Karur Vysya Bank Ltd Directors Report

To the Members,

The Board of Directors of your Bank takes great pleasure in presenting the 107 th Annual Report on the Banks business and operations, along with the audited financial statements for the Financial Year (FY) ended 31 st March 2026.

Your Bank has achieved significant growth across all areas of operations and delivered a strong performance during the FY 2025-26, reflecting the effectiveness of the strategies implemented over the past few years. The highlights of the performance for the FY 2025-26 are outlined below:

PARTICULARS	31 ST MARCH 2026	31 ST MARCH 2025
	(Rs.in Crore)	(Rs.in Crore)
Deposits	1,15,665.74	1,02,077.99
Advances	98,754.01	84,490.56
Investments	29,394.19	24,206.14
Total Income	13,158.67	11,507.59
Total Expenditure	9,083.69	8,295.26
Operating Profit	4,074.98	3,212.33
Net NPA	186.21	166.21
Net Profit	2,510.33	1,941.64

The Banks CASA balances increased by Rs.3,290.09 Crore to

Rs.31,121.86 Crore as on 31 st March 2026, from Rs.27,831.77 Crore as on 31 st March 2025, registering a growth of 11.82%. The CASA balance as on 31 st March 2026 comprised Savings Bank deposits of Rs.21,983.70 Crore and Other Demand Deposits of Rs.9,138.16 Crore. The CASA ratio of the Bank as on 31 st March 2026 stood at 26.91%.

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The Banks Gross Deposits increased by Rs.13,587.75 Crore to

Rs.1,15,665.74 Crore as on 31 st March 2026, from Rs.1,02,077.99 Crore as on 31 st March 2025, registering a growth of 13.31%.

Term Deposits increased by Rs.10,297.66 Crore to Rs.84,543.88 Crore as on 31 st March 2026, from Rs.74,246.22 Crore as on 31 st March 2025, registering a growth of 13.87%.

During the year, your Banks credit portfolio increased by

Rs.14,263.45 Crore to Rs.98,754.01 Crore as on 31 st March 2026, from Rs.84,490.56 Crore as on 31 st March 2025, registering a growth of 16.88%.

The growth in advances was primarily driven by the Retail and Agriculture segments. The composition of the advances portfolio reflects a continued shift towards a more granular and diversified mix.

The detailed break-up of the advances portfolio for the FY 2025-26 vis-à-vis FY 2024-25, along with comparative growth, is provided in the table below.

Classification of Advances Portfolio

Commercial	34,279.03	30,729.51	11.55
Retail (Personal Banking)	26,196.86	20,896.00	25.37
Agriculture	24,783.78	20,818.50	19.05
Corporate	13,494.34	12,046.55	12.02
Total Advances	98,754.01	84,490.56	16.88

As on 31 st March 2026, the Banks Priority Sector Lending stood at Rs.41,261.50 Crore, constituting 48.28% of its Adjusted Net Bank Credit (ANBC), as against the statutory requirement of 40%.

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Your Banks Agriculture Advances stood at Rs.24,784 Crore as on 31 st March 2026. Further, Priority Sector advances to agriculture, in terms of RBI guidelines, were Rs.17,861.48 Crore, constituting 20.90% of ANBC, as against the regulatory requirement of 18%. Average advances to Micro Enterprises and Weaker Sections stood at 10.95% and 12.43% of ANBC, respectively. The Bank has consistently achieved and surpassed

NPA and Net NPA ratios at 0.75% and 0.19% respectively, as against 0.76% and 0.20% in the previous year. Further, Banks SMA30+ levels has been managed well and confined to 0.17% as against 0.30% of previous year.

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all priority sector targets and sub-targets across all quarters of the year through focused lending strategies.

Your Bank has a dedicated vertical, the Credit Monitoring and Recovery Department, which oversees recovery functions and plays a pivotal role in maintaining the health and stability of the loan portfolio. In the face of economic fluctuations and market challenges, the Bank remains focused on effectively managing Non-Performing Assets (NPAs) to minimize risks and optimize recovery outcomes. High-value NPA accounts are handled through eight Asset Recovery Branches located across India, ensuring focused and effective recovery efforts. In addition, the Bank has engaged recovery agencies to support these branches in reaching customers and ensuring continuous follow-up.

The Banks Gross NPAs increased by Rs.102.11 Crore to Rs.743.91 Crore as on 31 st March 2026, from Rs.641.80 Crore as on 31 st March 2025. Correspondingly, Net NPAs increased marginally by Rs.20 Crore to Rs.186.21 Crore as on 31 st March 2026, from Rs.166.21 Crore as on 31 st March 2025. In percentage terms, the Banks asset quality remained stable, with Gross

The Bank has undertaken focused recovery initiatives on a continuous basis, resulting in improved recovery performance over the past three years. The Provision Coverage Ratio (PCR) stood at 96.45%, reflecting a consistent strengthening trend over the last six years. The Bank remains committed to further enhancing asset quality by taking all necessary measures to curtail slippages and expedite recovery in existing SMA and NPA accounts.

The Bank has implemented a range of measures to minimize slippages and enhance recovery, including strengthening credit risk assessment processes, proactive monitoring systems, timely restructuring for stressed borrowers, engagement of specialized recovery agencies, utilizing a dedicated Early Warning Signal (EWS) tool, and streamlining of legal and recovery frameworks. These initiatives facilitate early identification of potential stress, prompt resolution actions, and improved recovery efficiency, thereby contributing to reduced slippages and enhanced recovery performance.

The Banks Investment Portfolio stood at Rs.29,394.19 Crore as on 31 st March 2026, as against Rs.24,206.14 Crore as on 31 st March 2025, registering a year-on-year increase of 21.43%. The average investment for FY 2025-26 was Rs.28,187 Crore. The composition of the investment portfolio remains aligned with the Banks Investment Policy, with a focus on liquidity management, regulatory compliance, and income generation.

Interest income earned on investments during FY 2025-26 amounted to Rs.1,883.92 Crore, compared to Rs.1,622.47 Crore in FY 2024-25. Profit on sale of investments was Rs.162.81 Crore during the year. To minimize volatility, the modified duration of the overall portfolio, including Held to Maturity (HTM) securities, was maintained at a prudent level of 3.83 years. The Bank maintained a comfortable liquidity position throughout the financial year.

The Banks merchant turnover stood at Rs.26,223 Crore for FY 2025-26, as compared to Rs.25,136 Crore in the previous financial year. Export credit extended by the Bank amounted to Rs.1,473 Crore during FY 2025-26, marginally higher than

Rs.1,467 Crore in FY 2024-25. Total income earned from foreign exchange transactions increased to Rs.67.36 Crore during FY 2025-26 from Rs.58.83 Crore in the previous year. This comprised exchange profit of Rs.39.27 Crore and commission and other income of Rs.28.09 Crore.

