Jana Small Finance Bank Ltd Management Discussions

PROFITABILITY: EARNINGS:

Profit After Tax (PAT) of the Bank is 501.42 crores in FY 202425 as compared to 669.54 crores in FY 202324.

Our total income (Interest income + Other income) is increased by 17.1% from 4,684 crores in FY 202324 to 5,486 crores in FY 202425, mainly due to increase in interest income by 17.3%. Our net interest income grew by 12.5% from 2,128 crores in FY 202324 to 2,393 crores in FY 202425, primarily due to a robust 19.4% growth in AUM Portfolio.

NET INTEREST MARGIN:

Our Net Interest Margin reduced to 7.54% in FY 202425 from 8.03% in FY 202324, primarily due to increase in cost of funds in FY 202425 and partially due to increase in secured portfolio mix.

KEY RATIOS

The following table sets forth, for the periods indicated, the key financial ratios:

NON INTEREST INCOME CRORES

DEPOSITS:

Our deposits base grew by 29% to 29,120 crores in FY 2425 from 22,571 crores in FY 2324.

This focus on employee engagement has had a profound impact on our ability to cultivate a highly motivated workforce. By prioritizing the development, feedback and engagement of our employees, we have seen a deeper sense of connection to the organization. Our retention strategies have been key to maintaining a stable and experienced workforce. Jombay, reflecting the positive work environment we have created for our employees, has recognized our efforts, with the bank proudly receiving the WOW Workplace 2025 BFSI Award.

HR has orchestrated innovative recruitment strategies, leveraging digital platforms and forging

symbiotic partnerships to attract toptier talent that aligns with the banks ethos and future aspirations. Through targeted recruitment efforts, Jana has successfully on boarded individuals from various sectors, including Banking, Housing/ NBFCs and fresher talent.

During the year, the bank has made significant strides in implementing government schemes like National Apprenticeship Training Scheme (NATS) and National Apprenticeship Promotion Scheme (NAPS) to strengthen our talent pipeline and contribute to the development of a skilled workforce. These government initiatives provide a structured framework for training and upskilling young individuals, ensuring they are equipped with the necessary skills to thrive in the banking sector. By actively engaging with these programs, the bank has been able to offer valuable apprenticeship opportunities that not only help bridge the skills gap in the industry but also support the professional growth of apprentices. This partnership reflects our commitment to fostering a diverse and capable workforce, aligned with the banks longterm goals. It also highlights our responsibility in contributing to national efforts aimed at enhancing employability and creating sustainable career paths for the next generation of skilled professionals.

Embracing the spirit of innovation and growth, Jana Bank has welcomed 3751 fresh graduates and early career professionals, which was about 24% of the total hiring during the year 20242025. Including fresh talent in the bank has introduced fresh perspectives, creativity, and enthusiasm, infusing the bank with new vitality and energy. These individuals bring innovative ideas and an eagerness to contribute, making them a crucial part of our ongoing transformation and success. Recognizing the importance of fostering their potential, the bank has implemented an ongoing mentorship program designed to ensure a smooth transition into their new roles. As part of this initiative, each new recruit is paired with experienced senior leaders who mentor them by offering valuable insights, guidance, and support. This mentorship also empowers them to align their personal goals with the banks longterm vision. Senior leaders serve as role models, offering practical advice, career development tips, and professional wisdom, which accelerates their growth and understanding of the organizations culture and values. Furthermore, the mentorship program is designed to promote continuous learning and skill development. The new employees receive tailored training that addresses both technical expertise and soft skills, ensuring they are well equipped to take on increasing responsibilities within the bank. The program also fosters a sense of community and belonging, allowing new talent to feel supported as they integrate into the broader organization. Through this combination of mentorship and targeted training, Jana Bank is committed to nurturing a pipeline of future leaders. By investing in the growth and development of these young professionals, we are not only ensuring their success but also securing the banks continued success by preparing the next generation of leaders to navigate the challenges of an everevolving banking landscape.

