dcb bank Management discussions

Your directors are pleased to present the Twenty-Eighth Annual Report of DCB Bank Limited (hereinafter referred to as the Bank/Your Bank/DCB Bank) together with the audited accounts for the Financial Year ended March 31, 2023 (FY 2023).

In FY 2023, the Bank has posted an Operating Profit of 786.73 Crore (FY 2022796.98 Crore) and Net Profit of 465.56 Crore (FY 202228750 Crore).

Total Assets have increased by 7,573.31 Crore and reached 52,365.87 Crore as on March 31, 2023 ( 44,792.56 Crore as on March 31, 2022).

Customer Deposits have increased by 5,859.50 Crore and Advances have increased by 5,284.96 Crore. Your Bank continues to make significant contribution to Priority Sector Lending (PSL) and has achieved the overall PSL target as required by the Reserve Bank of India (RBI).

The Net Interest Margin (NIM) was 3.93% in FY 2023 as compared to 3.56% in FY 2022 and the Current and Savings Accounts (CASA) ratio stood at 26.42% as on March 31, 2023.

Cost to Income Ratio has increased to 63.00% in FY 2023 from 55.96% in FY 2022. Total Branch network stood at 427 as on March 31, 2023 (400 as on March 31, 2022) and Automated Teller Machines (ATMs) network was 396 as on March 31, 2023 (349 as on March 31, 2022).

Provisions Other Than Tax have decreased to 159.17 Crore in FY 2023 from 40743 Crore in FY 2022. Your Bank has been making conservative provision for Non-Performing Assets (NPA) and Covid-19 related restructured loans. In addition, the Bank has also been making periodic Floating Provision and provision against Standard Assets.

Gross NPAs have decreased to 1,122.84 Crore as on March 31, 2023 from 1,289.93 Crore as on March 31, 2022. Consequently, Gross NPA Ratio as on March 31, 2023 was 3.19% as compared to 4.32% as on March 31, 2022. Net NPAs have decreased to 356.92 Crore as on March 31, 2023 as against 573.23 Crore as on March 31, 2022. Consequently, Net NPA Ratio as on March 31, 2023 was 1.04% as compared to 1.97% as on March 31, 2022. The overall NPA Provision Coverage Ratio as on March 31, 2023 was 79.34% (67.84% as on March 31, 2022).

Return on Assets (RoA) Ratio in FY 2023 was 0.97% as compared to 0.70% in FY 2022. Corresponding Return on Equity (RoE) Ratio in FY 2023 was 11.70% as compared to 792% in FY 2022.

Capital Adequacy Ratio (CAR) under Basel III as on March 31, 2023 stood at 17.55% (18.92% as on March 31, 2022).

FINANCIAL SUMMARY

(Rs in crore)

Balance Sheet	As at March 31, 2023	As at March 31, 2022	Increase / (Decrease)
Customer Deposits	37,139.76	31,280.26	5,859.50
Inter Bank Deposits	4,099.15	3,411.43	687.72
Total Deposits	41,238.91	34,691.69	6,547.22
[Including Total CASA*]	[10,895.61]	[9,281.08]	1,614.53
Advances	34,380.74	29,095.78	5,284.96
Gross - NPA	1,122.84	1,289.93	(167.09)
Net - NPA	356.92	573.23	(216.31)
Total Assets	52,365.87	44,792.56	7,573.31

* Current and Savings Accounts (CASA)

Profit & Loss	For the year ended March 31, 2023	For the year ended March 31, 2022	Increase / (Decrease)
Interest Income	4,200.27	3,512.77	687.50
Interest Expense	2,483.26	2,155.26	328.00
Net Interest Income	1,717.01	1,357.51	359.50
Non-Interest Income	409.39	452.04	(42.65)
Total Operating Income	2,126.40	1,809.55	316.85
Operating Cost	1,339.67	1,012.57	327.10
Operating Profit	786.73	796.98	(10.25)
Provisions Other than Tax	159.17	407.43	(248.26)
Net Profit Before Tax	627.56	389.55	238.01
Tax	162.00	102.05	59.95
Net Profit After Tax	465.56	287.50	178.06

DIVIDEND

Your Board is pleased to recommend a dividend of 1.25 per equity share of 10.00 each in respect of Financial Year ended March 31, 2023 ( 1.00 per equity share of 10.00 each for the Financial Year ended March 31, 2022).

MANAGEMENT DISCUSSION AND ANALYSIS VISION

The Banks vision is to be the most innovative and responsive neighbourhood bank in India serving entrepreneurs, individuals, and businesses. In line with this vision, the Bank began implementing a new strategy in FY 2010.

TARGET MARKET

Keeping in view its inherent strengths, branch network and expertise, the Banks target market is mainly small business owners / self-employed / small business segment (traders, shopkeepers, business owners, Micro, Small & Medium Enterprises (MSMEs) and (Small and Medium-sized Enterprises (SMEs). The MSME/SME sector is a vibrant and dynamic sector of the Indian economy and plays a very important role in the growth of the Indian economy. This segment is usually resilient (once again demonstrated post Covid-19 pandemic) and displays entrepreneurial spirit. Small enterprises create millions of jobs and maintain social stability. The MSME sector plays a pivotal role in the economic and social development of the country. As per estimates the MSME sector contributes around 30% to Indias GDP.

Some useful information on the MSME sector is given below:

• Number of Working Enterprises: 63.4 million,

Employment: 111 million individuals

• Urban: 49%, Rural: 51%

• Manufacturing: 32%, Trade 35%, Other Service: 33%

• Sole Proprietor: 96%

(Source: Annual Report FY 2021-22 Government of India, Ministry of Micro, Small and Medium Enterprise)

DCB BANK CUSTOMERS

Your Bank provides banking services to a varied base of business owners, self-employed / small businesses for example - Commodity Trader, Gold Trader, Vegetable Trader, Commission Agent, Retailer, Restaurant Owner, Caterer, Baker, Vending Machine Supplier, Consultant, Doctor, Contractor, Interior Decorator, Software Designer, Salon, Beauty Parlour, Printer, Electrical Engineer, Saw Mill, Flour Mill, Rice Mill, Grocery Store, Brick Maker, Builder, Fabricator, Artist, Writer, Auto Repair, Ship Repair, Pharmacy, Computer Specialist, Furniture Maker, Uniform

Maker, Garment Shop, Fashion Tailor, Hardware Shop, Agri Processor, Pesticide Dealer, Auto Dealer, Scrap Dealer, Stationery Supplier, FMCG or Consumer Goods Dealer, Tool Maker, Agri Input Dealer, Tractor Dealer, Plastic Manufacturer, Mattress Manufacturer, Water Supplier, Computer Training Classes, Internet Cafe, Coaching Classes, Tour Operator, Hotel Owner, Transporter, Ticketing Agent, C&F Agent, amongst others. The list of SelfEmployed occupation is endless. The target market is essentially Micro, Small and Medium Enterprises both in Manufacturing and Services. (Please refer to MSMED Act, 2006). Majority of lending to MSME sector qualifies for Priority Sector Lending. A major share of deposits and loans of the Bank are from the self-employed segment.

CREDIT RATINGS

During the year FY 2023, CRISIL Ratings Limited has reaffirmed the Banks rating for Tier II Bonds (under Basel III) as CRISIL AA-/Stable and re-affirmed its rating of the Banks Certificates of Deposit Programme and Shortterm Fixed Deposit Programme as CRISIL A1 + .

During FY 2023, ICRA Limited has reaffirmed the rating for Tier II Bonds as ICRA A+ with revision in outlook to Positive from Stable and re-affirmed its rating on the Banks Short-term Fixed Deposit Programme as ICRA A1+. Further, at the request of the Bank, ICRA Limited has discontinued the rating of Tier II Bonds that got matured during the year.

AWARDS AND RECOGNITION

Your Bank continued to be recognized for its progress and initiatives across verticals. The details of various awards/ recognitions received by your Bank during FY 2023 are given below:

Corporate Social Responsibility (CSR)

Your Bank was recognized as Indias Best Bank for CSR 2022 by Asiamoney. The Bank won Euromoney Market Leaders CSR (Notable) 2022 by Euromoney. Groundwater depletion, which also endangers the availability of food, is becoming a widespread concern. Community organisations manage and maintain water collecting systems in Banki block, Cuttack district, Odisha to ensure year-round cultivation and sustainable livelihoods for themselves and the next generation. The projects impact includes the creation or restoration of 6 water harvesting structures, impacting 40,615 beneficiaries, with an estimated 18 Crore liters of water storage capacity, benefiting 2,140 acres of irrigated land, and creating approximately 4.75 lakh square feet surface area by way of ponds and tanks. Within the communities, we are promoting, building capacity for resilience to climate change. For the Livelihood Improvement Project in Banki, the DCB Bank CSR project has been recognized by Asiamoney as Indias Best Bank for CSR 2022. Moreover, DCB Bank CSR project has been recognized by Euromoney as Market leader CSR (Notable) 2022.

DCB Bank won the Gold in ACE (Asian Leaders Awards for Branding, Marketing, and CSR) 2022. The Banks CSR partnership project of Livelihood Improvement Project (LIP) through Integrated Watershed Management in Banki, Odisha in collaboration with Concern India Foundation for water conservation and restoration won the Best Corporate (Non-profit Partnership category).