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Your Banks interest expenditure increased by Rs.717.68 Crore to

Rs.6,135.80 Crore during FY 2025-26, as compared to Rs.5,418.12 Crore in FY 2024-25, in line with the growth in deposits over the previous year. Operating expenses increased to Rs.2,947.89 Crore during FY 2025-26 from Rs.2,877.14 Crore in the previous financial year, reflecting the Banks continued focus on business expansion, technology initiatives, enhancement of digital capabilities, and strengthening of operations. The Bank continued to maintain a disciplined approach towards cost management through regular monitoring of operating and establishment expenses and implementation of effective expenditure control measures across the organization.

Your Bank continued to maintain a healthy margin profile during FY 2025-26 through effective management of funding costs and asset yields in spite of reduction in repo rates by 100 bps during the year. The Cost of Deposits reduced by 5 bps to 5.56% during the FY 2025-26 as compared to 5.61% for the FY 2024-25 and Yield on Advances stood at 10.02% as against 10.15% in the previous financial year. Yield on Investments improved by 7 bps to 6.68% from 6.61% in the previous financial year. Due to reduction in Cost of Deposits, the Spread between Yield on Funds and Cost of Funds improved marginally to 3.37%, with Yield on Funds at 8.93% and Cost of Funds at 5.56%, compared to 3.32% in the previous financial year. Accordingly, Banks Net Interest Margin (NIM) improved by 2 bps to 4.11% during FY 2025-26 from 4.09% in the previous financial year.

The Net Profit of Rs.2,510.33 Crore along with Rs.11.74 Crore brought forward from the previous financial year, aggregating to

Rs.2,522.07 Crore, was appropriated as follows:

Appropriation - Transfer to Reserves	Amount (Rs.in Crore)
Statutory reserve	627.60
Capital reserve	9.55
Investment reserve	Nil
Investment Fluctuation reserve	31.13
Special reserve	59.85
General reserve	1526.00
Balance carried to Balance sheet (including proposed dividend of Rs.251.33 Crore)	267.94

Your Bank has formulated a Dividend Distribution Policy in accordance with the requirements of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), and the directions issued by the Reserve Bank of India. The objective of the Policy is to maintain an equitable balance between rewarding shareholders through dividends and retaining adequate funds to support the Banks future growth, in line with the dividend payout matrix prescribed under the extant RBI guidelines. The Policy is available on the Banks website at: .

Accordingly, considering the Banks capital position and the permissible payout, the Board of Directors has recommended a dividend of Rs.2.60/- per equity share of face value Rs.2/- each (130%) for the FY 2025-26. The Bank has fixed 24 th July 2026 as the record date for determining the shareholders eligible for the dividend on equity shares. The proposed dividend is in accordance with the Banks Dividend Distribution Policy and is subject to the approval of the shareholders at the ensuing 107 th Annual General Meeting (AGM) and receipt of necessary regulatory/statutory approvals, if any.

In accordance with Accounting Standards 4 - Contingencies and Events Occurring after the Balance Sheet date notified under the Companies (Accounting Standards) Rules 2021, the proposed dividend amounting to Rs.251.33 Crore has not been shown as an appropriation from the Profit and Loss account for the year ended 31 st March 2026 and correspondingly not reported under Other Liabilities and Provisions as at 31 st March 2026 (is reported under balance of profit).

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As on 31 st March 2026, the Banks Authorized Share Capital stood at Rs.250 Crore, comprising 125 Crore equity shares of face value Rs.2/- each. During FY 2025-26, the Bank increased its authorized capital from Rs.200 Crore (100 Crore equity shares of face value Rs.2/- each) to Rs.250 Crore (125 Crore equity shares of face value Rs.2/- each).

During FY 2025-26, the shareholders of the Bank approved the issuance of Bonus shares at the 106 th AGM of the Bank held on 21 st August 2025. Accordingly, the Bank issued 16,11,85,653 equity shares of face value Rs.2/- each, out of which 16,10,35,439 equity shares were allotted to eligible shareholders, and 1,50,214 equity shares were kept in abeyance, corresponding to existing abeyance shares. Further, Bank has allotted 4,86,121 equity shares of face value Rs.2/- each to the employees who

exercised their options under KVB ESOS 2011 Scheme and KVB ESOS 2018 Scheme, during the financial year under review.

Post issuance and allotment of the aforesaid equity shares, the Issued Share Capital increased from Rs.1,61,14,46,944 to

Rs.1,93,47,90,492, comprising 96,73,95,246 equity shares of face value Rs.2/- each, and the Paid-up Share Capital increased from

Rs.1,61,02,49,318 to Rs.1,93,32,92,438, comprising 96,66,46,219

equity shares of face value Rs.2/- each. Other than the above, there was no change in the capital structure of the Bank during the year under review.

The Banks Net Owned Funds increased to Rs.14,107.87 Crore as on 31 st March 2026, from Rs.11,929.54 Crore in the previous financial year.

The Banks Earnings Per Share (Basic) stood at Rs.25.98 for the financial year 2025-26, as against Rs.20.10 of the previous year. Consequent to the issuance of bonus shares during FY 2025-26, the previous years EPS has been restated in accordance with the Accounting Standards. The Book Value of shares was Rs.145.95 (includes proposed Dividend) per equity share of face value Rs.2/- each (fully paid up) as on 31 st March 2026, as against previous year position of Rs.148.17 per equity share of face value Rs.2/- each (fully paid up). The decrease in Book Value is primarily due to the impact of bonus shares issuance during FY 2025-26.

The Bank did not issue any debt instruments during the year under review. The details of the credit ratings obtained during the period are provided below:

Particulars	Rating Agency	Rating	Rating Action	Date of Revision
Certificate of Deposit Programme for Rs.5,000 Crore	ICRA	[ICRA] A1+	Reaffirmed	13.06.2025
Certificate of Deposit Programme for Rs.10,000 Crore (Enhanced from Rs.5,000 Crore)	ICRA	[ICRA] A1+	Reaffirmed/ Assigned for enhanced amount	19.06.2025
Certificate of Deposit Programme for Rs.10,000 Crore	ICRA	[ICRA] A1+	Reaffirmed	16.09.2025
		[ICRA] A1+	Reaffirmed	11.12.2025
		[ICRA] A1+	Reaffirmed	09.03.2026
Issuer Rating	ICRA	[ICRA] AA (Stable)	Reaffirmed	19.06.2025
Certificate of Deposit Programme for Rs.5,000 Crore	CRISIL	CRISIL A1+	Reaffirmed	20.05.2025
		CRISIL A1+	Reaffirmed	25.09.2025
Short Term Fixed Deposit of Rs.12,000 Crore	CARE	CARE A1+	Reaffirmed	16.12.2025
Fixed Deposit		CARE AA (Stable)	Reaffirmed	16.12.2025

As per rating agency schedule:

ICRA A1+ / CARE A1+ / CRISIL A1+ : Securities with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations and carry lowest credit risk.

ICRA AA / CARE AA : Issuers/securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

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The Banks Capital Adequacy Ratio (CAR) stood at 18.76% as on 31 st March 2026, in accordance with Basel III norms. This is well above the regulatory requirement of 11.50%, comprising a minimum capital requirement of 9% and a Capital Conservation Buffer of 2.50%, as prescribed by the Reserve Bank of India.

