Fedbank Financial Services Ltd Management Discussions

Global Economic Landscape

The global economy has maintained a steady growth trajectory and is expected to sustain this momentum over the near term. Easing inflation, strong capital flows into innovation-led sectors, and improving corporate confidence backed by calibrated policy action are supporting this resilience. Emerging markets continue to anchor global expansion, while advanced economies grew at a more measured pace. The risk environment, however, warrants continued vigilance. Geopolitical tensions, evolving trade policies, and elevated public debt in several economies are introducing uncertainty into the outlook, keeping global trade growth moderate. Any escalation in these pressures could affect commodity prices and dampen business investment sentiment more broadly. For financial institutions, the more consequential signal is the direction of inflation and borrowing costs. With headline inflation on a downward path and commodity prices, particularly energy, softening, the conditions for a more supportive credit environment are gradually taking shape. For well-capitalised NBFCs with disciplined risk frameworks, this translates into a broadening opportunity across consumption, MSME, and infrastructure-linked credit segments.

Indian Economic Landscape

Indias macroeconomic performance in FY 2025-26 was defined by breadth as much as pace. Growth was robust, driven by stable domestic demand, ongoing infrastructure investment, and the continued formalisation of the economy. Together, these factors create durable conditions for credit expansion and financial inclusion, rather than merely cyclical demand. Household consumption remained a key driver, supported by easing inflation, improving income visibility, and stable employment conditions. This translated into stronger demand for retail and MSME financing across housing, vehicles, and consumption-linked segments, precisely the credit categories where NBFCs play a meaningful and complementary role alongside banks. Investment momentum held firm as well, with Gross Fixed Capital Formation growing at 7.8%, underpinned by public infrastructure spending and a gradual revival in private capex. Urbanisation, infrastructure development, and services-led expansion collectively improved cash-flow visibility and strengthened underwriting conditions for lenders.

(Source: https://www.mospi.gov.in/uploads/latestReleases/latest_ release_1767781372753_1380ce82-f5a5-440d-99e6-e6b35af0deb5_GDP_ Press_Note_on_FAE_2025-26.pdf)

Inflation and Monetary Policy Environment

The inflation environment in FY 2025-26 was favourable. Headline CPI averaged approximately 1.7% between April and December 2025, a multi-year low, reflecting moderating food prices, improved supply management, and stable global commodity trends. Lower inflation preserved household purchasing power and created the space for a more accommodative monetary stance. Fiscal discipline reinforced this stability. Robust tax collections and calibrated expenditure management gave the government the headroom to sustain capital formation and social spending without compromising its consolidation objectives, a balance that strengthened broader economic confidence.

Monetary policy responded accordingly, with cumulative repo rate reductions, targeted liquidity measures, and healthier bank balance sheets improving systemic liquidity and accelerating the transmission of lower borrowing costs to the real economy. Credit availability improved across sectors through the year, and the financing environment for businesses and households became meaningfully more supportive as a result.

Outlook

Indias growth outlook for FY 2026-27 remains constructive, with real GDP projected to grow at 6.6%-7.2%, consistent with the countrys potential growth rate. Domestic demand, private investment recovery, and sustained infrastructure spending are expected to remain the primary drivers. Stable inflation, prudent fiscal management, strengthening financial sector fundamentals, and ongoing structural reforms position India well to sustain its growth momentum. For NBFCs operating in secured retail and MSME lending, this environment, characterised by rising formalisation, improving borrower cash flows, and a supportive monetary cycle, represents a conducive period for disciplined and sustained credit growth.

(Source: https://www.pib.gov.in/PressReleasePage. aspxRs.PRID=2219912&lang=1&reg=3&utm_)

Gold Market Landscape

FY 2025-26 marked a decisive shift in Indias gold market, from consumption-led growth to investment-driven momentum, as record-high prices fundamentally reshaped buying behaviour across segments. According to the World Gold Council, Indias gold demand fell by approximately 11% to around 711 tonnes in calendar year 2025. Elevated prices moderated jewellery purchases, particularly in value-sensitive rural markets. Yet the volume decline masked a more nuanced picture, with the overall value of gold demand rising, reflecting significantly higher price realisations. This trend was further reinforced by trade data, with Indias gold imports surging to a record high of approximately USD 72.4 Billion in FY 2025-26, up over 24% from around USD 57.9 Billion in the previous fiscal, underscoring resilient underlying demand despite elevated prices.

