IndusInd Bank Ltd Management Discussions.

Macro-economic and banking environment

The Indian economy and banking sector faced multiple challenges during the financial year 2018-19. The first half of the year saw a challenging global environment characterised by rising oil prices and sustained capital outflows from emerging markets including India, as the US Federal Reserve continued to raise rates. That culminated into a sharp Rupee depreciation on the back of widening current account deficit and net portfolio capital outflows. Monetary policy turned tighter in response to rising inflationary pressures and Repo rate was raised by 0.50% in the first half. The second half of the year saw domestic concerns around the Non-Bank Financial Companies (NBFC) sector take centre stage with the IL&FS default event. Various risks related to the sector came to light, especially in the backdrop of very rapid credit growth from the shadow banking sector over the last 5 years. Furthermore, given the interlinkage between the banking, NBFC and mutual fund sectors, asset quality concerns and liquidity risks were heightened across the financial sector. That added to the already tight liquidity conditions on account of a balance of payments deficit and rising currency in circulation. And, the subsequent credit-squeeze from the NBFC sector, added to the drag on growth from headwinds of the first half.

Active liquidity management by the RBI through large open market bond purchases and a USD-INR swap, coupled with a pick-up in capital inflows, helped in easing of the liquidity deficit during the fourth quarter. Credit offtake from banks picked-up over the second half, helping to ensure adequate fund supply for the commercial sector. Easing inflation, strengthening rupee, lower oil prices and a dovish shift in the monetary policy by the US Fed opened up room for monetary easing in February and the Repo rate was cut by 0.25%. Sovereign bond yields too eased over the last quarter, though large government market borrowings programme for FY 2019-20, kept them in check.

Despite various headwinds intensifying over the year, the economy maintained a reasonably strong pace of growth. Real GDP growth was estimated at 6.8% in FY19, marginally lower than 7.2% in FY 2017-18. Growth slowed down over the second half of the year to 6.2% from 7.5% in the first half, as private consumption, investment activity and exports slowed down. Rural consumption was particularly under pressure, on account of a broad-based fall in food prices and weak rural wage growth. Urban consumption was affected too on account of uncertain economic prospects in the near-term along with tightening of credit availability from the NBFC sector. Investment activity remained robust for first three quarters, helped by the Government focus on development of roads network and affordable housing, but lost steam in the last quarter. Gross Fixed Capital Formation (GFCF) saw the period of double-digit growth, which began in Q3FY18 extend to Q3FY19. Sectoral break-up of GDP showed that growth slowed down in the farm sector from 5% in FY18 to 2.9% in FY19 following erratic monsoons, while it picked up for manufacturing, construction and financial and IT services.

Bank credit growth picked up over the year to touch 13.2% up from about 10% in FY18. Credit flows became more broad-based during FY19, with services accounting for the highest share as against personal loans a year ago. Credit flow to industry and infrastructure improved too. Overall non-performing assets ratio of banks also moderated over the first three quarters, but the pace of NPA resolution remained slow. Average recovery rate under the new Insolvency Code at 46% in the first half of the FY19 was better than the mechanisms that existed before IBC and improved from 41.3% in FY18.

Indias external sector came under renewed pressure during the year, with Rupee weakening sharply against the US dollar over the first half, making a new all-time low. Current Account deficit widened to 2.5% of GDP on the back of a broad-based increase in imports, particularly that of oil following a 26% increase in prices. That coupled with portfolio capital outflows on global investor risk aversion, saw the Rupee lose almost 14% of its value in the first half. The RBI had to drawdown its foreign exchange reserves to support the Rupee, as balance of payments was in a deficit of $17.5 billion over the first 3 quarters. The Rupee recovered over the second half helped by a sharp crash in oil prices in October and improving investor risk appetite on the back of US central bank signalling a pause on rates after a cumulative 1% increase in 2018. Capital inflows picked up in the fourth quarter, helping RBI to shore up its forex reserves by $19.5 billion and end the year at $413 billion. Overall, Rupee finished the year weaker by 6% against the US dollar.

On the global economic front, IMF estimates indicate that global growth peaked at 4% in 2017, softened to 3.6% in 2018 and is projected to decline further to 3.3% in 2019. Global economic activity slowed down notably in the second half of 2018, led by slower growth in China and Euro-area. Trade tensions between US and China and BREXIT related uncertainty took a toll on business confidence and global trade volumes. Furthermore, financial conditions tightened, especially affecting emerging markets, as the US Fed raised rates and continued with quantitative tightening. In the first quarter of 2019, there was some improvement in business and investor sentiment, on the back of a shift towards a more accommodative monetary policy stance by major global central banks, led by the US Fed. US-China trade negotiations also helped.

The year 2018-19 ended on a relatively positive note. While growth slowdown concerns emerged over the second half, macro-economic stability improved with low inflation, stable rupee and benign oil prices. Global financial and market conditions turned supportive too, though global trade tensions have resurfaced with US tariff increases on Chinese imports in May. These developments have allowed monetary policy to focus on shoring up growth through lower rates. Between February and early June, Repo rate was reduced by a cumulative 0.75%. Fiscal policy remains in an expansionary mode too. Both centre and states exceeded their FY19 budget targets, cushioning growth but raising concerns about stretched public finances. Furthermore, the Central Government introduced a minimum income scheme to support small farmers and improve rural livelihoods. While such income support would help in alleviating rural stress, recurring nature of such a spend would pose a risk to fiscal consolidation. Financial stability risks remain from the NBFC sector. Most crucially though with the re-election of a BJP led NDA Government, economic policy continuity and the endeavour to reach a $5 trillion economy in next 5 years, will help in reviving growth.

BUSINESS PERFORMANCE

Despite a slowing economy and difficult operating environment during the year, the Bank continued to perform well on all operational parameters, consistent with the earlier years. However, the results for the year were adversely impacted when a large exposure to a group in the infrastructure sector turned non-performing towards end of the year where in an unprecedented move, the Government of India replaced the entire Board of Directors and the reconstituted Board initiated a Resolution Plan, and in the interim, the National Company Law Tribunal ordered a moratorium on all recovery actions.

The salient features of the Banks operating performance during the year 2018-19 are summarised in the table below:

Particulars FY 18-19 FY 17-18 Y-o-Y
(Actual) (Actual) (Growth)
Interest Earned 22,261.15 17,280.75 28.82%
Interest Expended 13,414.97 9,783.30 37.12%
Net Interest Income 8,846.18 7,497.45 17.99%
Non-Interest Income 5,646.72 4,750.10 18.88%
Revenue 14,492.90 12,247.55 18.33%
Payment to Employees 1,853.51 1,780.69 4.09%
Other Expenses 4,551.17 3,810.75 19.43%
Operating Expenses 6,404.68 5,591.44 14.54%
Operating Profit (before Depreciation and Provisions and Contingencies) 8,317.07 6,867.75 21.10%
Operating Profit 8,088.22 6,656.11 21.52%
Provisions and Contingencies 3,107.65 1,175.43 164.38%
Profit Before Tax 4,980.57 5,480.68 (9.12%)
Provision for Taxes 1,679.47 1,874.69 (10.41%)
Net Profit 3,301.10 3,605.99 (8.46%)
Net Profit (adjusted for one off NPA impact) 4,475.10 3,605.99 24.10%

During the FY 2018-19, the Bank witnessed robust growth in its topline as well as in operating profits. The one time provisioning required for a group exposure in the infrastructure sector led to subdued net profits. The Bank posted Net Profit of 3,301.10 crores as against 3,605.99 crores in the previous year. Net Profit, adjusted for the one-off impact, would have been 4,475.10 crores registering a growth of 24.10% y-o-y. The Operating Profit (before Depreciation and Provisions and Contingencies) increased by 21.10% to 8,317.07 crores, as compared to 6,867.75 crores in the previous year.

The topline numbers continued to show a healthy growth with Net Interest Income of the Bank rising by 17.99% to 8,846.18 crores from 7,497.45 crores. Yield on Advances increased by 5 bps to 11.26% and the Cost of Deposits increased sharply by 60 bps at 6.58%. However, proactive management of the funding mix between Deposits and Borrowings, resulted in the Net Interest Margin (NIM) for the year being placed at 3.80%; further, if adjusted for the one-off NPA impact, NIM would have been higher at 3.86%.

Fee and Miscellaneous Income grew by 18.88% to 5,646.72 crores as compared to 4,750.10 crores for the previous year. Core Fee Income from revenue streams like Commission, Exchange, Fees on distribution of third party products and earnings from foreign exchange business, etc. rose to 5,067.57 crores as against 4,176.75 crores registering a growth of 21.33%.

The Bank expanded its branch network steadily to reach 1,665 branches / banking outlets (including 65 banking outlets), as against 1,400 branches at the beginning of the year. Revenue per employee during the year improved to 52.25 lakhs from 48.44 lakhs last year.

The Net Non-Performing Assets ratio of the Bank stood at 1.21% as of March 31, 2019; but for the large one-off exposure to the group in the infrastructure sector, net NPA ratio would have been significantly lower at 0.48%. The Provision Coverage Ratio (PCR) as at March 31, 2019 stood at 43.04%.

On account of the lower Net Profit, the Return on Assets (RoA) for the year stood at 1.39%, and if adjusted for the one-off impact, it would have been higher at 1.89%.

During the year under review, the Bank allotted 24,63,681 Equity shares, pursuant to the exercise of Options under its Employees Stock Option Scheme, 2007. An aggregate of 4,18,91,300 Options, comprising 6.95% of the Banks equity capital, have been granted under the Scheme.

On October 14, 2017, the Board of Directors of the Bank approved a Composite Scheme of Arrangement

(Scheme) under which (a) Bharat Financial Inclusion Limited (BFIL), the largest MFI lender of the country was to merge with the Bank with effect from January 1, 2018 being the appointed date, (b) the promoter entities to the Bank was to be allotted Share Warrants at a price of 1,709 per Share Warrant in accordance with the applicable SEBI Regulations, and (c) the Business Correspondent undertaking, post-merger would be divested to a wholly-owned subsidiary of the Bank to be specifically incorporated for the purpose. This Scheme was subject to a host of approvals, and during the year 2017-18, the Competition Commission of India granted their No Objection and RBI, on March 13, 2018, granted their No Objection for the Scheme.

Further, the Stock Exchanges (NSE and BSE) and the SEBI (through the Stock Exchanges) granted their No Objection to the Scheme in June 2018. In accordance with a specific approval granted by the RBI, IndusInd Financial Inclusion Limited (IFIL) a wholly-owned subsidiary was incorporated on August 8, 2018. Based on these regulatory approvals, the Bank as well as BFIL and IFIL, made an application before the National Company Law Tribunal on August 24, 2018 seeking an order to convene the meeting of the shareholders of the respective companies and the creditors of BFIL. Further to the Order passed by the NCLT on October 31, 2018, the shareholders of the Bank approved the Scheme in an overwhelming manner on December 11, 2018; the Scheme also received overwhelming approvals of the shareholders of BFIL and IFIL, as well as the creditors of BFIL. A joint petition to sanction the Scheme was filed before the NCLT on December 14, 2018.

The joint petition was heard at the NCLT and on April 23, 2019, the NCLT reserved the matter for final orders. In the absence of the final sanction from the NCLT, the merger could not be given effect to, and the Board of Directors of the Bank, on May 22, 2019 adopted the financial statements of the Bank that are being placed before the members in this Annual Report. Meanwhile, on June 10, 2019, the NCLT passed a final Order sanctioning the Scheme and the Bank is in the process of giving effect to the Order.

Since the Appointed Date for the Scheme is January 1, 2018, had the NCLT sanctioned the Scheme before the financial statements for FY 2018-19 were approved by the Board, the financial statements of the Bank would have incorporated the impact of BFILs financials as of the Appointed Date and transactions from the said Appointed Date of January 1, 2018. The following table presents a pro forma summary of the merged company financials as at / for the year ended March 31, 2019:

Particulars As at / for the year ended March 31, 2019, as approved by the Board, without giving impact of the Scheme Pro forma financial statements of the merged company, as at / for the year ended March 31, 2019, considering January 1, 2018 as the Appointed Date
Share Capital 603 692
Reserves and Surplus including ESOP 26,083 29,890
Deposits 1,94,868 1,94,715
Borrowings 47,321 48,129
Other Liabilities and Provisions 8,944 10,236
Capital and Liabilities – Total 2,77,819 2,83,662
Cash, Balance with RBI, Money at Call and at Short Notice 14,783 16,624
Investments 59,266 59,266
Advances 1,86,394 1,90,114
Fixed Assets and Other Assets 17,376 17,658
Assets – Total 2,77,819 2,83,662
Interest Earned 22,261 24,313
Other Income 5,647 5,919
Total Income 27,908 30,232
Interest Paid 13,415 13,916
Operating Expenditure 6,405 6,983
Total Expenditure 19,820 20,899
Operating Profit 8,088 9,333
Provisions and Contingencies 3,108 3,162
(excluding Provision for Income Taxes)
Profit Before Tax 4,980 6,171
Income Tax – Current Tax and Deferred Tax 1,679 2,090
Net Profit 3,301 4,081

Pursuant to the Scheme becoming effective on July 4, 2019, the financial results of the Bank, duly considering the merger, have been published under SEBI (LODR) Regulations 2015 for the Quarter ended June 30, 2019.