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Your Bank does not have any Subsidiaries or Associates/Joint Ventures for the financial year ended 31 st March 2026.

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Pursuant to provisions of the Regulation 34(2)(e) of SEBI LODR, the Management Discussion and Analysis Report for the year forms part of this Annual Report.

The selection of new branch and office locations is undertaken through a strategic approach focused on identifying high-potential areas. To assess the viability of prospective centres, the Bank conducts a detailed analysis leveraging data from various sources and platforms. Additionally, inputs from location-based surveys conducted by Divisional Offices provide valuable on-ground insights. By integrating these inputs, the Bank carefully shortlists locations for opening new branches and offices, ensuring that its expansion strategy remains aligned with the growth potential of each center.

Your Bank has added 13 Branches (Regular Branches - 5, Lite Branches - 8) and 9 Offices viz. Telangana North Divisional Office, ED-Secretariat, Central Financial Intelligence and Surveillance Unit, Open Market Channel (OMC)-Vadodara, OMC-Coimbatore, OMC-Kanpur, OMC-Hyderabad, OMC-GOA and OMC-Hubli during FY 2025-26.

Your Bank has 901 Branches as on 31 st March 2026. During the year under review, your Bank has installed 151 new Automated Teller Machines (ATM) at new and existing locations, 76 Bunch Note Recycler Machines (BNRM) and 127 Self Service Passbook Kiosks.

As of 31 st March 2026, 1,538 Automated Teller Machines (ATM), 675 Bunch Note Recycler Machines (BNRM) and 397 Self-Service Passbook Kiosks are providing uninterrupted Banking services to customers.

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As on 31 st March 2026, your Bank has eight Currency Chests across different locations in Tamil Nadu, Andhra Pradesh, Telangana and Karnataka to ensure adequate supply of cash to branches and ATMs within their respective regions, in adherence to the Reserve Bank of Indias (RBI) Clean Note Policy. Currency Chests also assist branches in maintaining cash within prescribed retention limits, thereby facilitating smooth operations. During the year, the Bank also conducted soiled note exchange melas and undertook distribution of coins through Currency Chest-linked branches, further supporting currency management initiatives.

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Financial inclusion refers to efforts to make financial products and services accessible and affordable to all individuals and businesses, regardless of their personal net-worth or company size. Financial inclusion is an effort to make everyday financial services available to more of the worlds population at a reasonable cost. It aims to ensure that the poor and marginalized people make the best use of their money and attain financial education.

Your Bank has undertaken several initiatives and reached the underserved segment of society and extended its focused financial services through 156 Bank Mitras in rural villages,

3 Bank Mitras in urban locations including 39 Ultra Small Branches. The Bank Mitra use Business Correspondent (BC) devices for providing banking services to the customers.

Your Bank continues to provide basic financial products including Basic Savings Bank Deposit Account (BSBDA), Social security schemes of Insurances viz., Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pension product viz., Atal Pension Yojana (APY) and thereby support the Government in implementation of various social welfare schemes. The Bank has made 1,19,417 fresh enrollments under PMJJBY, 2,75,197 fresh enrollments under PMSBY and 30,440 enrollments under APY during the financial year.

Pradhan Mantri Jan Dhan Yojana (PMJDY)

Your Bank has opened 76,056 PMJDY accounts during the year. The balances outstanding in the PMJDY accounts as on 31 st March 2026, was Rs.44.91 Crore. The Bank has issued 76,056 Rupay Debit Cards under PMJDY accounts during the year. Micro ATM devices are provided to Bank Mitras for facilitating payments, which are enabled for accepting Aadhaar enabled Payment system (AePs)/Third Party deposit,

Balance enquiry, Mini statement. Bank Mitras have carried out

Rs.3.80 Lakh transactions, amounting to Rs.51.29 Crore during the year under report which includes Direct Benefit Transfer/ Old Age Pension/Viksit Bharat Schemes transactions.

Micro Credit

Your Bank provides credit facilities to Joint Liability Groups (JLG) to meet the credit needs of the poor. As on 31 st March 2026, the Bank has 83,882 JLG loans with outstanding of Rs.183.22 Crore.

Financial Literacy

Financial Literacy campaigns are intended to provide basic banking knowledge to people across various corners of the Society. Your Bank has been in the forefront in creating awareness to the rural masses on the financial services and products through the Financial Literacy Campaigns. During FY 2025-26, your Bank has conducted 417 financial literacy campaigns in Rural, Semi Urban/Urban areas, including RBI Financial Literacy Week Campaign 2026.

Your Bank has consistently demonstrated a strong inclination toward adopting emerging trends, technological advancements, and innovative practices. Long-term initiatives are initially undertaken as study projects and, upon establishing their technical feasibility, are transformed into structured action plans for implementation, thereby enhancing value for customers. The Bank has been progressively integrating Artificial Intelligence (AI) and Machine Learning (ML) into its operations to strengthen decision-making, augment risk assessment frameworks, and elevate customer service. These technologies enable the delivery of personalized banking experiences while optimising operational efficiency and workflows.

Your Bank has implemented the following customer centric projects during the FY 2025-26:

& Interoperable Card less Cash Withdrawal

The Bank has introduced Interoperable Card-less Cash Withdrawal at select ATMs, providing customers with enhanced convenience and security. This service allows customers to withdraw cash without the need for a physical ATM card. This service that facilitates participating Banks customers who are live on UPI, to withdraw cash from any participating Banks ATMs (enabled for UPI-ATM) without using their card.

To utilize this service, customers shall simply scan a dynamic QR code displayed on the ATM screen and authorize the transaction using their UPI PIN. Each

transaction permits withdrawals of up to Rs.10,000. The entire process is facilitated by the UPI and NPCI systems, helping to significantly reduce the risk of common ATM frauds such as card skimming.

& Corporate Mobile Banking

KVB Corp Mobile Banking App is designed to address the diverse banking requirements of corporate users by offering a wide range of features. In addition to core functionalities such as account management and transaction services, the app includes other utilities that support day-to-day business operations of the corporate customers. The application is built with a sleek, minimalistic user interface that prioritizes content clarity and ease of navigation, ensuring a seamless user experience.

& Enhancement in GST payment through UPI

The Bank has implemented a convenient and secure solution for taxpayers to meet their Goods and Services Tax (GST) obligations. Taxpayers are now able to pay their GST liabilities directly through the official GST portal (gst.gov.in) by utilizing Unified Payments Interface (UPI) applications. Supported UPI apps include widely used platforms such as BHIM. This enhancement streamlines the tax payment process, offering users the ability to complete transactions swiftly and securely from their mobile devices.

& Digital Account Opening (Paperless & Video KYC Enabled)

The Bank continued to enhance its digital onboarding capabilities by strengthening the paperless account opening process integrated with Video KYC (V-KYC). Customer can seamlessly initiate account opening through digital channel using Aadhaar based e-KYC enabling faster data authentication of customer information. Further, the Bank enabled secure V-KYC slot booking and real time video verification allowing customers to complete identity validation conveniently without visiting branches, these initiatives accelerated customer onboarding, improved operational efficiency, reduced processing time and to secure seamless and technology driven banking services.