Jana has a robust rehire practice and this is where we institutionalised Jana Alumni Portal in July 2024, through which 451 employees were rehired in the bank during the year. A robust alumni network of more than 20000 former employees have registered. The alumni portal plays a rather pivotal role in maintaining relationships, fostering collaboration, while also serving as a strategic resource for talent acquisition and brand advocacy.

Various employee development opportunities have further strengthened a culture that champions diversity

and inclusion. Additionally, we have focused on addressing key challenges such as employee attrition, a prominent challenge faced within the banking industry.

Diversity and inclusion have become essential pillars of our organizational identity and strategy, playing a critical role in shaping a dynamic and thriving workplace. By fostering a culture that celebrates differences and encourages the free exchange of ideas. Employees from diverse backgrounds bring unique perspectives that drive innovation, spark creative solutions, and deepen our understanding of the needs and expectations of a varied customer base. For Jana Bank, embracing diversity is not just a moral imperative but also a strategic one. It allows us to better navigate the complexities of an everevolving financial landscape. A diverse workforce gives us a distinct competitive advantage, enabling us to stay agile, anticipate market shifts, and respond swiftly to the diverse needs of our growing and expanding clientele. It also enhances our capacity to develop products and services that cater to a broad spectrum of customers, ensuring that we remain relevant and responsive in a fastchanging global market. By prioritizing diversity and inclusion, we not only enrich our workplace culture but also position ourselves for longterm success. It strengthens our ability to drive sustainable growth, foster innovation, and deliver exceptional service to all our stakeholders. Through this commitment,

Jana Bank continues to build an environment where everyone can thrive, ultimately benefiting our employees, customers, and the wider community. There has been a growth in overall diversity by 5.2% from last financial year.

In this financial year, we successfully retained 97.6% of our high performing talent, losing only 2.4% to the competition. This indicates the effectiveness of our talent retention strategies and the strength of our organisation culture. The overall voluntary attrition was 26.9% and involuntary of 14.0%. While we have shown improvements in attrition during the year, we continue to remain vigilant and address potential talent retention challenges.

Our retention strategies are designed to go beyond competitive pay, and further strengthening our culture, help maintain an environment where employees feel valued, supported, and engaged in their careers. By offering clear career progression, talent mobility, continuous learning opportunities, and fostering a culture of recognition, we ensure that our team remains motivated and committed to the banks goals.

One of the major initiative in response to driving employee retention was the coaching program for all our Branch heads and Leaders in the zone, with objective was to address our growing focus on talent retention. We had rolled out coaching program through 28 sessions covering 372 Zonal and Regional Heads, and 36 sessions covering 824 branch heads and assistant branch managers.

Additionally, we launched a formal mentoring program to support employee development and strengthen institutional knowledge. By pairing experienced team members with new hires, we promote knowledgesharing, foster leadership, and ensure a smooth integration to the bank, and thereby ensuring early success of new hires.

We further ensure our employees stay committed, building a lasting relationship along with their families with the bank. To strengthen this relationship, we conduct regular family connect programs across all our branches. It helps foster enhanced communications and empowers the employees to communicate and contribute their valuable insights. It helps foster mutual respect and trust, enabling innovation and effective problem solving. These strong relationships drive employee engagement, boost productivity and ultimately contributes to our longterm success as a bank committed to people first values. The Human Resource team conducted family connect programs once in six months for each branch, which was attended by 20,597

Attrition is a crucial metric that offers valuable insights into the shifting dynamics of our workforce. As we strive for stability, we understand that employee turnover is an inevitable part of the banking industry and a widespread phenomenon across sectors. It is natural for individuals to pursue new opportunities or career paths, we acknowledge the challenges that come with turnover, yet we also embrace it as a chance to reevaluate our strategies, enhance our employee engagement efforts, and refine our retention initiatives. By understanding the reasons behind attrition, we can take proactive steps to create a more supportive, fulfilling, and rewarding work environment. Our primary focus remains on not just reducing turnover, but also fostering a culture where employees feel valued, empowered, and motivated to stay and grow within the organization. Ultimately, managing attrition effectively allows us to maintain a workforce that is not only highly skilled and capable but also committed to the longterm success of the bank.

family members. Another aspect of family connect is to Recognize and reward employees for their work through Rewards and recognition(R&R), in which 5875 employees were recognized and rewarded for their hard work and achievements.