CONSUMER BANKING

The Consumer Banking business exhibited a strong performance during the year, with sustained revenue growth across business segments. All business segments of the Consumer Bank contributed to the growth story. Consumer liabilities grew by 37%, backed by focus on deposit mobilisation across key client segments. Consumer Non-vehicle assets (fund based) showed 24% y-o-y growth with unsecured segment growing at 54%.

The Current Account book grew by 15%, backed by continued focus on mobilisation across key client segments of Small & Medium Enterprises, Government Banking Group, and LIC-Cooperatives. Acquisition across the key client segments, propelled by higher footprints of CMS products and process simpli_cations lead to double digit growth. E-tendering solutions, sharp focus on Thrift Societies and higher digital engagement fueled the Current Account book growth.

The Trade and Foreign Exchange services continue to serve Business Owner segment with innovations in services and customised product offerings. The Bank took concrete steps to reduce turn-around time for its customers by introducing online trade platform in its drive to adopt and promote digitisation in cross border transactions.

The Bank continued to strengthen its Online Forex platform. During the year, the Bank has introduced the unique feature called "Insta-reload" for reloading forex card within 5 minutes of placing an application, along with addition of 6 new currencies. The Bank acquires over 60% of its forex card business digitally via its website www.indusforex.com.

The Bank made significant strides towards the Digital India agenda, driving digital payment acceptance at merchant establishments, including Bharat QR, UPI and AadhaarPay. The Bank grew its terminal and Bharat QR deployment at a very fast pace and was amongst the fastest growing banks in the country. Keeping the consumer convenience in mind the Bank launched Duo Card, a Credit cum Debit Card first of a kind product.

The IndusMobile Banking App continued to be the key channel for our customers services and transactions. A slew of services has been launched on IndusMobile including mutual fund investments, comprehensive card management tool and UPI. Mobile transactions and Debit Card usage has been growing at a rapid pace, driven by AI-led analytics-led client campaigns and offers. Digital transactions crossed 80% of the aggregate number of transactions, in line with the Business Plan.

The Business Banking Group remains a key contributor to the Banks asset growth. The Bank deepened its presence with its existing customer base as branch-led acquisition grew to 45% of overall acquisition in FY19 and the branch-led asset book now stands at 36% of overall BBG assets. Synergy initiatives - with Consumer Finance Division (CFD) assets, Business Loans, Current Accounts, Savings Account, etc. - that were launched in FY19 have begun contributing to the overall growth of the business and will remain the key focus areas for FY20.

Additionally, geographical expansion through a judicious entry into Tier 3 cities through hub-and-spoke models will be undertaken, so as to leverage the existing business locations as hubs.

Another significant initiative undertaken by the Business Banking Group was on servicing and client coverage under the McKinsey Customer Experience (CEX) led initiatives. Besides imbibing the Banks philosophy of SEFT (Seamless, Easy, Fast and Transparent), it has also contributed to better customer retention, cross-sell and relationship deepening.

Loan Against Property (LAP) business displayed a growth of 11% in the Loan Book with a strong focus on acquisition yields in a competitive market. The business continued leveraging the Branch distribution network and active cross-sell opportunities, with share of its internal sourcing rising to 45%. The Bank continues to distribute Home Loans in association with HDFC Ltd. and it remains one of the key Asset products distributed through the branch network.

Personal Loans business continued on its rapid growth path, while contributing strong yield to the Assets portfolio. The performance of the Book continued to be robust, growing by 54%, while exhibiting strong portfolio metrics. The product has a live portfolio of 1,73,818 accounts, with 1,06,263 accounts on-boarded in the year 2018-19. Cross-sell synergy with the Consumer Finance Team helped expand the footprint into new geographies.

The Credit Cards business grew by 45% on the customer receivables. The business continues to display strong

Retail Agriculture

The Retail Agriculture Business witnessed sturdy growth through expansion to rural and semi-urban locations in the States of Kerala, Chhattisgarh, Punjab, Haryana, Rajasthan, Maharashtra, Gujarat and Madhya Pradesh. Presently, Kisan Credit Cards are being offered in 98 districts in aforesaid states. More than 8,000 customers have been financed under KCC for traditional agricultural activities / Agri-allied activities, with nearly 33% growth in the Retail Agri Book over the previous year. profitability with a strong revenue growth momentum. The cards business crossed 1 million clients during the year. The asset quality is robust with yields on the portfolio continuing to be stable. The business has created a strong platform and is poised for rapid growth in the coming years. The investments behind digital channels for sourcing new accounts will enable the business to ramp up without compromising on profitability.

Business Loan Asset Book has shown a steady growth of 28% y-o-y without compromise on asset quality despite challenging external environment post launch of GST and NBFC crisis resulting in liquidity stress during the year. The book closed at 1,090 crores as of March 2019 with clients spread across the Micro, Small and Medium Enterprise segments.

The team also entered into partnerships with _n-techs for digital lending under a revenue and risk sharing model.

With the increasing footprint of Digital payments in the country, the Loan Against Card Receivables (LACR) business of the Bank continues to increase its share in financing the Retail merchants comprising of Micro, Small and Medium enterprises across 18 locations by growing the receivables by 44% and the customer base by 54%.

Given its strong risk reward matrix, the product will be a focus area for major scale up for the Bank, by increasing penetration through digital processes, Merchant acquisition, addition of locations and partnerships. Merchant acquisitions would also be a key driver for the Banks Current Account base.

Since its launch, the Bank has built a highly diversified portfolio, ranging from funding of traditional agricultural activities to high-tech farming / Agri-allied activities and crossed the 1,440 crores mark as on March 2019.

Key focus remains on deepening the high-potential Agri markets. Loans have been extended to Small and Marginal Farmers, Weaker Sections, persons with disabilities, thus establishing the Banks commitment to these segments.

Client Experience

The Bank had started its journey towards Customer experience (CEX) transformation in FY18 by outlining the plan for redefining 21 Customer Journeys across the Bank, embedding the principles of convenience – Seamless, Easy, Transparent, Fast. The Bank had also prioritised key organisation enablers that will facilitate customer experience mind-sets and behaviors and augment its efforts to put the customer at the center of all activities of the Bank.

During the financial year FY19, the Bank has successfully implemented 6 journeys along several key shifts that have aided in achieving utmost convenience for the customers. The key shifts include ‘SIMPLIFICATION, ‘DIGITISATION and ‘PERSONALISATION. The customer journey transformation is augmented by strong governance mechanism measuring internal and external metrics that define customer experience. The Bank has further invested in technology to capture real-time Net Promoter Score and voice of customer across the Bank.

The Bank has placed renewed thrust on increasing employee engagement along the lines of ‘Customer First and has undertaken various initiatives to create customer centric mindset. These initiatives include Roadshows by senior management, ‘Customer First trainings across the Bank for 16,000+ employees, leader messages, Customer First newsletter, revamped ‘Rewards & Recognition workshops, to name a few.

The objective of the bank-wide Customer Experience transformation is to place ‘Customer First in our working ideology by focusing on constant improvement in Net Promoter Score, increase in share of wallet penetration and reduction in customer dormancy and attrition.

The Bank aspires to differentiate itself through such customer-centric initiatives and garner significant and demonstrable competitive advantage in the commoditised banking space.

Distribution

Apart from opening 200 new branches and 65 new banking outlets, ATM network expanded by setting up 337 new ATMs. The Bank has also partnered with White-Label ATM Operators to set up co-branded ATMs.

Innovation

IndusInd Bank bagged yet another market first by being the first in India to introduce its chatbot-IndusAssist on Alexa for its customers adding to its ‘On The Go social banking service already available on Twitter, Facebook

Messenger. This reputation was further strengthened by the launch of DUO Card, an industry first Credit cum Debit Card.

Credit Cards

The Banks Credit Card Business has grown robustly over the last year, fueled by industry-first product launches, strong digitisation initiatives and data-driven portfolio actions. The quality of customer receivables has continued to be robust, and receivables have grown by 45%.

The business achieved a significant landmark when it crossed the 1 million customer milestone during the year. The business continues to expand its distribution through the branch network and through the adoption of a strong cross-sell strategy. Increased focus on acquisitions through online and digital channels has also contributed to the growth, delivering scale and efficiency.

The product suite has been further enhanced with new and innovative product launches, offerings and luxury brand tie-ups, keeping in mind lifestyle preferences across various customer segments. To enhance the Pioneer Wealth Management platform, two products; the Pioneer Heritage and Legacy Credit Cards were launched. The business also launched two innovative cards, the IndusInd Bank Duo Card which is Indias first Debit-cum-Credit Card, and the IndusInd Bank Nexxt Credit Card which is the countrys first interactive Credit Card with buttons, and which provides flexible payment options to the customer. These back-to-back launches were backed by strong media campaigns.

The business has started issuing NFC enabled Contactless Credit Cards for all new card issuances from December 2018 onwards, to embrace the latest payment technology along with highest level of security.

With a focus on bringing differentiated and value-accretive products to customers, the business has continued to partner with leading local and international brands to bring best-in-class benefits and features to its customers. Adoption of convenient, secure and contactless payment technologies such as Visa PayWave, MasterCard PayPass and Samsung Pay have helped in creating and delivering a seamless payment experience to customers.

Commercial Cards spends volume has grown by 80% in the financial year due to accelerated cross-sell to existing Corporate Banking relationships of the Bank. With the launch of ERP integrated B2B products, the Bank has been able to provide Corporate customers with enhanced digital solutions, along with simpli_ed travel and entertainment management products, thereby creating a uni_ed platform to cater to all business related expenses. The business has also grown the distribution footprint by increasing geographical coverage and by focusing on cross-sell to existing current account holders through the introduction of card-based B2B payment solutions.

CONSUMER FINANCE

The Consumer Finance Division (CFD) extends funding for a wide range of Vehicles / Equipment, which include Commercial Vehicles, viz., Heavy, Light and Small Vehicles used both for goods and passenger applications, Passenger Cars, Utility Vehicles, Two-Wheelers, Tractors, and Construction Equipment such as Excavators, Loaders, Tippers, Cranes, etc. Finance is extended for both new and used assets in all the above segments. Housing loans to low cost housing segment has also been launched in line the accent on housing for all focus by Government of India.

Aggregate disbursements made during the year rose to 34,706 crores in 2018-19 up from 27,973 crores in 2017-18, a growth of 24% over the previous year. New Loan Accounts numbered 12.84 lakhs in 2018-19 as against 11.30 lakhs in 2017-18.

The focus during the year was optimising the product mix to maximise yields, while maintaining portfolio quality despite the industry sluggishness.

During the year 2018-19, new vehicle disbursement was 28,398 crores vs 23,127 crores in 2017-18, a 23% growth y-o-y and used vehicle disbursement was 6,046 crores as against 4,760 crores in 2017-18, an increase of 27% over the previous year.

Tractor funding, a major initiative towards Priority Sector Lending and Financial Inclusion has recorded a disbursement of 2,030 crores in 2018-19 as against 1,667 crores in 2017-18, a 49% growth over the previous year.

Disbursement under the low cost housing segment for 2018-19 was 262 crores and is aimed at recording higher growth in the coming years. Many of the beneficiaries under this segment qualify under the PMAY CLSS scheme for Government interest subsidy.

This Division also earned Commission Income of 69.68 crores through distribution of various third-party insurance products of Cholamandam MS General Insurance, the Banks strategic partner for bancassurance in the General Insurance segment.

The operations of this Division are solidly supported by the Document Storage and Retrieval Facility at the Banks Karapakkam Unit (near Chennai), which handles processing of Loan Documents and maintenance of records. This Unit handled over 2.3 million Loan bookings and closure transactions and over 45 million customer service / accounting transactions during the year 2018-19.

The Banks processing and vaulting facility at Karapakkam has state-of-the-art facilities in terms of data / equipment protection mechanisms and is equipped with access rights with sensors to facilitate monitoring of document movement within the Centre.

The Bank has a Data Centre within the Airtel Data Centre facility with state-of-the-art security systems with a backup at the Banks G. N. Chetty Road premises, as part of Business Continuity Planning.

Sourcing of applications for two-wheeler and car loans are completely through TAB which has reduced the Turn Around-Time (TAT) in the Credit Delivery process. Sourcing through tabs for other products is being implemented in a phased manner and will be completed mid 2019-20. In order to be in line with the latest technology, hand-held terminals are being replaced with mobile devices to handle collections which will be through an Android App. The transition is in a phased manner and will be completed by September 2019. These initiatives have led to improvement in process efficiencies and customer experience.

CORPORATE AND COMMERCIAL BANKING GROUP

Corporate Banking

Corporate & Investment Banking provides Universal Banking Solutions to large Indian groups and multinational corporates. Over the years, with continued addition of New-to-bank clients, the unit has become a banker and developed deep relationships with almost all large corporate houses and large market cap companies in India.

Investment Banking

With over 100 years of Financial Services expertise (aggregate team experience), the business has developed significant underwriting and syndication abilities. The unit has showcased its structuring capabilities through its deep understanding across a variety of sectors. The Investment Banking offerings of the Bank are trusted by leading Indian business houses, which services clients in the fields of Infrastructure, Energy, Healthcare, Metals and Telecom.

Investment Banking Unit provides Strategic advisory services to aid growth initiatives and offers Equity and Debt products to support a variety of funding structures and enables the Bank to partner with growth-oriented corporates throughout their lifecycles.