& Improved mobile and internet banking performance by providing Value-added service to customers

The bank enhanced the performance, scalability and reliability of its mobile and internet banking platforms by deploying technology upgrades and introducing value added digital services. This improvement resulted in

higher transaction processing efficiency and increased platform stability.

& Strengthened grievance tracking and resolution through centralized monitoring dashboard

To strengthen governance, service monitoring management processes were integrated with a centralized monitoring dashboard that provides real time tracking, workflow visibility, analytics driven insights, and faster issue resolution.

& Enabled 24x7 digital services with improved uptime and Disaster Recovery (DR) readiness

The Bank ensured the availability of digital services through improved uptime management, infrastructure optimization, proactive monitoring and enhanced DR readiness. This initiative reinforced the Bank focus on resilient, secure and future ready technology systems.

The Board of Directors and Senior Management recognize the risks associated with implementing new information technology and digital transformation initiatives to enhance customer service. To address these risks, your Bank had established the Information Security Group (ISG), led by a Chief Information Security Officer (CISO) who is a specialist in managing information and cyber security risks to safeguard the banks information assets.

The ISG has been formed to protect the banks information assets-including systems, data, and networks-from both internal and external threats. This is achieved through the implementation of robust security controls, policies, and technologies that are aligned with regulatory standards and industry frameworks. The ISGs responsibilities cover a broad range of activities, such as developing and enforcing information security policies, ensuring compliance with regulations, Security Operations Center (SOC) monitoring, incident management, application and cloud security, data protection, endpoint and network security, threat intelligence and monitoring, cyber forensics, vulnerability management, and conducting security assessments. The group is also in the process of adopting advanced approaches like Artificial Intelligence, Machine Learning, and zero trust models to further strengthen the Banks security posture.

The CISO is responsible for defining the Banks information security strategy and reports directly to the Chief Risk Officer. Key duties include overseeing security governance, risk management, policy development, continuous security monitoring, cyber incident response, and ensuring that

the Bank complies with all applicable laws and Reserve Bank of India (RBI) regulations related to cybersecurity. The CISOs office remains dedicated to adapting to the evolving threat landscape by leveraging skilled personnel, effective processes, and advanced technology.

Your Bank has maintained ISO/IEC 27001 certification since 2018, demonstrating compliance with the globally recognized standard for information security management. In accordance with this certification, the CISO office has established and documented Information Security Management System (ISMS) procedures, including formal processes for change management and incident management. In case of security issues, the Bank conducts a Root Cause Analysis (RCA) to identify the underlying issues and implements corrective measures to resolve any weaknesses, if discovered. Additionally, the Bank adheres to best practices by setting baseline standards for its IT systems.

Your Banks ISMS reinforces not only the Confidentiality, Integrity and Availability of information but also other security principles such as Authenticity, Non-Repudiation and Accountability. Thus, your Banks ISMS ensures the following objectives:

Safety and privacy of sensitive customer and Banks information.

Prevent IT Assets and Information System from Unauthorized Access.

Protect the Data / IT Systems from threats such as Phishing, Ransomware and other malware, malicious actors targeting cloud services and integrated systems in multiple locations over the Internet and zero-day attacks.

Timely availability of Data / IT Systems to the authorized users.

The Bank has implemented several controls to prevent or detect data breaches, including:

Perimeter security controls such as network firewalls, web application firewalls, network intrusion prevention, network segregation, network behavior analysis and anomaly detection systems.

Privileged access management control.

Host-based intrusion prevention systems to automatically detect and prevent known vulnerabilities.

24x7 security monitoring to identify unusual security events in the Banks IT environment and timely incident response actions.

Periodic management and Board oversight to review control effectiveness and strengthen controls.

To provide awareness on recent trends in Information Security and understanding on the crucial role in safeguarding the data, Bank has been arranging Virtual trainings, Cyber awareness workshops, Phishing campaigns, awareness Email and SMS, etc., to its employees and also circulating the awareness Email and SMS to its customers.

There was no change in the nature of business of the Bank during the financial year under review.

Your Bank uses computerized solutions comparable to those of new-generation private sector banks to meet all customer banking needs. It has established adequate infrastructure to process day-to-day transactions efficiently. The Bank operates on Flexcube, a Core Banking Solution (CBS) widely used by several leading banks in the country. The platform is configured with well-defined internal financial controls, including maker-checker requirements and appropriate access credentials. Automation of interest, charges, and accounting entries further strengthens these controls. In addition, periodic IT audits of the CBS help ensure compliance with regulatory and mandatory requirements. The Bank also uses dedicated reporting software supported by appropriate systems and protocols, which are reviewed regularly to ensure clear and accurate business reporting. Standardized operating procedures for monitoring account operations support effective internal controls, while a separate monitoring team helps prevent and detect fraud and errors. Regulatory and mandatory compliance is overseen by a dedicated team that follows defined procedures to implement approved policies and maintain disciplined financial reporting. Together, these systems provide the Bank with a robust framework of internal control over financial reporting.

The Bank has Board-approved policies covering key banking activities such as lending, investment, and borrowing, supported by a clearly defined hierarchy of officials with sanctioning authority. The Inspection & Audit Department and Risk Management Department periodically review internal controls, procedural compliance, and credit assessment protocols.

Internal Financial controls of the branches are verified by the Statutory Branch Auditors during their branch audit and covered in their report. Joint Statutory Central Auditors of the Bank audit the internal controls over financial reporting of the Bank and submit a separate report containing the salient features of their observations to the Board of Directors.

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Risk is inherent in all banking activities, and the Bank recognizes that effective risk management is fundamental to achieving sustainable growth and financial stability. The Bank has established a robust, multi-layered risk management framework to systematically identify, assess, measure, monitor, and mitigate risks through well-defined processes supported by advanced information technology systems.

The overarching objective of the Banks risk management framework is to optimize the risk-return trade-off while operating within the Board-approved Risk Appetite Statement. An independent Risk Management function ensures comprehensive coverage of risks across all business lines through policies and procedures duly approved by the Board of Directors. The function adopts both quantitative and qualitative methodologies to proactively identify emerging vulnerabilities at both transaction and portfolio levels.

The Bank continues to enhance its risk measurement and management capabilities through ongoing refinement of models, strengthening of data architecture, and automation of risk processes. These initiatives are aimed at ensuring regulatory compliance, improving risk transparency, and enabling optimal capital allocation to achieve superior risk-adjusted returns.

The Board of Directors retains ultimate responsibility for oversight of the risk management framework and periodically reviews the Banks risk profile to ensure alignment with the defined risk appetite. To facilitate focused governance, the Board has delegated oversight responsibilities to the Board-level Risk Management and Asset Liability Management Committee (RM & ALM Committee). This Committee monitors the implementation of the risk governance framework and adherence to risk policies and processes.

