C, and B2B2C opportunities. The Banks strong presence in the business enables the Digital India vision of the Government.
Key new initiatives in FY 2022-23
1. Launch of RBL Bank BMRCL NCMC Card: The RuPay National Common Mobility Card (NCMC) launched in association with Bangalore Metro Rail Corporation Ltd (BMRCL) is in line with the Government of India and Prime Ministers ‘One Nation One Card initiative. It can be used at all transit locations making all new metro and transit payments interoperable via one card, as well as across fuel payments, shopping, dining, parking and toll payment.
2. Collaboration with Amazon Pay to offer UPI Payment services: The Bank enables UPI Payments services for ‘Peer-to-Peer and ‘Peer-to-Merchant transactions.
3. Dream 11 UPI Partnership: The Bank is providing escrow services to Indias first-ever fantasy sport company, by facilitating payments for its users through RBL Bank UPI collection solution.
4.3 Branch and Business Banking (BBB)
The Bank through its BBB segment offers a complete suite of products supported by multi-channel electronic banking system, including Mobile Banking, Internet Banking, Phone Banking, WhatsApp Banking, Chat pay and ATM.
4.3.1 New Initiatives in FY22-23
Renewed focus on senior and super senior citizens through- a. Revamp of the existing Seniors First Savings Account to offer elite banking facilities as well as healthcare benefits.
b. A special deposit exclusively catering to super senior citizens (80 years and older), which provides additional 0.25% interest over and above senior citizen rates. Further, a unique Recurring Deposit product (Smart Deposit) allows customers to invest additional funds on their existing recurring deposit.
c. For current account customers (businesses and merchants), QR codes and VPA IDs allow them to leverage on the UPI proposition, which can be availed through branch or Do-It-Yourself on MoBank.
New NRI deposit products through -
Foreign Currency Fixed Deposits at GIFT City, Gujarat, through which NRIs can invest in foreign currency deposits (USD/GBP/EUR).
Resident Foreign Currency (RFC) Deposits which will help NRIs who have returned to India to maintain their overseas earnings in foreign currency deposits (USD/ GBP) with interest rates similar to FCNR deposits.
4.3.2 Digital Banking
Digital Banking is a coming together of the Banks vision and innovative capabilities, and its ability to harness the power of technology as a force multiplier for creating benchmarks in customer experience.
Neo Banking
In the Neobanking space, the Bank enables its non-Bank partner to provide a software overlay, enabling their customers to access the Banks entire banking suite of offerings, including digital CASA accounts, co-branded cards and payment services, and more. The Banks unique platform-centric strategy enables horizontal placement of the products with applications, facilitating open banking through APIs, real-time data integration and management, and low dependency on third party providers.
Digital Engagement Channels
i. MoBank: The Banks on-the-go comprehensive mobile banking platform enables retail customers to manage their banking accounts and access 200+ banking products and services.
ii. Chat-bot (RBL Cares): The Banks Artificial Intelligence (AI) & Natural Language Processing (NLP) powered conversational chat-bot provides real-time assistance 24x7, complemented by a live agent integration
UPI payments & online bill payments have grown multi-fold over the past year
service for queries that need assistance from bank executives.
iii. Retail Internet Banking (RIB): The Banks web-based application enables customers to experience seamless Internet Banking with ease.
iv. Corporate Internet Banking (CIB): The Banks browser-based platform for its current account holders has been revamped to enhance limit for IMPS transactions and offers Bill Pay facility to its users.
v. Biz Bank App: The Banks mobile-based application for its current account customers offers hassle-free registrations through compliance with SIM and Device binding features. It provides checkers and approvers with the capability to approve transactions and requests on the go. Users can also view real-time account balances and download statements.
vi. Diplomat App: An extension of the MoBank app for its customers in the diplomatic segment, it enables foreign currency transactions and allied services.
vii. Smart Branch: Equipped with a Virtual Relationship Manager (VRM), the Smart Branch enables the customer to access all services remotely.
Additional Services on Digital Channels i. National Payments Corporation of India (NPCI) Initiatives
(Unified RBL Bank offers UPI Payment Interface) payments through the NPCI network, enabling customers to make individual & merchant payments through MoBank by scanning UPI QR code, available 24X7. The Bank is certified with NCPI to provide these services, covering all utilities payments. It has also successfully launched bill payment feature over Corporate Internet Banking. As such, UPI payments & online bill payments has grown multi-fold over the past year.
ii. eASBA
Under the Banks Application Supported by Blocked Amount (ASBA) facility, customers can raise bid applications in their interested IPOs/Rights Issues/ FPOs/ NFOs while investing through ASBA and continue to earn interest on their CASA until they receive allotment in the applied issue. Nearly 80% of these applications are from eASBA a testimony to the value provided by the digital experience.
iii. Tax Payments
Customers can process their tax payments through RBL Bank Branches as well as its corporate & retail internet banking platform.
4.3.3 Client Segments
The Bank places the customer at the core of all its offerings. It tailors its offerings to match three customer segments of Insignia, Signature, and Aspire. It also follows a strong relationship & service model to cater to the HNI clients banking needs. Insignia Preferred banking is the premium banking offering for the high-net-worth customers and is available across 176 branches. Signature and Aspire Banking are available across 500+ branches across the country.
4.3.4 Debit Cards
The Bank offers 14 debit card variants across customer segments, including HNIs, salaried, SMEs, women customers and more. Each card is uniquely positioned to cater to the specific needs of the cohort it is designed to serve. Select debit cards of the Bank offer a key value-added feature of Zero Markup on international transactions. During FY 2022-23, the overall spends on debit cards have continued to grow. RBL Bank is Indias only bank to offer foreign-currency debit card services to diplomats.
4.3.5. Specialised Online Digital Remittance Platform under LRS
Under the Liberalised Remittance Scheme (LRS), the Bank has launched a specialised online digital remittance platform for prompt remittances. It provides money transfer in 16 different currencies with simplified documentation, lowest cost in the market, competitive foreign exchange rates, minimum/nil Bank charges, and more. It charges nil application of extra processing fees for remitting educational funds, making RBL Bank the chosen partner for the Education remittance segment. The Bank offers a variety of outward remittance products, including outward remittance, travel card, demand draft and foreign currency.
4.3.6 Non-Resident Indians (NRI) Segment
A dedicated relationship management model and digital-first platforms provide seamless and hassle-free banking experience to NRIs. The Banks NRI customer base continues to grow across GCC, US, UK, Singapore, Hong Kong, Canada, and Australia.
4.3.7 Diplomatic Missions
The Banks Diplomatic segment comprises embassies, high commissions, consulates and diplomatic personnel, across India. RBL Bank is the only bank in the country to launch a dedicated mobile app for this segment. The Bank is a large player in this segment, with over 240 missions/ consulates & divisions (trade, defence, cultural, education, tourism among others) and about 1,600+ diplomats from over 135 countries across India.
The Bank provides money transfer in 16 different currencies with simplified documentation, lowest cost in the market, competitive foreign exchange rates, minimum/ nil bank charges
4.3.8 Trusts Associations Societies & Clubs (TASC)
The TASC business is a key contributor to the Banks growth in overall deposits. The business grew a healthy 30% during FY 2022-23 and will focus on educational institutes, religious trusts, co-operative & regional rural banks over FY 2023-24.
4.3.9 Insurance
The Bank has partnered with seven entities to offer a bouquet of insurance products, including HDFC Life Insurance; Bajaj Allianz Life Insurance; and ICICI Prudential Life; Bajaj Allianz General Insurance; ICICI Lombard General Insurance; Aditya Birla Health Insurance; and Care Health Insurance.
4.3.10 Investments
RBL Bank partners leading mutual fund houses to offer Investment Products such as Mutual Funds, Portfolio Management Services and AIF (Alternative Investment Fund) through its ‘Invest First digital platform. It enables customer access to market offerings through its unique 3-in-1 account offering comprises an RBL Bank account, a trading account of ICICI Securities Limited (a platform which allows you to trade in various financial instruments including equity) and an RBL Bank Demat account, which holds shares and other assets in the dematerialised or digital format.
| 4.4 Retail Assets |
| The Retail Assets business segment of the Bank comprises: |
| Secured Loan Programs |
| Business Banking Group (BBG) |
| Housing Loans |
| Credit Cards |
| Rural Vehicle Finance |
| Microfinance |
4.4.1 Secured Loan Programmes
Catering to the small and medium businesses customer segment, the Bank offers secured loans in the form of Loan Against Property (LAP). The Bank partners with NBFCs for co-lending of secured business loans and offers clients with working capital finance through its branch network. During FY 2022-23, the Bank enhanced its portfolio quality by focussing on customers with higher credit scores and ensuring the business is spread across regions to mitigate concentration risk.
4.4.2 Business Banking Group (BBG)
The Bank helps MSMEs meet their working capital and capex needs under the sole banking arrangement provided through their branch network across various cities. Key products include cash credit, overdraft, term loans, export- import credit, bill discounting, letter of credit and bank guarantee and more. Facilities are secured through collaterals. Post-pandemic, additional financial support in the form of Emergency credit line is being extended to existing customers to help them tide over turbulent times. The Bank follows robust monitoring mechanisms to ensure asset quality of the portfolio. In FY 2023-24, the Bank will focus on expanding its presence.