To accelerate career growth and recognize high performers, we recently introduced fasttrack promotions, through which already 100+ employees were promoted in last quarter of the FY 202425. This initiative provides exceptional employees with quicker advancement, higher compensation, and greater opportunities, bypassing the traditional promotion timelines. By rewarding performance and potential, we aim to enhance talent mobility and motivation.

As we move forward, we remain committed to building a resilient, futureready workforce. By investing in our people, nurturing their growth, and continuously evolving our practices, we aim to create a thriving culture that supports both individual fulfilment and organizational excellence.

SEGMENTWISE OR PRODUCTWISE PERFORMANCE

For Liabilities:

Jana bank offers all forms of Liability accounts i.e. Savings, Current, Fixed and Recurring. Deposits form an integral part of any banking operation and building granularity in deposit building is of paramount experience

In liabilities, we cater to all types of clients i.e.

A. Individual: Senior Citizens, Non Resident Individuals (incl. OCI holders), Resident Individuals, Minors, etc.

B. Non individuals: Sole Proprietors, Private Limited company, Partnership company, Public Limited company, TASC, etc

As on 31st March 25, Liability book growth details are as follows:

CASA deposit grew by 18%

TD deposits grew by 32%

CASA ratio stands @ 18%

FOR AFFORDABLE HOUSING:

Indias affordable housing market holds immense potential for addressing the housing needs of its burgeoning population. Following a period of subdued growth in FY20 through FY22 primarily attributed to pandemic, Growth in the assets under management (AUM) of affordable housing finance companies (AHFCs)1 is expected to remain solid at 2223% this fiscal and the next.Historically, AHFCs have seen AUM grow faster than overall mortgage finance2 for four reasons: relatively lower competition from banks compared with the prime lending segment; a low base; high growth potential due to rising urbanisation; and supportive policies for affordable housing construction and financing.

The optimistic outlook for AHFCs is supported by several factors, including their relatively smaller base compared to traditional banking institutions and prime housing finance entities, their capacity to penetrate unorganized market segments, and their adept appraisal skills. These competencies enable AHFCs to effectively serve customers who may not meet the prime credit criteria.

Source: Crisil January 23, 2025 FY2425

FOR MSME:

MSME sector plays a vital role by contributing significantly to economic growth and creating employment opportunities. As of February 4, 2025, the Udyam Portal boasts an impressive total of 5.93 crore registered MSMEs, with the vast majority classified as microenterprises. Beyond their economic contributions, these MSMEs have generated substantial employment opportunities, providing jobs to over 25.18 crore individual.

Investment limits raised by 2.5 times and turnover limits by 2 times to allow MSMEs to scale operations and adopt better technology. This will enable more businesses to qualify as MSMEs and avail government incentives. In recent years, the sector has displayed remarkable resilience, with its share in the countrys Gross Value Added (GVA) increasing from 27.3% in 202021 to 29.6% in 202122 and 30.1% in 202223, highlighting its growing role in national economic output. Exports from MSMEs have seen substantial growth, rising from 3.95 lakh crore in 202021 to 12.39 lakh crore in 202425. The number of exporting MSMEs has also surged, increasing from 52,849 in 202021 to 1,73,350 in 202425.