At the executive level, specialized committees-including the Credit Risk Management Committee, Market Risk Management Committee, Operational Risk Management Committee, and Asset Liability Management Committee oversees respective risk domains. These Committees regularly evaluate the effectiveness of risk management practices and provide strategic guidance. Proceedings of these committees are reported to the RM & ALM Committee of the Board for review and direction.

The Risk Management Department plays a central role in reviewing all key policies of the Bank to ensure adequate incorporation of risk management considerations. The Bank has instituted a comprehensive suite of risk management policies, including those covering Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Strategic Risk, Reputational Risk, Risk Culture, Integrated Risk Management, Stress Testing, and the Internal Capital Adequacy Assessment Process (ICAAP).

The Banks risk management approach encompasses end-to-end risk lifecycle management, including identification, assessment, measurement, monitoring, control, mitigation, and reporting of risks across all business segments. The strategy is anchored in a clear articulation of risk appetite, reflecting

the Banks capacity and willingness to assume risk under both normal and stressed conditions.

All material risks arising from the Banks operations are subject to continuous monitoring and are managed through a well-defined control environment to ensure timely mitigation.

The Bank remains adequately capitalized, with a Capital to Risk Weighted Assets Ratio (CRAR) of 18.76% as at 31 st March 2026. The capital base provides a strong buffer to absorb unexpected losses that may arise despite prudent risk management practices. Based on the current assessment, there are no material risks that pose a threat to the Banks going concern status.

The Bank has put in place a Whistle Blower Policy in compliance to the provisions of Regulation 4(2)(d)(iv) of the SEBI LODR, the Companies Act, 2013 and SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended, from time to time. This policy also incorporates suggestions of the Protected Disclosure Scheme for Private Sector Banks instituted by the Reserve Bank of India. The Banks Whistleblower Policy is in synchronization with all statutory and regulatory guidelines on Vigil Mechanism.

Through the Whistleblower Policy / Vigil Mechanism, the Bank encourages an open and transparent system of working and dealing amongst its stakeholders to make or report any disclosures under this Policy, without any fear of reprisal, retaliation, discrimination or harassment of any kind.

Under the Whistleblower Policy, the employees are free to report violations of applicable laws & regulations and Code of Conduct. The objective of the policy is to pre-emptively identify any untoward events with the help of the employees and to take timely corrective measures before they become incidents. This mechanism also provides adequate safeguards against victimization of employees who avail this mechanism and provides for direct access to the Chairman of the Audit Committee of the Board, in exceptional cases when the Whistleblower is not satisfied with the resolution of the complaint. During FY 2025-26, 8 complaints were received under this mechanism and there were no instances of escalations made to the Chairman of the Audit Committee. The Audit Committee of the Board reviews the complaints received through the Whistleblower mechanism on a quarterly basis.

The Bank is encouraging all its stakeholders to share the details of any kind of unlawful/unethical instances/practices noticed on the part of any employee, in order to take appropriate action upon review. Further, the Bank is ensuring that the details shared under this mechanism are kept confidential and protection is available to the Whistleblower. Periodical training and awareness sessions are being conducted for the employees on the importance of Whistleblower mechanism.

The details of the Whistleblower policy is made available on the website of the Bank at .

The Bank has a robust Vigilance Mechanism which provides guidance on managing the Fraud Risk. Cases detected / reported are investigated and appropriate process refinements and systemic corrections are implemented to avert similar incidents in future. Various mitigation measures and surveillance mechanisms are employed to combat both internal and external frauds. Regular sensitization programs for employees on various frauds and prevention techniques foster an atmosphere of vigil.

The Bank is committed to raising employee awareness about modus operandi of recent frauds through, email channel under tag line Beware... Be Aware...!. The Preventive Vigilance workshops, curated by the Vigilance Department, elucidates the gaps exploited by fraudsters to perpetrate frauds against Banks. This program also imparts strategies to avert such frauds. Additionally, Fraud prevention meetings under the tag line Watchful eyes, Honest ways are regularly conducted for branches to familiarize the employees with the various modus operandi of trending frauds and their preventive measures. Surprise visits of identified branches / divisions are conducted on a monthly basis to ensure that vigil mechanism is in place.

Vigil at KVB: The stakeholders are encouraged to voice their concerns by way of Whistleblowing and may raise their concerns at .

DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The details related to Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are furnished in the Corporate Governance Report that forms part of this Annual Report.

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The Bank has complied with the applicable provisions of Maternity Benefit Act, 1961.

All transactions entered into by the Bank with related parties are in a repetitive nature, carried out in the ordinary course of business and on an arms length basis. Omnibus approval was obtained from the Audit Committee for such repetitive transactions, and the same are reviewed on a periodic basis. The Banks policy on Related Party Transactions is available at .

During the year, your Bank has not entered into any materially significant transactions with the related parties, which could lead to potential conflict of interest. Therefore, pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no related party transactions to be reported under Section 188(1) of the Companies Act, 2013 and Form AOC-2 is not applicable to the Bank.

AUDIT COMMITTEE RELATED DISCLOSURE UNDER SUB-SECTION 8 OF SECTION 177 OF THE COMPANIES ACT, 2013

Your Bank has constituted a Board-level Audit Committee in accordance with the requirements of the Companies Act, 2013, SEBI LODR and the guidelines issued by the Reserve Bank of India, as amended from time to time. The Board has accepted all the recommendations made by the Audit Committee. The details of the composition of the Audit Committee are disclosed in the Corporate Governance Report forming part of this Annual Report.

DISCLOSURE RELATED TO DETAILS OF DEPOSITS ACCEPTED UNDER RULE 8(5)(V) OF COMPANIES (ACCOUNTS) RULES, 2014

Being a Banking company, the disclosures required as per Rule 8(5)(V) of Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable.

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Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided, or any investment made by a Banking Company in the ordinary course of business. Hence, the particulars of loan and guarantees as required under Section 134(3)(g) of the Companies Act, 2013 are not required to be disclosed. The particulars of investments made by the Bank are disclosed in the Financial Statements as per the applicable provisions of the Banking Regulation Act, 1949.

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Joint Statutory Central Auditors

In terms of Section 139 of the Companies Act, 2013 read with Section 30(1A) of the Banking Regulation Act, 1949, it is proposed to re-appoint, M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/ W100166) and M/s. Varma & Varma, Chartered Accountants (Firm Registration No. 004532S) as Joint Statutory Central Auditors of the Bank (for the third year of the three year term), who are retiring at the conclusion of the ensuing 107 th Annual General Meeting (AGM), subject to the approval of Reserve Bank of India and shareholders of the Bank. The Bank has received consent from the Auditors on their reappointment and confirmation to the effect that they are not disqualified to be reappointed as the Auditors of the Bank in terms of the provisions of the Companies Act, 2013 and the rules made thereunder.