(Source: World Gold Council, Business Standard, Ministry of Commerce/DGCI&S)

Global price dynamics played a pivotal role in shaping domestic trends. Gold prices rose approximately 65% through 2025, climbing from USD 2,607 per ounce to USD 4,315 per ounce by end-2025, according to Indias Economic Survey. The rally was supported by a weakening US dollar, expectations of prolonged negative real interest rates, and heightened geopolitical and financial tail risks, reinforcing golds appeal as a safe-haven asset. Gold investment demand accounted for over 40% of Indias total gold consumption in 2025, a structural shift that signals a maturing market. With macroeconomic uncertainty persisting and gold continuing to serve as an effective portfolio hedge, this investment-led orientation is expected to strengthen further through 2026.

Indian MSME Sector Landscape

Micro, small, and medium enterprises (MSMEs) remain central to Indias economic architecture, acting as powerful engines of growth, employment and inclusive development. With over 7.47 Crore enterprises employing nearly 32.8 Crore people, the sector is the second-largest employer after agriculture. It plays a critical role in livelihood generation, particularly across rural and semi-urban regions. According to the Union Budget 2026-27, MSMEs contribute approximately 35.4% of Indias manufacturing output, 48.58% of exports and 31.1% of GDP. This underlines their systemic importance to industrial expansion, trade competitiveness, and balanced regional development. The Government of India has rolled out a focused suite of initiatives to accelerate the growth and competitiveness of the MSME sector, targeting formalisation, credit access, and market integration. Expanded credit guarantee schemes, digital lending platforms and the Udyam registration framework have strengthened financial inclusion and improved access to institutional support. Export promotion measures, cluster development programmes and production-linked incentives (PLIs) are enabling MSMEs to scale and integrate into domestic and global value chains. Backed by sustained policy support and an enabling ecosystem, MSMEs are well positioned to anchor Indias next phase of inclusive, innovation-led, and sustainable economic growth.

(Source: https://www.pib.gov.in/

PressReleasePage.aspxRs.PRID=2228306&utm)

Non-Banking Financial Company Sector Landscape

The Non-Banking Financial Company (NBFC) sector in India has evolved into a significant pillar of the countrys financial banking systems and expanding credit access in underserved segments. The sectors total assets stood at approximately 45 Trillion in FY 2025-26, reflecting a steadily expanding footprint across Indias financial markets, with AUM expected to scale further in the coming years. NBFCs are projected to continue outpacing bank credit growth, with loan book expansion estimated at 15-17% through FY 2025-26, driven by strong retail and MSME demand. This growth momentum is anchored by targeted niche lending strategies, digital distribution models, and deeper penetration into underserved credit markets.

(Source: https://bfsi.eletsonline.com/indias-top100-nbfcs-ranking-2025/Rs.utm, https://www.loansjagat.com/news/nbfc-loan-book-set-to-grow-15-17-in-fy26-amid-gst-cutsRs.utm)

Despite sustained double-digit AUM growth, asset quality pressures have emerged in specific portfolios. Rapid expansion in unsecured lending, particularly small-ticket personal loans, fintech-linked credit, and certain microfinance to delinquencies. These pressures have coincided with a significant shift in the regulatory landscape.