4.4.3 Housing Loans
RBL Bank offers housing loans with loan ticket sizes ranging from a minimum of Rs 7 lakh to Rs 15 crore. In FY 2023-24, the Bank will focus on growing the category with mark to market pricing, exclusive tie-ups with reputed builders, specific targeted campaigns towards the salaried segment, and established channel partners. It is currently sourcing housing loans through select liability branches, builder projects and business correspondent partner. The Bank intends to move towards digital onboarding for existing as well new to bank applicants.
4.4.4 Credit Cards
RBL Banks credit card business is currently the sixth largest in the country, and the Bank also ranks sixth in terms of card spends. The Banks card portfolio has grown from 83,000 customers in FY 2015-16 to 4.4 million customers in FY 2022-23 via strategic partnerships, diversified portfolio, and powerful customer experience.
In the last one year, the business has acquired around 2.1 million customers holding a market share of 5.2%. The book size has grown to Rs 16,800 crores in just 6 years. The cards division also saw one of the highest growth in y-o-y spends in the domestic industry during FY 2022-23, with total spends of over Rs 59,600 crore.
Key Product Developments & Process Enhancements
1) Launch of co-branded credit cards in FY 2022-23 with existing partners with offers targeting specific uses:
PaisaBazaar Duet and PaisaBazaar Duet Plus, are 2-in-1 cashback cards with offers on purchases and also a line-of-credit from RBL Bank with instant money transfer into the account.
Play, in association with BookMyShow, is available to customers on BookMyShow; it provides
In the last one year, Credit Cards business has acquired around 2.1 million customers holding a market share of 5.3% offers across movies and live entertainment, enabling access to content on the BookMyShow Stream.
2) Brand new channel partnerships: The Bank launched partnerships with top leading fintech players in the industry, LazyPay and BankBazaar.
LazyPay Credit Card on the LazyPay application provides 1% cashback on all online and offline spends.
Savemax co-brand cards offer accelerated rewards on groceries & cashbacks on Zomato & BookMyShow along with free monthly credit checks from BankBazaar.com.
3) Integration of Banks SDK in Co-Brand partner mobile apps: The Bank is enabling its credit card customers to easily access card-related information through e-comm apps of Co-Brand partners such as Zomato and PaisaBazaar. By embedding its SDK in these apps, the Bank has enhanced customer experience while ensuring compliance to the regulators guidelines on protecting customer privacy.
4) New digital acquisition channels for Short-term Personal Loan and Xpress Cash facility: Facilities such as short-term personal loan and Xpress Cash on RBL Bank Credit cards are now available on RBL Bank Credit Card Mobile App ‘MyCard as well as chat-bot, driving ~70% of new acquisitions.
5) A simplified & digital card application journey for existing customers: A convenient & digital card application journey was developed to help existing RBL Bank customers apply for secured credit cards through RBL Banks mobile banking application ‘Mobank.
6) Touch-free instant card issuance: The Bank issues cards instantly in a touch-free mode through API-based integrations for partners.
7) ‘RBL MyCard: The Banks credit card customers can now manage their card accounts with utmost ease, including converting credit card transactions into EMIs (MyCard accounts for 85% conversions at no extra cost) and short-term personal loans, and more. Nearly 85% of active credit card accounts use MyCard; 83% of these are regular users.
4.4.5 Rural Vehicle Finance
With farm mechanisation expanding consistently at a CAGR of ~10+%, RBL Bank launched the Rural Vehicle Finance vertical in FY 2021-22 dedicated to funding farm equipment. In FY 2022-23, fresh loans amounting to Rs 869 crore were disbursed to 18,573 customers growing 267% over the previous year. As of March 2023, the existing book size was worth Rs 1,029 crore with an active customer base of 26,229, with most of them falling under the ambit of priority sector lending.
Product Offerings - This business focusses on funding new tractor, used tractors, harvesters and farm equipment.
Customer Segment & Coverage The Bank services small and medium farmers by ascertaining their incomes and bureau scores, across all major tractor and farm equipment selling areas.
Channel Partners - Sourcing is done through a network of ~3,700 channel partners across 9 states, which include new tractor dealers, Direct Selling Agent (DSA), online partners and local influencers There are plans to extend these services to 3 more states during FY 2023-24.
Digital Lending platform The Banks rural customers experience digital services whose experience matches that of urban customers, that too with minimal documentation, transparency in transactions, loan approvals and disbursements within 24 hours of application.
4.4.6 Microfinance
The Bank offers microfinance solutions to unserved and underserved segments of rural India, contributing 100% to its priority sector lending. These include credit facilities as well as programmed savings, and life, health and general insurance products to individuals, groups, and small businesses. It encourages financial inclusion by providing finance to women borrowers and conducts financial literacy trainings for financial awareness.
- During FY 2022-23, the Banks training partner ‘Arunodaya Sarveshwari Lok Kalyan Samiti in Madhya Pradesh conducted 162 training sessions in all, benefitting 3,470 individuals.
- Additionally, in Q4 FY 2022-23, the Bank conducted compulsory group training for 1,17,671 groups.
- A total of 3,63,750 women were trained until March 31, 2023.
The Banks flagship financial literacy programme ‘SAKSHAM continues to empower women with financial literacy training, 10 years since its launch in December 2013, using traditional delivery methods.
4.5 Treasury and Markets
The Treasury and Markets function comprises domestic markets, treasury sales, debt capital market and bullion sales.
4.5.1 Domestic Markets
Focussing on the day-to-day management of funds for the Bank, including liquidity coverage ratio (LCR), Statutory Liquidity Ratio (SLR) and Cash reserve ratio (CRR), the Domestic Markets Group deploys the Banks liquidity in high-quality earning securities by taking proprietary positions (in rates, equities, and currency trading) as defined by Asset Liability Committee of the Bank.
4.5.2 Securities Trading
The Bank has a proprietary desk dealing in interest rates trading through government bonds, corporate bonds, and interest rate futures and swaps. FY 2022-23 saw bearishness in the bond markets as a result of aggressive hike in REPO rates and reduced liquidity in Banking system from a surplus of Rs 8 lakh crore to Rs 1 lakh crore, undertaken by RBI.
specifically These led to yields blowing out further, in money market rates: 1-year bill saw yields going higher by 200+ bps; 10-year yield on Government Bonds started the year at 6.80% and hit a high of 7.60% during the year. Despite this, the Banks trading desk actively managed to deliver healthy trading profits. The equity desk also contributed by undertaking primary and secondary market investments.
4.5.3 Liquidity Management
The Bank continues to maintain sufficient levels of liquidity and contingency buffers in the light of ongoing banking crises around the globe. Throughout FY 2022-23, the Bank successfully garnered funding from various sources through prudent choice of liabilities. The Bank continues to maintain a healthy Liquidity Coverage Ratio (LCR) at levels higher than the regulatory requirement, resulting from a prudent mix of long-term granular deposit mobilisation and rupee borrowings in the form of re-finance from various financial institutions. Derivatives are used to hedge the interest rate risk associated with assets and liabilities considering the volatility.
4.5.4 Capital Markets
Capital Markets team delivers across Debt Capital Markets (DCM), Loan syndication and Structured Finance (SF) distribution business, working closely with asset managers, insurance companies, other banks and investors to understand their requirements and originate transactions as well as for sell-down of underwritten transactions.
4.5.5 Debt Capital Markets (DCM)
The DCM desk provides advisory services to corporate issuers for expansion, acquisitions, and refinancing of existing debt. During the year, the Bank partnered with clients to offer bespoke solutions for fund raising and closed marquee transactions generating robust fee income. The team structures, under-writes and places bonds, loans, asset-backed securities and more to various investors - NBFC, mutual funds, insurance companies, banks, wealth clients and more.
4.5.6 Structured Finance & Debt Syndication
The debt syndications and structured finance business has developed a niche in loan distribution abilities. During FY 2022-23, the team successfully managed various debt issuances of mid-sized corporates, including structured term loans, working capital and infrastructure finance. The debt syndication desk contributed significantly to foreign currency loan book through GIFT city branch. The team focusses on partnering mid-sized, growth-oriented companies, introducing them to investors. The team has nurtured relationships across the financial markets especially with NBFCs, IDFs and more.
| RBL Banks Financial Overview | (Rs in crore) | ||
| Particulars | FY 2022-23 | FY 2021-22 | % Change |
| Net Interest Income | 4,451 | 4,027 | 10.5% |
| Non-Interest | 2,490 | 2,340 | 6.4% |
| Income | |||
| Operating Revenue | 6,941 | 6,367 | 9.0% |
| Operating Expenses | 4,738 | 3,622 | 30.8% |
| Operating Profit | 2,203 | 2,745 | (19.8%) |
| Provisions and Contingencies | 1,022 | 2,860 | (64.3%) |
| Profit before Tax | 1,181 | (115) | |
| Taxes | 298 | (40) | |
| Profit after Tax | 883 | (75) |
Operating Revenue rose 9.0% YoY from Rs 6,367 crore to Rs 6,941 crore in FY 2022-23. Net Interest Income (NII) rose 10.5% YoY from Rs 4,027 crore to Rs 4,451 crore in FY 2022-23. Non-interest income, comprising fee income, trading income and other income, grew 6.4% YoY from Rs 2,340 crore to Rs 2,490 crore in FY 2022-23
Operating expenses increased 30.8% YoY from Rs 3,622 crore to Rs 4,738 crore in FY 2022-23 as the Bank continued its investments in increasing its distribution footprint, customer acquisition, technology and employee addition.