Accordingly, the Board of Directors have recommended to the shareholders, the reappointment of M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/ W100166) and M/s. Varma & Varma, Chartered Accountants (Firm Registration No. 004532S) as Joint Statutory Central Auditors of the Bank, to hold office from the conclusion of the ensuing 107 th AGM till the conclusion of the next AGM. Fee payable to Joint Statutory Central Auditors is proposed at 1.40 Crore (Rupees One Crore and Forty Lakh only) plus applicable taxes and out of pocket expenses with a cap of 10% of fees for the FY 2026-27, subject to the approval of Reserve Bank of India and shareholders of the Bank.

Members are requested to consider the re-appointment of M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/ W100166) and M/s. Varma & Varma, Chartered Accountants (Firm Registration No. 004532S) as Joint Statutory Central Auditors of the Bank.

Pursuant to the Regulation 33(1)(d) of the SEBI LODR, the Joint Statutory Central Auditors have confirmed that they

are subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

Independent Auditors Report

The Joint Statutory Central Auditors of the Bank viz., M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Registration No. 104607W/W100166) and M/s. Varma & Varma, Chartered Accountants (Firm Registration No. 004532S), have audited the accounts of the Bank for FY 2025-26 and their Report forms part of this Annual Report. Pursuant to Section 143(3)(i) of the Companies Act, 2013, the Joint Statutory Central Auditors have also reported on the adequacy and operating effectiveness of the internal financial controls system over financial reporting, which has been enclosed as Annexure A to Independent Auditors Report.

There are no qualifications, reservations or adverse remarks made by the Joint Statutory Central Auditors in their report for FY 2025-26.

Secretarial Auditor

In line with Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI LODR, shareholders of the Bank approved the appointment of M/s S.A.E. & Associates LLP, Company Secretaries, (Firm Registration No. L2018TN004700) in 106 th AGM of the Bank held on 21 st August 2025 for undertaking the Secretarial Audit of the Bank for a period of five years from FY 2025-26 to FY 2029-30 with a remuneration of

2,25,000/- plus applicable taxes and out of pocket expenses for FY 2025-26 with 10% increase in last drawn fees every year thereafter till FY 2029-30.

Secretarial Audit and Secretarial Compliance Report

M/s. S.A.E. & Associates LLP, Company Secretaries (Firm Registration No. L2018TN004700), undertook the Secretarial Audit of the Bank for FY 2025-26 pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI LODR. The Secretarial Audit Report for the FY 2025-26 is annexed to this report as Annexure - I .

There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in their report for the FY 2025-26.

Further, in terms of aforesaid provisions, the Bank has obtained Secretarial Compliance Report, from the Secretarial Auditor of the Bank on compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder and the copy of the same was submitted to Stock Exchange within the stipulated

timeline.

Implementation of Indian Accounting Standards (Ind AS)

As per the RBI guidelines, the Bank has been submitting Proforma Ind AS financial statement to RBI on a Half yearly basis. RBI has issued final guidelines on 27 th April 2026 Reserve Bank of India (Commercial Banks -Asset Classification, Provisioning and Income Recognition) Directions, 2026, effective from 1 st April 2027.

The Bank has initiated necessary measures towards implementation of the new framework, including assessment of systems, processes and data requirement for compliance with the RBI directions. The Bank will continue to closely monitor further regulatory updates and clarifications in this regard.

Further details are given in Schedule 18 - Notes to Account of the Balance Sheet.

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During FY 2025-26, one of the frauds identified by the Bank and duly reported to the Reserve Bank of India (RBI), with necessary corrective actions taken, was reported by the Joint Statutory Central Auditors to the Central Government under Section 143(12) of the Companies Act, 2013 read with the NFRA Guidelines dated 23 rd June 2023. Other than the above, no fraud was reported by the Joint Statutory Central Auditors under the said provisions during the review period.

Further, no fraud was reported by the Secretarial Auditor under the said provisions during the review period.

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During FY 2025-26, your Bank is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

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Disclosures relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are detailed as under:

Conservation of Energy

Your Bank has undertaken various energy efficiency improvement initiatives for energy conservation at its branches / offices

by installing LED lights in a phased manner. VRF (Variant Refrigerant Flow) AC units have been installed in back offices across various cities to save electricity by energy conservation technology. Your Bank owns a 850 kW Wind Turbine Generator in Govindanagaram, Theni District, Tamilnadu and the said windmill has generated 8,81,599 units during the year under review. Bank is utilizing the power generated by Wind Turbine for its Central office at Karur and Divisional Office at Chennai.

Roof top solar power plant has been installed at our Banks own buildings at Trichy Divisional Office (38 kW), Namakkal Main branch (15 kW) and Batlagundu branch building (7.50 kW) for utilization of renewable energy during the year under review. In addition to the above, your Bank has installed roof top solar power plant at Hyderabad Divisional Office (38 kW). The total generation from Roof top solar power plant is 1,02,470 units from the said four locations during the year under review.

Your Bank has made a capital investment of Rs.42,71,971/- on LED Lights and Rs.44,85,042/- towards installation of roof top solar power plant during FY 2025-26.

Technology Absorption

Your Bank has always used information technology extensively to deliver quality service to its customer, for more details please refer the section on Technology Initiatives that forms part of this report.

Foreign Exchange Earnings and Outgo

Your Bank continuously supports and encourages the countrys export efforts through its export financing operations. The details on foreign exchange earnings and outgo are furnished in the Foreign Exchange Transactions section that forms part of this report.

There are no material events/changes and commitments, which affect the financial position of the Bank between the end of the financial year of the Bank and the date of the Directors Report.

During FY 2025-26, no significant and material orders were passed by the Regulators or Courts or Tribunals against the Bank which impacts its going concern status and Banks operations in future.

Being a Banking Company, your Bank is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

The Annual Return for the financial year ended 31 st March 2026, as required under Section 92 (3) and Section 134(3)(a) of the Companies Act, 2013 is available on the Banks website at .

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

There is no application or proceeding against the Bank under Insolvency and Bankruptcy Code, 2016 during FY 2025-26.

However, Bank has been filing cases in NCLT under IBC, 2016 as a part of its recovery mechanism and the status of the cases as at the end of FY 2025-26 is furnished as below:

S. No	Particulars	No of Cases	Book balance (Rs.in Crore)	Status
1^	Cases filed by KVB against the Corporate Debtors under IBC	4	181.51	Under CIRP & Liquidation
2	Cases filed by KVB against Individual Guarantors of the Corporate Debtors	22	463.40	Filed and pending

^There are 48 other claims filed with NCLT under IBC by other Lenders/ Operational Creditors, involving Rs.1,010.46 Crore, in which the Bank has submitted claims as one of the creditors.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

Being a Banking Company, the aforesaid provision is not applicable to the Bank.

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The information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure - II .