The RBIs Scale-Based Regulatory (SBR) Framework has progressively strengthened prudential norms, risk management practices, and supervisory oversight across the sector. The framework classifies NBFCs by systemic importance and risk profile, ensuring that larger entities maintain adequate capital, liquidity, and governance standards. Recent clarifications extending regulatory purview to smaller non-deposit-taking NBFCs further signal the RBIs intent to monitor and manage risk comprehensively, irrespective of entity size or asset thresholds. The sectors near-term outlook remains balanced. According to CRISIL, NBFC AUM is expected to grow at a mid-teens rate through FY 2026-27, potentially crossing 50 Trillion, supported by consumption demand and continued formalisation of credit. However, funding costs, competitive pressures, and regulatory compliance may moderate margins. Strategic investments by large corporates in digital lending platforms signal ongoing innovation and intensified competition. the Indian NBFC sector remains on firm footing, but sustainable growth will hinge on disciplined risk management, capital resilience, and regulatory alignment as macroeconomic conditions continue to evolve. has heightened vulnerability

(Source: https://www.business-standard.com/industry/news/nbfcs-face-funding-pressure-despite-healthy-outlook-crisil-ratings-125112400780_1. htmlRs.utm)

NBFC Segment Growth Drivers

Retail Credit Expansion

Retail lending remains the primary growth engine for NBFCs. According to the Reserve Bank of India (RBI), retail credit growth remained strong, growing by 19.8% in FY 2025-26 primarily driven by strong consumer demand for housing loans, surging gold-backed loans, rapid digitisation of lending processes, and rising consumption patterns among a growing urban middle class.

(Source: https://www.pib.gov.in/PressReleasePage. aspxRs.PRID=2290384&reg=48&lang=2)

Digital Lending and Fintech Partnerships

Digital origination continues to drive scale, with fintech-NBFC small-ticket personal lending and embedded finance offerings, especially in Tier 2 and 3 cities. These partnerships have evolved within a more structured framework, as the RBIs Digital Lending Guidelines have improved governance and borrower transparency while supporting continued digital growth.

(Source: RBI Digital Lending Guidelines https://www.rbi.org.

MSME Lending Momentum

NBFCs are increasingly critical lenders to MSMEs, with MSME and retail assets accounting for nearly 60-65% of NBFC loan books, as per ICRA Limited. Despite some moderation in overall growth, MSME credit demand has remained resilient, aided by policy-driven formalisation and GST-linked underwriting.

(Source:https://economictimes.indiatimes.com/industry/banking/finance/ banking/nbfcs-credit-growth-to-moderate-to-13-15-in-fy25-and-fy26-from-

17-witnessed-in-last-two-fiscals-

Co-Lending Model Expansion

The co-lending framework between banks and NBFCs has strengthened balance sheet efficiency and credit penetration in priority sectors. RBI guidelines governing these arrangements enable risk sharing and capital optimisation, supporting sustainable credit expansion.

(Source: RBI Co-Lending Model Guidelines https://www.rbi.org.in/Scripts/NotificationUser.aspxRs.Id=11991)

Vertical-Wise Growth Opportunities

Gold Loans

According to ICRA Limited, amid a sharp surge in gold prices, the organised gold loan market crossed the 15 Lakh Crores milestone in FY 2025-26, one year ahead of earlier projections. The market is further expected to expand to nearly 18 Lakh Crores by FY 2026-27, reflecting sustained structural momentum. While banks continue to dominate the overall gold loan landscape with an estimated 82% market share, the NBFC segment has witnessed evolving dynamics. The share of NBFCs in the overall gold loan market has moderated from 22% in March 2021, with concentration among leading players gradually easing. The top four NBFCs accounted for 81% of NBFC gold loan AUM as of March 2025, compared with 90% in March 2022, indicating increasing competitive intensity within the segment.

(Source: https://www.fortuneindia.com/personal-finance/organised-gold-loan-market-to-hit-15-lakh-crore-in-fy26-amid-soaring-prices-icra/127304)