Operating Profit as a result, de-grew 19.8% to Rs 2,203 crore from Rs 2,745 crore in FY 2021-22.
Provisions and contingencies decreased 64.3% YoY from Rs 2,860 crore in FY 2021-22 to Rs 1,022 crore in FY 2022-23 specifically primarily due to normalisation in businesses, the Banks retail segments, and continued recoveries from accounts which had turned non-performing in previous years.
As a result, the Bank reported a Profit after Tax of Rs 883 crore for the year as compared to a Loss of Rs 75 crore in FY 2021-22.
Net Interest Income (Rs in crore)
| Particulars | FY 2022-23 | FY 2021-22 | % Change |
| Interest Earned | 9,130 | 8,176 | 11.7% |
| Interest/Discount | 7,132 | 6,317 | 12.9% |
| On Advances/Bills | |||
| Income On Investments | 1,626 | 1,348 | 20.6% |
| Other Interest Income | 372 | 511 | (27.0%) |
| Interest Expended | 4,679 | 4,149 | 12.8% |
| Interest On Deposit | 4,006 | 3,539 | 13.2% |
| Other Interest Expense | 673 | 610 | 10.2% |
| Net Interest Income | 4,451 | 4,027 | 10.5% |
The Bank reported a Profit after
Tax of Rs 883 crore for the year 2022-23 as compared to a Loss of
Rs 75 crore in FY 2021-22
| Particulars | FY 2022-23 | FY 2021-22 |
| Average Interest Earning Assets | 95,395 | 90,545 |
| (Rs in crore) | ||
| Average Interest Earning Advances | 60,281 | 54,455 |
| (Rs in crore) | ||
| CASA ( Rs in crore) | 31,717 | 27,879 |
| Yield on Interest Earning Assets (%) | 9.6 | 9.0 |
| Yield on Advances (%) | 11.8 | 11.6 |
| Yield on Investments (%) | 6.2 | 5.8 |
| Cost of Funds (%) | 5.4 | 5.0 |
| Cost of Deposits (%) | 5.3 | 4.9 |
| Net Interest Margin (%) | 4.7 | 4.4 |
| Average LCR for the Year (%) | 144 | 143 |
Net Interest Income (NII) rose 10.5% YoY from Rs 4,027 crore in FY 2021-22 to Rs 4,451 crore in FY 2022-23. NII was 64.1% of the total Operating Revenue in FY 2022-23 as against 63.2% in FY 2021-22.
During this period, the yield on interest earning assets increased from 9.0% last year to 9.6% in FY 2022-23. The yield on advances increased by 23 bps from 11.6% in FY 2021-22 to 11.8% in FY 2022-23. The yield on investments increased by 43 bps during FY 2022-23.
Cost of funds increased by 37 bps from 5.0% in FY 2021-22 to 5.4% in FY 2022-23. In FY 2022-23, the Banks focus continued to be on increasing the contribution of retail deposits, improving granularity and tenor of deposits, improving CASA and maintaining healthy levels of liquidity. Due to the increasing interest rate environment, the cost of deposits increased from 4.9% last year to 5.3% in FY 2022-23.
CASA deposits reported an increase of 13.8% from Rs 27,879 crore in FY 2021-22 to Rs 31,717 crore in FY 2022-23.
| Non-Interest Income | (Rs in crore) | ||
| Particulars | FY 2022-23 | FY 2021-22 | % Change |
| Fee Income | 2,324 | 2,070 | 12.2% |
| Foreign Exchange | 245 | 201 | 21.4% |
| Brokerage | |||
| Processing Fee | 695 | 603 | 15.3% |
| General Banking | 706 | 625 | 13.0% |
| Distribution Income | 76 | 60 | 25.3% |
| Payments Income | 506 | 498 | 1.4% |
| Trade & Others | 96 | 83 | 13.7% |
| Trading Income | 166 | 268 | (37.9%) |
| Total | 2,490 | 2,340 | 6.4% |
Non-interest income comprising fees, trading and miscellaneous income increased by 6.4% from Rs 2,340 crore in FY 2021-22 to Rs 2,490 crore in FY 2022-23 and constituted 36% of the Operating Revenue of the Bank.
Fee income increased by 12.2% from Rs 2,070 crore in last financial year to Rs 2,324 crore in FY 2022-23 and continues to remain a significant part of the Banks non-interest income. Fee income constituted 93.3% of non-interest income and contributed to 35.9% of the Operating Revenue in FY 2022-23.
Total fee income from the Banks retail operations accounted for 28.6% of the total Operating Revenue of the Bank in FY 2022-23 as compared to 26.6% in FY 2021-22, and 79.7% and 72.4% of the Banks total fee income for FY 2022-23 and FY 2021-22 respectively.
Wholesale Banking accounted for 15.2% of the total fee income in FY 2022-23.
In FY 2022-23, trading income decreased 37.9% to Rs 166.4 crore from Rs 268.0 crore last year mainly on account of the lower income to the Bank on the SLR portfolio in FY 2022-23.
Operating Revenue
The Operating Revenue rose 9.0% YoY from Rs 6,367 crore to Rs 6,941 crore in FY 2022-23. This was primarily led by increase in Net Interest Income in FY 2022-23. The Bank saw an increase in Interest Income primarily owing to increased lending activity specially in its microfinance business segment and the reducing negative impact of excess liquidity carried by the Bank in FY 2022-23.
Operating Expenses Rs ( in crore)
| Particulars | FY 2022-23 | FY 2021-22 | % Change |
| Employee | 1,340 | 1,002 | 33.8% |
| Expenses | |||
| Depreciation | 196 | 164 | 19.8% |
| Other Operating | 3,202 | 2,456 | 30.3% |
| Expenditure | |||
| Total Operating | 4,738 | 3,622 | 30.8% |
| Expenses |
The operating expenses for the Bank increased 30.8% in FY 2022-23 as compared to last year, from Rs 3,622 crore to Rs 4,738 crore, primarily owing to the Banks continued investments in expanding infrastructure, technology, customer acquisition and human resources required for supporting the existing and new businesses.
Staff cost increased 33.8% from Rs 1,002 crore in FY 2021-22 to Rs 1,340 crore in FY 2022-23. This was due to 19.2% increase in employee strength from 9,257 as at end of FY 2021-22 to 11,032 as at the end of FY 2022-23, and an increase in employee compensation of 10.13% (average) in FY 2022-23. In addition, the Bank recognised the full impact of ESOPs granted to employees as against the impact of ESOPs given to Material Risk Takers in FY 2021-22. This change saw an additional impact of Rs 17 crore in FY 2022-23 related to the earlier period.
Other operating expenses increased 30.3% YoY from Rs 2,456 crore in FY 2021-22 to Rs 3,202 crore in FY 2022-23. The increase was primarily due to the full year impact of investments in branch infrastructure done in FY 2021-22 along with branch additions done in FY 2022-23 and technology related costs to support business growth.
Operating Profit
During the year, the operating profit of the Bank decreased by 19.8% to Rs 2,203 crore from Rs 2,745 crore last year on account of higher growth in the expenses along with comparatively lower growth in operating revenues.
| Provisions and Contingencies | (Rs in crore) | ||
| Particulars | FY 2022-23 | FY 2021-22 | % Change |
| Provision on NPAs | 1,122 | 2,500 | (55.1%) |
| Standard Assets | (222) | 304 | (172.9%) |
| Other Assets | 54 | 8 | 563.7% |
| Provision on | 68 | 48 | 39.3% |
| Investments | |||
| Total Provisions | 1,022 | 2,860 | -64.3% |
The Bank provided Rs 1,122 crore towards non-performing assets as compared to Rs 2,500 crore last year. The decrease in provision towards non-performing assets was primarily on account of lower, more normalised slippages in the retail assets segment of the Bank. These are mainly in the unsecured loan segments which were severely impacted as a result of the second wave of the COVID-19 pandemic in FY 2021-22. The slippages in FY 2022-23 were Rs 2,755 crore as compared to Rs 3,943 crore in FY 2021-22. The Banks Provision Coverage Ratio was 68.1% as at March 31, 2023.
Provisions for standard assets
The Bank saw a provision release of Rs 222 crore for standard assets in FY 2022-23 as compared to provision of Rs 304 crore last year.
Provision on Investments
Provision for non-performing investments for FY 2022-23 amounted to Rs 68 crore as compared to Rs 48 crore in FY 2021-22. The increase was primarily on account provisioning on Securities Receipts.
Provision for tax
Provision for tax for FY 2022-23 stood at Rs 298 crore as compared to a negative of Rs 40 crore for last year.
Net Profit
As a consequence, the Bank reported a profit after tax of Rs 883 crore for the year ended March 31, 2023 as compared to a loss of Rs 75 crore last year.