During the year, the Bank has been recognised amongst the Top 5 syndicators in the league table rankings for CY2018 and CY2017. The Bank was ranked 1st in number of deals and emerged as the 4th largest Mandated Lead Arranger with syndication volumes of more than 15,000 crores in CY18. With strong domain expertise in Wind Energy, Solar Energy, Roads, Ports, Logistics and Power Transmission sectors, the Project Finance team was able to win Project Underwriting and Syndication mandates from several large reputed Indian corporates.

Public Sector Group

This Group handles relationships with majority of Maharatna, Navratna and Mini Ratna Public Sector Undertakings, their Joint Venture companies, autonomous Authorities and State Government undertakings.

The Group offers working capital facilities and structured Banking solutions to Public Sector companies and entities including long-term asset finance, project finance, regular trade finance and Forex solutions including long-term hedging / risk management advisory, Cash Management solutions and new age digital banking solutions, etc. The group is a source of avenue for liabilities for the Bank.

Financial Institutions Group

Financial Institutions Group (FIG) manages relationships with Domestic and International Banks as well as Global Financial Institutions including Development Finance Institutions (DFIs) and Multilateral Financial Institutions (MFIs). The Group comprises three sub-divisions handling Coverage, Credit and Support functions.

FIG continued its significant performance during the year under review contributing handsomely to Banks fee and float. FIG is also actively involved in raising non-deposit resources for the Bank in the form of Syndicated Loans, Bilateral and Club Loans, Borrowing programmes with MFIs and DFIs, etc. During the year, FIG helped conclude borrowing deals in excess of USD 1.20 billion from global banks and financial institutions and also worked with Global Markets Group on setting up of USD 1 billion EMTN programme. The Bank conducts its FI Business in strict conformity with applicable domestic and international laws and abides by various sanction provisions applicable from time to time.

FIG has evolved into a strategic business unit of the Bank, managing such diverse roles from business origination and facilitation to policy making and risk management in the inter-bank domain.

International Financial Service Centre Banking Unit (IBU)

The product offering from IBU includes External Commercial Borrowings (ECBs), Trade Credits, Loans to Overseas Entities, and non-funded products. Having developed the product offerings that cover an area that the Bank was not able to address hitherto, the IBU is slated to be a significant contributor to the Banks Balance Sheet as well as profitability.

GIFT (Gujarat International Finance Tec-city) is conceptualised as a global Financial and IT Services hub, a first of its kind in India, designed to be at or above par with globally benchmarked financial centres. IndusInd Bank has opened its IFSC Banking Unit (IBU) in GIFT City in June 2016.

Industry Attractiveness & Competition: International Financial Service Centre (IFSC) is a hub of financial services with regulations that are different from rest of the country. In its current form, IBU is at par with foreign branches of Indian Banks. In Union Budget 2018, a uni_ed regulator for all entities in IFSC is proposed, a move that will contribute to better regulation and supervision of the financial entities within IFSC. IBU has a 10 year tax holiday and exemptions on GST, STT and long term capital gains tax.

Commercial Banking Group

The Banks Commercial Banking Group focuses on providing end-to-end financing solutions to mid-sized corporates, Supply Chain Financing and Agriculture companies.

Mid-Markets Group (MMG) focuses on Corporate Banking needs of Emerging and Mid-sized corporates. The portfolio remains highly diversified with a large client base. MMG mainly focuses on Granular Transactional Working capital facilities and also has a significant liability base. The team has a strategic focus on this sector through relationship-lending approach, a deep understanding of clients business requirements, and offering Products and Services that meet all the evolving needs of business across industries and sectors. This approach has helped the Bank to get a substantial share of clients wallet and product penetration.

Incrementally, the Group follows target industry approach and has specialised verticals.

Supply Chain Financing: The Supply Chain Finance Division of the Bank, provides Comprehensive Financing Solutions to both sides of Large Corporates manufacturing: Channel Finance to the Dealers and Vendor Finance to the Suppliers. Supply Chain Finance team is responsible for Channel and Vendor finance activities for Automobile and other industries e.g. Steel, FMCG, White goods, Electronics and Electricals and Textiles etc. through various programmes customised to specific needs of the large manufacturers and their dealers / suppliers. The Unit works on providing end-to -end financing solutions by offering a complete product suit for financing the whole Ecosystem of a Corporate across industries through dedicated teams of Relationship and Product managers covering different geographies throughout India using seamless electronic delivery solutions. The Group also offers comprehensive funding solution to its clients including cash credit and term loan under one roof.

Inclusive Banking Group

Inclusive Banking Group is currently engaged in the inclusive finance space and caters to the financially excluded segment with client-centric products as part of the overall financial inclusion agenda. The Group provides comprehensive product offerings including short term lending solutions and also savings account and deposits facility, to the economically weaker section of the society. There are various channels / facilities, including Business Correspondent (BC), Term Loans and Securitisation, being used to reach out to the segment which comprises women borrowers engaged in small farm (livestock rearing, _shery, etc.) and non-farm activities (Petty businesses, kirana stores, etc.). The loan size extended ranges from 1,000 to 1 Lakh and till date around 1100+ activities have been financed. The aim of Inclusive Banking Group is to build a Sustainable, Scalable and Profitable business through a bouquet of financial products and services to the creditworthy unbanked low-income rural, semi-urban and urban households. The inclusive banking and agriculture finance-related operations of this division help the Bank in meeting the RBI Priority Sector Lending requirements.

Agricultural Business Group (ABG)

The Group follows value chain financing approach to cover the complete Agri value chain from farmers to Agri corporates. ABG offers complete suite of banking products that helps the Bank gain significant wallet share of Agri customers. With presence across 17 States, 60 locations and 45 commodities, ABG has strong presence in core Agri markets. ABG has widespread relationships with Collateral Managers to handle commodity-related and associated risks.

This Division has scaled up innovative products such as Agri Project Finance, Agri Trade Finance and Agri

Infrastructure Finance. Currently, the vertical dominates the commodity funding space through its flagship pledge finance product and has established itself as a significant player in Agri Infrastructure and Dairy financing segments.

Food Financing Unit was introduced as a sub-vertical of ABG to bring sectorial focus and segment diversification. With customised bouquet offerings and focus towards dairy industry, the Bank is the 2nd largest banker to Indias diary giant and other marquee clients.

Environment and Social Management System Policy

To promote sustainable development through the Banks investment activities, while conforming to international and national standards, a department-wide Environmental and Social Management System (ESMS) was instituted across Corporate Banking unit in FY18.

ESMS is administered via an online portal, which in addition to screening proposals for risks, also captures data on the volume of projects having a positive impact on environment and society. ESMS has helped the

Corporate Banking department foster new partnerships with several development financial institutions such as ADB and OPIC; and international development agencies like USAID, among others.

GLOBAL MARKETS GROUP

The Asset Liability Management Unit manages various regulatory requirements including Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Liquidity Coverage Ratio (LCR), Intra-day Liquidity (IDL), High Quality Liquid Assets (HQLA), etc., as prescribed by the Central Bank and other governing bodies. In addition, the Desk manages day-to-day liquidity requirements of the Bank through appropriate funding avenues along with Transfer Pricing, involving both INR and Foreign Currency. The liquidity and resource mobilisation strategy proactively addressed the Structural Liquidity Risk conditions and achieved significant efficiency in the Banks sourcing of funds with an optimal mix of Term deposits, Market borrowings and Refinance. The Bank has leveraged its strengths in raising long term funds during the year, through issuance of Additional Tier-1 Bonds and Long Term Foreign Currency Loans.

The Trading Desk trades in Rates, Foreign Exchange and Credit. It is instrumental in taking proprietary positions in Government Bonds, Corporate Debt, Interest Rates (INR and Foreign Currency), Interest Rate Futures and Currencies. The Trading Desk also trades in Derivatives, and has executed Long-Term Currency and Interest Rate Swaps with established market counterparties.

The Financial Markets Sales and Solutions team is instrumental in providing hedging solutions to clients across Corporates, Financial Institutions and Retail clients on their foreign exchange, and interest rate exposures. The Bank enters into these transactions based on a strict suitability and credit criteria. Besides the above OTC products, the Bank is also Trading-cum-Clearing Member in NSE and BSE, which enables it to offer a web-based platform across client segments for hedging of currency exposures by them in currency derivatives market.

During the year, GMG increased its operations in the IFSC Banking Unit established in GIFT City, Gandhinagar as well as offering hedging solutions to clients and cover operations with international counterparties. During the year, the Bank has established a Euro-Medium Term Notes (E-MTN) programme of USD 1 billion, on the Singapore Stock Exchange and India International Exchange (IFSC) Limited (India INX)

The Bank has well laid-out front office policy guidelines, Risk Management Policies, Client Suitability and Appropriateness Policy, and appropriate systems support to monitor transactions and risk on real-time basis. Given the dependency on System and Trading platforms, the Bank has been conducting business continuity plan drills at regular intervals. The Bank has an Integrated Treasury application interfaced with the Risk Monitoring System that covers all Client and Trading products of the Global Markets business and provides seamless straight- through flow of transactions.

TRANSACTION BANKING GROUP

The Transaction Banking Group (TBG) offers products and services to customers across all Business Units in the areas of Cash Management, Trade Services & Finance, Supply Chain Financing, Factoring, Global Remittances and continues to build a world class Transaction Banking product portfolio by leveraging the strengths of its Digital Banking platform.

The Bank continued to be one of the leading players in the Rupee Drawing Arrangements, acting as a preferred Bank for several partners worldwide. More partners were added to real-time cross-border payments using the NPCI-promoted IMPS facility (instant payments). IndusInd Bank is among the top banks for cross-border flows under IMPS.

Under the umbrella of Cash Management Services (CMS), the Bank offers customised and differentiated products to its Corporate and Consumer Banking customers, to enhance efficiencies in their Payables and Receivables Management. Apart from this, the Bank is steadily becoming a significant player in providing Digital solutions to Government

Departments across e-Tendering, PFMS and subsidy management services.

The Bank has emerged as one of the fastest growing players in trade finance segment of the country by differentiating itself through various initiatives and customer-friendly solutions based upon deep understanding of their business and requirements. This has enabled the Bank to be a formidable player amongst peer banks and as a Bank of First Choice for trade finance solutions by leading business groups and institutions across segments in the country. The Bank also caters to client requirements of Trade Credit through its GIFT City branch.

The Bank took significant initiatives in its Digitisation programme and launched its corporate mobile banking App, for payment authorisation, trade services and escrow services. The Bank is among the few banks working with Swift India and IBA for digitisation of the Bank Guarantees process for e-stamping and is empanelled on the Government e-Marketplace (GeM) as a Settlement Banker.

The year also saw the launch of Digital and one-stop Receivable Management platform for small and large Corporates that enables multi-modal collections in a seamless manner. This platform complements the existing suite of Digital products which provide comprehensive Payable Management and Reporting Services.

Blockchain technology was another area of focus for the Bank, which became the first Bank to commercialise Cross Border payments on the Ripple Blockchain platform. The Bank is also one of the founding members of the Blockchain Infrastructure Company which will drive adaptation of DLT solutions for domestic trade and other use cases in banking.

The Banks prowess in Transaction Banking is underlined by the multiple recognitions received by it from ‘The Asset, an independent leading Asian business journal:

Gems and Jewellery Group

The Gems and Jewellery sector plays a significant role in the Indian economy, contributing around 7 per cent of the countrys GDP and 15 per cent to Indias total merchandise exports. It also employs about 5 million artisans and workers and is expected to employ 8 million by 2022. One of the fastest growing sectors, it is extremely export-oriented and labour intensive. This Group caters to the important manufacturing export sector engaged in diamond manufacturing, jewelery manufacturing and exports. India is a world leader in Diamond manufacturing and exports. The Diamond sector standalone employs 1 million artisans and other allied activities.

IndusInd Bank is the industry leader in this Sector. Through expertise in this business, the Bank has been recognised by the Trade Council as a Centre of Excellence, and the same has been acknowledged through continuous awards and recognitions, the latest being the Gems and Jewelery Export Promotion Council (GJEPC), sponsored by the Commerce Ministry of the Government of India, awarding the Bank as the ‘Best Bank financing the Industry in the category of ‘Highest Limits Sanctioned. The sector provides large cross-sell opportunities and contributes to the Banks targets in Priority Sector Lending. Risk reward profile of the segment is satisfactory.

PRIORITY SECTOR LENDING

The Bank has achieved the RBI-prescribed target for Priority Sector Advances, which aggregated 50,285.99 crores at the end of FY 2018-19, representing 40.76% of the Adjusted Net Bank Credit (ANBC) of the previous year, as against the prescribed target of 40%.

As per extant RBI guidelines dated December 4, 2018, the targets and sub-targets set for Priority Sector Lending are given in the following table along with details of the Banks achievements, calculated as a simple average of all 4 quarters of FY 2018-19.

Accordingly, the average of all quarters for FY 2018-19 is represented in the table below:

Category Targets % PSL Targets* PSL Achievement Shortfall / Excess % Achieved
Overall achievement 40% 49,352.80 50,285.99 933.28 40.76%
Agriculture 18% 22,208.76 18,533.98 -3,674.78 15.02%
Small and Marginal Farmers 8% 9,870.56 9,102.20 -768.36 7.38%
Micro Enterprises 7.5% 9,253.65 9,370.60 116.95 7.59%
Weaker Section 10% 12,338.20 14,418.59 2,080.39 11.69%

* The computation of priority sector targets / sub-targets achievement is based on the Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of O_-Balance Sheet exposures, whichever is higher, as on the corresponding date of the preceding year.