Growth Drivers for Gold Loan

Elevated Gold Prices	Shift towards Secured Lending	Strong Rural and MSME Demand
Sustained strength in gold prices has increased the collateral value of pledged jewellery, allowing borrowers to access larger loan amounts against the same underlying assets.	As stress rises in unsecured retail segments, particularly personal loans and credit cards, lenders are increasingly prioritising secured products. Gold loans, with their physical collateral backing and short tenures, offer lower credit risk and superior asset quality, making them an increasingly attractive proposition for banks and NBFCs alike.	Gold loans continue to meet short-term liquidity needs in rural and semi-urban markets, particularly for agriculture, small businesses and household expenses. Limited access to formal credit in these segments supports sustained demand.
Regulatory Clarity	Digital Adoption and
and Stability	Process Efficiency
Clear guidelines from the RBI on loan-to-value (LTV) ratios, auction norms, and provisioning standards have reduced regulatory uncertainty. This stability has encouraged lenders to expand gold loan portfolios confidently.	Digital onboarding, quicker renewals, and streamlined appraisal processes have improved customer experience and reduced turnaround time, making gold loans more competitive with other retail credit products.

Mortgage Loans

Indias mortgage and housing finance sector entered FY 2025-26 on a structurally strong footing, supported by rising urbanisation, steady income growth, continued policy thrust on affordable housing, and improving credit penetration. Over the past decade, access to housing finance has deepened meaningfully, with housing loans as a share of GDP rising to around 11% in FY 2024-25 from 8% in FY 2014-15, according to the Economic Survey 2025-26. Reflecting this sustained expansion, outstanding individual housing loans more than tripled to approximately 37 Lakh Crores by March 2025, compared with about 10 Lakh Crores a decade earlier.

The Loan Against Property (LAP) segment has emerged as an important pillar of Indias secured lending landscape, complementing traditional housing finance. The secured MSME LAP portfolio outstanding is projected to grow by 16-18% over FY 2024-25-FY 2027-28, reflecting sustained demand for asset-backed credit. Growth has been largely supported by increasing MSME financing needs, appreciation in real estate values, and borrowers preference for secured loans that offer relatively favourable borrowing terms.

Growth Drivers for Mortgage Loans

Easing Interest	Improving Housing	Digital
Rate Cycle	Affordability Trends	Mortgage Transformation
A stabilising or declining interest rate environment is improving mortgage affordability and supporting refinancing activity.Lower first-time buyers to enter the approval times and lowering	In several markets, mortgage payments are becoming more competitive relative to rental costs, encouraging	Automated underwriting, AI-driven credit scoring, digital documentation and fintech partnerships are reducing
borrowing costs expand loan eligibility and strengthen buyer sentiment heading into FY 2025-27.	market. However, affordability remains sensitive to property price movements.	processing costs, accelerating loan origination growth.
Expansion of Non-Traditional	Policy and	Strong
Loan Segments	Regulatory Support	Demographic Drivers
Growth in non-QM loans, DSCR products, and lending to self-employed or gig-economy borrowers is broadening the eligible borrower base and creating new revenue streams for lenders.	Government incentives such as tax benefits, affordable housing schemes, and higher conforming loan limits in certain markets are enhancing purchasing power and supporting demand.	A growing population in the prime home-buying age group (25-40 years) and increasing aspiration for home ownership continue to provide structural demand support.

Growth Opportunities

Indias credit landscape in FY 2025-26 is being shaped by expanding digital public infrastructure and deeper financial inclusion. Improved rural connectivity, Aadhaar-enabled authentication, UPI penetration and Account Aggregator frameworks are lowering customer acquisition and underwriting costs, enabling NBFCs to expand formal credit access across semi-urban and rural markets. Increasing use of alternative data, including cash flows, GST records, bank transactions and utility payment patterns, is accelerating the shift from collateral-based to data-driven underwriting, broadening access to underserved and thin-file borrowers while maintaining risk discipline.

Technology adoption is transforming NBFC operating models through AI-led credit assessment, automated collections, fraud analytics and cloud-based loan systems, improving efficiency and portfolio monitoring. At the same time, co-lending partnerships between banks and NBFCs/HFCs are gaining momentum, combining funding strength with specialised underwriting and last-mile reach to support scalable growth.

Structural opportunities are also expanding across MSME financing, gold-backed lending and sustainable finance. As MSMEs formalise and demand for green financing rises, NBFCs are strengthening their role in supporting inclusive and environmentally responsible growth while diversifying their lending portfolios.