Asset Quality
The Bank saw a reduction of Rs 309 crore to Gross NPAs during the year with the Banks ratio of Gross NPAs to gross advances decreasing to 3.37% at the end of March 2023 from 4.40% as at the end of March 2022. The Bank reduced Rs 34 crore in Net NPAs and the Banks Net NPA ratio (Net NPAs as percentage of net advances) reduced to 1.10% from 1.34% for the same period.
The Banks provision coverage increased during FY 2022-23 and stood at 85.0%, including prudential write-offs and 68.1% excluding prudential write-offs. The Banks accumulated prudential write-off pool stood at Rs 2,738 crore as at end of FY 2022-23.
The fund-based outstanding of standard loans under COVID-19 resolution scheme as at March 31, 2023 stood at Rs 344 crore. The linked non-fund based outstanding for which there was no change in original terms stood at Rs 0.46 crore. Outstanding restructured loans under the MSME scheme stood at Rs 635 crore. The Bank held a provision of Rs 130 crore on these restructured assets.
Other Key Ratios
Basic Earnings Per Share (EPS) in FY 2022-23 was Rs 14.72 compared to a negative of Rs 1.25 last year, while the Diluted Earnings Per Share was Rs 14.66 compared to a negative of Rs 1.25 last year. Return on Equity (RoE) and Return on Assets (RoA) were 6.69% and 0.83%, respectively. Book Value per Share was Rs 216.76 as at March 31, 2023. Credit Deposit ratio of the Bank as on March 31, 2023 was at 82.71% as compared to 75.97% last year.
| Balance Sheet | Rs ( in crore) | ||
| Assets | As at March 31, 2023 | As at March 31, 2022 | % Change |
| Cash and Balances with Reserve Bank of India | 6,238 | 13,111 | (52.4%) |
| Balances with Banks and Money at Call and Short Notice | 2,282 | 4,437 | (48.6%) |
| Investments | 28,875 | 22,274 | 29.6% |
| Advances | 70,209 | 60,022 | 17.0% |
| Fixed Assets | 574 | 548 | 4.7% |
| Other Assets | 7,698 | 5,817 | 32.3% |
| Total | 115,876 | 106,209 | 9.1% |
Total assets increased by 9.1% to Rs 115,876 crore as on March 31, 2023 from Rs 106,209 crore on March 31, 2022.
Cash and Balances with Reserve Bank of India was lower as Bank utilised the surplus liquidity towards growth in advances and investments.
| Advances | (Rs in crore) | |||
| Particulars | As at March 31, 2023 | As at March 31, 2022 | YoY | % of Advances |
| Wholesale Banking | ||||
| Corporate & Institutional Banking | 24,643 | 22,150 | 11.3% | 35.1% |
| Commercial Banking | 7,788 | 6,543 | 19.0% | 11.1% |
| Wholesale | 32,431 | 28,693 | 13.0% | 46.2% |
| Banking Total | ||||
| Retail Banking | ||||
| Business Loans | 6,656 | 8,058 | (17.4%) | 9.5% |
| Credit Cards | 16,593 | 13,383 | 24.0% | 23.6% |
| Microfinance | 5,963 | 4,852 | 22.9% | 8.5% |
| Housing Loans | 4,583 | 2,463 | 86.1% | 6.5% |
| Retail Agri | 1,357 | 1,189 | 14.1% | 1.9% |
| Rural Vehicle | 1,029 | 314 | 227.7% | 1.5% |
| Finance | ||||
| Others | 1,597 | 1,070 | 49.3% | 2.3% |
| Retail Banking | 37,778 | 31,329 | 20.6% | 53.8% |
| Total | ||||
| Total | 70,209 | 60,022 | 17.0% | 100% |
Total advances of the Bank as on March 31, 2023 increased 17.0% to Rs 70,209 crore from Rs 60,022 crore as on March 31, 2022, largely driven by growth in the commercial banking segment within wholesale banking and credit card, microfinance, housing and rural vehicle finance segments within retail banking. Retail advances comprised 53.8% of total advances and grew 20.6% to Rs 37,778 crore, wholesale advances comprised 46.2% of total advances and grew by 13.0% to Rs 32,431 crore.
Credit cards remain the largest retail segment and accounted for 23.6% of total advances, business loans 9.5%, micro-banking 8.5%, housing loans 6.5%, retail agri 1.9%, rural vehicle finance at 1.5% and others accounted for 2.3%.
| Investments | |||
| Particulars | As at March | As at March | % Change |
| 31, 2023 | 31, 2022 | ||
| Government | 26,296 | 20,162 | 30.4% |
| Securities | |||
| Debentures & | 1,037 | 1,028 | 0.9% |
| Bonds | |||
| Money Market/ | 1,119 | 470 | 138.0% |
| Equities/Mutual | |||
| Funds | |||
| Subsidiaries | 145 | 145 | 0.0% |
| Others | 278 | 469 | (40.7%) |
| Total | 28,875 | 22,274 | 29.6% |
The investment portfolio of the Bank grew 29.6% to Rs 28,875 crore. Investments in Government securities, increased 30.4% to Rs 26,296 crore. The Bank continued to maintain higher levels of government securities, primarily driven for maintaining the level of liquid assets for Liquidity Coverage Ratio purposes. Money market/equities/mutual fund investments increased 138% to Rs 1,119 crore in FY 2022-23. As on March 31, 2023, the Bank classified 66.2% of the total government securities in the Held To Maturity category, and bonds and debentures portfolio was classified in the Available For Sale category.
Other Assets
Other assets of the Bank as on March 31, 2023 increased to Rs 7,698 crore from Rs 5,817 crore as on March 31, 2022, primarily on account of increase in RIDF Deposits and Deferred Tax Assets.
Liabilities and Shareholders Funds Rs ( in crore)
| Particulars | As at March 31, 2023 | As at March 31, 2022 | % Change |
| Capital | 600 | 600 | |
| Reserves and Surplus | 12,977 | 12,018 | 8.0% |
| Total Shareholders Funds | 13,577 | 12,618 | 7.6% |
| Deposits | 84,887 | 79,007 | 7.4% |
| Current Account Deposits | 14,795 | 11,522 | 28.4% |
| Saving Account Deposits | 16,922 | 16,357 | 3.5% |
| CASA | 31,717 | 27,879 | 13.8% |
| Term Deposits | 53,170 | 51,128 | 4.0% |
| Borrowings | 13,331 | 11,093 | 20.2% |
| Other Liabilities and Provisions | 4,081 | 3,491 | 16.9% |
| Total | 115,876 | 106,209 | 9.1% |
Shareholders Funds
Shareholders funds of the Bank increased from Rs 12,618 crore as on March 31, 2022 to Rs 13,577 crore as on March 31, 2023, on account of the profit reported by the Bank in FY 2021-22 and ESOPs exercised by employees.
Deposits
The total deposits of the Bank increased by 7.4% to Rs 84,887 crore against Rs 79,007 crore last year. Savings Bank deposits reported a growth of 3.5% to Rs 16,922 crore, while Current Account deposits reported increase of 28.4% to Rs 14,795 crore. As on March 31, 2023, low-cost CASA deposits increased to Rs 31,717 crore, and constituted 37.4% of total deposits as compared to 35.3% last year.
Borrowings
The total borrowings of the Bank increased 20.2% from Rs 11,093 crore in FY 2021-22 to Rs 13,331 crore in FY 2022-23, primarily on account of addition of USD 100 million of Tier II Notes issued by the Bank in May 2022 and other short-term borrowings. The Bank continued to reduce the refinance borrowings on its balance sheet in favour of granular retail deposits.
Capital Management
The Bank ended FY 2022-23 with a robust capital position. The Banks overall capital adequacy ratio (CAR) under Basel III stood at 16.92% at the end of the year, well above the benchmark requirement of 11.50% stipulated by Reserve Bank of India (RBI). Of this, the Common Equity Tier I (CET I) CAR was 15.25% [against minimum regulatory requirement of 5.50% (8.00% including CCB)] and Tier I CAR was 15.25% [against minimum regulatory requirement of 7.00% (9.50% including CCB)]. As on 31 March, 2023, the Banks Tier II CAR under Basel III stood at 1.67%.