We offer tailor made financial solutions business loans to assist MSME fulfilling their existing business needs as well as achieve their business goals and future expansions:

Term Loans for Business Purpose

Term Loans for Commercial Property Purchase

Overdraft Facility for Daily Business Need

Facility for purchase of Inventory

Bank Guarantees

Customized Current Accounts designed for MSME Need

As on 31st March25: AUM Asset Book INR 4304 Crores (YTD Growth of 27%)

Source: Government of India, Press Information Bureau

FOR TWO WHEELER

The Indian twowheeler sector represents more than just a market; it serves as a dynamic engine driving the nations progress. According to a recent TechSci Research report titled "India Two Wheeler Market Industry Size, Share, Trends, Competition Forecast & Opportunities, 2029," this industry stood at a substantial USD 16.63 Billion in 2023 and is projected to grow with a commendable CAGR of 10.29% in the forecast period from 2024 to 2029.

The historical roots of the Indian twowheeler industry run deep, with motorcycles and scooters being the cornerstone of personal mobility for decades. The twowheeler market in India is witnessing a paradigm shift, fuelled by the rise of newage startups such as Ola Electric and Ather Energy.

Jana Small Finance Bank provides loan for purchasing Two Wheeler/ Electric Two Wheeler to Existing & New to Bank Customers.

As of 31st March25 TW Portfolio book: 1,002 Crores (YTD growth of 106%).

FOR MICROFINANCE

Jana Bank offers small ticket size loans (primarily MFI) to its customers through its Retail financial services vertical in the forms of Agri Group Loans, Group loans, Individual loans and Gold loans, these loans are offered to the customers who are unbanked/underbanked to bring them into the formal financial banking fold

Agri Group loan: Loan offered to the group of customers under JLG model to customers involved in Agri/agri allied activity in predominantly Rural/Semi Urban location

Group loan: Loan offered to the group of customers under JLG model to customers in predominantly Urban/metro location

Individual loan: Individual loans offered to a graduated customers who has taken a Group/Agri group loan once with the bank

The slight reduction in the portfolio is due to increased stress within the industry, which has resulted in lower disbursements as a result of stricter credit norms

Gold Loan:

Indias gold loan market is expanding rapidly, projected to exceed 10 lakh crore in FY25 and 15 lakh crore by FY27. Public sector banks lead with a 63% share, while NBFCs cater mainly to higherticket retail loans. The unorganized sector, however, still controls 63% of the overall market. Despite high gold ownership, only 5.6% of household gold is currently monetized, signaling significant untapped potential for growth. We provide loans under the following categories:

Agricultural and nonAgricultural enduse, empowering individuals across various sectors.

As of 31st March25 Gold Portfolio book: 980 Crores (YTD growth of 238%).

TPP function:

Jana Bank is registered as corporate agent with IRDAI for solicitation of Insurance business. The Bank offers multiple products across Life & NonLife Insurance to its asset as well as retail branch banking customers.

The Bank is currently tied up with 3 Life Insurance (ICICI Prudential Life, Bajaj Allianz Life & Kotak Life) and 3 NonLife Insurance( ICICI Lombard, Bajaj Allianz General & SBI General Insurance) partners. Solicitation of Insurance is restricted to Jana Banks customers and is purely on voluntary basis.

For Investment products, the bank has partnered with Axis securities for offering 3 in 1 a/c to its customer which is a combination of Savings, Demat & Trading a/c. The Bank has also started distribution of Mutual funds recently and have partnered with Axis AMC, IPRU AMC, Kotak AMC & SBI AMC for MF Distribution.

A. Credit Life Insurance: Credit Life Insurance product if offered to Banks loan customer across RFS, AHL & MHL, TW & MSE vertical.

B. NonLife Group Insurance: The Bank also offers multiple NonLife Insurance products like Hospicash Insurance, Credit linked health plans, Collateral policies etc to its loan customers.

C. Retail Life Insurance: Bank offers various categories of life insurance plans like Traditional, term, ULIPs, Guaranteed Benefits plan etc to its customer in Branch Banking. The solicitation is done by certified staff as per extant regulations and restricted to Jana Banks customer only.