Threats and Challenges

Increased Competition

The competitive landscape remains intense, as well-capitalised banks expand retail and MSME lending, leveraging lower funding costs and strong balance sheets. Fintech and digital lenders continue scaling through data-driven underwriting and embedded finance models.

Data Privacy and Regulatory Compliance

The implementation of the Digital Personal Data Protection framework in India has heightened compliance expectations across financial institutions. With greater reliance on alternative data for underwriting and analytics, robust consent-based data governance and secure storage protocols are increasingly non-negotiable.

Cybersecurity and Technology Risks

The BFSI sector remains one of the most targeted industries for cyberattacks globally. Cyber threats targeting financial institutions frequency and sophistication during the year with India alone recording various such incidents with attackers increasingly targeting digital banking portals and government-linked financial ecosystems.

(Source: https://www.expresscomputer.in/news/apac-financial-institutions-face-intensifying-cyber-attacks-as-campaigns-more-than-double-in-2025-check-point-research/132331/)

Company Overview

Fedbank Financial Services Limited (Fedfina, The Company, We), incorporated on 17^th April, 1995 and headquartered in Mumbai, is a publicly listed NBFC. As a majority-owned subsidiary of Federal Bank Limited, we benefit from strong institutional parentage, robust governance standards, and diversified access to both debt and equity capital markets. Our listing on the NSE and BSE in November 2023 marked a significant milestone in our journey, strengthening our capital base and enhancing our visibility in the public markets.

With an expanding presence across 17 states and union territories, we operate through a diversified branch network spanning urban and semi-urban markets. Our localised underwriting expertise, customer-centric approach, and agile decision-making enable us to deliver contextual and responsive credit solutions tailored to regional needs.

Performance Highlights

During FY2025-26,Fedfinadelivered resilient year-on-year growth, supported by strong expansion in secured lending and disciplined execution of its strategic priorities. AUM increased by 27.5% year-on-year to 20,153 Crores, reflecting steady portfolio growth and improved product mix. Profitability strengthened with net profit rising from 225.2 Crores in FY 2024-25 to 343.6 Crores in FY 2025-26, demonstrating consistent earnings momentum.

The gold loan portfolio remained the primary growth engine, with AUM expanding 76% year-on-year in FY 2025-26, supported by record disbursements of 28,326 Crores during the year. To augment distribution capabilities, the Company commissioned 148 newgoldloanbranchesduringthefiscalyear, enhancing reach and customer acquisition.

Strategically, the Company transitioned to a predominantly secured portfolio, with unsecured business loan exposure declining to 0.4% of on-book assets by FY 2025-26. Credit costs remained well contained at 0.8%, within the guided range of <1%. Improved operating performance translated into stronger return metrics, with Return on Assets (ROA) at 2.4% and Return on Equity (ROE) at 12.6% during the year under review.

Key Ratios

Particulars	FY 2025-26	FY 2024-25	Remarks (changes of 25% or more)
risen sharply in
(i) Debtors Turnover	NA	NA	-
(ii) Inventory Turnover	NA	NA	-
(iii) Interest Coverage Ratio	NA	NA	-
(iv) Current Liability Ratio	0.3	0.4	-
(v) Debt Equity Ratio	4.6	4.0	-
(vi) Operating Profit Margin (%)	NA	NA	-
(vii) Net Profit Margin (%)	15.4	10.8	Better NII, reduced operating cost and
			improvement in credit cost led to better
			Net Profit Margin
(viii) Return on Net Worth	12.6	9.4	Improvement in Net Profit Margin led to
(RONW) (%)			better RONW

Product Range

Mortgage Loans

Our mortgage franchise is built on a calibrated twin-engine approach, with Medium-Ticket LAP (MT LAP) and Small-Ticket LAP (ST LAP) segments driving balanced and diversified growth. During the year, we strengthened underwriting consistency through the implementation of a system-driven Business Rule Engine (BRE) and enhanced credit filters, reinforcing policy discipline while supporting responsible portfolio expansion. Operationally, we focused on improving efficiency and scalability by co-locating 70 MSME Hubs within our gold loan network, unlocking cost synergies and optimising infrastructure utilisation. The mortgage portfolio grew 16% year-on-year to 9,362 Crores, reaffirming its position as a core growth driver and contributing approximately 46.5% to our total AUM of 20,153 Crores. During the period, total mortgage disbursements stood at 3,084 Crores, reflecting steady demand across both segments.