The following table sets forth the capital, risk-weighted assets and capital adequacy ratios computed as on March 31, 2023 and March 31, 2022 in accordance with the applicable RBI guidelines under Basel III.
| Particulars | March 31, 2023 | March 31, 2022 |
| Tier I Capital (Rs in crore) | 12,984 | 12,301 |
| Tier II Capital (Rs in crore) | 1,424 | 470 |
| Of which | ||
| Tier II Capital Instruments | 822 | 66 |
| (Rs in crore) | ||
| Other Eligible Tier II Capital | 602 | 404 |
| (Rs in crore) | ||
| Total Capital Qualifying for | 14,408 | 12,771 |
| Computation of Capital Adequacy | ||
| Ratio (Rs in crore) | ||
| Total Risk Weighted Assets And | 85,138 | 75,909 |
| Contingencies (Rs in crore) | ||
| Total Capital Adequacy Ratio (%) | 16.92 | 16.82 |
| Of which | ||
| Common Equity Tier I Capital | 15.25 | 16.21 |
| Ratio (%) | ||
| Tier I Capital Ratio (%) | 15.25 | 16.21 |
| Tier II Capital Ratio (%) | 1.67 | 0.62 |
The movement in capital position for FY 2022-23 was as below
| Particulars | March 31, 2023 ( Rs crore) | CRAR (%) |
| Capital Position as of March 31, 2022 | 12,771 | 16.82 |
| Increase due to Profit in FY 2022-23 | 883 | 1.16 |
| Others | (2) | 0.00 |
| Increase on Account of Fresh | 822 | 1.08 |
| Tier II Issuance | ||
| Decrease on Account of Haircut on Tier 2 Bonds | (66) | (0.09) |
| Decrease on Account of Consumption in FY 2022-23 | (2.06) | |
| Capital Position as of March 31, 2023 | 14,408 | 16.92 |
5. RISK REPORT
5.1 Risk Management Framework
Effective Risk Management is integral to the Banks ability to deliver sustainable growth. The Banks Risk Management Framework is underpinned by its strong risk culture and commitment to total compliance. The Banks Risk Management Framework ensures that all risks to the Banks business sustainability are well understood, along with the existence of appropriate and adequate measures to monitor, mitigate and control these risks. It comprises key aspects of: a) Risk taxonomy, b) Risk appetite, c) Risk culture, d) Risk governance.
a) Risk Taxonomy
The Banks risk taxonomy classifies types of risk facing the Banks business, taking into account the various external causative factors such as macroeconomic environment, disruptive technologies, environmental, social and governance (ESG), climate risk, legislation, regulation and internal causative factors such as people, processes, systems, balance sheet, products, clients, reputation and behaviour and more. There are various processes in place to identify emerging risks, to be analysed and classified as a next step.
Three Lines of Defence Model
The Bank follows the industry standard of ‘three lines of defence model of risk management to clearly demarcate the responsibility between risk takers and different internal control functions. The management within each business or function consists the first line of defence. They operate their business within a set risk appetite, framework for which is provided by the second line consisting of dedicated departments. The third line of defence is the Internal Audit authority, which evaluates the effectiveness of governance processes and outcomes, compliance to internal policies/regulatory guidelines, management, and control processes. It has a coordinating role towards the external auditor and the regulators.
b) Risk Appetite
Risk appetite refers to the level of risk that the Bank is willing to take in its pursuit of business growth. The Bank is committed to maintaining a moderate risk profile, which is assessed regularly. At the apex level, the Banks Board of Directors approve the risk appetite statement, which defines acceptable risk boundaries and drives the Banks business strategy.
The Banks Chief Risk Officer (CRO) assists and reports to the Risk Management Committee of the Board (RMCB), a Board sub-committee in fulfilling their risk oversight responsibilities. The CRO establishes ongoing risk management practices appropriate for size and scale of the Bank and escalates identified or emerging risk exposures to the Management and the Board. The CRO does not have discretionary authority to approve any transaction.
The status of adherence to the risk appetite, breaches along with curative actions, the outlook/glide path and such are discussed by the Executive Risk Committee, Risk Management Committee of the Board and the Board, at quarterly intervals by way of Enterprise Risk Management report.
c) Risk Culture
The Bank has created an institutional framework to enable all employees to understand the need for prioritising risk and compliance as integral to its risk culture. The Bank leverages Target Operating Model Framework to control credit concentration risks and move towards risk-based (linked to internal credit rating) credit origination, credit underwriting and exposure management to achieve desired/target risk profile the Bank has set itself. These include risk appetite thresholds/tolerance levels, KRIs for various businesses, segments, products and more, facilitated through continuous communication, awareness, education, and training. These are guided by management KPIs to inculcate the larger objective that risk mitigation is a shared responsibility for everybody.
d) Risk Governance
Risk Management Committees
The Risk Management Committee of the Board (RMCB) monitors the risk management function of the Bank. It prescribes policies, processes, systems and strategies for monitoring and managing the entire gamut of risks i.e. credit risk, market risk, concentration risk, liquidity risk, interest rate risk and operational risks, regulatory and compliance, third party risk, reputation risk, cyber risk and more.
It is supported by various executive committees: the Executive Risk Committee (ERC); Management Credit Committee (MCC); Asset Liability Management Committee (ALCO); Product Approval Committee (PAC); Operational Risk Management Committee (ORMC); Retail Risk Management Committee (RRMC); Business Operations & Technology Steering Committee (BOT); Compliance Implementation Committee (CIC) and Environmental & Social Risk Governance Committee (ESGC). The ORMC and RRMC report to the ERC.
The Board Investment and Credit Committee (BICC) monitors the Banks treasury investment performance and also approves credit & investment proposals as defined in the Banks credit policy. The IT Strategy Committee of the Board oversees the overall IT strategy of the Bank, including cyber security risk. It prescribes policies and procedures with respect to cyber security and is supported by the Information Security Steering Committee (ISSC), an executive committee.
Details and brief terms of reference of the various executive committees:
1. Executive Risk Committee (ERC) is responsible for identifying, monitoring and managing both current and emerging risks at the enterprise level and the development of the Banks risk appetite statement. It reviews the adequacy of the enterprise risk management framework, policies and procedures and recommends policies on standards for presentation of credit proposals, financial covenants, ratings, prudential limits on large credit exposures, standards for loan collaterals, and more.
2. The Management Credit Committee (MCC) operationalises the credit policy and implements credit framework as approved by the Board and the RMCB for retail & wholesale banking businesses. It also reviews the performance of Exception Management Committee and approves credit proposals as per delegation authority prescribed in the Board-approved credit policy.
3. The Banks Asset Liability Management Committee (ALCO) is responsible for managing market risks liquidity risk, interest rate risk in banking book, currency risk, funding policy and the pricing of deposits and advances.
4. The Product Approval Committee (PAC) is a cross-functional committee comprising members of the senior management, which reviews and approves of all new products and service offerings. It also periodically reviews existing products.
5. The ORMC is a cross-functional committee of the senior management, which oversees operational risk management across the Bank by establishing an appropriate operational risk management framework.
6. Retail Risk Management Committee (RRMC) is responsible for risk oversight over retail credit portfolios of the Bank and reports into ERC.
7. The Business Operations & Technology Committee (BOT) committee is responsible for approving and overseeing strategic and new operations & technology projects, ensuring alignment with the Banks strategy, and management of IT-related risks.
8. The Compliance Implementation Committee (CIC) oversees regulatory compliances.
9. The Environmental & Social Risk Governance Committee (ESGC) oversees the implementation of the environmental and social risk management system across the Bank.
10. The Information Security Steering Committee (ISSC) ensures adequacy of information security policy, standards and procedures. It also ensures that Bank is fully prepared for all types of technology threats.
Risk Management Policies
The Banks Enterprise Risk Management (ERM) policy is based on best practices and provides a summary
The Bank has created an institutional framework to enable all employees to understand the need for prioritising risk and compliance as integral to its risk culture.
of its principles regarding risk taking and risk management. The Risk Appetite Framework, Internal Capital Adequacy Assessment Process (ICAAP) and Stress Testing framework are pillars of the Banks enterprise risk management policy.
The Bank has various policies such as Liquidity Risk & Asset Liability Management (ALM) Policy; Credit Policy; Investment Policy; Liquidity and Contingency Plan; Market Risk Policy; FX & Derivatives Policy; Customer Suitability and Appropriateness Policy; Internal Control Policy; Recovery Policy; KYC and AML Policy; Operational Risk Management Policy; Risk-based Internal Audit Policy; Sustainability Policy; Cyber Security Policy, Information Security Management Policy, and more.
Risk Management System
The Bank has a robust framework to communicate risk MIS to its senior executives and risk committees in the form of dashboards and reports. Portfolio-level risk aggregates are assessed through various reports covering credit risk, market risk, operational risk, liquidity and interest rate risk, among others, reviewed by the Board/RMCB/Risk Committees/ Senior Management on an ongoing basis.
5.2 Risk and Mitigation
5.2.1 Capital Adequacy Risk
The Bank maintains a strong capital position with the capital ratios well above the thresholds defined by the regulator. The Bank has strengthened its Tier 1 capital structure through continuous and timely capital infusion, adhering to its Board-approved risk appetite threshold.
5.2.2 Credit Risk
In a Banks portfolio, losses may arise due to outright default or due to inability or unwillingness of a customer or counterparty to meet commitments in relation to re-payments, trading settlements, or any other financial transaction. Alternatively, losses could occur due to reduction in collateral value. The Banks credit policies prescribe the sanction and monitoring procedures for various categories of loans, with separate credit origination and appraisal processes for wholesale and retail segments.
Within the Wholesale segment, the Bank has adopted Target Operative Model (TOM) to help manage concentration risks (counterparty, borrower group, tenor risks). TOM is defined for different client segments that is based, inter alia, on internal risk ratings and other risk parameters.
Internal ratings for the wholesale segment is carried out by Independent Credit Rating (ICR) function that is independent of the credit and business function. The ICR facilitates informed credit decision-making by quantifying credit risk in a way that is consistent, reliable and valid. It adds to the ease of credit approving authorities in evaluating the creditworthiness of borrowers.