Approach to Priority Sector Lending

The Banks PSL portfolio is sourced from various business divisions from Corporate, Commercial and Consumer Banking Groups, to address the demands of various niche areas.

The Bank identifies potential high-credit areas like micro-enterprises, agri-allied sectors, etc. and to achieve the stipulated targets for these segments, defined processes have been set up including a committee which looks after identifying the gaps and oversees the PSL portfolio built-up by contributing business divisions.

Moreover, with the Bharat Financial Inclusion Limited (BFIL) merger in place and its portfolio largely comprising of Agriculture and Small and Marginal Farmers, it is expected that the Bank will be able to meet the PSL targets and reduce the outflow to Rural Infrastructure Development Fund (RIDF).

Submission of Financial Information to Information Utilities

In accordance with the regulations under the Insolvency and Bankruptcy Code (IBC), 2016, and the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, which has come into force with effect from April 1, 2017, financial creditors are required to submit information to Information Utilities (IU). The Insolvency and Bankruptcy Board of India (IBBI) has registered National E-Governance Services Limited (NeSL) as the first IU under the IBBI (IUs) Regulations, 2017 on September 25, 2017.

As per the directives of Reserve Bank of India, all financial creditors regulated by RBI were advised to adhere to the relevant provisions and immediately put in place appropriate systems and procedures to ensure compliance to the provisions of the Code and Regulations.

In accordance with the same, we are happy to share that the Bank has executed the necessary agreement with NeSL and submitted the required data to NeSL as per their guidelines.

RISK MANAGEMENT

Management of risks arising out of banking business in an effective and proactive manner is critical to sustainable growth. Banking is exposed to a wide range of risks and it is imperative that such risks are measured precisely, monitored on an on-going basis and managed effectively. A robust Enterprise-wide Risk Management (ERM) framework enables effective and proactive management of various risks, while supporting business growth. ERM helps reduce volatility in earnings and enhances shareholder value.

The Bank has an integrated Risk Management Department, independent of business functions, covering Credit Risk, Market Risk, Assets-Liabilities Management (ALM) and Operational Risk Management. Risk management practices in the Bank have been aligned with the best industry practices and are adaptable to a dynamic operating environment and market conditions.

Credit Risk Management

Credit Risk is managed both at transactions level as well as at portfolio level.

Key objective of Credit Risk Management is to maintain credit quality within the defined risk appetite, while achieving appropriate return in relation to risks assumed. Various measures adopted for management of Credit Risk are mentioned hereunder:

Credit Risk policies are aligned with business strategies and the defined risk appetite. The policies are maintained in alignment with changes in RBI guidelines and economic environment;

Credit Risk at the time of credit assessment is gauged by means of risk-rating models, implemented for different business segments;

Credit Portfolio Management Analysis monitors credit quality, composition of portfolios, concentration risk, yield versus risk and the business growth;

Measurement and monitoring of credit quality regularly by means of Weighted Average Credit Rating (WACR) of the credit portfolio;

Prudential internal exposure limits prescribed for assuming exposures on counterparties (linked to internal rating of borrowers), industries, sectors, etc.

Measurement of credit quality of Vehicle Finance portfolios by means of Behaviour Models;

Sector reviews are carried out to assess and evaluate potential risks and stress within such sectors for analysing the impact of stress on portfolio health and taking proactive actions to mitigate such risks.

Management of exposures to counterparty banks and the countries by setting exposure limits basis their risk profiles and monitoring such exposures regularly;

Stress Testing of credit portfolios is carried out periodically to measure shock absorbing capacity under multiple stressed scenarios and assessment of impact of potential credit losses on profitability and capital adequacy, thus enabling initiation of appropriate risk mitigation measures.

Despite the challenging environment, the Bank has been able to maintain its credit growth and the quality of its portfolio. The Banks restructured assets are among the lowest in the industry, with the Corporate as well as the Retail loan books having remained resilient. During the year, Weighted Average Credit Rating (WACR) of Credit Portfolio has remained stable.

The Bank has been introducing wider range of Retail products, to have larger share of the wallet and to meet customers needs. Such products are governed by structured product programmes specific to the business, which details out the criteria on customer selection and underwriting standards.

Market Risk Management

Market Risk is the possibility of loss to the Bank caused by changes in market variables such as interest rates, exchange rates, equity prices and risk-related factors such as market volatilities.

The Bank manages market risk in trading portfolios through a robust Market Risk Management Framework prescribed in its Market Risk Management Policy.

The Bank has implemented state-of-the-art Market Risk

Management System, which supports monitoring of risk sensitivities and computation of capital charge. The Market Risk Management System supports advanced risk measurement functionalities for pro-active management of risks. The system supports monitoring of Value-at-Risk (VaR) limits, PV01 limits for Forex, Investments, Equity and Derivatives portfolios, besides Stop-Loss limits, Exposure limits, Deal-size limits, etc. Valuation of all portfolios and the risk sensitivities are monitored on daily basis.

Asset-Liability Management (ALM)

The Banks Asset-Liability Management system supports effective management of liquidity risk and interest rate risk, covering all assets and liabilities.

• Liquidity Risk is managed through Liquidity Coverage Ratio (LCR), Structural Liquidity Gaps, Liquidity Simulation, Dynamic Liquidity Monitoring, Liquidity Ratios Analysis, Behavioural Analysis of Liabilities and Assets, and Prudential Limits for negative gaps in various time buckets.

• Interest Rate Sensitivity is monitored through prudential limits for Rate Sensitive Gaps, Earning at Risk, Modified Duration of Equity and other risk parameters.

• Interest Rate Risk on Trading Portfolios is monitored through Market Risk Measurement tools such as, VaR, PV01 and other Risk Sensitivities on a daily basis. Optimum risk is assumed through the Market Risk Measurement parameters, to balance between risk containment and profit generation from market movements.

Detailed analysis of liquidity position, interest rate risks, product mix, business growth versus budgets, interest rate outlook, etc., is presented to Asset-Liability Management Committee (ALCO) which meets frequently and deliberates on liquidity position and interest rate risk and reviews the business strategies.

ALCO provides directional guidance to Business Units towards effective management of liquidity position, while achieving Business goals. The Bank assesses its structural liquidity position on a daily basis for managing liquidity in a cost-e_ective manner.

Stress Testing – Liquidity Risk

The Bank carries out stress tests on liquidity position periodically to assess the impact of stressed liquidity scenarios on funding and liquidity position. Stress tests help to be better equipped to meet stressed situations and have contingency funding plans in place.

Contingency Funding Plan (CFP)

Contingency Funding Plans have been developed to respond swiftly to any anticipated or actual stressed market conditions.

The Bank reviews its contingency plans considering the evolving market conditions. Contingency Funding Plan covers monitoring of internal as well as external contingency triggers, categorised into Yellow, Amber and Red. The CFP mentions the available sources of funds to supplement cash flow gaps in the event of stressed scenarios. CFP prescribes the conditions basis contingency triggers for assessment of liquidity position and invocation of contingency if deemed appropriate. Roles and responsibilities of Contingency Management Group constituted under the CFP have been defined to facilitate effective execution of contingency plans in the event of invocation of Contingency Plan.

Interest Rate Risk on Banking Book (IRRBB)

Interest Rate Risk on Banking Book largely arises on account of: (i) Re-pricing Risk; (ii) Optionality; (iii) Basis Risk; and (iv) Yield Curve Risk.

From an economic value perspective, it is Banks policy to minimise sensitivity to changes in interest rates on assets and liabilities. Interest Rate Risk is measured based on the re-pricing behaviour of each item under Asset, Liability and o_-Balance Sheet products. The Banks Assets and

Liabilities Management Policy has laid down tolerance limits based on the risk appetite and the impact on NII and Economic Value of Equity (EVE) for a given change in Interest Rate.

The Bank has put in place necessary framework to measure and monitor Interest Rate Risk on Banking Book using the Duration Gap Approach as well as Traditional Gap Approach.

Operational Risk Management

Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people, systems or external events. The Operational Risk Management Policy documents the Banks approach towards management of Operational Risk and defines roles and responsibilities of various stakeholders within the Bank. Based on this Policy, the Bank has initiated several measures for management of Operational Risk. The Bank has put in place an Operational Risk Management Framework to effectively manage operational risks through several internal Committees, viz., Operational Risk Management Committee (ORMC), Sub-ORMC, Fraud Risk Management Committee and BCM Steering Committee.

With the objective to reinforce Operational Risk Management Framework in the Bank, EGRC system (Enterprise Governance Risk and Compliance) with following modules have been implemented.

i. Incident Management Module enables reporting and management of incidents (i.e. operational risks and fraud incidents), root cause analysis, internal escalations, action plan, resolutions etc., which helps mitigation of such risks.

ii. Issue & Action Module enables tracking and monitoring issues emanating from Root Cause Analysis, Risk Assessment, Investigations, Actionables relating to various operational risks, products / processes approvals, etc.

iii. Key Risk Indicator (KRI) Module: enables reporting, monitoring, tracking, trend analysis of Key Risk Indicators, Control Indicators, Compliance Indicators, Bank-wide Risk Indicators etc. It has been designed to generate periodic reports automatically for all concerned stakeholders (Function Heads, Department Heads, Business Heads) for necessary actions towards mitigation of such identified risks.

iv. Risk and Control Self-Assessment (RCSA) Module: provides single platform enabling identification of operational risks, recording of such risks, assessment of residual risks and effectiveness / adequacy of corresponding controls, etc. RCSA module shall progressively reinforce assessment of operational risks and their mitigation. Status of operational risks, associated controls, Heat Map and Risk Index are generated by the system for concerned stakeholders (Operation Heads, Department Heads, Business Heads) to take appropriate action towards risk mitigation.

The Bank weighs new Products and Process enhancements under Operational Risk Assessment Process (ORAP) Framework. An advanced ORAP system has been implemented to enhance the ORAP Framework.

In order to strengthen the existing Operational Risk Framework and make it more forward looking, Bank has created Operational Risk Stress Testing Framework covering different operational risk scenarios for assessing resilience under stressed scenarios. Stress tests are carried out to gauge the impact of stressed events on Profitability and Capital Adequacy of the Bank.

As per RBI guidelines, the Bank has been following Basic Indicator Approach for computation of Capital Charge for Operational Risk.

The Bank has adopted Business Continuity Policy (BCP) wherein critical activities and system applications have been identified and appropriate recovery plans have been put in place for such critical activities and applications to ensure timely recovery of Banks critical operations and services in the event of crisis. BCP framework ensures continuity of critical processes to extend essential services to the customers. Regular mock tests are carried out to ascertain BCP preparedness. With implementation of EGRC system, key components of BCP such as Business Impact Analysis (BIA), BCP Recovery Plan, BCP Testing, BCP Risk Assessment, IT DR Drill and Fire Drills are system driven, which ensure effective monitoring and management of Business Continuity.

Systems Risk

The Banks Information Security Policy provides the security framework upon which all subsequent security efforts are based, and to guide the development and maintenance of a comprehensive information security programme. It deals with security of information in various forms like spoken, written, printed and electronic or any other medium and handling of information in terms of creation, viewing, transportation, storage or destruction. It contains the principles that direct managerial decision- making and facilitates secure business operations. It is designed to enable management of the Bank to ensure the security of information assets and maintain accountability. It also defines the appropriate and authorised behaviour for personnel approved to use the Banks information assets. The policies and procedures are built around the following principles:

Treat Information Security Risk in line with Business, Regulatory and Legal requirements;

Ensure Availability, Integrity, Confidentiality of Information, establish Accountability and provide Assurance;

Focus on People, Process and Technology for implementation;

Apply least privilege, need to know / use principles;

Promote Information Security Awareness to create security-aware culture within employees, contractors, third parties and customers;

Deal with exceptions and violations appropriately;

Focus on Information Security Governance, Assurance and Evolution to ensure suitability, adequacy and effectiveness;

Participation of security team during initial stages of system acquisition and development;

Structured approach towards Information Security Awareness.

Bank is utilising structure data on its system for Anti-Money Laundering and Enterprise-wide Fraud Management System, Risk Analytics and Enterprise BI.

FINANCIAL RESTRUCTURING AND RECONSTRUCTION GROUP

All activities relating to recovery of non-performing loans and restructuring of stressed assets are handled by the Financial Restructuring and Reconstruction Group (FRRG). The Insolvency and Bankruptcy Code 2016 implementation and NCLT activities have picked up especially with the regulator RBI, notifying mandatory filing in certain large value cases in a time-bound manner. A dedicated desk to handle and monitor IBC related activities has been created.

The Bank has also actively utilised the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for recovering its dues. During the year, the Bank recovered 29.90 crores in written-off accounts. The Net NPAs of the Bank stand at 1.21% of the Total Advances, while the ratio of Gross NPA as percentage of Total Advances amount is 2.10%.

GENERAL BANKING OPERATIONS

The Bank has from time to time, strengthened the policy framework on "Know Your Customer" (KYC) norms and "Anti Money Laundering" (AML) measures in line with regulations. The Bank has implemented a simplified procedure of "Know Your Customer", which will benefit Lower Income Group persons to open accounts with minimal documentation.