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Your Bank has formulated and adopted Employee Stock Option Schemes to provide a platform to employees for participating in the ownership of the Bank and in its long-term growth. Bank uses stock options as a compensation tool to

attract and retain critical talent and encourage employees to align individual performances with that of Banks objectives. In order to ensure sustainable progress and to aid next journey of Banks growth path, attracting, retaining, and rewarding talent is essential. Bank aims to attract, retain, develop talent pipeline and align employees long-term interests with the Banks strategic objectives. To support this alignment and given the limited number of stock options available in the existing ESOP Schemes for the current talent pools requirements, introduction of Karur Vysya Bank - Employees Stock Option Scheme 2025 (KVB-ESOP-2025/ Scheme) was proposed during the review period and the same was approved by the shareholders in the AGM held on 21 st August 2025. Currently, the Bank has the following Schemes in compliance with the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB & SE Regulations) erstwhile SEBI (Share Based Employee Benefits) Regulations, 2014.

Karur Vysya Bank Employees Stock Option Scheme 2011 (KVB-ESOS-2011).

Karur Vysya Bank Employees Stock Option Scheme 2018 (KVB-ESOS-2018).

Karur Vysya Bank Employees Stock Option Scheme 2025 (KVB-ESOS-2025).

During the period under review, your Bank has granted to the tune of 1,03,541 options under KVB-ESOS-2018 to Shri B Ramesh Babu, MD & CEO and other Senior Management towards their variable pay as a part of non-cash component for the performance period FY 2024-25. The said variable pay is in accordance with Banks Compensation policy read with Reserve Bank of India (Commercial Banks - Governance) Directions, 2025. Further, consequent to the issue of bonus shares during FY 2025-26, appropriate adjustments have been made in the respective pool of the Scheme and in the options granted where such options remain unvested.

Pursuant to Regulation 13 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, (SEBI SBEB & SE) Banks Secretarial Auditors, M/s S.A.E. & Associates LLP, Company Secretaries, has certified that the Banks above mentioned Schemes have been implemented in accordance with the Resolutions passed by shareholders for 2011 & 2018 Schemes and SEBI SBEB & SE Regulations. The disclosures as required under the said regulation are available on Banks website at .

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Pursuant to Sections 124 and 125 of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), dividends remaining unclaimed for a period of seven years and all shares in respect of which dividends have not been claimed for the last seven consecutive years are liable to be transferred to the Investor Education and Protection Fund (IEPF). This requirement does not apply to shares in respect of which there is a specific order of a Court, Tribunal, or Statutory Authority restraining the transfer of such shares. Further details are provided in the Corporate Governance Report forming part of this Annual Report.

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Your Banks commitment to social responsibility traces back to its Articles of Association drafted in 1916, which provided for setting aside one percent of the annual profits towards a Charity Account to support the health and education needs of the underprivileged. More than a century later, the Bank continues to uphold this enduring legacy through its contemporary Corporate Social Responsibility (CSR) initiatives.

The Banks view on CSR is not merely as a statutory obligation, but as a strategic commitment towards creating sustainable and inclusive value for communities. Guided by its CSR Policy and in compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Bank continues to undertake initiatives that contribute meaningfully to social development and environmental sustainability. A dedicated CSR Committee of the Board oversees the planning, execution, monitoring, and governance of CSR programmes, ensuring transparency, accountability, and alignment with the Banks broader values and objectives.

During the year under review, the Bank spent Rs.40.65 Crore towards CSR initiatives across key areas prescribed under Schedule VII of the Companies Act, 2013. The Banks CSR interventions are focused on Education, Skill Development, Healthcare and Sanitation, Environmental Sustainability, and Art & Culture. Through these initiatives, the Bank aims to foster inclusive growth, strengthen community well-being, support sustainable development, and preserve the countrys cultural heritage.

The Bank remains committed to driving meaningful change at the grassroots level through carefully designed and monitored programs that create long-term social impact. Details of the CSR Policy, composition of the CSR Committee, CSR expenditure, and other disclosures form part of Annexure - III to this Report.

Your Bank recognizes Environmental, Social, and Governance (ESG) principles as a core pillar of responsible banking and sustainable value creation. Sustainability is not viewed as a compliance obligation but as a strategic imperative shaping our decision-making, operations, and stakeholder engagement.

The Bank emphasize on robust governance, environmental stewardship, and social responsibility underpins sustained financial performance while advancing a resilient and inclusive growth trajectory. ESG considerations are systematically integrated into our business strategy and enhancing long-term institutional resilience.

To reinforce these initiatives, a dedicated ESG function has also been institutionalized to facilitate policy alignment, and coordination of sustainability-related initiatives across the organization.

In terms of Regulation 34(2)(f) of the SEBI LODR Regulations, 2015 read with applicable SEBI circulars issued from time to time, Business Responsibility and Sustainability Reporting (BRSR) is applicable to the top 1,000 listed entities by market capitalization with effect from FY 2022-23.

Your Bank remains committed to sound governance, accountability, and sustainability-related disclosures and has been publishing the BRSR from FY 2021-22 on a voluntary basis. In line with the applicable regulatory requirements, the Bank has published the BRSR disclosure for FY 2025-26, which is annexed to this Report as Annexure - IV . The Bank has also undertaken Reasonable Assurance of applicable BRSR Core disclosures in accordance with the applicable regulatory requirements, with a view to enhancing the reliability and credibility of such disclosures.

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The Board of the Bank is constituted in accordance with the provisions of the Companies Act, 2013, the Banking Regulation Act, 1949, and the SEBI LODR, maintaining an appropriate balance between Executive and Non-Executive Directors, along with majority representation of Independent Directors to ensure effective governance. The Board meets at regular intervals to discuss and decide on Banks business policy and strategy, apart from other items of business. During the year under review, Thirteen Board Meetings were conducted, and the prescribed periodicity for holding such meetings was complied with. The schedule of the meetings of the Board is circulated in advance to the Members of the Board. Details of the composition of Board, Meetings held and attendance of the Directors at such Meetings are provided in the Corporate Governance Report which forms part of this Annual Report.

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Pursuant to Section 134(3)(p) of the Companies Act, 2013, Regulation 17(10) of SEBI LODR and other applicable regulations, Board has carried out annual evaluation of its own performance (Board as a whole), Committees of the Board, Non-Executive Independent Directors including Chairperson and MD & CEO. Further Independent Directors in their separate Meeting have carried out evaluation of Board as a whole and Non-Executive Non-Independent Directors. The manner of evaluation conducted for the FY 2025-26 is furnished in the Corporate Governance Report that forms part of this Annual Report.

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Changes in Board of Directors of the Bank during the review period and till the date of this report are presented below;

Appointment

Dr Mythili Vutukuru (DIN: 10371961)

Dr Mythili Vutukuru was co-opted as an Additional Director of the Bank under Non-Executive Independent Director category by the Board in its meeting held on 24 th September 2025, subject to the approval of the shareholders of the Bank.

In terms of Regulation 17 (1C) of SEBI LODR, the listed entity shall ensure that approval of shareholders is obtained for appointment of a person on the Board of Directors at the next general meeting or within a period of three (3) months from the date of appointment, whichever is earlier.

Accordingly, the appointment of Dr Mythili Vutukuru as Non-Executive Independent Director of the Bank, for a period of three (3) years with effect from 24 th September 2025 to 23 rd September 2028, not liable to retire by rotation, was placed before the shareholders of the Bank for their approval through Postal Ballot having remote e-voting process and the same was approved by shareholders of the Bank on 20 th December 2025.