Human Resources (HR)

Your Bank continues to be recognized as a Great Place to Work (GPTW) Certified organization for building a High Trust, High Performance Culture. The Bank has been recognized as Top 40 Indias Best Workplaces in Health & Wellness 2022 and has been featured amongst Top 50 Best places to work in BFSI, both recognitions have been conferred by GPTW.

Information Technology (IT)

During FY 2023, your Bank has participated in various events and has been recognized and awarded.

• DCB Bank won 3rd Annual BFSI Technology Excellence Awards 2022 for Blockchain Initiatives- automated process for ATM cash replenishment.

• DCB Bank won 7th Banking Frontiers Finnoviti Awards 2022 for Social Command Center that helped the Bank in tracking posts more real-time with far better turnaround times.

BRANCH EXPANSION / ATMs

The number of branches, as on March 31, 2023, stood at 427 [233 Retail branches and 194 branches in Agri and Inclusive Banking (AIB)]. Of these, 80 branches are in rural areas (approximately 19%) and 108 branches are in semi-urban areas (approximately 25%). The new branches have a standard look and feel; and they are designed to provide a unique, positive, and seamless banking experience to customers. The Bank had 396 ATMs as on March 31, 2023.

RETAIL BANKING

Retail Banking offers unique products for meeting financial needs of individuals and businesses. The Bank follows a multi-product approach which results in "all products being offered in all branches" subject to customer demand in the branch catchment area. To remain competitive, the Bank is particular about the quality and timeliness of service delivery. The Bank has a wide range of products that caters to the various needs of the customers.

Fixed Deposits

Your Bank continues to be amongst the top banks in India in terms of offering attractive interest rates in both Savings Accounts and Fixed Deposits. In FY 2023, the Bank continued to build its granular deposits by offering attractive benefits and interest rates in Savings Accounts and longer tenor Fixed Deposits. In Fixed Deposits, the Bank has two unique propositions - DCB Suraksha Fixed Deposit and DCB Health Plus Fixed Deposit. DCB Suraksha Fixed Deposit provides free Life Insurance coverage up to 10 lakh and DCB Health Plus Fixed Deposit provides a basket of health benefits like free consultation with doctors, reimbursement of pharmacy expenses and ambulance services. The Bank has also started offering Non-Callable Fixed Deposits for retail customers (below 2 Crore) to boost the retail deposit growth.

The Banks Savings Account and Fixed Deposit book recorded a growth of 23 % and 19 % respectively over the FY 2022. The top 20 deposits ratio, which was at 6.31% at start of the year, slightly increased to 6.96 % at the end of FY 2023.

Mortgage and Micro Mortgage Loans

Mortgage is the prime lending product for the Bank and is contributing more than 50% of the Banks Advances book. As part of the Mortgage business, the Bank offers both Home Loans and Business Loans to self-employed and salaried segments in the neighbourhood areas of the Banks branches. The purpose of these loans, inter alia, are property purchase, home improvement, home repairs, business requirements (purchase of plant and machinery, purchase of stocks, purchase of shops, working capital) and personal expenses such as education, marriage or medical. Micro or small ticket Mortgages are most suitable in Tier 2 to Tier 6 locations. Many people in the rural and semi-urban areas derive cash income from informal sectors or trades. At times, many customers do not have sufficient documents to prove their income / repayment capacity for obtaining loans. The Bank has demonstrated the ability to assess the household income for such customers by adopting a method of in-depth personal discussions with the borrowers and co-borrowers. Apart from creating a robust portfolio, the Bank has been able to achieve financial inclusion goals. Most of these micro loans qualify under the Priority Sector Loan (PSL) norms of the RBI. A part of the Banks portfolio qualifies for long term refinance from National Housing Bank (NHB).

The Mortgages business expanded very well during the year with increased sourcing from the selected segments and more focus on home loans. The Bank increased its distribution in the Mortgage business by adding frontline headcount and expanding geographic presence.

Construction Finance (CF)

The construction sector is an important contributor to the growth of the economy. Affordable housing in both rural and urban areas is one of the key thrust areas for the Government of India. The implementation of Real Estate Regulation & Development Act, 2016 in most states, has brought in much needed transparency in this sector, creating favorable conditions for home buying and financing. The Banks approach is to focus on reputed builders with a strong track record of delivery who are primarily concentrating in the affordable and mid-segment housing segment. At the same time, the strategy is to be cautious and limit exposure per builder / project. The Bank has established processes to monitor sales, collections and utilization of funds towards project completion. In FY 2023, the country witnessed many new projects launches resulting in strong buying in the affordable and midsegment housing units across most of the geographies. The Bank expects sizable opportunity in lending to affordable and mid-segment housing projects.

Commercial Vehicle (CV) Loans

The Bank offers CV Loans to existing customers. Most of the CV portfolio is categorized as PSL. During difficult Covid-19 pandemic, the Bank supported CV customers on a case-to-case basis by offering regulatory packages and Emergency Credit Linked Guarantee Scheme (ECLGS).

Loan against Gold

Loan against Gold is offered in most of the branches of the Bank. The Bank has focused on improving customer experience and service by continuously investing in process improvements through in-housing of valuation process and significant overhaul of the front-end system used for loan processing. Most of the verification and validation processes have been automated leading to faster turnaround and improved customer experience. The Bank has invested in improving controls in order to avoid operating errors and fraud losses.

Insurance and Mutual Funds Distribution

The Bank has corporate agency tie-ups for distribution of life insurance, health insurance and general insurance. The Bank also has referral tie ups for mutual fund distribution.

This enables the Bank to deepen customer relationships in addition to increasing fee income.

Traditional Community Banking

In FY 2010, with a vision of strengthening neighbourhood banking, the Bank set up a separate vertical to focus on Traditional Community Banking. The aim was to address the specific needs of the vintage neighbourhood community customers and to provide personalized solutions wherever possible. This perhaps is the purest form of neighbourhood banking and is directed towards addressing small credit needs such as education, personal, business and working capital.

Non-Resident Indian (NRI) business

In FY 2023 there was greater focus on growing the NRI deposit base as customers were able to travel to India after Covid-19 disruptions. NRI Savings Account balances grew by 20% and FCNR (B) deposits grew by more than 70% during the year. The Bank has NRI customers from 128 countries and it contributes to 8.55% of total customer deposits.

Government business (Collection of Direct and Indirect Taxes)

The Bank has been authorized by the Reserve Bank of India, Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs, Controller General of Accounts and Ministry of Finance to collect various kinds of Direct and Indirect Taxes. After technology integration, DCB Bank account holders will be able to pay their Direct and Indirect Taxes through Internet banking as well as at branches, resulting in significant ease and convenience. Non-account holders will be able to avail of the services at branches. The Bank expects to make collection of Direct Taxes available in the first quarter of FY 2024. In terms of collection of Indirect Taxes, the Bank expects the same to be available in the second half of FY 2024.

COLLECTIONS AND RECOVERIES

The Banks in-house Collections unit is a common utility for all products and is present in more than 304 locations across India. The Collection unit played a vital role in assisting customers in a sensitive manner during and post Covid-19 including management of the Restructured Advances. The unit has also been very proactive in identifying vulnerable customers and offering them suitable solutions within RBI guidelines. Despite the challenges posed by Covid-19, the unit has managed to balance its customer-centric approach with maintaining adequate risk management practices. The unit also embraced automation to streamline loan collections

and improve customer experience. The unit has enabled self-service options, allowing customers to initiate and manage their repayment through digital channels. The units use of technology has contributed significantly to its success in managing overall portfolio with improved Non Performing Asset (NPA) while maintaining a customer-centric approach.

STRATEGIC ALLIANCES

One of the key strategies of the Bank is to enter alliances with entities whose products and services enable the Bank to improve customer acquisition and retention. Apart from new and enhanced products, the alliances help in speed to market.

The various strategic alliances and business association of your Bank are given below:

Bancassurance

Name of the Partner	Type of arrangement
Aditya Birla Health Insurance Company Ltd	Corporate Agency for insurance sales
Aditya Birla Sun Life Insurance Company Ltd	Corporate Agency for insurance sales
HDFC Life Insurance Company Ltd	Corporate Agency for insurance sales
ICICI Lombard General Insurance Company Ltd	Corporate Agency for insurance sales
Royal Sundaram General Insurance Company Ltd	Corporate Agency for insurance sales

Service Partners

Name of the Partner	Type of arrangement
Euronet Services India Limited	ATM and Switch Management
Aditya Birla Finance Ltd.	Lending Business
Fintech Alliances
Name of the Partner	Type of arrangement
Finnew Solutions Private Limited (Niyo)	Global Niyo Card Management
Greenizon Agritech Consultancy Private Limited	Agri Supply Chain Financing Business
Dvara E Registry P Limited	Agri Farmer Loans Business
Ninjacart P Limited	Agri Supply Chain Financing Business

Trade Receivables Discounting System (TReDS) Alliances

Name of the Partner	Type of arrangement
Mynd Solution Private Limited (M1xchange)	Lending on TReDS Platform
Receivables Exchange of India Ltd (RXIL)	Lending on TReDS Platform
A. TReDS Limited (Invoicemart)	Lending on TReDS Platform

CORPORATE BANKING (CB)

The Banks intention is to have a niche presence in Corporate Banking. This business operates across India with regional offices in Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai. The objective is to provide a complete range of commercial banking solutions including Foreign Exchange, Trade Finance and Cash Management. The Bank has a robust underwriting and credit system to address the inherent risks in Corporate Banking. The emphasis is on building a secured loans portfolio and creating long term relationships with high quality large and mid-corporates. Corporate Bank during the year maintained a stable loan book while continuing to build on the short-term products. This unit is also responsible for cross-selling other products of the Bank including raising wholesale Deposits thereby being self-reliant and enabling to maintain a healthy mix of retail to wholesale deposits across diverse industries. The momentum is likely to carry on in the coming years with the unit leveraging on existing customers as well as focusing on adding new customers to the Bank. The unit added 74 new- to-bank customers across different products in FY 2023.