The Bank has implemented a state-of-the-art Workflow and Imaging System for Account Opening, booking Term Deposits, processing Trade Finance transactions, sale of Third-Party products and Branch Expenses processing.

The System enables faster turnaround time and movement of work from branch locations across the country to the Central Operations Unit in real-time mode, thus cutting out the time that physical forms would take to arrive through courier. This has helped in freeing up manpower at the branches to tend to customer service.

With the emphasis on digitalisation and e-KYC, the Bank has implemented Digital Account Opening through TAB wherein account opening process is straight through and validation of KYC is online. This cuts short the turnaround time for account opening process and provides greater convenience to customers with stronger controls and compliance.

The Bank is a member of the Banking Codes and Standards Board of India (BCSBI), which was set up to ensure that banks in India adhere to a voluntary Code, which sets minimum standards for fair treatment to customers availing of banking services.

The Bank is committed to adhere to all the provisions of the Code prescribed by BCSBI. The Bank has taken steps to implement the provisions of the Code of Commitment to Customers (Individuals).

The Code is displayed at all the branches, and is also hosted on the Banks website. The Code had been revised in January 2018, and has been adopted by the Bank.

The Bank has also adopted the "Code of Commitment to Micro and Small Enterprises" (MSE Code) for customers belonging to the Micro and Small Enterprises segment. This Code was last revised in 2015 by BCSBI, and was adopted by the Bank. It sets the minimum standards of banking practices.

The Bank has also formulated the Policy on ‘Financing to the Micro, Small and Medium Enterprises, and the same is hosted on the Banks website.

The Bank is participating in Clearing through Cheque Truncation System (CTS). As on March 31, 2019, the Bank had 315 locations covered under the Grid Clearing, through its three CTS Centres at Mumbai, Chennai and Delhi.

The Bank has also started participating in NACH (National Automated Clearing House) transactions both for Debit and Credit (ECS) at Mumbai, as also Aadhaar-based Payment System (ABPS) transactions through NPCI.

The Bank has adopted a "Comprehensive Policy", on settlement of claims in respect of deceased depositors. The Policy covers all types of deposits, and has simpli_ed the procedure for settlement. The forms are also provided on the Banks website.

The Bank has put in place a "Deposit Policy" and a "Fair Practice Code". The former outlines the guiding principles in respect of various products of the Bank and the terms and conditions governing the operations of the accounts and the rights of depositors. The Fair Practice Code is a voluntary Code, establishing standards to be followed by all the branches in their dealings with customers.

The Bank has framed the "Citizens Charter" to promote fair banking practices and to give information in respect of various activities relating to customer service.

The Bank has put in place "Customer Compensation Policy" as part of the commitment to customers for any direct and actual loss by way of internal loss / payment of charges by customers due to defficiency in service to the extent mentioned in the Policy. The Policy is based on principles of transparency and fairness in dealings with customers.

The Bank has framed the "Unclaimed Deposit Policy" based on RBI guidelines with the objective of classification of unclaimed deposits and setting up the Grievance Redressal Mechanism for quick resolution of complaints and record-keeping. Further, in line with RBI directives, balances in unclaimed deposits and other accounts have been transferred to "Deposit Education and Awareness Fund" (DEAF), w.e.f. June 2014. Details relating to accounts unclaimed have been duly uploaded on the Banks website (www.indusind.com).

The Bank has also formulated the "Customer Rights Policy", and the same is hosted on the Banks website (www.indusind.com).

The Bank has framed a "Customer Protection Policy" based on RBI guidelines with the aim to provide safe, rational, superior and transparent service experience to the customers. The Policy aims to address customer complaints related to all unauthorised transactions done through electronic mode. It also lays down the criteria for determining customer liability in different circumstances and increases awareness among the customers.

CORPORATE AND GLOBAL MARKETS OPERATIONS (CGMO)

Corporate and Global Market Operations (CGMO) manages the operations related to Trade Services, Cross Border Remittances, Supply Chain Finance, Global Markets, Foreign Exchange and Derivatives, Cash Management Services, Depository and Capital Markets, Payments, and Bullion Operations. CGMO services all clients in the Corporate and Retail segments for these products.

The primary focus of a majority of initiatives during the year was on building economies of scale, upgrading processing systems, automation, improving Client Experience and also proactively managing risk.

Building scale

Centralisation of transaction processing with superior client service locally at branches has been a strategy that CGMO has adopted for the last 6-7 years. This has enabled greater economies of scale, standardised delivery and has improved processing controls. During the year, projects were initiated to ensure further centralisation in Trade Operations. Processing in other functions is already centralised entirely.

CGMO also continued with the focus of high end automation through Robotic Process Automation (RPA). Processes related to risk analytics and customer service have already been automated, delivering improved efficiency, reduced risk and improved client service. This has ensured that we build scale to manage more without cost linearity.

Client Experience

Client Experience continues to be an important focus area for the Bank and as part of this initiative, a corporate client servicing journey was implemented. This journey provides the Banks corporate customers superior servicing at 47 branches including dedicated support for account opening, door step services and resolution of customer complaints within stringent timelines. This also ensured that routine processing was further centralised at the 4 processing centres.

Centralised transaction processing and increased footprint providing customised servicing at branches is expected to improve turnaround times and provide the clients with a world class banking experience keeping in mind the principles of Seamless, Easy, Fast and Transparent delivery.

A new application offering CMS Collection services – IndusCollect was launched during the year. The system provides a one stop solution for the Banks cash management clients as it supports all modes of collection including NEFT / RTGS / IMPS / IFT and PG and seamless client servicing options.

A system for processing foreign currency outward remittances on behalf of our AD2 partners (DigiForex) was also implemented during the year. This system has capabilities to offer online transaction initiation thereby providing a digital and improved client experience.

These system implementations have helped improve operational efficiency and provide clients with a better experience (including facilitating digitisation initiatives). With similar end objectives in mind, the Bank also upgraded important systems like the systems used for processing Bankers to the Issue offers (eASBA), Treasury (Calypso) and Trade (TradePro).

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Operational Controls

The Bank has laid down the Policy Framework related to "Know Your Customer" (KYC) norms, "Anti Money Laundering Measures" (AML) and Combating of Financing Terrorism (CFT). The Policy has been framed on the basis of recommendations of the Financial Action Task Force and the Paper issued on ‘Customer Due Diligence for Banks by the Basel Committee on Banking Supervision.

The Bank has sharpened internal controls and compliance through the following:

Separate and independent Compliance function has been set up for Bank-wide compliance;

Separate and independent Vigilance function;

Expenses Management Software has been deployed at all branches for facilitating cost control;

Standard Operating Procedures have been defined for processes at branches to ensure consistency of delivery with the expanding branch network;

Branch Monitoring Unit is entrusted with regular monitoring of branch operations;

The Process Adherence and Quality function has been operationalised for attaining uniformity in processes followed by branches to minimise operational risk.

Customer Service

In accordance with RBIs recommendations, a Standing Committee on Customer Service (SCCS) comprising senior Functional Heads of the Bank and a few customers has been constituted.

The Bank has also constituted a Customer Service Committee of the Board of Directors (CSCB) to review the performance of the SCCS.

The Bank has constituted Branch-level Customer Service Committees (CSC) at all branches, comprising employees and customers. CSC meetings are convened every month to examine complaints / suggestions, cases of delay, difficulties faced / reported by customers / members of the Committee. Feedback and suggestions are submitted to SCCS.

SCCS examines and provides regular feedback to the Customer Service Committee of the Board for necessary policy / procedural actions.

The Bank has implemented ‘Talisma, a ‘Customer Complaints and Requests Management System. The key objective of this solution is to have a single system to track requests, complaints and queries at customer level so that the service standards as set out by the Bank are managed and enhanced. The system has been implemented across all branches and the Banks Contact Centres in Mumbai and Chennai.

Grievance Redressal Mechanism

The Bank follows the Board-approved "Grievance Redressal Policy", which lays down a defined escalation process for all customer complaints received at branches and at the Corporate Office, within the overall framework of RBI guidelines.

A Quarterly Report related to complaints received and redressed is placed before the Board of Directors. Based on the recurrence of complaints in specific areas, causative factors are identified and remedial measures are initiated.

A link has been created on the Banks website for a ‘Feedback Form, which gives opportunity to all customers to air their grievances, in a simpli_ed way and get their complaints redressed without delay. Further, customers can contact their respective Branch Manager or call the Banks Contact Centre on the toll-free number or send an email to the dedicated email IDs to lodge their grievances.

Details of the Principal Nodal Officer / Regional Nodal Officers have been furnished. These details are also displayed at the Banks branches. Details of the Banking Scheme, 2006 as amended up to July 01, 2017, are also displayed at Branches and hosted on the Banks website.

The Bank maintains a dedicated page for lodging of complaints and the complaint redressal mechanism on its website www.indusind.com contains information on the escalation process.

Internal Audit

The Bank has a remarkably fortified, distinct and dedicated Internal Audit function performing an independent and objective evaluation of the adequacy and effectiveness of internal controls on an on-going basis to ensure that units invariably adhere to the compliance requirements and internal guidelines.

In congruence with the RBIs Guidelines on Risk Based Internal Audit (RBIA), bank has adopted an Internal Audit Policy and the Internal Audit function undertakes a comprehensive Risk-based Audit of operating units. An Audit Plan is drawn up on the basis of risk-pro_ling of auditee units and audit of operating units is undertaken at a frequency synchronised to the risk profile of each unit in line with the guidelines relating to Risk-Based Internal Audit. The Audit Policy defines the audit strategy in terms of a concerted focus on strategic and emerging business risks. The scope of risk-based internal audit, besides assessing the adequacy and effectiveness of internal control systems and external compliance, includes an evaluation of the risk residing at the auditee units. In order to strengthen the Internal Audit function and to achieve the incessant real time supervision and control, critical units of the Bank are subjected to the Independent Concurrent Audit Process by reputed external audit firms.

The Head - Internal Audit functionally reports to the Audit Committee of the Board, ensuring its independence and for administrative purpose, reports to the Managing Director & CEO of the Bank. The Audit Committee of the Board reviews the performance of Internal Audit Department, the effectiveness of controls laid down by the Bank, and compliance with regulatory guidelines. Therefore, these are in alignment with the best global practices on corporate governance.

Compliance

The Board and Management of the Bank are committed to maintaining a corporate culture of integrity and ethical conduct and carrying out business within the framework of internal policies and procedures, guidelines of Regulatory Authorities and Statutory requirements.

The management ensures that the activities undertaken by the Bank are transparent, non-discriminatory and compliant with the applicable Rules and Regulations by laying down policies and guidelines for the Bank. These policies become the guiding documents for all activities undertaken. Implementation of the policies is ensured by the senior functionaries who design the products which are compliant with laws and regulations of the regime. Further, for streamlining / standardising the day-to-day functioning of the Bank, standard procedures are laid down in line with regulatory guidelines. Adherence to the policies, guidelines, procedures is monitored by different units such as, Compliance, Risk and Audit who help in ensuring the compliance culture and becoming the best-in-class customer service oriented Bank.

Vigilance Function

The Vigilance Department has been functional in the Bank since October 2008, and its objective is to enhance the level of managerial and operational efficiency and effectiveness. The aim is to prevent, detect and analyse corruption / wrongdoing / misdemeanours on the part of the employees and follow it up by deterrent / preventive action to ensure highest standards of integrity, governance and ethical practices.

Whistle Blower Policy was adopted by the Bank in 2009 so as to provide a channel to various stakeholders, viz., employees, customers, suppliers, shareholders, etc., to bring to the notice of the Bank any issue involving compromise / violation of ethical norms, legal or regulatory provisions, etc., without any fear of reprisal, retaliation, discrimination or harassment of any kind.

The Banks Vigilance Manual / Whistle Blower Policy and practices are totally in synchrony with all statutory and regulatory guidelines on Vigil Mechanism to ensure a compliant, fraud-free and ethical work environment.

IndusInd Bank has been awarded the ‘Certificate of Commitment by the Central Vigilance Commission.

HUMAN RESOURCES

The Bank realises that its human capital is the most important business growth driver. The Banks strategic HR agenda is to be a strategic business partner by focussing on talent acquisition, talent development, talent management, retention, employee life cycle processes and compliance.

The Bank believes in attracting and retaining quality talent and provides them with an enabling work culture to realise their potential. The Bank becomes a dream employer by creating an environment of entrepreneurship, innovation and creativity. The Bank has several cutting-edge HR processes that effectively enhance employee value proposition in terms of employee development, compensation, performance management, career planning, work-life balance, etc.

Our Bank continues to be a preferred career destination in the BFSI sector and this is manifested by high potential talent joining the Bank and negligible attrition at strategic job layers.

KEY HIGHLIGHTS

Employee headcount of the Bank stood at 27,739 employees in FY19. The headcount increased in FY19, and new hires were mainly for kick-starting new business initiatives and new branches. The Bank believes in hiring the "best in class" and providing employees with fruitful and rewarding career opportunities. The Bank continues to employ diversified hiring channels such as Employee Referral Schemes, Job Portals, Consultants, Campus Hiring, Social Media, Hire-Train-Deploy model, etc. for quality hiring. Social Media (LinkedIn, Facebook) was leveraged for niche and leadership hiring. The Banks selection process comprised qualitative and quantitative assessments, multi-layered interviews, background verification and reference checks to recruit the right candidates.