We maintain a prudently managed loan portfolio anchored in high-quality borrower selection. Across our MT LAP, ST LAP, and Home Loan segments, we have consciously focused on customers with strong credit profiles, generally reflected in CIBIL scores of 700 and above.

Small-Ticket LAP and Housing Loans

The ST LAP segment, which accounts for approximately 40.5% of our mortgage portfolio, focuses on higher-yield opportunities within the self-employed and emerging borrower segments. Following the stress observed in FY 2024-25, we undertook a structured recalibration of this business during the year. This included the implementation of a system-driven Business Rule Engine (BRE), tighter credit filters including higher CIBIL score thresholds, and strengthened underwriting controls to enhance portfolio quality and consistency in credit decision-making. We also verticalised our collections function by onboarding experienced senior leadership and significantly expanding our field collections team to improve delinquency management and recovery efficiency. To further strengthen the balance sheet, we selectively divested legacy stressed pools to asset reconstruction companies and optimised our cost structure through branch co-location initiatives. These corrective measures, coupled with our strategic shift toward a higher-quality new book, are aimed at stabilising asset quality metrics and positioning the segment for sustainable and disciplined growth going forward.

Medium-Ticket LAP

The MT LAP segment remains central to our mortgage portfolio, characterised by stability, lower risk, and consistent performance. Focused primarily on established MSMEs with documented cash flows and formal income records, this segment has demonstrated resilience despite broader industry yield pressures. During the year, the segment sustained steady disbursement momentum and maintained stable portfolio yields, supported by disciplined underwriting standards and prudent risk selection. Contributing approximately 59.5% to our total mortgage AUM, the segment underscores our strategy of building a scalable, quality-driven secured lending franchise.

Gold Loan

FY 2025-26 has been a year of strong momentum and disciplined expansion for our Gold Loan franchise. The portfolio witnessed robust growth with gold loan AUM increasing steadily during the year to 10,352 Crores by the end of FY 2025-26, reflecting a 76% year-on-year growth. Disbursement activity remained strong, with cumulative disbursements during FY 2025-26 reaching 28,326 Crores, showcasing sustained customer demand across markets.

Operationally, we significantly strengthened our physical distribution network by adding 148 new branches in FY 2025-26, enhancing our reach and deepening market penetration. In parallel, we leveraged infrastructure synergies by co-locating 70 MSME Hubs within gold loan premises, optimising cost structures and improving branch-level productivity. AUM per branch improved to 16.5 Crores despite the rapid network expansion, reflecting healthy traction in new locations.

From a risk management perspective, we maintained a conservative LTV stance, with portfolio LTV moderating to 60.9% during the year, despite regulatory headroom for higher limits. Fresh loan originations were calibrated at an onboarding LTV of approximately 70%, balancing growth with prudent risk controls. Strategically, we continue to focus on sustainable tonnage growth, targeting a long-term CAGR of 10-12%, rather than relying solely on gold price movements. Doorstep Gold Loan (DSGL) offerings also recorded strong traction during the year, expanding our customer reach and service flexibility.