The Retail segment relies largely on standardised product programmes for credit risk assessment and approvals. The Bank also monitors credit concentration of exposures to single borrower, group of borrowers, sensitive industry exposures, geography and product, among others. Portfolio reviews for Wholesale and Retail are conducted on regular basis.
5.2.3 Market Risk
The Bank manages market risk in accordance with the Board-approved investment policy, market risk management policy, foreign exchange & derivatives policy, and customer suitability and appropriateness policy. The Market Risk Policy identifies all the risk factors which arise out of Treasury activities, defining limits at position/ product- and portfolio-level as per the risk appetite set by the Board.
The investment policy lays down the instruments that are permitted to be held as investments and also defines prudential limits for various categories of instruments. The Bank has implemented all the necessary infrastructure in terms of systems and risk management processes and has undertaken the Libor transition for all the applicable benchmarks and curves at the appointed date i.e., December 31, 2021.
5.2.4 Liquidity Risk
The Bank emphasises the management of funding Liquidity Risk, as it is the most important of risks. The Bank has a comprehensive Liquidity Risk & ALM (Asset-Liability Management) policy incorporating RBI guidelines and industry best practices and maintains Liquidity Coverage Ratio (LCR) as per RBI guidelines. The Bank has also put in place a mechanism of short-term dynamic liquidity and contingency plan as a part of liquidity risk management. Contingency Funding Plan (CFP), approved by the Board sets forth a process of dealing with crisis situations in the event of a liquidity crunch or a run on the Bank.
5.2.5 Compliance Risk
The Bank has an independent Compliance function for effective management of compliance risk. The Chief Compliance Officer reports to the Board of Directors. The Bank practices zero tolerance to compliance breaches and has also included adherence to regulatory and internal guidelines into its Code of Conduct, which requires every employee to sign during enrolment. The Bank has adopted a code for prevention of insider trading, which is applicable to its Board members and employees, as well as their dependent family members. Under the supervision of the Managing Director and CEO, the Company Secretary is tasked with setting forth policies and procedures and monitoring compliance with the rules related to the disclosure of price sensitive information.
5.2.6 Cyber Security Risk
The Bank has robust policies, procedures, controls and monitoring tools to manage and mitigate cyber security risk. The framework covers people, processes and technology. The Bank has a cyber security policy and the information security management policy approved by the Board. The Bank also has a robust cyber crisis management plan to establish strategic framework and actions to prepare for, respond to, and recover from a cyber-incident, should this occur.
5.2.7 Digital Risk
The Bank has an independent Digital Risk function reporting under Enterprise Risk function for management and mitigation of risk pertaining to unwanted and often unexpected outcomes of digital transformation. The Digital risk team reviews PAC notes, reviews and approves of SOPs, Business Requirement Documents (BRD), loss data, fraud data, new business partnerships, provisions created, customer complaints and internal audit reports and more. It is also responsible for transaction monitoring.
5.2.8 Environment & Social Risk Management (E&S)
RBL Bank has made a strategic commitment towards sustainable development, making it an integral part
The Bank has a robust cyber crisis management plan to establish strategic framework and actions to prepare for, respond to, and recover from a cyber-incident, should this occur.
of its business practices, including risk management. The Environmental and Social Risk Governance (ESG) Committee provides due oversight and periodic updates to the Board.
The Bank has developed a comprehensive ESG framework with the following key objectives:
- Setting strategic E&S objectives, such as new offerings that address E&S sustainability
- Incorporating E&S risk considerations into all financing activities and developing client awareness on this subject
- Exclusion of clients whose business activities do not meet the Banks principles; the Bank has adopted the IFC Exclusion List
- Communicating E&S expectations to all employees, clients and other external stakeholders
- Consistently enhancing the Bank employees capability to identify E&S risks
- Developing and delivering financial products and services that enable more sustainable agricultural practices and result in resource conservation/ enhancement of resource efficiency
- Running microbanking programmes for marginalised, economically weaker sections in various states across the country.
E&S risk assessment is an integral part of the credit appraisal and sanction process.
All transactions are screened against the ‘exclusion list - an illustrative list of activities which the Bank does not fund, including production or trade in weapons and munitions; production or trade in alcoholic beverages excluding beer and wine; production or trade in tobacco; activities of gambling, casinos and equivalent enterprises, among others.
These are screened for E&S risks as per the Banks Environmental and Social Management System based on the IFCs Performance Standards (PS). The Bank engages with the client to perform a detailed E&S due diligence involving identification, assessment and mitigation of potential E&S risks, including impact of climate change. In case material unmitigated risks are identified, the Bank requires the client to mitigate the same in a time-bound matter through a Corrective Action Plan (CAP), which are discussed and agreed upon mutually. These are also incorporated into the legal documentation with the client. The CAPs are tracked and monitored by the Bank.
Climate Risk:
As a part of E&S Risk assessment, the Bank assesses climate-related risks and runs it through a mandatory probabilistic tool to identify and evaluate any physical climate change risks. It covers extreme weather-related events like floods, draught, storms, landslides, and more. A risk score is generated and all high-risk cases are flagged to relevant business and credit teams. The Bank also focusses on transition risks by identifying Borrowers that are: (a) Overly dependent on water or energy for operations; (b) Sectors facing market pressure towards transitions; and (c) Sectors with supply chains that could be adversely affected due to climate-related transition risks.
In FY 2022-23, the Bank adopted exposure limits to the carbon intensive sectors like coal, oil & gas, iron & steel. The sectoral exposure as a percentage of the loan book is tracked monthly and reported to the management. This should serve as a proxy to the transition risk, in absence of borrower-specific emissions and related potential financial risks. The Bank is also looking at other best practices from interactions with various stakeholders for the integration of these parameters in the scenario analysis and stress testing.
In August 2022, the Bank became a supporter of the Taskforce on Climate-related Financial Disclosures (TCFD). TCFD recommendations are based on four pillars governance, strategy, risk management, and metrics and targets. Given its remit from the Financial Stability Board, the TCFD is committed to market transparency. The RBI has also recommended adoption of the TCFD
Framework by Indian banks, in its new climate risk consultation paper.
The Bank has a dedicated E&S expert group within the risk team, which provides the necessary tools and templates to assist the transaction teams in performing E&S due diligence. The group also reviews the E&S due diligence reports prepared by transaction teams for quality standards. The group provides updates on E&S risks to Senior Management and the Board at periodic intervals. Please refer to Natural Capital for more details on E&S Risk Assessment.
5.2.9 Operational Risk
Operational Risk results from inadequate or failed internal processes, people and systems or from external events, including legal risk. The Banks use of technology exposes it to potential errors, frauds, or unforeseen events resulting in unexpected losses. The Bank has a Board-approved Operational Risk Management Policy. The Operational Risk Management Committee (ORMC) provides the ORM framework in line with the ORM Policy and implements the operational risk activities of the Bank.
| Accordingly, the Banks operational risk identification process includes, inter-alia: |
| - New Product Approval Process |
| - Risk and Control Self-Assessment (RCSA/RCM) |
| - Key Risk Indicators (KRI) |
| - Operational Loss Events (Loss & Near Miss cases) |
| - Control Issues & Actions |
The Bank has also introduced a Third Party Risk Management Governance Framework for screening of third parties (sometimes interchangeably referred to as vendors, suppliers, partners, contractors, and/or service providers).
Key metrics used for measurement of Operational Risk include:
| (i) Operational Losses |
| Total Gross Operational Loss |
| - As a Percentage of Capital |
| - As a Percentage of Revenues |
| (ii) Key Risk Indicators (KRI) |
| (iii) High Risk Open Actions Ageing |
These metrics are tracked at individual Business/Support Unit level, aggregated at the Bank level and measured against the established risk appetite of the Bank.
5.2.10 Model Risk
The Bank has an inventory of retail and non-retail models, enlisted in the Enterprise Risk Management (ERM) Policy, which are increasingly being used across the banking sector for informed strategic decision-making. Success of financial models depends considerably on judgement and expertise, which is critical since the objective is to replicate real-life situations. The Bank maintains model risk sanctity through initial and periodic validation, helping to improve its reliability.
The Bank has been validating some of the models such as credit rating, ICAAP, and more, externally. However, it has also established a model validation forum to govern the Model Validation framework and review its validation exercises undertaken prior to reporting to the ERC and the RMCB. The Banks existing retail validation forum, which was undertaking validation of the retail model, has been included in the Bank-level Model Validation forum.
5.2.11 Stress Testing
The Bank undertakes stress test for Credit Risk, Credit Concentration Risk, Market Risk, Interest Rate Risk in the Banking Book, Operational Risk, Counterparty Credit Risk, Liquidity Risk and Intra Day Liquidity Risk. It helps gauge potential vulnerability to exceptional bur plausible adverse events. The results of the same are reviewed in the ERC Sub-Committee and subsequently placed to RMCB on a quarterly basis.