D. Retail NonLife Insurance: The Bank also offers various solutions to its Branch Banking customer across Non Life Insurance which typically includes Health Policies, Motor Insurance, Fire Insurance, Travel Insurance, Liability Insurance etc.

FOR PAYMENTS & CARDS :

Jana Bank offers various digital assets to the customers for their ongoing Payment and Investment needs. Various Payment products like UPI , IMPS, RTGS, NEFT, Card Payments, NACH are offered to the customers which facilitate the CASA and TD growth for the Bank. These products not only facilitate payments for Liability Business but also Collection for the Loan Business , alongside we provide payment as service product to FIG segment under sponsorship.

Value INR in crores. Please note that the NEFT and Card transaction volumes have reduced as they have been overtaken by UPI and IMPS which are more preferred mode of payments.

Value INR in crores. Please note for FY202425 all the credit and debit transaction has been considered

Jana Carded customer percentage is @ 86.7% in the last Financial year;

AEPS Off Us Issuance transactions volume for the financial year ending March 2025 was 114625 including cash deposit and cash withdrawal amounting to INR 58 Crore;

Mobile Banking ranking on the Playstore was 4.5 ( highest among the peer banks );

YoY growth on Mobile Banking Activation is 19.79;

Bank Merchant QR implementation were at 24,521till financial year 2025 which is 75% increase than

the preceding financial year with more than 50% activation rate;

PoS installed at Jana Bank Merchant Locations for financial year 202425 1047;

PoS transactions through installed machines at Jana merchant locations in the last financial year are 203560 and value is INR 50.65 crore;

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Banks Internal Audit function provides independent assurance to the Board of Directors on an ongoing basis on the quality and effectiveness of its internal controls, risk management, governance, systems and processes. The internal audit function in the Bank has sufficient authority, stature, independence, resources and cosourced specialised vendors, thereby enabling Internal Auditors to carry out their assignments with objectivity. The Banks Internal Audit Function works in close coordination with second line of defence i.e. Risk Management Department and Compliance Department.

Internal Audit department develops an annual Audit Plan using appropriate risk based methodology, including risks or control concerns identified by Management and the Audit Committee, and submits that plan to the Audit Committee for review and approval. The annual Audit Plan covers all the Banking outlets (including BCs), Central Functions, Information System (IS) and Credit Process based on the regulatory guidelines issued by the RBI, Guidance Note on Risk Based Internal Audit (2002)

and Internal Audit Policy framed by the bank.

Information System (IS) Audit is also part of internal audit function. The scope of IS audit covers all information systems used by the Bank in related activities viz. system planning, organisation, acquisition/ development, implementation, delivery and support to endusers. The scope also covers monitoring of implementation in terms of its process effectiveness, input/output controls and accomplishments of system goals. All IS audits are carried out periodically by a team of CISA qualified auditors and external CERTin empanelled firms.

Internal Audit team carries audit diligently as per the approved plan, highlights the concerns at appropriate levels and reviews necessary corrective actions and ensures continuous engagement with stakeholders including regulators, investors and management for all key issues identified concerning with improvement in policies, procedures or their compliance.

RISKS AND CONCERNS

Managing risk is fundamental to ensure the sustainable performance and organisational stability. Jana Small Finance Bank ("the Bank") recognizes that risk management is integral to sound business practices and endeavours to ensure that risks are identified, assessed, measured (where possible) and managed in a timely manner.

Integrated Risk Management framework

The Bank adopts an integrated risk management approach in order to develop a comprehensive view of risks faced in its businesses. The Banks risk management framework aligns the risk and capital management to business strategies, aims to protect its financial strength and reputation and ensures support to business activities for adding value to customers while creating sustainable shareholder value. The Bank has a risk management structure that augments its risk evaluation and management capabilities while allowing it to stay nimble to adapt to the changing business and regulatory environment in an efficient and effective manner. The Board of Directors are responsible for the governance of risks and approves the Banks risk management policies. To ensure a focused approach, the Board has delegated the responsibility to Risk Management Committee of the Board, which reviews the implementation of risk management policies and monitors the risk mitigation measures. The Bank has various executivelevel Committees such as Executive Risk Management Committee (Executive RMC), Asset Liability Management Committee (ALCO), Product Risk Management Committee (PRC), Functional Operational Risk Management Committee (FORC), Zonal Risk Management Committee (ZRMC), Customer Service Committee and Information Security Committee, among others, which meet periodically to review the risks comprehensively in the respective areas. The Bank also has an independent risk management function headed by the Chief Risk Officer.