Employee development is the main theme. Well-trained employees are catalysts for business growth and innovation. The Bank has a well - defined training process comprising training need identification, dissemination of training plan and delivery through classroom / e-learning modes. The training needs of the Bank are tailor-made to the business requirements as outlined in the Business Planning Cycle.

During FY19, the Bank conducted 12,90,000 learning man-hours for over 3,97,000 participants with an emphasis on Leadership development, Selling and Negotiation skills, Innovation and Creativity, Banking Products, Banking Operational Processes, Credit, Risk, Treasury, Compliance and Induction programmes. The Bank conducted over 1,000 workshops for 21,200 employees for aligning them towards the Banks vision of being the "Bank of Convenience"

The learning effectiveness was ensured through well designed content, delivery by qualified internal and external subject matter experts, refresher courses, online assessments and a feedback mechanism to improve learning e_cacy.

The Banks performance objectives are derived from its business objectives. The Bank has robust Performance Management Processes comprising Goal-Setting and Annual Performance Review, which helps to assign individual performance objectives through "SMARTs", evaluate individual performance based on tangible achievement of performance objectives, reward basis performance and provide performance counseling and developmental feedback. The Annual Performance

Appraisal for FY18 was executed meticulously with an emphasis on linking rewards to performance, identifying future leaders for enhancing the Banks business growth and devising course corrections to enhance performance and productivity.

The Banks strategic intent has been to Attract, Reward and Retain quality talent. The Banks core Compensation philosophy is to "Pay for Performance" and Role criticality, be a competitive paymaster and offer market-linkedperformance-based compensation, build long-term employee ownership through ESOPs and ensure complete compliance with the regulatory guidelines on compensation practices.

The Bank believes in employee connect and bonds with its employees through various employee engagement initiatives. Quarterly Webcasts by the MD

& CEO and Employee Town-halls have helped to communicate the Banks vision, business direction, performance and priorities and also emphasised on core values of compliance, integrity and desirable conduct.

Branch and locational visits by HR and Line Managers are a regular feature which help resolve employee complaints and grievances and understand employee problems and constraints. Employee recreation programmes such as marathons, sporting competitions, business o_-sites, team get-togethers, outdoor training workshops, celebration of festivals help energise the employees.

Technology continues to be the driver in improving the operational Employee Lifecycle processes. The theme is digitisation and robotisation of HR operational processes. Launch of digital onboarding platform, online joining kits were a step in the direction. All the Employee Lifecycle HR processes relating to Attendance, Leave, Payroll, Confirmations, Loans, Mediclaim, Gratuity, Exits, Full and Final Settlement were managed accurately and within the stipulated TATs.

The Bank passionately follows "Discipline and Compliance" as its core values. Every employee follows the Banks Code of Conduct and any aberration or deviation is dealt with very strictly. Compliance is an integral part of SMARTs of employees. The Bank conducted several awareness programmes on a pan Bank basis on compliance aspects. The Bank also ensured adherence to all the HR-related regulatory and statutory laws.

Employees Stock Option Scheme

The Bank had instituted the Employee Stock Option Scheme (ESOS-2007) to enable its employees, including Whole time Directors, to participate in the future growth of the Bank. Under the Scheme, Options can be granted, which upon exercise could give rise to the issuance of a number of shares upto 7% of the issued Equity Capital of the Bank from time to time. The eligibility and number of Options to be granted to an employee is determined on the basis of criteria laid down in the Scheme and is approved by the Compensation Committee of the Board of Directors.

An aggregate of 4,18,91,300 Options, comprising 6.95% of the Banks Equity Capital, have been granted under the Scheme. Statutory disclosures as required by SEBI (Share Based Employee Benefits) Regulations, 2014 are given at Annexure III, and form an integral part of this Report.

The Annual Certificate on compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 issued by Statutory Auditors of the Bank shall be placed before the Members at the ensuing AGM.

The Employees Stock Option Plan is administered by the Compensation Committee of the Board.

SHAREHOLDERS SATISFACTION

Contact details of shareholders such as e-mail IDs, mobile numbers and telephone numbers are obtained, so as to communicate to them about developments in the Bank. This direct communication is in addition to the regular dissemination of information through usual channels such as the Stock Exchanges, Press, Banks website, RTAs website, etc.

The Bank continued the practice of sending SMS / e-mail messages to shareholders informing about Board meetings for Quarterly / Annual Financial Results, and forwarding snapshots of the Results.

Shareholders shall continue to receive best-of-class services and be promptly informed of the developments in the institution.

The Bank has been at the forefront in "Green Initiatives", and aspires continually to graduate to paperless disclosures and compliances.

Shareholders have been requested to furnish their e-mail IDs at investor@indusind.com or by sending a request in writing at Secretarial & Investor Services office to help accelerate the Banks migration to paperless communication.

With the implementation of the Companies Act, 2013, companies can send Annual Reports and other communications through electronic mode to those shareholders who have registered their e-mail addresses with the Bank or made available by the Depository.

The full text of the Annual Report shall also be made available in an easily navigable format on the website www.indusind.com under the link ‘Investors / Reports and Presentation / Annual Reports.

Shareholders are also informed about the easy process for claiming the dividend amounts lying unclaimed with the Bank.

As regards transmission of securities, in case of securities held in physical mode (in single name, without Nomination), SEBI have prescribed a threshold limit of _2,00,000 (Rupees Two lakhs only), i.e., market value of securities per folio, as on date of the application for transmission, for following simpli_ed documentation. SEBI have, however, empowered Issuer Companies to enhance the value of such securities, at their discretion.

Considering the difficulties faced by the legal heirs in obtaining of Succession Certificate / Probate / Letters of Administration, the Board of Directors of the Bank have, for operational convenience, delegated the authority to the Share Transfer Committee for approving the transmission of securities held in physical mode, in case of market value of securities of up to _10,00,000 (Rupees Ten lakhs only) subject to compliance with simpli_ed documentation procedure prescribed by SEBI.

Members are requested to note that pursuant to provisions of Section 124 of the Companies Act, 2013, the amounts of Dividend remaining Unpaid or Unclaimed for a period of 7 years from the date of their transfer to the Banks Unpaid Dividend Accounts are required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Further, the Ministry of Corporate Affairs has made effective the provisions of Section 124(6) of the Companies Act 2013, which requires that all shares in respect of which Dividend has not been paid or claimed for seven consecutive years or more to be transferred to IEPF Authority.

The Bank has sent intimation to Members on May 13, 2019 in respect of the shares on which Dividend for FY 2011-12 had remained Unpaid or Unclaimed for seven consecutive years or more, requesting them to claim such dividend on or before August 21, 2019 so as to avoid the corresponding shares from being transferred to the IEPF Authority.

Notice in this regard was also published in Financial Express (all editions) and Loksatta (Pune Region) on May 14, 2019.

The detailed procedure for claiming the shares / Dividend amounts which have been transferred to IEPF Authority is available on the website of the Bank at www.indusind.com and can also be accessed at http:/www.iepf.gov.in/IEPFA/refund.html

Members are requested to contact Link Intime India Pvt. Ltd. (Contact details and Office Address given elsewhere in the Notice) / Banks Secretarial and Investor Services Team for claiming Unclaimed Dividends standing in their name.

The information pertaining to Unpaid or Unclaimed Dividends, and the details of such Members and the Shares due for transfer to the IEPF Authority are also available on the Banks website at www.indusind.com.

Updating of KYC details of shareholders

SEBI has directed all listed companies, vide its Circular No. SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated April 20, 2018, to record the PAN and Bank Account details of all shareholders holding shares in physical mode through their RTA.

Adhering to the requirements set out in the aforesaid Circular, 15,312 intimations were sent to shareholders whose shares were held in physical mode on June 19, 2018.

Two Reminder Intimations were subsequently sent to shareholders on September 19, 2018 and December 3, 2018 via Speed Post and Ordinary Post, respectively.

Shareholders holding shares in physical mode, who are yet to update their KYC details, are requested to do so by contacting the Banks Secretarial Team or our Registrar & Share Transfer Agent – Link Intime India Pvt. Ltd.

Mandatory Dematerialisation for Transfer of securities

The amendment to Regulation 40 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 vide Gazette notification dated June 8, 2018 has mandated that transfer of securities would be carried out in dematerialised form only.

SEBI had, vide their notification dated November 30, 2018, extended this date up to March 31, 2019.

14,487 shareholders who were holding shares in physical mode were intimated via Speed Post on September 19, 2018, advising them to dematerialise their physical holdings to have easy access to Stock Exchanges offering them liquidity option for their holdings.

Two Reminder Intimations were subsequently sent to Shareholders on December 3, 2018 and March 5, 2019 via Ordinary Post since the Stock Exchanges had relaxed the requirement of sending intimations only through Speed Post / Registered Post.

Shareholders holding shares in physical mode are advised to dematerialise their shares. Holding of shares in physical mode is valid, but transfer of shares is not permissible with effect from April 1, 2019, and only transmission or transposition is permissible from April 1, 2019.

Accordingly, shareholders desirous of transferring their holdings are required to dematerialise their shares beforehand to facilitate the transfer.

INFORMATION TECHNOLOGY

Technology in IndusInd Bank

Information Technology is a strategic partner to the business to build the Bank of the future. Information Technology continues to deliver on its commitment of better customer service, improved risk management and superior performance through compliant, secure and resilient solutions and infrastructure.

Some key transformation initiatives launched in FY 2018-19 are:

Superior customer experience –New Initiatives

• WhatsApp Banking – The Bank has innovated to launch WhatsApp Business as a new channel for customer service and engagement.

With this launch, IndusInd Bank became one of the first banks to participate in the WhatsApp banking. Through WhatsApp channel, customers can use a ‘Verified Account principle which offers banking services like checking balance, mini statement, checking reward points as well as updating of Aadhaar through WhatsApp.

• EmpoweRM – RM productivity App – EmpoweRM is a tool to equip the Relationship Managers to facilitate Cross-sell and upsell by providing a holistic view of the Customer. It provides 360 degree holdings information of the customer by collating information from multiple systems of record such as, customer request / query / complaints, etc.

• Cash and Trade App – IndusDirect Mobile App 2.0 is the existing Corporate Mobile Banking App that is now integrated with both IndusDirect & ConnectOnline. It facilitates corporate banking customers, irrespective of the channel being used by them to avail the Mobile Banking Services. The App offers services like self-registration, self-managing accounts, cash management services and Trade Services.

• Customer Enrichment Experience through IndusMobile – The Bank has constantly innovated on its flagship mobile App by providing secure facilities such as, block, unblock and limit maintenance features on the _y. These features enable customers to manage their wealth securely and conveniently and is a market first. App launch, login time has been optimised by re-engineering.

• IndusAssist: Personal Banker on Alexa – IndusInd Bank is the first bank in the industry to offer both

financial and non-financial transactions on Alexa with voice-based current task, conversational banking without a single tap or click and without interrupting customers.

Transactions are authenticated via Voice Pin set up during one time account linking process followed by OTP for completing any financial transaction. Voice PIN is the Industry-first initiative by IndusInd Bank. The most frequently used services include successful transfer, recharge and CC bill payments.

Digital Payment Initiatives

• IndusCollect – Offers simplicity to customers as a single dashboard view for multiple forms of collection. It simpli_es the refunds management with mobile application for smaller merchants. This has generated transactions with a value of 12 crores.

• Ripple Blockchain – The Bank has launched cross border remittance with Al Rajhi Bank of Saudi Arabia and Bank Dhofar of Oman with live transactions that commenced from October 2018. This uses the distributed ledged technology to settle inward remittance transactions resulting in IMPS credit within 5 minutes from existing turnaround time of one working day. The platform also performs an AML check for inward remittances (for value < 5 lakhs).

• Public Financial Management System – cBKonnect Version 3.0 platform has become a single platform supporting government disbursements like Rajasthan Payment Portal (RPP) Module, MP Health Payment System, Certificate-Based Payment Processing for Corporate, New Account validation for Mahatma Gandhi National Rural Employment Guarantee Act (Mnerga), E-tax, Enhanced functionality of WPS (Kerala - Wage Protection).

Superior risk management and operating efficiency

• Credpro: Loan Origination System – CredPro supports the digital Credit Appraisal process from Customer Creation, Initiation of Credit Proposal in system by Business (Relationship Manager), Evaluation of Credit Proposal by Credit Risk and generation of Sanction Letter post sanctioning. The users of the application broadly include Business, Credit Risk, and Credit Administration (CAD).

• TradePro 2.8 Upgradation – SWIFT published significant changes to their messaging standards in Nov 2018. The Bank has adopted the new standards for its Trade Finance System. The Bank has upgraded the TradePro system from Ver. 2.5 to 2.8 ensuring SWIFT compliance in November 2018.

• SWIFT Upgrade – SWIFT 7.2 was implemented and is compliant with SWIFT Security Norms. Some of the salient features of 7.2 version migration are: Message/ Instance search enhancement, Identification of messages touched by human in message search, Four-eyes security for con_guration changes, Enhanced local password policies, Improved information in events. It has been communicated by the Swift Alliance partner that IndusInd Bank is the second Private Sector Bank and overall 7th in the country to successfully upgrade Swift to latest 7.2 version.