5.3 Technology Adaptation to Aid Risk Management:
Various digital platforms help enhance the Banks risk management capabilities across functions such as Regulatory Capital (RWA), Market Risk, Operational Risk & Fraud Risk. Some of these initiatives are:
Data analytics for retail business Helps with sourcing, credit decisioning as well as credit monitoring. All models are validated by independent model validation team under the CROs vertical or by Forum/Committee.
Early Warning System Using publicly available information in external databases, stock markets, disclosures, news, and so on, to highlight potential red flags, the platform aids better credit decisioning and credit monitoring.
Machine Learning based models Used for predicting stress-based on transactional data with the Bank such as Current Account, CC-OD transactions, LCs, BGs, cheque bounces and more. It helps with real-time fraud prevention by monitoring multiple transaction channels such as ATMs, mobile banking, net banking, and more.
Market Intelligence Unit (MIU) In line with the Malegam Committee recommendations on large value loan exposures, the Bank has set up a dedicated Market Intelligence Unit to conduct both Pre and Post onboarding checks on borrowers of Wholesale Banking group.
6. TECHNOLOGY
Technology has been and continues to be a major pillar in driving the Banks strategy. It has shown significant growth over the past two years in strengthening of the IT infrastructure and architecture. Building on these efforts, in FY 2022-23, the Bank invested in cutting-edge technologies, strengthening cybersecurity measures, and expanding its digital banking offerings.
It continues to stay invested in creating a seamless digital and customer experience across digital touchpoints and also ensures resilience through a robust disaster recovery mechanism. Moreover, the technology team also aligns with business needs to provide effective and timely solutions to business problems.
Key highlights of FY 2022-23
Finacle Upgrade from 10.2.09 to 10.2.25: RBL Bank became the first bank in India to adopt the containerised version of Finacle CBS, enabling the Bank to handle rapid growth and product portfolio expansion. It facilitates a seamless transition to digital banking, supported by a robust core banking engine and an improved pathway for system enhancement and automation.
Microfinance Upgrade FIS Profile Implementations
Migration from Ganaseva: The Bank crossed a major milestone in October 2022 by migrating from Ganaseva Application to FIS-Profile Core Banking, which involved 80 lakh centres/groups/customers, 90 lakh loan and savings accounts, and 7.3 crore transactions.
The migration has improved operations, enhanced security, customer experience, efficiency, scalability, and cost savings.
Automation (Low code No Code + Robotic Process Automation BOTs): The Bank set a new benchmark in the number of live applications on ‘Low Code No Code platforms and Robotic Process Automation.
The Banks Automation Centre of Excellence (CoE) successfully delivered over 160+ LCNC and RPA applications. It has automated several critical and time-bound processes using BOTs. The automation unit has also streamlined various operational and regulatory processes, resulting in significant time and effort savings.
The implementation of LCNC has drastically reduced the delivery time of new applications to 15-20 days as compared to traditional development methods. The Bank has also established a robust governance structure around the return on investment for applications developed within this CoE.
LOS Loan Origination System for Housing Loans &
Loans Against Property: The focus is on digitalising end-to-end journeys, from product discovery to loan servicing. The Bank has adopted onboarding application that is stable, robust, and scalable, featuring 35+ integrated APIs for a seamless digital journey. It enables Home Loan and Loan Against Property users to submit their applications and documents digitally via a web portal, ensuring an end-to-end journey to the next stage.
The business is looking at the future in terms of configuration of BRE API for pricing, deviation, eligibility, and underwriting, with 8 APIs in total, along with e-KYC (biometric), V-KYC, e-agreement, and NACH/Payment integration and more.
SCF Customer Portal: This web-based platform developed by the Bank allows wholesale customers to conveniently submit their requests for Supply Chain Finance online. The Bank has followed up the launch of Phase 1 of the SCF portal during FY 2022-23 with Phase 2.
7. OPERATIONS
RBL Bank ensures its end-to-end operations involve the use of 360-degree digitalisation, robotics/AI/ML, business process re-engineering, automation, and lean operations. The focus is on areas like service excellence, cost and process optimisation, automation and business transformation.
The Bank continues to improve operational flexibility by simplifying several internal processes and realignment of various teams. Technology is leveraged extensively to deliver enhanced customer journeys, business efficiency, business collaboration and cybersecurity.
7.1 Branch Enhancements
The Bank is empowering its branches to house multi-functional teams required to garner liabilities as well as assets customers; nurture relationships and bring the entire bouquet of services of the Bank to diverse set of customers.
Branches are encouraged to provide suggestions regarding process/system related enhancements which will improve customer experience. These suggestions are reviewed internally and those deemed appropriate are implemented by the central branch operations team. A dedicated & independent branch control and monitoring team works to ensure there is continuous focus on process adherence, control compliance, regulatory aspects & client services at the branches.
The Bank has been actively participating in various inclusion initiatives including organising Aadhar Enrolment/Updation camp for customers and employees at various branches and office locations.
With its continued focus on sustainability, the bank has deployed IOT devices to control air conditioning costs at 50 high spend locations, reaffirming its commitment to save energy and reduce its carbon footprint.
7.2 Digital Interventions
A dedicated team caters to the ever-growing demand for Liberalized Remittance Scheme, supported by the LRS Online Platform, enabling customers to make a remittance of up to USD 25,000 instantly.
RBL Bank has established a comprehensive Learning & Development programme for its employees, under which it embarked on a Learning Mission to ensure that employees complete a minimum of one learning programme each year.
The Bank offers TAB-based account opening facility for new customers, helping reduce customer acquisition costs helping improve customer experience.
The Bank has scaled its Straight-Through Processing (STP) to enhance the customer experience by improving Turn Around Time (TAT). For Rural Vehicle Finance Business, the entire disbursement is done digitally through scan-based model.
Credit Card Business has been transformed into a digital platform with STP and real-time API integrations for customer acquisition and card issuance. The Bank offers strategic solutions to partners for on-boarding customers with biometric authentication and VCIP. It currently onboards more than 95% of its credit card customers through digital journeys. After successful implementation of CRM Next phase 1, the Bank is undertaking further enhancements towards operational efficiency.
8. HUMAN RESOURCES (HR)
RBL Banks human resources are united by a passion and commitment to build an institution of scale, eminence, and impact. The Bank is constantly investing in its employees and empowering them to achieve its Vision.
Employee Reward Management
To strengthen and standardise RBL Banks reward policy to attract, retain, and motivate employees, the Bank commissioned Deloitte Touche Tohmatsu India LLP for its annual remuneration benchmarking survey. The Bank has implemented best practices in hiring, promotions and general remuneration budget planning. It continues to keep its compensation policy aligned with the latest guidelines published by the Reserve Bank of India.
Talent and Succession Planning
The Bank runs a formal talent management process through its Talent Management Council (TMC) to identify, build, and nurture leaders. It is further aligned with succession planning at the Bank. The Talent Review consists of a thorough assessment and analysis process for senior leaders in the organisation followed by integrated leadership development programmes.
Learning & Development (L&D)
Learning is integral to work, RBL Bank has established a comprehensive Learning & Development programme for its employees, under which it embarked on a Learning Mission to ensure that employees complete a minimum of one learning programme each year. This is in addition to mandatory training on compliance, risk & governance. specific The programme features role- learning journeys, which were enhanced by adding more roles and business units for Retail & Wholesale Banking during FY 2022-23. There was emphasis on building awareness and knowledge on Risk & Compliance Culture with individual focus on Know Your Customer (KYC), Anti-money Laundering (AML), Counter-terrorist Financing, Cyber Security, Digital Risk, Emerging Technologies, Ethical Leadership and Early Warning Signals, among others.
The Bank also introduced new programmes across grades under the developmental programmes aimed at enhancing leadership and management competencies. It collaborated with best-in-class learning partners such as NIIT, CRISIL, CAB, CAFRAL, NIBM, Euro Finance, IDRBT, FEDAI, FIMMDA, Simplilearn and many more. During FY 2022-23, the Bank reported 36,405 Training Days (8 hours = 1 training day).
CEOs Award – The ‘Incredibles
RBL Banks flagship annual rewards and recognition (R&R) event celebrates the exemplars of excellence within the organisation. A Rewards & Recognition process leading up to an Awards Ceremony was organised in August 2022. The Bank recognises its employees with the PREET (Professionalism, Respect, Excellence, Entrepreneurial and Teamwork) Awards for living the Banks values in action; Achievers Award for accomplishments that had an organisation-wide impact and SPOT Award to recognise the employees who go beyond the call of duty.
Culture of Recognition - The Bank institutionalized RBL Bank Loyalty Awards for employees who have crossed the 5- and 10-years milestones in service.
Employee Engagement Initiatives during FY 2022-23
InSync: The Bank believes in a culture of open conversations. A series of free-wheeling interactions with the Banks MD & CEO have been created where each session is curated as per a specific theme targetting a specific audience. InSync allows employees to connect with the organisations larger vision and goals with RBL 2.0 in sight.
Industry Outlook Series: To develop capabilities and understanding of various industries and fields, the Bank invites experts to deliver a session on the key trends, growth expectations and demand drivers, and outlook on various industry topics.
Launch of Get-set-Go: A self-paced Onboarding Learning Portal was launched which serves as a one-stop shop for everything a new employee needs to know in terms of people, products, and processes.