The intensity and frequency of regular review of exposures continued enabling identification of emerging risks in a timely manner. The focus is to continuously improve understanding of the borrowers business/prospects, ensuring right mix of products, enhance analytics, strong promoter connect, cash flow understanding and tracking.

MSME & SME

Your Banks core target segment is MSMEs/SMEs. It is a large and vibrant sector. It is the backbone of our economy. This segment which was unfortunately affected due to Covid-19 pandemic is now clearly showing positive signs of growth and rebound. The Bank strives to be the business partner of MSMEs/ SMEs by offering custom made solutions to meet the credit demand of the segment. The Bank offers a range of products and personalized services including Foreign Exchange, Cash Management, Trade finance and Internet Banking. Given the inherent risks associated with this segment the Bank aims to have large portfolio of small ticket secured exposures.

AGRI AND INCLUSIVE BANKING (AIB)

AIB is a separate unit with the primary objective of achieving financial inclusion, PSL and enhancing the Banks footprint in the rural and semi urban areas. At the end of FY 2023, AIB had 194 branches in 13 states of India. There are many opportunities to offer simple innovative products backed by superior technology in the rural and semi urban areas of India. Many of the new branches are in Tier 2 to Tier 6 locations. There is a constant endeavor to cater to underbanked and unbanked population of the country through a wide range of products, for example, zero balance savings account, small recurring deposit account, small loans to match the income and cash flow cycle. AIB also coordinates the entire PSL efforts for the Bank and is primarily responsible for achieving the financial inclusion targets.

Pradhan Mantri Jan-Dhan Yojana (PMJDY)

In FY 2023, the Bank actively participated in PMJDY program. The Bank had 39,908 PMJDY accounts as on March 31, 2023. The Bank has enabled Rupay Debit Cards for PMJDY account holders.

Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Atal Pension Yojana (APY)

The Bank successfully reached out to unbanked and economically weaker population through PMSBY, PMJJBY and APY programs that are designed to bring social security. Your Bank had 5,400 customers under PMSBY, 2,628 customers under PMJJBY and 7,153 customers in APY as on March 31, 2023.

Basic Savings Bank Deposit Account (BSBDA)

BSBDA has replaced "No frills account". This is a wonderful product for achieving financial inclusion especially for those who have limited transaction needs in the low-income group. The Bank had 44,945 BSBDA accounts as on March 31, 2023.

Kisan Mitra

"Kisan Mitra" as the name suggests, is a deposit product, which fulfils the requirement and enhances the savings habit in rural areas. It is a product specially designed for farmers. It is a modified Savings Account with zero account opening amount and no maintenance charges.

Retail Agriculture Loan and Kisan Credit Card

To meet the credit needs of the farmers, the Bank has retail agriculture products like Kisan Credit Card that aims at providing adequate and timely credit support to the farmers for crop cultivation and allied activities. Under the KCC program, the Bank offers Cash Credit/Overdraft to farmers for purchasing seeds, fertilisers, pesticide for crops cultivation and Term Loan facilities for land levelling, irrigation and purchasing farm equipment.

Tractor Loans

Tractor Loans are an integral part of the total agricultural equipment sector and is a direct indicator of growth in the agricultural sector. The Bank has steadily built its business across Tier 2 to Tier 6 branches. Tractor loans helps the Bank to partly meet PSL targets for agriculture and small and marginal farmers set by the RBI. The Bank has benefited small and marginal farmers in farm mechanization improving their yield and allied income.

Microfinance Institutions (MFIs) and Business Correspondents (BCs)

The Bank lends to MFIs who in turn lend directly to end borrowers. Over time, the Bank has created a network of MFI relationships across India. In a few states of India, the Bank has provided Joint Liability Groups (JLGs) unsecured loans through BCs to promote economic activities. Group loans from the Bank has enabled unprivileged customers to avail small loans from the banking sector instead of high- cost borrowing from money lenders. These loans are usually provided to small farmers and weaker sections mainly in rural areas. To support the growth, the Bank has an efficient software system for managing BC Loans. This software helps maintain adequate information about the borrowers under JLGs. It provides a common platform for both, the Bank and the BCs for seamless processing of loans and has added immense value by reducing the loan disbursal cycle time.

School Finance Loans

The Bank has a lending programme for the education segment by providing loans to schools for infrastructure development which helps to impart quality education to students. The Bank provides loans based on the requirement of schools. Funding is done basis the audited financials and/or the cash flows. This product helps the Bank to cater the education segment and boost the social infrastructure development of the country.

CO-LENDING PARTNERSHIPS

Co-lending is a unique concept enabled by the RBI. The Banks intention is to partner with Non- Banking Financial Sector Companies (NBFCs) that may be offering products not currently offered by the Bank or segments not served by the Bank. Further, the Bank has established Co-Lending Partnerships with four new partners in FY2023 and thereby taking the total to six active Co-lending partnerships as on March 31, 2023. Colending has also contributed significantly to the Banks overall advances growth.

ALTERNATE CHANNELS AND DIGITAL BANKING

Phone Banking

In FY 2023, the Banks Customer Care Associates attended to approximately 75,000 calls per month and 13,000 calls per month are self-serviced on Intelligent Interactive Voice Response (IVR). The Bank has invested in technology and infrastructure to take customer service to new heights. It has implemented self-service options through "IVR" which allow the customers to access their account easier than before. Moreover, the Bank has also implemented a range of new customer-centric policies, designed to ensure that the customers receive the best-in-class service from the Bank. To provide uninterrupted service and load balancing, the Bank has trained its branch staff to take phone banking calls that are diverted to the branches using a unique technology solution. This has in some ways redefined call centre and customer service in the industry.

The Bank has ensured that its Customer Care Associates can interact with the customers in 8 languages (English, Hindi, Gujarati, Kannada, Marathi, Odiya, Tamil and Telugu).

Adoption of new technology, load balancing, multi skilled officers, regular intervention by the training team inter alia has enabled the contact centre team to provide timely and quality service to the customers. DCB Contact Centre unit has achieved 16% better productivity in comparison with pre Covid-19 and conscious efforts put in people management, knowledge enrichment has resulted in disposing customer queries 15% quicker while improving quality of service.

ATMs

The Bank has 396 ATMs as on March 31, 2023. The Bank ensured that ATM uptime was maintained at above 94% in the FY 2023. The Bank has closed a few unviable and unprofitable ATMs during the year. The Bank has completed the implementation of cassette swap in ATMs and OTC lock activation in all the 396 ATMs.

DCB Mobile and Internet Banking

Approximately 1,40,000 of the Banks customers are actively using the new and improved Mobile Banking Application that is offered in 9 languages. Your Bank continues to get encouraging feedback on Google Play Store. The new version has additional features like biometric based login and Debit Card control management.

DCB Internet Banking is used by more than 70,000 retail and corporate customers. Internet Banking platform is rich with plethora of digitally managed services, which has reduced the need for customers to visit branches for their transactions.

DCB Unified Payment Interface (UPI)

UPI continues to be the dominant channel for digital payments, and the transaction volumes have registered a growth of 90% over the previous year.

DCB Debit Cards

The Bank focusses on constantly improving offerings, features, and security on Debit Cards. Your Bank launched a new Debit Card variant, DCB TravelSmart, which is beneficial for international travellers as it offers a competitive foreign exchange mark up, as well as complimentary travel insurance. The Bank also introduced much sought after features like contactless payment (Tap and Pay) and e-mandate for ease of recurring payments. From security and control perspective, the Bank has introduced instant response to customers for failed transactions, as well as tokenisation which enables transactions with masked card details for better safety.

DCB Niyo Global Cards

DCB Niyo Global Card is a Debit Card powered by Visa and issued with DCB Niyo Current Account. This program is segmented especially for customers travelling abroad which provides competitive exchange rates making the product a compelling proposition. The Card holders are offered a Mobile Application which supports security features such as switching on or off card usage, changing transaction limits and block or unblock the Card.

Trade Receivables Discounting System (TReDS)

In FY 2022, the Bank commenced participation on TReDS, a unique digital capability that provides assured and faster financing to MSMEs / SMEs who are providing goods and services to larger companies. TReDS is improving flow of finance to MSMEs / SMEs. The Bank has financed more than 10,000 MSMEs through 18,000+ Invoices in TReDS platform in FY 2023. Financing on TReDS also qualifies as PSL.

TRANSACTION BANKING

Cash Management Services (CMS)

The Bank provides Corporates, MSME/SME and Retail customers sophisticated and cost-effective CMS. This helps customers manage their collection and payment logistics with ease. The Bank has 7 vendors for CMS cheque collections across India. At the end of FY 2023, the Bank had 3,300 active customers using CMS facilities.

Business Internet Banking (BIB)

The Bank offers state of the art BIB especially designed for MSME/SME customers. The adaptive and responsive feature of the application makes it user friendly for customers across devices. At the end of FY 2023, BIB facility had 32,615 users.