• ProCollect – Collections for Consumer Finance Division – All collections have moved to an App to replace HHT (Hand Held Terminal). This is securely handled through a MDM (Mobile Device Management) enabled mobile device and Bluetooth printer, to support cash less payments - integration of Alternate payment modes like payment through Debit Card and Uni_ed Payment Interface (UPI) has been created.

• CRETA – Customer Request Enablement Through Aadhaar – Customers at branches have a single window to handle service requests, for example, Aadhaar Linking / Seeding with IndusInd Account for Government subsidies, signature changes, address and e-mail changes after biometric authentication.

Security, Risk and Internal Efficiency Initiatives

• Advanced Threat Protection – Advance persistent threats that occur on networks and endpoints can operate under stealth mode. To mitigate such attacks, the Bank needed a tool that would mitigate such next generation attacks. The Bank has deployed the MacAfee ENS on endpoints. Components of the solution include Anti-virus, IPS, behavior monitoring, forensics, etc. On the perimeter side, the Bank has deployed Cisco NG IPS (Appliance-based) which caters to block attacks coming from internet and internal networks.

• Web Application Firewall – Application vulnerability exploitation has become an attack vector and to mitigate such attacks, the Bank has deployed a solution called Web Application Firewall (WAF). WAF protects the Banks internet assets from internet-based attacks. The Bank has deployed a cloud based WAF. All internet traffic is scanned for anomalies and only clean traffic is sent to web server, thus reducing DOS type attacks.

• Crisis Communication Management System – An internal communication system for employees and contract staff. The Bank has launched Crisis Communication System, which executes call tree with employees and track employee status in case of alerts.

It also pushes advisories to employees. The selection of employees for communication basis is on Business units, Applications, Zone, Region, City, Branch, and Special Groups. It has Reporting Manager and Functional Manager workflows.

• CTS Data Exchange Module (DEM) – IndusInd is the first Bank to go live on Cheque Clearing House at NPCI end. The solution replaces the Clearing House Interface at Banks end with low cost DEM, which has resulted in cost savings by removing Oracle database licenses and reduces risk of non- compliance.

• Software Defined Data Centre: VLAN to NSX-VxLAN

This is the next generation data centre offering on demand Application delivery, granular security by stopping lateral spread of security attacks and improved asset utilisation leading to reduced hardware spend.

• Enterprise Collection System – Secure, fast and web- based environment for eReceipts, Settlement, Vendor billing and Legal Modules. Enables control, visibility, data security and active monitoring on overdue debts. Scalable model having operational web and mobile solution. Low cost outsourcing of data processing.

Technology Awards

IBA Banking Technology Awards 2019

Winner under category – Best Payment Initiatives

IndusInd Bank was awarded winner in the category ‘Best Payment Initiatives, for being at the forefront and following an innovation-led strategy both for Consumer and Corporate payments.

Winner under category – Best Financial Inclusions Initiatives

IndusInd Bank was winner in the category ‘Best Financial Inclusions Initiatives, for developing and pioneering a collaborative approach to reach out to the financially-excluded segment of population.

Winner under category – Best use of Data and Analytics

IndusInd Bank was winner in the category ‘Best use of Data and Analytics, for realising business outcomes in Consumer, Corporate and MSME segment.

Runner-up under category – Best Technology Bank

IndusInd Bank was awarded Runner-Up in the category ‘Best Technology Bank, the Bank was recognised for executing an array of innovative technology initiatives focused on customer experience and accessibility.

LEGAL

There are no major changes in the Laws impacting Banking except the following:

Amendments to the Insolvency and Bankruptcy Code, 2016: i) Introduction of Section 12 A - The Adjudicating Authority may allow the withdrawal of application admitted under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of ninety percent voting share of the Committee of Creditors. This is significant for banks since it provides an opportunity for the corporate debtor to settle the matter at the very preliminary stage by offering the settlement amount, which would in turn enable banks as a creditor to recover its dues at the initial stage;

ii) Home buyers are to be treated as financial creditors, which implies that home buyers would be competing with banks as financial creditors; and iii) The voting threshold for decisions of the Committee of Creditors in respect of the following matters has been lowered to 66% from 75%:

(i) Appointment of the Resolution Professional,

(ii) Approval of the Resolution Plan, and

(iii) Increasing the time limit for the insolvency resolution process.

This reduction shall promote resolution and discourage liquidation of the corporate debtor.

Information on important legal proceedings faced by the Bank

There are certain legal proceedings during the course of banking business carried on by the Bank which are not unusual for a Bank of comparable size. The Bank is otherwise not involved in any legal proceedings and is not aware of any threatened legal proceedings, which if determined adversely, could result in a material effect on the business.

CORPORATE SOCIAL RESPONSIBILITY

IndusInd Bank is committed to running its business in a way that generates sustainable value for its customers, clients, shareholders and employees. The Bank also recognises that since its sphere of activity and influence extends beyond the boundaries of the financial system, it needs to work through various CSR initiatives for social upliftment and environmental conservation.

Environment

Powered by its belief that Good Ecology is Good Economics, IndusInd Bank continues to strive for Environmental Conservation through various initiatives

In compliance with Section 135 of the Companies Act, 2013 and CSR Rules 2014, the Bank has set up a Board-level CSR Committee to look after its CSR initiatives. IndusInd Banks CSR Policy and strategy, direct and govern the Banks activities in its focus areas of Environment, Education, Livelihood, Healthcare and Sports.

in the areas of Water Stewardship, A_orestation, Renewable Energy and Waste Management.

Water Stewardship – IndusInd Bank Jal Jeevan (Supported by Hinduja Foundation)

Understanding the severe water crisis that India is facing, in FY 2018-19, IndusInd Bank identified Water Stewardship as a high-priority area under Environmental Conservation. The Banks Stewardship initiatives are branded as IndusInd Bank Jal Jeevan (supported by Hinduja Foundation). The various initiatives include:

Watershed Development: Through which the Bank is aiming to increase the percentage of land under irrigation over 16,937 ha, enhancing livelihood by creating year-round farming opportunities. This will benefit about 60,000 people in 89 villages across Madhya Pradesh, Jharkhand, Odisha and Maharashtra.

Installation of Water ATMs: As drinking water interventions for communities facing water stress, IndusInd Bank embarked on a mission to provide access to a_ordable RO puri_ed drinking water. This will benefit about 1,60,000 people across 35 villages in Rajasthan and Uttar Pradesh.

The Bank is constructing 250 Rooftop Rainwater Harvesting structures, creating the capacity for the availability of additional 60 lakhs litres of water, across 18 villages of Jaitaran Tehsil in Rajasthan.

Restoration of Water Bodies: The Bank aims to recharge the fast-depleting groundwater levels in cities and villages while reviving the local ecology and creating more days of water availability during the year. These initiatives include the restoration of the Sholinganallur Lake and two ponds in Chennai, the restoration of the Wazirabad Drain in Gurugram and the rejuvenation of two village ponds in Rajasthan.

A_orestation

Through its Urban A_orestation Programme, along with beautifying the city, IndusInd Bank aims to mitigate Green House Gas emissions in several urban centres in which it operates. In FY 2018-19 alone, the Bank planted 25,861 native trees across 31 locations in 7 cities, with an estimated Carbon Sequestration of 6,410.43 MT of CO2 (over 15 years). Since FY2015-16, the Bank has planted a total of 41,000 native trees with a certified Carbon Sequestration of 10,975.39 MT of CO2 (offsetting over 15 years).

Renewable Energy

In another effort to mitigate Green House Gas emissions through the burning of fossil fuels, IndusInd Bank supports the movement of energy consumption to clean or renewable energy.

The Bank has light up the streets of 29 villages of Rajasthan by installing 2,000 Solar Street Lights benefiting 1,65,000 villagers.

Through Schools on Solar initiative, the Bank has helped educational institutions in 4 locations of Mumbai to move a significant portion of energy consumption from grid power to Solar Energy. With the generation of 91,000 units of solar energy annually, the combined carbon emission reduction of this programme is 74.62 MTCO2e. The total annualised savings for these institutions is 6,60,000, which will be utilised for the benefit of the students.

Solid Water Segregation and Management

IndusInd Banks Solid Waste Management programme in partnership with the Ministry of Panchayati Raj in Uttarakhand is known as Jagmagaata Uttarakhand. The Bank took up the segregation and management of waste in 8 villages of Doiwala Cluster of Dehradun, benefiting more than 19,000 people. 1,277.5 MT of waste will be generated annually out of which 43.8 MT will be recyclable and 115 MT of compost will be produced.

Education

The most powerful way to empower an individual or a community is by educating them. IndusInd Bank believes in inclusive growth and therefore tries to ensure that those from poor or lower income families benefit from all its social programmes.

Assisted Learning

Enhanced Education Programme: This is a group tuition programme running in 400 rural centres of 22 districts in Uttar Pradesh, Bihar and Jharkhand. Through this, IndusInd Bank helps those weak at any subject to have the motivation to continue studying at least up to Class X. In FY 2018-19, 14,200 under-privileged children have benefitted.

Support for the education of under-privileged children in Dehradun: The Bank continued to support the education of 75 under-privileged children in FY 2018-19 in Purkal Youth Development Society School. The children get a much better quality of education there compared to any municipal school.

Mid-day meals for children of Municipal Schools: Through Akshaya Patra Foundation, IndusInd Bank provides good quality mid-day meals to 27,370 children of Municipal schools in Bhubaneshwar. This provides an incentive to attend school regularly.

Non-formal Education

Legal Literacy Programme: In Madhya Pradesh, the Bank has been conducting this programme since 2015. It builds awareness among women in Rural areas by training and educating them on their legal rights, entitlements, and protective laws on the issues of domestic violence and gender discrimination. In FY 2018-19 alone, 25,000 women were the beneficiaries as against 65,000 since 2015.

Digital Literacy Programme (PMGDISHA): Since 2017, IndusInd Bank has been supporting the National Digital Literacy Programme. Till date over 3,00,000 individuals across 11 states have been trained, out of which 1,00,000 were trained in 2018-19.

Healthcare

IndusInd Bank has initiated several programmes to provide accessibility to better healthcare to the poorest of poor and those from lower income groups than they normally have access to. The Banks programmes are aimed at benefiting those belonging to rural areas of India.

The Bank has supported the setting up and running of 177 Mini Health Clinics across backward districts of Uttar Pradesh, Bihar, Jharkhand and Madhya Pradesh to provide a_ordable primary healthcare to individuals from poor and lower income group families. In FY 2018-19, over 1,00,000 patients have benefitted.

The Bank continued to support the treatment of 50 children with cancer from rural Rajasthan in FY 2018-19, whose parents were not able to a_ord the treatment at Bhagwan Mahaveer Cancer Hospital and Research Centre (BMCHRC) in Jaipur.

In another Healthcare initiative that commenced in FY 2018-19, under the Stree Swabhiman Programme of CSC e-Governance (a SPV of Government of India), the Bank provides free sanitary napkins for one year to 50,000 girls / women in rural Madhya Pradesh. These are first-time users and the Bank is hoping that the free usage for a year will make them want to use them permanently for menstrual hygiene.

Livelihood

The Bank is currently focusing on Skill Development and Vocational Training Programmes as a means to empower individuals from poor families to get a livelihood.

The Bank has been supporting the Rehabilitation through Vocational Training of youngsters in Maharashtra involved in Drug Abuse. Skills like carpentry, welding and printing are taught to them among others.

In another programme, that commenced in FY 2018-19, the Bank supports the Skill Development of Rural Youth in Rajasthan with an assured livelihood of 12,000. About 450 unemployed youth from 18 villages will benefit. Micro Finance Executive, Customer Relations Executive and Unarmed Security Guard are the three trades selected for skill development training.

Sports

As one of the key focus areas of its CSR Policy, the Bank believes in using Sport as a medium for social development and inclusiveness. To this end, the Bank collaborates with the organisations dedicated to enhancing social development and providing equal access and opportunity to all sections of society through sports. IndusInd Banks CSR Programmes in Sports aligns with two verticals of Khelo India, a National Priority Area, as outlined by the Government of India.

Sports for Women

IndusInd Girl Power Programme: In this programme, IndusInd Bank supports 60 talented girl athletes from across India, mostly belonging to low-income families, to be developed into National and International champions in the disciplines of Boxing, Judo and Wrestling. For this, the Bank has partnered with JSW Foundations Inspire Institute of Sport (IIS), which is a world-class, high-performance sport training facility primarily to scout and train junior athletes.

Sports for People with Disabilities (PWD)

IndusInd Para Champions Programme: In this pioneering initiative, IndusInd Bank has partnered with GoSports Foundation to make a visible difference in the life of Indian Para-athletes. The endeavour is to help these athletes break the psychological and physical barriers that serve to inspire other differently-abled individuals to think differently about their condition. This is an on-going initiative that commenced in FY 2016-17. In FY 2018-19, the number of athletes supported under this programme has increased from 32 to 45.

IndusInd Blind Cricket Programme: The Bank has also adopted the Indian Blind Cricket teams as principal sponsors with the Cricket Association for the Blind in India (CABI), the sports arm of Samarthanam Trust. Through this Programme, the Bank not only supports their coaching, training, nutrition and fitness needs, but also promotes the team and its achievements in public domain, to garner support and inspire others, while attempting to break social prejudices about people with visual disability.