Executive RMC is given the responsibility for governing all the Banks risks through a rollup of all risks for Risk aggregation, addressing corrective actions and to govern the corrective actions. The chairperson of the executive RMC is the CEO while CRO is a member and the convenor. Bank manages risks through a comprehensive framework of functional and unit KRIs for granular Risk selfassessment; review of KRIs and incidents by zonallevel committees and functionlevel committees for all enterprise processes.

Monitoring of KRIs Incident reporting

The Bank has identified over 242 KRIs over 12 Process gaps or unforeseen events resulting in

functional verticals to monitor risk as part of the operational risk are reported through an incident

Operational Risk Management Framework. The reporting process. These incidents are subsequently

thresholds for the KRIs have been finalised in reviewed to identify the cause and take corrective

consultation with the stakeholders. The threshold action and preventive action, as applicable. The

breaches are monitored the by the zonal and incident description, rootcause and corrective

functional level committees and aggregated to the actions are presented to the Executive RMC for

Executive RMC for review and governance. review and guidance to strengthen controls.

Outsourcing Risk

Outsourcing is defined as the Banks use of a third party (either an affiliated entity within the corporate group or an entity that is external to the corporate group) to perform certain activities on a continuing basis that would normally be undertaken by the Bank itself, now or in the future. Key activities undertaken for Outsourcing risk assessment include the following: onboarding risk assessment covering financial strength; review of outsourcing contracts by the legal team, reference checks from other principals using their services and review of internal controls and service quality and ongoing risk monitoring to ensure that the renewal and updation of contracts, review of performance and business continuity. Bank outsourcing Risk is governed by the Executive RMC.

Business Continuity Management (BCP)

Banks BCP framework aims to ensure continued service to customers during unforeseen adverse events. Banks BCP governance includes periodical Business Impact Analysis (BIA), BCP testing and outsourcing reviews to monitor its BCP preparedness on an ongoing basis. The Banks Business Continuity Plan is governed by Executive RMC. For IT and Information Security processes, there are welldefined BCP testing protocols along with roles and responsibilities for disaster recovery programs. For nonIT, BCP is tested through periodic drills conducted to test the effectiveness of alternatives and recovery plans. Bank outsourcing Risk is governed by the Executive RMC.

Credit Risk

The Bank has put in place prudent risk management practices to manage Credit risk, beginning with the development and monitoring of statistical scorecards to screen borrowers credit worthiness, sound collateral assessment practices, robust assessment of borrower limits through credit policies and underwriting practices, disbursal related controls, early warning reviews to detect early signs of stress, risk grading of borrowers after 6 months on books and monitoring of accounts, to make sure that the potential losses arising out of Credit Risk are minimised. In FY23, the Bank focussed on further strengthening its risk management framework and undertaken several measures to strengthen the processes. The Bank Product Risk Committees (PRCs) conduct an indepth analysis of key portfolio segments to identify pockets of stress within subsegments like geography, ticket size, and customer segment, among others, on a regular basis and based on the findings, actions were taken to ensure there is no dilution in the overall asset quality of the Bank. In addition, the Bank through the PRCs conducts regular assessments of the Credit Scorecards to make sure that the Scorecard are discriminating the customers credit worthiness effectively. The Early Warning Signal framework supports the monitoring of Large Borrowers by reviewing qualitative and quantitative metrics to judge signs of stress. The Banks provisioning policy is conservation. In the past, Bank has been proactive in taking additional provisions to account for signs of stress wherever observed in the Banks portfolios. Stress testing forms an integral part of risk monitoring. The Bank carries out periodic stress testing to measure the effect of COVID, demonetization as well as other economic developments, to gain insights on the impact of extreme situations on the Banks risk profile, and capital position.