TREASURY, MONEY MARKET AND FOREIGN EXCHANGE

Treasury

Treasury actively manages liquidity, compliance with Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), trading in fixed income securities & currencies, and participating in Initial Public Offers (IPOs). It also shares the responsibility of interest rate risk management of the Bank. In FY 2023, the Bank was cautious in maintaining fixed income securities as central banks across the globe were increasing interest rates in response to inflationary pressures. Yields on bonds across the world rose sharply thereby negatively impacting the bond portfolios. The Bank selectively invested in equity IPOs and booked profits by way of listing gains.

Money Market

Tightening in global policy has been accompanied by a deceleration in global money supply growth. Recent earnings have continued to moderate corroborating a growth slowdown. While slow growth could be headwind for risk assets, it may also help alleviate the inflation challenge. As inflation moderates, expect part of the economy to recover even as exports driven sectors face headwinds. RBI started increasing policy rates in the month of May 2022. Domestic bond markets have tracked the global yield curves since the onset of the US and European banking crisis. At the same time, bond yields across most of the developed markets have substantially retraced the easing seen since July 2022, in a flattening trend. Repo Rate has been increased from 4.40% in May 2022 to present level of 6.50%.

Foreign Exchange

During FY 2023, the global financial market encountered numerous challenges, including geopolitical tensions, banking crisis, recession fears; and higher interest rates, resulting in high volatility in major currencies. Major central banks such as US Federal Reserve System, European Central Bank (ECB); and Bank of England (BOE) increased interest rates and maintained hawkish policies to control inflation. The InternationalMonetary Fund (IMF) and World Bank predicted a downward trend in global growth because of policy actions by central banks.

The US Federal Reserve increased its benchmark interest rate from 4.75% to 5.00%, which caused a surge in global securities yields and the USD index to reach their highest levels. The USD Index reached 114 against a basket of six major currencies, and US 10YT almost touched 4.30%. Commodity prices experienced significant fluctuations over the course of the year. Initially, due to geopolitical tensions, crude oil prices reached a peak of $125 per barrel, but later dropped to $70 per barrel because of the global economic slowdown, particularly in China, brought on by Covid-19 related restrictions. However, unexpected output cuts from Organization of the Petroleum Exporting Countries (OPEC+) resulted in a rise in prices, and by the end of the financial year, Brent Crude oil was trading at $85 per barrel.

The Indian Rupee depreciated by nearly 8% against the US Dollar due to geopolitical tensions, increased interest rates, and global recession fears. However, the RBI measures limited excessive volatility and slowed down the pace of Rupees depreciation, which helped Indian rupee to perform better than several other currencies. Despite the volatile USD index caused by the financial crisis in the US banking system, the Indian Rupee demonstrated resilience by gaining 0.7% against the US Dollar in the last quarter. By the end FY 2023, the Indian Rupee closed at 82.18 to a dollar, which is weaker than the 75.79 rate recorded a year ago. Looking forward, the US Federal Reserve may consider further interest rate hikes, but market predictions suggest that the rate hike cycle may approach its peak soon.

RISK MANAGEMENT

Risk is an integral part of the banking business and the Banks aim is to maintain portfolio quality by making appropriate risk/reward trade-offs. The Bank inter alia is exposed to credit, concentration, market, country and counterparty bank exposure, liquidity, operational, fraud and reputation risk. The Board of Directors of the Bank has oversight of risks assumed by the Bank and has delegated its power to manage risks to Risk Management Committee (RMC) of the Board.

Credit Risk

The Credit Risk unit ensures alignment with the objectives of achieving growth while maintaining portfolio quality by making appropriate risk / reward trade-offs. The idea

is to ensure long-term sustainable performance across business cycles. On-going efforts are made to improve risk assessment and controls. Credit Risk over time has developed capabilities to assess the risks associated with various products and business segments. As far as possible, efforts are made to standardize the entire process pan India while considering geographic nuances. The Bank has implemented a rating model that considers both quantitative and qualitative factors and produces a rating that becomes one of the key inputs to credit decisions. To continuously improve the quality of the portfolio, the Credit Risk unit uses SAS analytics and has created several insightful models that helped in refining the product offering, choosing the target segment of customers, collections and recoveries. Key processes in credit underwriting were examined and duplication was reduced to improve speed of processing. Periodic portfolio reviews were conducted with the business units that helped improve portfolio quality.

Concentration Risk

Concentration risk is monitored and managed both at the customer level and at the aggregate level. The Bank, inter alia, monitors portfolio concentrations by segment, product, business, ratings, borrower, group, sensitive sectors, unsecured exposures, industry, and geography. The Bank adopts a conservative approach within the regulatory prudential exposure norms.

Market Risk

The Bank has an established process to measure, monitor and manage Interest Rate, Exchange Rate and Equity Risk as part of Market Risk Management. Besides the usual monitoring of Structural Liquidity, Interest Rate Sensitive Gap limits and Absolute Holding limits, the Bank also monitors interest rate risks using Value at Risk limits. Exposures to Foreign Exchange and Capital Markets are monitored within pre-set exposure limits, margin requirements and stop-loss limits.

Country Exposure Risk and Counterparty Bank Risk

The Bank has established specific country exposure limits which is capped at 15% of its Capital Funds. The limit also depends upon rating of individual countries. The Bank mitigates risks using insurance cover available through the Export Credit and Guarantee Corporation (ECGC), where appropriate.

The Bank has established framework for setting up of limits for counterparty banks, basis their rating and monitors counterparty bank exposures against the approved limits.

Liquidity Risk

As part of the liquidity management and contingency planning, the Bank assesses potential trends, demands, events and uncertainties that could result in adverse liquidity conditions. The Banks Asset Liability Management (ALM) policy defines the gap limits for the structural liquidity and the liquidity profile is analysed on both static and dynamic basis by tracking cash inflow and outflow in the maturity ladder based on the expected occurrence of cash flow. The Bank undertakes behavioural analysis of the non-maturity products, namely CASA, Cash Credit and Overdraft accounts on a periodic basis to ascertain the volatility of balances. The renewal pattern and premature withdrawals of Fixed Deposits and drawdowns of un-availed credit limits are also captured through behavioural studies. The liquidity profile is estimated on an active basis by considering the growth in Deposits, Advances, and Investment obligations. The concentration of large deposits is monitored on a periodic basis. Emphasis has been placed on growing Retail Deposits and avoid as far as possible Bulk Deposits. The Bank periodically conducts liquidity stress testing.

Operational Risk

Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or external events. The Banks operational risk management framework is defined in the Operational Risk Management Policy approved by the Board of Directors. While the policy provides a broad framework, Operational Risk Management Committee (ORCO) oversees the operational risk management in the Bank. The policy specifies the composition, roles, and responsibilities of the ORCO. The framework comprises identification, assessment, management and mitigation of risks through advanced tools and analysis.

Reputational Risk

The Bank pays attention to issues that may create reputational risks. Events that can negatively affect the Banks reputation are handled cautiously ensuring utmost compliance and in line with the values of the Bank.

Information / Cyber Security Risk

The Bank operates in a highly automated environment and makes use of the latest technologies to support the business and functions. The Bank has put in place a robust governance framework, information security practices and a business continuity plan to mitigate IT and cyber security related risks. The Bank ensures that its information and cyber security policies are updated periodically to ensure protection of customer sensitive information, transaction integrity, availability of banking services and be resilient to emerging cyber security risks. The Bank has a 24x7 Security Operations Centre to monitor security alerts and take timely appropriate actions.

Process Review

The Bank strives to continuously improve process controls and customer satisfaction. The Bank has a separate cross functional committee - Management Committee for Approval of Processes (MCAP). In general, new processes are subjected to review by MCAP. The Committee is tasked with identifying operational and compliance risks in new processes and ensuring that steps are taken to mitigate risks. Also, MCAP regularly reviews and approves existing processes for further improvement. In the FY 2023, 79 processes were reviewed and approved by the MCAP.

IMPLEMENTATION OF BASEL III GUIDELINES

In accordance with the RBI guidelines, the Bank has migrated to Basel III capital adequacy disclosures with effect from Q1 FY 2014. The Bank continues to review and improve its risk management systems and practices to align with industry best practices. The Bank has implemented Standardized Approach for Credit Risk, Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk.

INFORMATION TECHNOLOGY (IT)

Once again, FY 2023 has seen increased focus on digital technologies for banking needs. Accordingly, the Bank inter alia is looking forward to adopting emerging technologies like Artificial intelligence (AI) / Machine Learning (ML), Blockchain, Internet of things (IoT), Edge Computing, Robotic Process Automation, Application Programming Interface (API) Banking, Metaverse, Conversational Banking, and Big Data. By embracing aforesaid technologies, the Bank aims to offer its customers futuristic services and newer business models while achieving operational excellence. Implementation of these technologies will also enable the Bank to automate customer interactions, enhance the security and offer personalized services based on real-time data, and create new ways of engaging with customers.

Following were some of products/features launched in your Bank during FY 2023:

1. DCB EazyBee Online Mutual Fund

• DCB EazyBee is a paperless and user-friendly platform that is accessible via desktop and mobile

devices. It enables quick and seamless investing in mutual funds, facilitates automatic payments, and provides up to date information to customers on their portfolios.