Sustainability

IndusInd Bank continues to consistently deliver greater value to the stakeholders while mainstreaming sustainability in to its business practices. It has committed to targets on Environmental, Social and Governance (ESG) aspects and continues to improve the sustainability performance to surpass the ESG targets.

The Bank consistently works to mitigate and reduce the impact of its business and activities on the natural environment. The Environmental Policy of the Bank lays out guidelines and targets in key areas of environmental sustainability. Within these, the Bank has undertaken and implemented programmes and activities in the domains of sustainable supply chain, green procurement, energy efficiency, water conservation, waste management and climate change mitigation, among others.

IndusInd Bank recognises and addresses global environmental issues like climate change and global warming and measures its carbon footprint. The Bank:

• Currently features in the ‘A List of the CDP, a platform that is widely referred by global Investors.

• Is investing in on-site Solar Energy Solutions and LEED-certified Green buildings as a frontrunner.

Continues to invest in energy efficiency, water conservation and greening the IT systems.

Promotes sustainable and ethical procurement practices through selection and on-boarding criteria for vendors and suppliers. The Bank continually emphasises the importance of environmental sustainability, human rights & labour laws, and adherence to standardised environmental norms by the upstream and downstream supply chain partners.

Additionally, IndusInd Bank recognises your need as an investor to seek both financial as well as non-financial information to take a well-informed investment decision. The Bank has been publishing the Integrated Report for the last two years, which aims to communicate how the Banks Strategy, Governance, Performance and Prospects creates value over time. All organisations depend on various forms of Capital for their success. The Bank believes that it is important that all such forms of Capital be disclosed to stakeholders to enable informed investment decision making.

The value creation story of the Bank articulated in the Integrated Report has been prepared on voluntary basis in adherence to SEBI Circular No. SEBI/HO/CFD/CMD/CIR/ P/2017/10 dated February 6, 2017. As a green initiative, the Bank has hosted the ‘Integrated Report on its website at https://www.indusind.com/content/csr-home/sustain ability-report.html.

MARKETING & COMMUNICATIONS

2019 is indeed a celebratory year as the Bank turns 25. As we cross this milestone, there is exuberance and joy at what the Bank has achieved, but more importantly there is a sense of anticipation and promise of what lies ahead.

The year 2018-19 witnessed the Bank making rapid strides in being where its customers are, and consistently provide solutions that offer them a seamless and rewarding banking experience. The world is fast moving towards simplifying consumer interactions and experiences through effective usage of technology.

During the year, the Bank leveraged on the latest technology to bring forth some of the most unique and state-of-the-art innovations that cater to the dynamic needs of its discerning customers. The Banks marketing and communication strategy was aligned with this vision wherein campaigns were designed to understand stakeholders interests and engage with them in their world.

Digital innovation at the heart of what we do

The Bank continued to follow the mantra of ‘Responsive Innovation through which it decodes customer satisfaction, delight and retention. This year, the Bank pioneered several innovations in the banking sector with service and product offerings that created disruptions within the banking space. The Bank conceptualised these products by understanding the needs of the customer by analysing their lifestyle through primary and secondary research.

Launch of the ‘DUO Card

The Bank also launched the ‘DUO card, Indias first debit-cum-credit card. The Card comes with two Magnetic stripes and EMV chips. The ‘DUO Card brings to the customers a variety of benefits that will treat them to the very best of a Credit and Debit Card, a single account statement and combined reward points. To launch the campaign, the Bank roped in renowned Bollywood actor, Boman Irani as the protagonist for two television commercials and also placed substantial digital media advertisements on popular websites and social media platforms. This product got acknowledged at multiple forums and was awarded the ‘Best Digital Marketing Campaign for delivering 2.5 times of the committed leads.

Launch of the ‘Nexxt Credit Card

The Bank has launched the Nexxt Credit Card, Indias first interactive card with buttons. This card offers absolute flexibility at the time of making payments at POS. This next gen state-of-the-art card has LED buttons which empower customers to switch between multiple payment options, i.e., regular credit card for online transactions, EMI and Rewards. A mega digital and print campaign was executed to launch the Card in the market which garnered tremendous response.

Banking on ‘Alexa

The Bank has always aimed at creating path breaking solutions by leveraging emerging technologies. In keeping with this legacy, the Bank launched IndusAssist, an Artificial Intelligence (AI) based banking service that enables customers to conduct financial and non-financial transactions on Amazon Echo and other Alexa-enabled devices using voice based commands.

Launch of ‘WhatsApp Banking

IndusInd Bank launched a new service with WhatsApp enterprise solution in India to communicate with customers, thereby becoming one of the first Bank in the country to participate in the WhatsApp pilot project. The integration with WhatsApp will allow the Bank to start appearing as a Verified account when it communicates with customers regarding important transaction alerts. It also allows two-way communication with replies to customer messages and provides basic banking services like checking balance, mini statement, checking reward points as well as updating Aadhaar through WhatsApp.

Launch of ‘PIONEER

The Bank has also served the clients needs for Wealth Management as a key priority over the years. The introduction of the ‘PIONEER Banking Wealth Management platform is a step further in that direction. This state of-the-art service effortlessly merges bespoke wealth management solutions with a gamut of personal and commercial banking products for the discerning few. Built on the values of trust, transparency, simplicity and service, inspired by the Indus Valley Civilisation, the PIONEER programme has been crafted for bringing back the lost art of Wealth Management. The first PIONEER lobby became operational this year in the Defence Colony region of New Delhi.

Launch of ‘IndusSmart

Another important addition to our suite of digital offerings this year was the launch of ‘IndusSmart, an online mutual fund platform that has been specifically designed to help our valued customers to learn, invest and plan for their investment goals. The portal is built with enriched information regarding investments using various creative formats.

Other Initiatives

The Marketing team also undertook various initiatives for customers like, Aadhaar Seeding, GST Registration, Investor meets at the zones as well as branch-level engagement activities that helped create a positive image about the Bank. There were specific campaigns designed for FD and Aadhaar that were carried out through a comprehensive marketing campaign including print.

Beyond Banking

The Bank is committed to running its business in a way that generates sustainable value for its customers, clients, shareholders and employees. The Bank also recognises that since its sphere of activity and influence extends beyond the boundaries of the financial system, it needs to work through various CSR initiatives for social upliftment and environmental conservation. Placed below, are a slew of fascinating initiatives, which have spearheaded the Banks efforts within the ‘Beyond

Banking domain. The Marketing & Communications team has crafted customised messages for each of them to create awareness among all stakeholders.

Water Stewardship:

One of the key areas of focus for the Bank within CSR is Water Stewardship. A video diary showcasing the Banks efforts was released on World Water Day. This video included Watershed development, Installation of Water ATMs, Rain Water Harvesting and restoration of Water bodies.

Rural Electrification:

The Bank has lit up the streets of 29 villages across Rajasthan by installing 2,000 solar powered street lights thereby benefiting 1,65,000 villagers. This was communicated by creating a docudrama wherein the Bank captured the real stories of the villagers - narrating the story through eyes of a village girl Meera.

Zonal initiatives:

Zonal teams undertook several initiatives to extensively promote social causes. One such initiative was undertaken by the East zone during the Durga Puja festival. Considering it is one of the most prominent festivals in the East, the Bank organised ‘Ebar Pujo, Shobar Pujo – a month-long celebration at all branches across the Eastern region. The event was conducted in association with Rotaract Calcutta Mid-South wherein the Bank donated new clothes to the underprivileged. The Bank collected over 1,200 pairs of new clothes from the branches which were then distributed. The event was also graced by the former Captain of the Indian cricket team - Sourav Ganguly.

Other CSR initiatives:

Apart from the above, the Bank engages with employees and customers by celebrating various days like World Literacy Day, World Ocean Day and Campaign against Human Tra_cking among others. The Bank also engages with employees through a monthly newsletter known as ‘Know Your CSR that encourages them to be a part of CSR by promoting Green Champions and Green Commando programme within the Bank.

#WinLikeAGirl – Girl Power Programme

Taking its sports vertical to the next level, the Bank, in association with JSW Foundation, supported 60 female athletes, under its Girl Power Programme. The Bank launched ‘WinLikeAGirl, an aggressive social-media campaign, to enlist support for the female athletes. The campaign was publicised on all social platforms including Facebook, Twitter, Instagram, etc. For internal stakeholders, regular mailers were sent out to keep them abreast with the developments. Three of the finalist who were supported by the Bank, made the country proud by winning medals at the Asian Games, and two medals at the Commonwealth Games.

Alliances and tie-ups

Through strategic alliances and tie-ups, the Bank not only offers customers more value, but also engages with them at the highest level. This year, the Bank entered into various tactical alliances to bring forth engaging value adds for its Debit and Credit Card customers. These partnerships are spread across an array of categories including Travel, Lifestyle, Food & Beverage, Health & Wellness among others.

Travel: In a bid provide customers with an enhanced travel experience, the Bank has partnered with brands such as Yatra, MakeMyTrip, ClearTrip to offer lucrative deals on hotel bookings and holidays. Further, it has also tied up with airline companies like Spicejet and Indigo as well as car rental firm Zoomcar to offer customers a seamless mobility experience.

Lifestyle: The Bank has tied up with both online and o_ine retail giants like Amazon, Flipkart, Snapdeal, Kalyan Jewellers as well as Metro C&C among others, to offer exciting deals on products of their choice, across categories.

Food & Beverage: The Banks Debit and Credit Card users can avail a slew of scrumptious deals across food joints at airports including Binge, Vango, KFC, Subway, Pizza Hut, Costa Co_ee, among others. Additionally, customers can also enjoy the privilege of getting exclusive discounts at premium restaurants such as

Hakkasan, PA PA YA, Hemant Oberoi, Imperfecto, Publiq, among others.

Health and Wellness: Under this category, the Bank has collaborated with online pharmaceutical brands like Netmeds and Pharmeasy to help customers get medicines delivered at their doorstep. They can also avail deals on wellness programmes offered by Enrich, Richfeel, O2 Spa and Four Fountains.

Employee engagements and activities

The Bank strongly believes that Employees are the first customers of the Bank and in keeping with this vision, the Bank organised two mega Town Halls which became a platform for colleagues and the senior management to engage at a personal level. The theme for the Town Hall was ‘Just 25 which was a celebration of the Bank celebrating 25 years, but with a difference. The theme resonates with the spirit of 25-year-olds of today, and strives to build an identity of a brand which is youthful, modern and full of energy. The Town Halls were conducted across two cities - Mumbai and New Delhi on February 22 and March 1, 2019, respectively. The Town Hall in Mumbai witnessed over 4,500 employees of the Bank gracing the occasion, with another 2,190 of them joining the proceedings through video conference from six other cities including, Nagpur, Pune, Indore, Ahmedabad, Vadodara and Bhopal. The Town Hall in New Delhi saw over 3,300 of the Banks employees in attendance, with another 1,358 of them joining through video conference from cities like, Jaipur, Chandigarh and Lucknow.

Internal stakeholders form an integral part of the Banks success. They are considered as Brand Ambassadors of the organisation. Within the Bank, employee activities go beyond the realm of banking to extend to innumerable initiatives that explore and nurture their talent, passion and team-spirit. The Bank considers running as a holistic activity that contributes to life like none other. The Bank celebrates running as an activity that inspires those around you. And this is the thought that the Bank believes in, which is why it has been sponsoring more than 6,000 of its employees across India to run marathons, making them more aware about the benefits of a healthy body and healthy mind.

Activities to reinforce Brand Image

The Bank has extended significant support to the fields of art, music, sports and environment through sponsorships. To begin with, the Bank collaborated with Sanctuary Asia to organise their Annual Wildlife Awards. Music being another key area of focus, the Bank has been continuing to partner with Sahachari Foundation to bring together Ustad Zakir Hussain along with other musicians from around the globe on one platform. This year, the performance was held at the National Centre for the Performing Arts (NCPA) in Mumbai. Further, the Banks association with Indradhanush and Uttung Sanskrutik has been offering significant support to musicians at the grass root level. This year, the Bank also partnered with Design One – an Art and Fashion exhibition which encourages budding entrepreneurs to showcase their creative side. The association with Rajmata Vijaya Raje Scindia Centre for Development has also ensured that the age old sport of Polo remains in its purest form through the Maharaja Jiwaji Rao Scindia Gold Cup. One of the biggest contributions of the Bank towards encouraging Fine Arts has been its association with ‘Art for Concern by Secure Giving Foundation. A charitable Exhibition cum Sale event organised by the foundation helps in achieving dual goals of promoting art and helping the underprivileged. Other associations include FICCI, Bombay Chamber of Commerce & Industry, Isha Utsav, Hindu Sindhi and Kochin Patrika.

BRANCH NETWORK AND INFRASTRUCTURE

With a total network of 1,665 banking outlets and 2,545 ATMs, the Bank has presence in all 29 States and 5 out of the 7 Union Territories. In addition, the Bank also has Representative Offices in London, Dubai and Abu Dhabi.

Apart from expanding its pan-India Branch network, the Bank has also refurbished / re-modelled 7 Branches and 2 Offices, set up 2 new Administrative Offices, and relocated 14 branches and 2 Offices towards better business prospects. A total of 665 new seats were added across India to cater to growth in Back-Office / Controlling Office requirements, distinct from branch network capacity additions. The Bank has 5 Currency Chests, one each, in Mumbai, Delhi, Chennai, Kolkata and Bengaluru.