Risk Management Matrix

Risk Type	Risk Description	Mitigation Strategy
Credit Risk	Credit risk arises from the	Monthly performance reviews by senior management covering
	possibility of financial loss	EWS triggers, asset quality indicators, and portfolio trends
	if customers fail to meet	Quar terly Risk Management Committee reviews with
	repayment obligations	corrective recommendations
		Regular review of lending policies, underwriting standards,
	otocols pr verification systems, and disbursement
		P ortfolio largely secured against gold or property assets, providing
		strong collateral coverage
Liquidity Risk	Liquidity risk refers to potential	Adequate liquidity buffers maintained across cash, liquid
	funding challenges arising	investments, deposits, and undrawn credit lines
	from mismatches in cash	Asset-liability mismatches continuously monitored under the
	inflows and outflows	ALM framework
		P eriodic stress testing conducted across different scenarios
		Structu ral liquidity reviewed in line with regulatory guidelines
Market Risk	Market risk stems from	Gold Price Risk
	fluctuations in gold prices,
	interest rates, and foreign	Gold prices tracked daily with conservative loan-to-value
	exchange movements, which	ratios maintained
	may impact asset values or	Regular stress scenario assessments conducted
	financial performance
		Interest Rate Risk
		Pricing and duration strategies guided by ALM analytics and
		macroeconomic monitoring
		Forex Risk
		Exposu re arising from external borrowings mitigated through
		appropriate hedging strategies
Operational Risk	Operational risks arise from	Thr ee Lines of Defence followed: business units manage risks; risk
	failures in processes, systems,	and compliance teams provide oversight; internal audit provides
	personnel, or external events	independent assurance
		Continuous risk mitigation through controls, training, and
		audit reviews
Fraud Risk	Risk of financial loss due to	Multi-la yered prevention covering due diligence, authentication
	internal or external fraud	checks, and centralised monitoring
		Mandatory staff training and incident reporting maintained
		Aler ts investigated promptly to minimise recurrence
Regulatory and	Risk of penalties, financial loss,	Robust compliance framework aligned with
Compliance Risk	or reputational damage due	regulatory requirements
	to non-compliance with laws
		P eriodic audits and continuous monitoring of
	and regulations
		regulatory developments
		Regular employee training maintained
Reputational Risk	Risk of brand or business impact due to negative perception or stakeholder distrust	T ransparent communication and ethical conduct maintained consistently F air customer practices and accurate disclosures upheld Compliance with regulatory and disclosure norms remains a standing priority
Cybersecurity Risk	Risk of financial loss, operational disruption or reputational damage due to cyber threats or technology failures	La yered controls across secure infrastructure, monitoring systems, and incident response P eriodic vulnerability assessments conducted F ull compliance with RBI cybersecurity guidelines maintained

Credit Rating

(as on 31st March, 2026)

Human Resources

Our progress is fundamentally driven by our people, a diverse team whose expertise, integrity and commitment shape the organisations growth journey. The depth of experience our employees bring from established financial services institutions translates into strong domain knowledge and operational insight that directly benefit the Company. Continuous investment in capability building through leadership development, structured training and performance management ensures employees remain future-ready while advancing both individual careers and organisational priorities.

Our workplace culture is anchored in trust, accountability, and customer centricity, guided by core values of execution excellence, integrity, and people focus. Emphasis on employee well-being, work-life balance and health and wellness initiatives reflects our holistic approach to workforce care.

Technology

Digital enablement remains central to how we serve customers and scale responsibly. Through technology integration across lending, credit assessment, collections and customer engagement, we have enhanced responsiveness, improved decision-making and created a more seamless customer experience. Digital loan origination, automated onboarding and always-on digital platforms have accelerated service delivery while improving convenience and accessibility. At the same time, our phygital approach balances digital innovation with human connection by combining technology-led convenience with a strong branch presence. Supported by public digital infrastructure, advanced analytics and robust cybersecurity frameworks, we continue to strengthen personalisation, governance and operational resilience, enabling us to build a scalable, secure and future-ready organisation.

Internal Control Systems

The Board of Directors, supported by the Audit Committee, provides oversight of the Companys internal control framework to ensure its adequacy and effectiveness. The control environment is structured to systematically identify, evaluate and mitigate risks, thereby offering reasonable assurance against material errors, fraud and financial loss. The assurance inputs from internal control functions and management oversight, anchored in a culture of integrity and regulatory compliance. Under the Boards guidance, management continuously monitors key risks and strengthens control mechanisms to safeguard the Companys operations, assets and stakeholder interests.

Cautionary Statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply, and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws and other statutes, and other incidental factors.