• The online platform inter alia comes with several attractive features such as no registration fees and transaction charges, easy mutual funds selection options to invest in products of reputed Asset Management Companies (AMCs), access to risk ratings and factsheets of all the funds, online uploading of Know your Customer (KYC) documents and facility to download National Securities Depository Limited (NSDL) consolidated account statement.

2. My Documents Portal

• A secure platform designed to streamline communication with customers. This user-friendly portal is the go-to source for all relevant documents and communications related to customers.

• Customers can access their documents from anywhere, at any time, after a secure authentication process. By centralizing all essential documents and communications in one easily accessible location, My Documents Portal enhances transparency and simplifies the customer experience. From welcome letters to account statements, everything is available in one convenient location, making it easier than ever for customers to stay up to date.

• New documents uploaded are communicated to customers through SMS and e-mail on the registered mobile number and e-mail address.

3. Zippi+

• Paperless and end-to-end digital Savings Account and Fixed Deposits Account opening application that has a wide range of products (DCB Premium Savings, DCB Privilege, DCB Classic Savings Bank Accounts) and other options.

4. Video Based Personal Discussion for Credit Team

• Online validation of applicants identity, documents, mobile number or e-mail id.

• Improved turn-around time and can be done at customer convenience.

• GPS validation of applicants location.

5. Issuance of Contactless Card

• The contactless (Tap & Pay) features enabled for DCB Visa Debit Cards.

• DCB Debit Contactless Visa cards is accepted by leading merchants in India.

6. CUBE - digital end-to-end branch application for

customer on boarding of deposit products

• Over 1 lakh customer accounts opened via CUBE, online interfaces with NSDL, Aadhaar etc for instant verification

• Turnaround time and errors have been substantially reduced with the introduction of CUBE.

7. Customer Service

• Customer self-service, in-branch kiosk enabled for real time KYC up-dation by existing customers of the Bank.

• Customer login for KYC verification enabled via valid DCB Debit Card and PIN or biometric authentication via Aadhaar/Virtual ID (VID).

• Biometric authentication in branches using kiosks.

• DCB Bank Loan Repayment Collection via Payment Gateway Partner & Bharat Bill Payment System (BBPS)

• Dispatch Management Solution implemented for end-to-end tracking of deliverables.

• DCB Travel Smart Debit Card - travel worldwide without any hassle of currency conversion.

• Customisable kit for Loan disbursal including agreements/policies.

• Branches can offer higher limits for Personal Internet Banking and Mobile Banking to select customers.

• Declined Debit Card transactions instant alert via SMS to customers.

8. DCB Mobile Banking

• Save and manage favourite transactions.

• EMI calculator for loans.

• Event based and personalized notifications.

• Multilingual - 9 language options.

• Biometric authentication.

• Positive pay functionality.

• Failed login alert to customers..

9. Internet banking Enhancements

• DCB Suraksha Fixed Deposit functionality in Personal Internet Banking.

• Financial Year addition in Statement of Account Module in Personal Internet Banking.

10. Automation of Group Personal Accident (GPA)

Policy Daily Issuance Benefits:

• Enhanced customer experience and significant improvement in turnaround times.

• Insurance policy and coverage commences from the next business day.

• Minimum manual intervention.

11. Intelligent Interactive Voice Response (IVR)

Interactive Voice Response (IVR) technology offers customers self-service options with DTMF (such as landline or mobile phone dial pad keys) tones input. In addition to identification and segmentation of the callers, it also facilitates the routing of customer calls to the most appropriate customer care/ service resource at the Banks Customer Care centre. .

• Preference for calls based on the customers requirement for example, a customer call for a debit card emergency will be allocated to a customer care representative with the appropriate expertise.

• Based on the registered mobile number, the system will identify the customer and, accordingly, the call will get transferred to the correct customer care associate.

• For calls received via non-registered mobile numbers an OTP validation option for customer verification has been provided.

12. Enhancement of UPI Transaction limit for specific categories

• DCB Bank customers can make ASBA payments up. to 5 lakhs per IPO

13. Customer Investment Declaration form (CIDF) enhancement for the customer

• Digital journey for Customer Investment Declaration Form for third-party product distribution

14. Mortgage Sales Support Application

• Tracking leads and monitoring appointments and activities

• Product details

• Monitor frontline productivity and performance.

BUSINESS INTELLIGENCE UNIT (BIU)

The core objective of BIU is to leverage data analytics to drive decision-making and improve business outcomes. Bank has invested in building modern & scalable data & Tech stack in areas of Big Data, Machine Learning and Deep Learning comprising of an Enterprise Data Lake and GPU servers enabling capability to deploy multiple use cases. The Banks stack includes Cloudera, Hadoop, Kafka, SAS Viya, R, Python and Spark etc. Bank has launched a focused BIU transformation project D2V which encompasses BI & Analytics uses cases in self-service MIS, Cross-sell, Revenue & cost efficiency. These business cases cover decision enablement across customer journeys for both Asset as well as Liability products from units across business lines. These projects are being initiated across work streams (but not limited to) to scale up Underwriting, Personalization, productivity optimization & Data driven collection.

OPERATIONS

Operations units continuous endeavour to improve efficiency and offer best in class services to customers continues to remain as the primary objective. During the year, there has been unprecedented growth in volumes across every unit and some of the units like Centralized Payments Centre and Clearing units operate 24/7 to cater to the customer needs. The focus on automation and improvements in productivity are yielding desired results as the growth in volumes and 24/7 operational shifts are managed without any significant increase in headcount and/or costs.

The new state of the art customer onboarding platform CUBE that was implemented two years ago to support operations at National Processing Centre (NPC), was further enhanced during the year to make it more robust, faster, resilient and offer more functionalities. The number of applications processed on CUBE crossed the magic number of 100,000 during the year. About 86% of the account opening forms duly submitted on CUBE application by branches, are processed and customers accounts opened by NPC within the same day against an average of about 5 days prior to implementation of CUBE thus providing superior and faster customer experience.

Centralized Payments Centre (CPC) which caters to all customer payments processing like RTGS/NEFT, CMS payments, and electronic banking transactions on 24/7 basis, handled about 208.20 lakh transactions with zero operational loss during the year. A new innovative state of the art NEFT /RTGS technology solution was implemented during the year to support 24/7 services and cater to increased volumes. Clearing unit continues to operate on 24/7 basis as well and during the year processed 86.78 lakh transactions with zero operational loss. Cash Management Services Unit which provides cash to branches and ATMs ensured that the average cash holding throughout the year was maintained at 15% of the approved limit through proactive management of cash logistics thus ensuring that idle cash levels were maintained at barest minimum levels.

Several initiatives taken during the recent few years with respect to implementation of newer technology solutions, strengthening of quality checks, process revamp, continuous training of staff including newly recruited staff and ensuring the staff remain motivated and focussed have helped various operations units to provide faster services to customers with zero operational losses and handle increased volumes seamlessly. Grooming next generation leaders and creating second line leaders across various unit continues to be a key focus area along with efforts for further automation and improvements in productivity.

INTERNAL AUDIT

Internal Audit (IA) function has employees with varied domain background and experience across Banking operations. It has a mix of Chartered Accountants and domain/technical experts and veterans. The IA team comprises of freshers, experienced bankers and specialists. IA function reports into the Audit Committee of the Board (ACB) which constitutes members with strong domain and audit knowledge. ACB oversees the IA function, monitors performance, and provides regular guidance for improving risk control and compliance across the Bank. In FY 2023, IA adopted different models for audits which included extensive use of data analytics, document verification, testing of design and effectiveness along with walkthrough. The IA team makes use of various tools for analysis in the audits like SAS. In FY 2023, IA conducted 186 branch audits, 46 periodic audits and 12 IT audits. IA team members attended multiple online and in person training programmes in various domains including audit framework / methodology, soft skills, risk management and Banking, for continuous enhancement of knowledge and skills.

VIGILANCE

In line with previous years, the Fraud Risk Monitoring (FRM) unit has enhanced the fraud detection and monitoring capabilities through enrichment of data points embedded into the monitoring tools. It has also enhanced the capabilities to identify and address the risks through their assessment methods and investigation. The unit also identifies learning from industry practices to enhance the capability of the function in the Bank. The team has been given continuous training on technical and functional aspects. The unit continues to have 24x7 monitoring to enable fraud detection across various channels and transactions.

COMPLIANCE

The Banks Compliance function is independent of business and operation functions. The Compliance function has created procedures and checks to ensure compliance with applicable regulations. In addition to ensuring timely submission of various returns to regulatory authorities, the Compliance function ensures that the Banks internal procedures and processes are in adherence with the applicable regulatory and statutory provisions. The Compliance function is also responsible for AML / KYC monitoring, the Bank relies on advanced software and analytics. Within the Compliance function, a separate unit for Compliance Monitoring and Testing has been created to carry out compliance testing on an ongoing basis. This unit also provides compliance risk assessment to various units / functions.

HUMAN RESOURCES (HR)

The Bank deeply believes that its employees are the driving force for business growth, branding, and customer satisfaction. The employees are an invaluable asset which deliver sustainable performance and shareholder value. The Banks HR unit is built on following four pillars:

Build

• In FY 2023, the Banks substantially increased headcount especially that of the frontline to create capacity for stepping up business growth. The Bank headcount stood at 9,905 as on March 31, 2023, an increase of 23% over FY 2022 (headcount 8,077). The recruitment team doubled its efforts in hiring through referrals, social media, and career websites. Further, to provide in-house talent with opportunities, the Bank, in FY 2023, provided new assignments through Internal Job Posting to 616 employees (470 in FY 2022).