BOOKed: An initiative to use the medium of books to encourage reading and learn through sharing. It started as an extension of Apna Library the Banks Corporate Library Subscription benefit that is open to all employees. The initiative invites in-house volunteers to narrate their learnings from a book. Conducted virtually, this is a one-hour programme that is open for all as audience.
Wellness Wheel: The Bank conducted a host of webinars during FY 2022-23 with a focus on wellness, physical and mental health.
Monsoon Indoor Sports Week: In the area of sports, the Bank launched the Monsoon Indoor Sports Week at various locations including games like table tennis, chess, carrom and yoga sessions and a lot more.
Diversity & Inclusion
The Bank aims to develop a truly diverse workforce and realises that embracing diversity is vital for its long-term success. Focussing on enhancing gender diversity within its ranks, the Bank undertook certain key steps as follows:
1. Strengthened the hiring programme for returnee women through its second career programme RETAKE
2. Gender sensitisation workshops for campus hires and employees of the Bank
3. Tracked the career progression of women employees within the Bank especially during appraisal and other review cycles
4. Adhered to PMS guidelines for all maternity cases, protecting the ratings of women who were on maternity leave
5. Initiated tie-ups with diversity consultants
6. Introduced a Women Leadership Development Programme to help women employees get adequate developmental opportunities to build their careers in the Bank
9. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Banks business philosophy is underpinned by its commitment to act as a responsible corporate citizen. It has created a strong legacy of fostering sustainable communities through meaningful programmes for the welfare and development of people from economically and socially disadvantaged backgrounds. Under its CSR Policy, the Banks key focus areas are health, education, and livelihood opportunities.
Overall, an estimated 1 lakh people benefitted directly from the various programmes under the CSR mandate during FY 2022-23 by RBL Bank. From the year 2014 onwards, RBL Bank has impacted more than 5 lakh beneficiaries directly and indirectly benefitted more than a million others.
The Banks CSR agenda is driven by the Board-led CSR Committee, under which CSR Executive Committee and the
CSR Team facilitate implementation of CSR programmes. The Monitoring & Evaluation (M&E) is carried out by the internal CSR Compliance team and by an external M&E agency. The Bank partners with several non-governmental organisations (NGOs) to fulfil its social responsibilities.
RBL Banks Flagship Community Programmes:
1. UMEED1000: The Bank distributed over 1,000 bicycles and school kits across India in Raipur, Guwahati, Goa, Hyderabad, Kolkata, Siliguri, Chennai and Kolhapur for school going girls, enabling sustained access to education. This was a direct implementation project by the Bank with the support of the government departments of the respective states.
2. Stimulating Tribal and Rural Transformation (START): Project START of PRADAN (NGO) and RBL Bank helps develop regionally suitable women-centric socio-technical institutional models for agricultural development and farm allied activities. It mobilises communities to ensure food safety for the rural poor through participation in MGNREGA and promotion of FPOs to revive the farming sector, as well as promoting self-employment through micro and Agri enterprises in the states of Odisha, Bihar, Jharkhand, and West Bengal.
3. Lighthouse Project: A collaboration between GTT Foundation and the Lighthouse Communities Foundation with the support of RBL Bank, the project helps capacity building among the youth by imparting education, enhancing skills, providing job opportunities, and facilitating sustainable livelihoods. It is aimed at benefitting ~5,000 youth from various communities.
4. Hear A Million: ‘Hear a Million is a programme envisioned by Enable India and supported by RBL Bank. It helps to mainstream people with hearing impairments through education, policies, skilling, training, and job opportunities. The programme aims at creating 10,000 deaf leaders across the nation.
Overall, an estimated 1 lakh people benefitted directly from the various programmes under the CSR mandate during FY 2022-23 by RBL Bank.
5. Asha Kiran: Nudge Life Skills Foundation through its project ‘Asha Kiran is targetting poverty alleviation for 2.5 million people residing in rural areas within the state of Uttar Pradesh. It will facilitate welfare access and remunerative, sustainable, and resilient livelihoods. Launched in association with RBL Bank, the programme aims to help 50,000 households (landless, marginal farmers, SC/ST and vulnerable households) with sustainable rural livelihoods: Goatery, backyard poultry, and agriculture as well as providing welfare scheme access like MGNREGA to rural families, migrant and construction workers.
Other CSR Programmes in the Thrust Areas of H.E.LO. (Health, Education and Livelihood Opportunities):
Healthcare:
1. Community Nutrition Initiative: RBL Bank supports the Community Nutrition Initiative (CNI) in Bhiwandi, Maharashtra led by the Foundation for Mother and Child Health (FMCH). It addresses the issue of malnutrition and poor maternal and child health in the area by working in partnership with the Integrated Child Development Schemes (Anganwadis).
2. Cataract-Free Palghar: RBL Bank is supporting an Eyecare Centre in Palghar district to make Palghar cataract-free. An estimated 5,000 cataract surgeries will be performed by the end of 2025.
Education:
1. Young Scholarship Programme: RBL Bank is collaborating with the International Foundation for Research and Education (IFRE)/Ashoka University to provide career exposure to high school students of class 9th, 10th, 11th and 12th of Udbhav RBL Schools and girls students from low-income families.
2. Undergraduate Scholarship: RBL Bank is providing meritorious students from low-income families with scholarships for their undergraduate studies at IFRE/Ashoka University. The Programme supports 4 students each year covering overall tuition fees and other costs.
3. RBL I-Saksham Fellowship: In collaboration with I-Saksham, RBL Bank is committed to nurturing 50 female educational leaders in the backward districts of the state of Bihar, in child-specific pedagogy and leadership. It enriches the childrens process of learning through intervention with local government schools and increased community engagement and participation.
4. In-Service Teacher Training: RBL Bank, in association with The Muktangan Trusts In-Service Teacher Training Programme, helps educated youth receive on-job training to become teachers in English Medium Schools.
5. Bal Gurukuls: Indian Development Foundation networks with schools in urban slums and villages and NGOs/CBOs to reduce school dropout ratio by opening after school/supplementary education program named Bal Gurukuls. RBL Bank is supporting 130 Bal Gurukuls across the country, benefitting nearly 5,000 students.
6. FFE-RBL Scholarship Programme: Foundation for Excellence, in collaboration with the State Government of Telangana and with the support of RBL Bank, helps 100 engineering students every year by funding their tuition and residence expenses directly.
Livelihood Opportunities:
1. Regenerative Farming: Supporting the rural communities, RBL Bank in association with Self-Reliant Initiative for Joint Action (SRIJAN) Foundation pioneers sustainable farming through regenerative agricultural methods to help 3,500 Tribal Women Farmers in Rajasthan aggregate funds.
2. Mobile Business School: Mann Deshi Foundation takes Financial Literacy, Livelihood creation and Business development skills directly to the doorstep of women entrepreneurs in Kolhapur, Maharashtra, through their mobile school. It also provides additional support through a platform called Chamber of Commerce. Through this association with Mann Deshi Foundation, the Bank aims to benefit 5,529 women by FY 2022-23.
3. Bees for Poverty Reduction: Through its partnership with Under the Mango Tree Society, RBL Bank is helping to improve the incomes of 3,429 tribal farmers in Maharashtra, Madhya Pradesh, and Gujarat, by training them in sustainable bee-keeping activities.
4. Digital Fashion Design & Financial Livelihoods
Programme: GTT Foundation, through its partnership with RBL Bank, provides training in fashion designing to 1,000 underprivileged women from minority communities in Pune and Mumbai, helping to create sustainable livelihoods. The Foundation also helps 1,200 women from Pune with financial literacy awareness.
10. CUSTOMER SERVICE
Customer experience is at the core of all the engagements. ‘Service Beyond Excellence is the vision of the Banks customer service team. The Bank ensures fair treatment for its customers. It also has an effective grievance redressal mechanism with a clearly defined TAT for resolutions.
Service Initiatives during FY 2022-23
Uplifting Service
Under the initiative, the Bank launched an EQ development journey for the customer-facing call-centre agents, aimed at helping them to demonstrate greater empathy and enhance customer experience.
Fraud Awareness
In the current environment of increasing financial frauds, RBL Bank emphasizes on customer awareness. The Bank runs Fraud Awareness Customer Campaigns across various channels, including its branches, social media platforms, the Banks website, SMS, and email.
Financial Literacy Week
The Bank observed ‘Financial Literacy Week educating customers on the of good financial behaviour, including active saving, planning, budgeting, and prudent use of digital financial services. Additionally, it organized
‘Financial Literacy Camps at rural branches to create awareness about financial literacy among customers. Customer awareness drives towards transparency and accountability were also initiated through the Banks campaign - #FarzBantaHai.
Apno Ki Baat
The Bank initiated an awareness drive across its branches aimed at customers including Senior Citizens, discussing Nomination, types of digital frauds, financial awareness, etc.
Digi Assist
Launched an online portal ‘Digi Assist which enabled Self- service of key customer requirements such as Insta Statements, Transaction advice, TDS & Interest certificates. 450 customers have been onboarded within the first 3 months of this offering.
Auto validation
The Bank introduced automated beneficiary validation facility to make banking simpler and error free for its API banking customers.
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ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.