Operational Risk Management

Operational Risk is "the risk of loss resulting from inadequate or failed internal processes, people, systems or from external events. It excludes Strategic and Reputational Risks but includes Legal Risk". Strategic and Reputational risks are secondorder effects of Operational Risk. Legal risk includes, however, is not limited to, exposure to penalties, fines, punitive damages arising out of supervisory action, civil litigation damages, related legal costs and any private settlements. Bank has a framework of Functional Operational Risk Management Committee (FORC) chaired by the respective functional heads and Zonal Risk Management Committee

(ZRMC) chaired by designated zonal heads to oversees the functioning, implementation, and maintenance of operational risk management activities in the respective functions and areas, The FORCs and the ZRMCs report to the Executive RMC.

ALM and Market Risk Management

Market Risk is defined as the possibility of loss to a Bank caused by changes in the market variables such as interest rates, credit spreads, equity prices, etc. The Treasury Middle Office(TMO) unit is responsible for identifying and escalating any risk, limit excesses on a timely basis. The unit is also responsible for establishing a comprehensive risk management policy to identify, measure and manage liquidity and interest rate risk. The TMO unit monitors the investment portfolio and the daily activities carried out by Treasury along with the set risk tolerance limits as per market risk policy such as VaR, PV01, and Modified Duration. The impact of interest rate risk on trading books is actively measured using trading book risk metrics like PV01, duration etc. The Bank assesses interest rate risk in the balance sheet from both earnings and economic perspectives. Liquidity risk is assessed from both structural and dynamic perspectives, and the Bank uses various approaches like the stock approach, cash flow approach and stress test approach to assess liquidity risk. The risk team monitors the broad liquidity profile of the Bank through the Liquidity Coverage Ratio, Net Stable Funding Ratio and Structural Liquidity Statement.

Information Security Risk

The Bank has a robust risk management framework in place to identify, assess and manage information security risks and has made significant progress in enhancing its information security governance through monitoring at the IT steering and Information Security Committees. The Information Security Management System, Information Technology Division is Certified on ISO/IEC 27001:2013 Standard by British Standard Institute(BSI)

The Banks information Security committee addresses information and cyber securityrelated risks. The function is governed by Boardapproved policies on information security and cyber security. Bank carries out periodical awareness exercises to ensure employees are updated on information security practices. It has invested in strong technical and administrative controls to proactively prevent, detect, contain and respond to any suspicious activity. The Bank has deployed a layered security defence with the latest technology tools to defend and protect information and assets. These include but are not limited to nextgen firewalls, intrusion prevention systems and antiDDoS, nextgen antimalware, proactive defence through web application firewalls, periodic vulnerability and penetration testing, security architecture review and data security assessments. A security operation centre is in place which monitors alerts and anomalies 24x7 in the Banks perimeter and internal network and systems. The Bank has put in place controls to ensure that security controls are on par with the defined standards. It periodically conducts phishing awareness and simulation exercises. Further, the advisories and alerts from regulators and CERTIn are acted upon to strengthen the Banks cyber and information security. The Bank also regularly participates in cyber drills conducted by the Institute of Development and Research on Banking Technology (IDRBT).

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

The Return on Net Worth (RoNW) witnessed a decline from 26.9% in FY2024 to 13.0% in FY2025, primarily due to the increase in capital base post IPO in February 2024, higher accelerated provision of 232 crores created during the period and higher Deferred Tax Assets of 125 crores created during FY2024. While the overall business growth remained healthy, the expanded net worth diluted the returns in the short term. The decline also reflects the impact of accelerated provision made to strengthen the balance sheet and support future growth, which is expected to yield improved profitability and enhance RoNW in subsequent period.