• The Bank continued its flagship B-school competition that has been recognized as one of the best practices in the industry. The Bank scaled up its "The Top Recruit" program and campus engagement initiatives across various regions, covering around 4,000 participants from 200 B- Schools in cities like Delhi, Mumbai, Pune and smaller towns in India. The higher participation helped to bolster the brand value of the Bank amongst the future job seekers.

• On Linkedin platform, which is a primary source of employer branding and portal for attracting talent, the Bank at the end of FY 2023 has over 3.55 lakhs followers vis-a-vis 2.74 lakh followers as at the end of FY 2022.

Develop

The Bank continued to provide training through classroom and e-learning to employees covering key modules like Ethics, Prevention of Sexual Harassment (POSH), Gender Sensitization, Code of Conduct, Capacity Building and AML/KYC. Examples of classroom and e-learning provided during FY 2023 are as follows:

• 1,900 training workshops were conducted internally and employees underwent through over 3.54 lakh hours of e-learning.

• "Olympiad" platform was initiated in FY 2021 to continuously strengthen the culture of assessment on critical areas. During FY 2023, the Bank continued to do product, process, and compliance assessments through the "Olympiad" platform.

• Signature interventions like RISE, ASPIRE and Budding programs under "Grow with Us" umbrella are being conducted for over 10 years. These programs have helped create a talent pool to take up leadership roles within the Bank.

• Capacity building initiatives have been undertaken through internal and external certification especially in the areas of risk management and credit. Cyber security programs were conducted for Senior Management employees with the Institute of Development and Research in Banking Technology (IDRBT).

• Critical employees in branch operations underwent Gold Loan appraisal workshops which helped them provide quick service to customers at our branches.

• Supervisory capability training continued to be driven through the ABCD program which builds foundation for being a good supervisor on four pillars of Appreciation, Building Ownership, Communication and Development (ABCD).

• S-PEAK survey achieved 100% participation from the Bank. The objective is to help supervisors reach their PEAK by deploying various Coaching, Mentoring and Developmental plans. Over a learning journey of 6 months, theme-based training programs are deployed to improve overall people management Competency of 800+ supervisors.

• Power of Three - Empathy, Speed and Quality (ESQ) is the Banks approach and philosophy to customer service. To enhance ESQ amongst employees, the Bank conducted various Bootcamps, a one-day classroom training program with focus on creating delightful customer experiences at every touch point the Bank. More than 90% of employees were covered in the ESQ training programs. Also, to promote ESQ on an ongoing basis, a digital platform was created to recognize and reward notable contributions.

Care

The Bank took special care of its employees by focusing on well-being:

• To inculcate the habit of regular exercise and walking, the Bank launched DCB Walkathon Challenge 2022 for all employees across India. Over 2,300 employees steps were monitored round the clock. Encouraged by the huge participation and enthusiasm amongst the employees, the unit extended the challenge from 5 days to 12 days. Within a span of 12 days, 70 million steps were clocked which equals 58,459 kms or is equivalent to 1.5 times the distance of walking around the world.

• Health Carnival 2022 was organized across all regional offices in the month of November 2022 which saw participation from over 3,000+ employees for onsite activities such as health check-up wherein weight, height, sugar levels, ECG, and blood pressure etc. were checked. Apart from onsite activities, there were online webinar sessions organized as well, covering topics such as awareness on diabetes, conjunctivitis; and ways to keep heart healthy. Discussions were held on nutrition and gastric related issues.

• Doctor on Call service ensures that DCB Bank employees can have access to qualified doctors 24x7 by simply downloading a free mobile application (available on Android and IOS). This application facilitates an instant video call with doctors who are available for consultation across various fields such as ENT, Ortho, Lifestyle diseases, Physiotherapy, Ayurveda, and Dental issues.

• Leadership and top management team are setting new examples of conducting self-driven wellness sessions for employees. Recently a yoga session was led by the CFO where he shared healthy habits and asanas for living and adapting a healthy lifestyle

• Employee loan processing was automated through the Banks HR Management System. The transition to digitalapplication saves significant amount of paperwork and reduces cycle time.

• During the year, emotional well-being assumed great importance for which the Bank drove wellness initiatives for employees under its Employee Assistance Program (EAP) wherein assistance was provided for psychological / mental health.

• The Bank negotiated a more comprehensive Mediclaim plan this year for its employees where inter alia Intensive Care Unit (ICU) charges at actuals, genetic disorders and waiver of co-pay in case of an unfortunate demise of employee and / or dependent were included.

• The Bank also conducted special programs for supervisors to monitor and report instances of poor mental health amongst their team to facilitate timely intervention. The Employee Assistance Program (EAP) partner, 1 to 1 help explained reasons for stress and encouraged supervisors to help employees to seek counselling.

• "Doing good does you good" - employee volunteering in large numbers for tree plantation, habitat restoration, clean-up of parks, lakes, and other water bodies. This year over 1600 employee volunteers participated in CSR activities.

• Towards improving the environment, the Bank planted over 1,01,120 trees during FY 2023.

Engage

• The Bank has regional recognition program called "DCB Spotlight" for felicitating top performers in different regions. This year, the Bank recognized over 800 awardees in eleven locations. This event also provides a unique opportunity to employees to showcase their talent in various areas.

• The Banks annual signature reward and recognition ceremony, the Movers & Shakers, was held at NCPA, Mumbai. Over 100 awardees were felicitated for their performance. The winners of the regional talent hunt, "Funkaar Beats" also competed for the top spot.

• "Hour HR" (the live radio show), unique communication platform for the employees to interact with the HR team and seniors directly on topics such as managing leave, dress code, doctors help, promotion process, rewards platform and Mediclaim.

• "RegionalForums" are conducted for leaders to address issues that could be resolved within their units through mutual collaboration.

• The quarterly newsletter, "High Decibel" is a communication channel where the employees contribute articles of personal experience and professional achievements. "High Decibel" is also used for communicating the latest updates, events, and happenings in the Bank.

• The Banks signature employee connect program "Each One Reach One" (EORO) went digital and over 95% of employees participated. Employees rated their satisfaction with respect to job, supervisor, work environment and career aspirations. The Bank initiated interventions and focus group discussions to address employee issues and receive their suggestions for improvements.

• The Bank continued the "EORO Supervisor Survey" for first time supervisors. The feedback was with reference to approachabi lity, helpfulness, care, development, and their alignment with the team. Counselling was completed for those supervisors who had a low score.

• In its effort to attract talent and boost the internal branding, various initiatives have been taken. The Bank launched "MANCO Bytes" (MANCO denotes Management Committee) series where the senior leaders spoke of their experience and how they overcame challenges to become successful.

CORPORATE SOCIAL RESPONSIBILITY (CSR) & ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)

The Banks CSR thrust areas are Water, Waste Management, Renewable Energy, Recycling, Support Technology incubators related with the Banks thrust areas, Preserve Archaeological and Historic sites, and Disaster relief. The CSR and HR team work together to engage employees in tree plantation, habitat restoration, clean-up of parks, lakes, beaches, and water bodies. In FY 2023, the Banks DCB Social volunteers engaged in various clean-up and environment restoration initiatives across Banks footprint. Meaningful contribution of time and effort by 1,600 CSR volunteers across DCB Bank locations has greatly helped drive awareness on saving water in households, reducing usage of single use plastic, encouraging local communities to segregate recyclable and organic waste, enhance green cover in rural and urban locations.

The ESG working group adheres to the established framework of the ESG Principles. The Banks Business Reporting and Sustainability Report (BRSR) is an outcome of the deliberations and application of the framework to the activities of the Bank.

CUSTOMER SERVICE

Delighting customer in every interaction is the core aim of the Bank. On a regular basis, customer complaints and satisfaction levels are monitored by the Managing Director & Chief Executive Officer along with the Senior Management team. The Bank has constituted an independent "Service Excellence" team to analyse customer complaints, identify root cause for service issues, make process improvements and work with the various businesses and functions to continuously enhance service levels. The Bank has an "Integrated Centralised Complaint Management" system and service standards to ensure that customer queries and complaints are addressed in a timely and quality manner.

The Bank continues to make steady progress on the service concept of Empathy Speed Quality (ESQ). In FY2023, the Bank conducted an independent customer satisfaction survey. The survey indicated that 98% customers have expressed their satisfaction on the services rendered by the Bank. Additionally, there have been measures taken by the Bank in FY2023 to make customer services automated or system driven. As a result, there has been a reduction of complaints by 9% across categories and 28% in the top 10 categories in comparison to FY2022. The Bank will continue to improve its processes to provide faster resolutions and efficiently. The Bank continuously works on the six pillars of Service Excellence - Voice of Customer, Service Recovery, Attrition Calling, Process Simplification, Service Culture and Measures and Metrics. The Service Excellence team continuously interacts with the frontline staff and key stakeholders to obtain customer feedback. Branch surprise visits and "mystery shopping" activities are undertaken by the Service Excellence team and instant feedback is provided to the branch staff and supervisors. The Bank has constituted three committees at different levels to monitor customer service - Branch Level Customer Service Committees (BLCSCs), Standing Committee on Customer Service (SCCS), and Customer Service Committee of the Board (CSCB). The Bank on a regular basis, through various means, educates its customers to be vigilant on the rising incidents of cyber-crimes.

MARKETING/BRAND AWARENESS

In FY 2023, the Bank took several initiatives to create brand awareness and improve visibility for its products and services. This resulted in quality lead generation and new customer acquisitions. Examples of the various activities during the year are given below:

• Nearly 10,000 micro marketing activities / customer engagement programs were conducted in the branch neighbourhood across regions by branch banking teams

• DCB Fixed Deposit print campaign in mainline publications was undertaken across Andhra Pradesh, Delhi, Gujarat, Kolkata, Mumbai, and Telangana.

• Airport branding was undertaken at Ahmedabad, Bhubaneshwar, Delhi, Kolkata, and Raipur. DCB Fixed Deposit, DCB Savings Account and DCB Remit communication were prominently displayed at these airports.

• Mobile van activation programs were executed in the states of Andhra Pradesh, Karnataka, Odisha, Tamil Nadu, and Telangana to promote DCB Savings Account and DCB Gold Loan. This medium was effective in generating quality leads to the branches.

• The Banks signature customer event "Ek Mulaqat Kuch Baatein" was organised in Bengaluru, Delhi, Hyderabad, Kolkata, Mumbai and Pune. Senior officers of the Bank along with select Directors interacted face- to-face with hundreds of customers who appreciated the Banks service, products, and CSR activities.

• Around 2,000 "Store Boards" with "DCB Gold Loan" product branding was installed in the branch neighbourhood in Odisha and Tamil Nadu.

• Almost 90 events were organised at various residential societies across the country to engage with the prospects / residents to promote products and services.

• Throughout the year, both internal and external branding campaigns were done to promote new branches, products, and services.

• DCB Fixed Deposit and DCB Remit online campaigns were done on Google and Facebook.

• The Bank actively engaged customers, prospects, and employees with regular informative posts in the social media.

IND AS IMPLEMENTATION

The Ministry of Corporate Affairs (MCA), Government of India has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015. Further, a press release was issued by the MCA on January 18, 2016 outlining the roadmap for implementation of Indian Accounting Standards (IND AS) converged with International Financial Reporting Standards (IFRS) for banks. As per earlier instructions, banks in India were required to comply with the IND AS for financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. On April 05, 2018, the RBI had announced deferment of implementation date by one year with IND AS being applicable to banks for accounting periods beginning April 01, 2019 onwards. On March 22, 2019, the RBI has announced deferment of the implementation of IND AS by banks till further notice.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE BANK

Particulars of Loans, Guarantees or Investments outstanding Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given, securities provided or acquisition of securities by a banking company in the ordinary course of its business are exempted from the disclosure requirement under Section 134(3)(g) of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the transactions with related parties are in the ordinary course of business and on arms length basis and there are no material contracts or arrangement or transactions with related parties and thus disclosure in Form no. AOC-2 is not required.

POLICY ON RELATED PARTY TRANSACTIONS OF THE BANK

The Bank has a policy on Related Party Transactions and the same has been displayed on the Banks website at the following link: https://www.dcbbank.com/uDload/pdf/

 

Policv-on-Related-Partv-Transactions-June-2022.pdf

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

In terms of Regulation 34(2)(f) of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015, the Banks Business Responsibility and Sustainability Report describing the initiatives taken by the Bank from an environmental, social and governance perspective forms part of this Report and has been hosted on the website of the Bank at the following Link: https://www.dcbbank.com/pdfs/DCB-Bank-Business- Responsibility-and-Sustainability-Report-2022-23.pdf

MAINTENANCE OF COST RECORDS

Being a Banking company, your Bank is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, no instances of fraud committed in the Bank by its officers or employees were reported by the Statutory Auditors and Secretarial Auditor under Section 143(12) of the Act, to the Audit Committee or the Board of Directors of the Bank.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR

• The Board shall have minimum 6 and maximum 15 Directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a Director on the Board.

• The Bank shall have such person on the Board who complies with the requirements of the Companies Act, 2013, the Banking Regulation (BR) Act, 1949, Provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the Fit & Proper criteria prescribed by the Reserve Bank of India (RBI), Memorandum of Association and Articles of Association of the Bank and all other statutory provisions and guidelines as may be applicable from time to time.

• Composition of the Board shall be in compliance with the requirements of Regulation 17 (1) of the Listing Regulations.

• Majority of the Directors as required under BR Act shall have specialized knowledge/experience in the areas like Agriculture, Banking, SSI, Legal, Risk Management, Accountancy, Economy, Accountancy and Audit, Finance etc.

• All Directors shall abide by the Code of Conduct.

• Directors shall not attract any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields

POLICY RELATING TO THE REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

• MD & CEO, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the Bank.

• Except for the Chairman and the MD & CEO, no other Directors are paid remuneration. The Chairman and the MD & CEO are paid remuneration as approved by the RBI and other applicable authorities. All Directors except the MD & CEO are entitled to sitting fees for attending various Board and its Committee meetings.

• Independent Directors are not entitled for Employee Stock Options.

• Remuneration of all employees including Senior Management and KMPs are decided as per the Compensation Policy of the Bank. The details are given on website at the following Link: https://www. dcbbank.com/pdfs/Policy for Remuneration for the Directors Key managerial personnel and other Employees of the Bank.pdf

PARTICULARS OF EMPLOYEES

The Bank had 9905 employees as on March 31, 2023. 10 employees employed throughout the year were in receipt of aggregate remuneration of not less than 1.02 crore per annum and no employee was employed for a part of the year. The details of top 10 employees in terms of remuneration drawn pursuant to provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended separately (Annexure-I) and form part of this Report.

The Report and Accounts are being sent to the Shareholders excluding these particulars and any Shareholder interested in obtaining the said details may write to the Company Secretary at the Registered Office of the Bank at investorgrievance@dcbbank.com.

EMPLOYEE STOCK OPTION PLAN (ESOP) AND CASH SETTLED STOCK APPRECIATION RIGHTS (CSAR)

The Bank has formulated and adopted the DCB Bank Limited -Employee Stock Option Plan in 2005 approved by shareholders on December 15, 2006 and amended from time to time in order to:

• provide means to enable the Bank to attract and retain appropriate human talent in the employment of the Bank;

• motivate the employees of the Bank with incentives and reward opportunities;

• achieve sustained growth of the Bank and to create shareholder value by aligning the interests of the employees with the long-term interests of the Bank; and

• create a sense of ownership and participation amongst the employees of the Bank. The Employee Stock Options ("ESOPs") and the Cash Settled Stock Appreciation Rights ("CSARs") granted to the employees of the Bank currently operate under the following Schemes:

i. DCB Bank Limited - Employees Stock Option Plan 2005 ("ESOP Scheme")

ii. DCB Bank Limited -Cash Settled Stock Appreciation Rights Scheme 2022 ("CSARs Scheme").

During the year, the Bank has not granted any ESOPs. However, 1,170,786 CSARs were granted on October 15, 2022 at the exercise price of 96.70 per unit of CSAR to the eligible employees of the Bank in accordance with the CSARs Scheme and as approved by the Nomination and Remuneration Committee ("NRC").

The provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB&SE) Regulations, 2021"), do not apply to cash settled SARs Scheme. As the Banks SARs Scheme provides only for cash settlement on stock appreciation, the provisions of SEBI (SBEB&SE) Regulations, 2021, are no longer applicable.

The aforesaid Schemes complied SEBI (SBEB&SE) Regulations, 2021, to the extent applicable. During the year under review, no material changes were made to the Schemes.

The relevant details of the aforesaid Schemes, as required under the SEBI (SBEB&SE) Regulations 2021, are available on the Banks website viz., URL: https://www.dcbbank. com/cms/showpaae/paae/disclosures These details, along with the certificates from the Secretarial Auditor, as required under the SEBI (SBEB&SE) Regulations 2021, stating that the ESOP Scheme and the SARs Scheme have been implemented in accordance with the SEBI (SBEB&SE) Regulations, 2021 and the resolution passed by the members, would be placed and available for inspection by the members during the AGM.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES

a) The ratio of the remuneration of each Director to the median employees remuneration for the financial year ended March 31, 2023 and such other details as prescribed are as given below:

Name	Ratio
Mr. Farokh Subedar	1:1
(Chairman from January 31, 2023)
Mr. Murali M Natrajan	102:1
(Managing Director & CEO)

b) The percentage increase in remuneration of each Director, Chief FinancialOfficer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Name	Ratio
Mr. Farokh Subedar (Chairman from 31-01-2023):	0%
Mr. Murali M Natrajan (Managing Director& CEO):	0%
Mr. Satish Gundewar (Chief Financial Officer):	5%
Ms. Rubi Chaturvedi Company Secretary:	15%

c) The percentage increase in the median remuneration of employees in the financial year: 7.5%

d) The number of permanent employees on the rolls of Bank: 9846

e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year ended March 31, 2023 and its comparison with the percentile increase in the managerialremuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration: Average increase in remuneration is 8.22 % for employees other than Managerial Personnel & 0 % for Managerial Personnel (KMP and Senior Management). There are no exceptional circumstances for increase in the managerial remuneration.

f) If remuneration is as per the Compensation Policy of the Bank: Yes

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(3)(m) of the Companies Act, 2013 relating to conservation of energy and technology absorption do not apply to the Bank. However, as mentioned in earlier part of the Report, the Bank has been continuously and extensively using technology in its operations. Foreign Exchange earnings and outgo are part of the normal banking business of the Bank.

ESTABLISHMENT OF VIGIL MECHANISM

The Bank has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue for the last several years. The policy was last reviewed in FY2022-23. This Policy, inter alia, provides a direct access to a Whistle Blower to the Chief Compliance Officer (CCO) on his dedicated e-mail whistleblower@dcbbank. com and Chairman of the Audit Committee of the Board (ACB) on his dedicated e-mail-ID cacb@dcbbank. com. The Whistle Blower Policy covering all employees and Directors is hosted on the Banks website at

 

httn://www.ricbbank.com/cms/shownaaa/naaa/whLstla-

blower-policv.

None of the Banks personnel have been denied access to the Audit Committee

THE DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Bank has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section134 (5)(e) of the Companies Act, 2013. For the year ended March 31, 2023, the Board is of the opinion that the Bank has sound IFC commensurate with the nature and size of its business operations wherein controls are in place and operating effectively and no material weaknesses exist. The Bank has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Banks operation.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Bank had appointed M/s. S. N. ANANTHASUBRAMANIAN & Co., Company Secretaries, Thane, to act as the Secretarial Auditor of the Bank for FY 2022-23. The Secretarial Audit Report for the financial year ended March 31, 2023, as required under Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations, is annexed to this Report. Your Bank is in compliance with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act for FY 2022-23. The Secretarial Auditors Report does not contain any qualifications, reservations, adverse remarks or disclaimers except an observation pertaining to appointment of Woman Independent Director on the Board.

In terms of the SEBI circular dated February 8, 2019, your Bank has submitted the Annual Secretarial Compliance Report for FY 2022-23 to the Stock Exchanges within the prescribed time and the same is available on websites of the Stock Exchanges i.e. BSE Limited (www.bseindia.com). National Stock Exchange of India Limited (www.nseindia.com) and on the Banks website viz., URL: https://www.dcbbank.com/upload/pdf/

 

BSENSEAnnualSecretarialComnlianceRenortFY202223. pdf

DIRECTORS RESPONSIBILITY STATEMENT

Based on the frame work of internal financial controls and compliance systems established and maintained by the Bank, the work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee of the Board, the Board is of the opinion that the Banks internal financial controls were adequate and effective during the year ended March 31, 2023. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, based on the above and the representation received from the Operating Management, the Board of Directors, to the best of their knowledge and ability confirms that

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departure there from;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent as to give a true and fair view of the state of affairs of the Bank as at March 31, 2023 and of the profit of the Bank for the year ended on that date;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively during the year ended March 31, 2023; and

(vi) proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the year ended March 31, 2023.

COPY OF THE ANNUAL RETURN

A copy of the Annual Return as of March 31, 2023 pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 11(1) of the Companies (Management and Administration) Rules, 2014 and forming part of this Report is placed on the

website of the Bank as per provisions of Section134(3) (a) and is available at the following link:

 

https://www.dcbbank.com/upload/pdf/Form-MGT-07-

for-FY-2022-2023.pdf

CORPORATE GOVERNANCE

The Bank has been continuously observing the best corporate governance practices and benchmarks itself against each such practice. A separate section on Corporate Governance and a Certificate from M/s S. N. Ananthasubramanian & Co, Practicing Company Secretaries, regarding compliance with the conditions of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

DIRECTORS

During the year under review, Mr. Shaffiq Dharamshi a Non-Executive Director and Ms. Rupa Devi Singh an Independent Director have ceased to be the Directors of the Bank with effect from January 12, 2023 and January 21, 2023 respectively, after completing their term of eight consecutive years (the maximum permissible) as per the provisions of the Banking Regulation Act, 1949. Further Mr. Ashok Barat has ceased to be an Independent Director of the Bank with effect from March 21, 2023 after completing his term of five years as Independent Director.

Mr. Farohk Nariman Subedar was appointed as an Additional Independent Director of the Bank with effect from October 15, 2022 and as the Non-Executive Part Time Chairman of the Bank with effect from January 31, 2023. The Shareholders had approved the appointment of Mr. Subedar as Independent Directors through Postal Ballot concluded on December 20, 2022 and subsequently RBI has approved his appointment as NonExecutive, Part-Time Chairman of the Bank with effect from January 31, 2023.

Mr. Iqbal Khan, Non Executive Non Independent Director of the Bank is liable to retire by rotation and being eligible, has offered him for re-appointment.

Ms. Lakshmy Chandrasekaran was appointed as an Additional Independent Director on April 14, 2023 for a term of three (3) years i.e. up to April 13, 2026. Her appointment is recommended for approval of shareholders in the 28th Annual General Meeting.

A brief resume relating to the persons who are to be appointed/re-appointed as Directors and recommended for approval of Shareholders, are furnished in the notice

of the 28th AGM and Corporate Governance Report Based on the disclosures provided by them. None of the above mentioned persons is disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013. The Certificate dated May 5, 2023 issued by M/s. Ananthasubramanian & Co., Practicing Company Secretaries in this regard is attached to and forming part of this report.

In the opinion of the Board of Directors, all the above mentioned Directors being appointed /re-appointed, possess the required integrity, expertise and experience (including the proficiency) of the Independent Director appointed during the year/as on date of this report

None of the Directors of the Bank is related to each other per se

CHANGE IN KEY MANAGERIAL PERSONNEL

Mr. Bharat Laxmidas Sampat ceased to be a Chief Financial Officer of the Bank on June 30, 2022 due to his retirement and Mr. Satish Subhash Gundewar was appointed as Chief Financial Officer of the Bank effective July 01, 2022.

Please note that Mr. Gundewar has tendered his resignation from the services of the Bank to pursue his career outside the Bank. His last working day with the Bank would be June 3, 2023. The Bank has identified Mr. Ravi Kumar as "officer in charge" to take over from Mr. Gundewar from June 4, 2023 onwards.

A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

As per the Board Evaluation Policy of the Bank, evaluation exercise of all Directors, Board as a whole and its various Committees was conducted during the year.

The Board review focused on governance, board structure and composition, relationship and dynamics of the Board, frequency of meetings, information flow and agenda etc.

The Committee review focused on the composition, adequacy of terms of reference of various committees, frequency of meetings etc.

The individual Board members review focused on relevant qualification/skill sets, understanding of the Bank and banking industry, contribution in meetings, attendance etc.

The findings of the exercise were discussed in the meetings of Independent Directors and the Board. The appropriate feedback was conveyed to each Director. The Board was satisfied with the performance of each Member, the Board and various Committees.

The details of familiarisation programme arranged for independent directors have been disclosed on website of the bank and are available at the following link:

 

https://www.dcbbank.com/upload/pdf/Familarisation-

Programme-for-IndeDendent-Directors.pdf

STATUTORY AUDITORS

In the Twenty Sixth Annual General Meeting (26th AGM) held on August 13, 2021, the terms of S R Bat11boi & Associates LLP, Chartered Accountants (RegistrationNo.101049W/E300004) were revised from 4 years to 3 years from the FY 2020-21 till (and including)the FY 2022-23 as Statutory Auditors of the Bank to hold office for three (3) years from their original appointment at the Twenty Fifth Annual General Meeting as per the requirements of the guidelines dated April 27, 2021, issued by Reserve Bank of India (RBI). Pursuant to the said RBI Guidelines, M/s Sundaram &Srinivasan, Chartered Accountants, (ICAI Registration No. 004207S), were also appointed as Joint Statutory Auditors of the Bank in the 26th AGM. As such, both the statutory auditors are working as joint statutory auditors for the Bank from FY 2021-22.

As per the extant provisions, the RBI gives permission for appointment of auditor on year-to-year basis till expiry of the tenure of the Statutory Auditors. Accordingly relevant application have been made to RBI requesting its approval for appointment of S R Batliboi & Associates LLP, Chartered Accountants (Registration No. 101049W/ E300004) and M/s Sundaram & Srinivasan, Chartered Accountants, (ICAI Registration No. 004207S) as the Joint Statutory Auditors of the Bank for FY 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the requirements of the Companies Act,2013, the Bank has appointed M/s. Ananthasubramanian & Co., Practicing Company Secretaries (COP 1774) as the Secretarial Auditor for FY 2022-23 and their report is attached separately to this Report.

ACKNOWLEDGEMENTS

Your Board wishes to thank the principal Shareholder and Promoters, the Aga Khan Fund for Economic Development S.A. (AKFED) and all the other Shareholders for the confidence and trust they have reposed in the Bank. Your Board also acknowledges with appreciation the Reserve Bank of India (RBI) for its valuable guidance and support to the Bank. Your Board similarly expresses gratitude for the assistance and co-operation extended by SEBI, BSE, NSE, NSDL, CDSL, NPCIL, Central Government and the Governments of various States, Union Territories and the National Capital Region of Delhi where the Bank has its branches.

Your Board acknowledges with appreciation, the invaluable support provided by the Banks auditors,lawyers, business partners and investors. Your Board is also thankful for the continued co-operation of various financial institutions and correspondents in India and abroad.

Your Board wishes to sincerely thank all its customers for their patronage. Your Board records with sincere appreciation the valuable contribution made by employees at all levels and looks forward to their continued commitment to achieve further growth and take up more challenges that the Bank has set for the future.

	On behalf of the Board of Directors
Place: Mumbai Date: May 05, 2023	SD/- Farokh N. Subedar Chairman