Dr Mythili Vutukuru is an accomplished professor and researcher in the broad area of computer systems, with expertise in operating systems, computer networking, virtualization, and cloud computing. She is a Professor in the Department of Computer Science and Engineering at IIT Bombay. She is one of the Members of Standing Committee on Technology (SCOT) at NSE Clearing Ltd (NCL).

She is a person of integrity and has relevant skills, experience and expertise, representing Majority Sector in the areas of Information Technology, Business Management, Payment & Settlement Systems, Cyber Security and MSME.

Re-Appointment

Dr Meena Hemchandra (DIN: 05337181) was re-appointed as Non-Executive Independent Director of the Bank for the second term of five (5) years with effect from 26 th May 2025, not liable to retire by rotation, pursuant to the approval of shareholders through postal ballot having remote e-voting process on 17 th May 2025. Further, Reserve Bank of India accorded its approval for the re-appointment of Dr Meena Hemchandra as Part-Time Chairperson of the Bank vide letter dated 9 th May 2025 for a second term of three years effect from 25 th July 2025.

Shri Murali Ramaswami (DIN: 08659944) was re-appointed as Non- Executive Independent Director of the Bank for second term of five (5) years effective from 14 th June 2025, not liable to retire by rotation, pursuant to the approval of shareholders through postal ballot having remote e-voting process on 17 th May 2025.

Shri B Ramesh Babu (DIN: 06900325) was re-appointed as Managing Director & Chief Executive Officer of the Bank for the third term of two (2) years with effect from 29 th July 2026, not liable to retire by rotation. The said re-appointment was approved by the shareholders of the Bank vide resolution dated 17 th April 2026 through postal ballot. Further, Reserve Bank of India accorded its approval for the reappointment of Shri B Ramesh Babu as Managing Director & Chief Executive Officer of the Bank vide letter dated 24 th April 2026.

CA Dr Chinnasamy Ganesan (DIN: 07615862) was re-appointed as Non- Executive Independent Director of the Bank for second term of five years (5) effective from 25 th April 2026, not liable to retire by rotation, pursuant to the approval of shareholders through postal ballot having remote e-voting process on 17 th April 2026.

Opinion of the Board regarding integrity, expertise and experience (including the proficiency) of the Independent Director appointed during the year:

In the opinion of the Board, the Independent Directors appointed during the year possess requisite qualifications, proficiency, expertise, track record, integrity, independence, vast and rich experience in their respective domains. Independent Director who was appointed during the year has undertaken to comply with the requirements relating to the passing of online proficiency self-assessment test for Independent Directors Databank, within the timelines prescribed.

Retirement by rotation

Pursuant to section 152 of Companies Act, 2013, two-thirds of the total number of directors, excluding independent directors, are liable to determination by retirement of directors by rotation. Accordingly, Whole Time Directors/ Executive Directors and Non-Executive Non-Independent Directors are considered for this purpose, out of whom one-third are required to retire by rotation in accordance with the said provisions. As Whole Time Directors/Executive Directors are appointed for fixed tenure with approval of RBI, the Bank has generally proposed the re-appointment of Non-Executive Non-Independent Directors who are liable to retire by rotation. As the Bank currently does not have any Non-Executive Non-Independent Directors on its Board,

Whole Time Directors/Executive Directors are being considered for retirement by rotation.

Accordingly, Shri B Sankar (DIN: 08846754) , Executive Director, retires by rotation at the ensuing 107 th Annual General Meeting (AGM) and being eligible, offers himself for re-appointment in terms of Section 152 of the Companies Act, 2013. He was appointed as Whole Time Director designated as Executive Director of the Bank, for a period of three (3) years with effect from 12 th March 2025 to 11 th March 2028, pursuant to approval of RBI, and his appointment was subsequently approved by shareholders through postal ballot having remote e-voting process on 17 th May 2025. Pursuant to his retirement by rotation, approval of the shareholders is requested for his re-appointment as Director of the Bank, as set out in the Notice of the ensuing 107 th AGM, in compliance with the provisions of section 152 of Companies Act, 2013.

The brief profile and details in terms of Regulation 36 (3) of SEBI LODR and the Secretarial Standard on General Meetings, in respect of the Director seeking appointment/re-appointment has been annexed to the Notice of the ensuing 107 th AGM and in the Corporate Governance Report that forms part of this Annual Report.

Retirement on completion of tenure

Shri J Natarajan (DIN: 02710776) , Executive Director of the Bank demitted office at the close of office hours on 21 st May 2025, consequent to completion of his tenure.

Shri K G Mohan (DIN: 08367265) , Non-Executive Independent Director of the Bank demitted office at the close of office hours on 11 th October 2025, consequent to completion of his tenure.

Shri R Ramkumar (DIN: 00275622) , Non-Executive Non-Independent Director of the Bank demitted office at the close of office hours on 24 th June 2026, consequent to completion of his eight (8) years tenure in terms of Section 10A(2A)(i) of the Banking Regulation Act, 1949.

The changes in Key Managerial Personnel of the Bank during the review period and till the date of this report are briefed below:

Re-Appointment

Shri B Ramesh Babu (DIN: 06900325) , Managing Director & Chief Executive Officer and a Key Managerial Personnel of the Bank, was re-appointed for a third term of two (2) years with effect from 29 th July 2026.

Cessation

Shri J Natarajan (DIN: 02710776) , Executive Director of the Bank and a Key Managerial Personnel demitted office at the close of office hours on 21 st May 2025, consequent to completion of his tenure.

Shri Sudhakar K V S M , Chief Compliance Officer and a Key Managerial Personnel, was relieved from the office on 30 th April 2025, consequent to his resignation.

Apart from the above, there were no changes in the Key Managerial Personnels as on the date of this report.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES FOR APPOINTMENT/ REAPPOINTMENT OF DIRECTORS

Pursuant to provisions of Section 178(3) of the Companies Act, 2013 and relevant guidelines of RBI, the Nomination and Remuneration Committee (NRC) formulated the criteria for determining qualifications, positive attributes and independence of a Director to adhere the various provisions and guidelines as detailed below:

Fit and Proper criteria as per Dr. Ganguly Committee Norms which stipulates age, qualification, experience, track record, integrity, etc., and various circular instructions and guidelines issued by Reserve Bank of India from time to time.

Norms laid down by the Banking Regulation Act, 1949 as amended from time to time which stipulates substantial interest, sectorial representation as per Section 10A (2) (a), restrictions as per Section 16 and 20 of the Banking Regulation Act, 1949, etc.

Disqualification/Conflict of Interest of Directors, and other norms as per the provisions of the Companies Act, 2013 and rules made thereunder from time to time.

Criteria of Independence of a Director as per the provisions of the Companies Act, 2013 and rules made thereunder and other applicable provisions as amended from time to time.

Applicable listing regulations as amended from time to time.

Articles of Association of the Bank.

Any other factors as the NRC may deem fit and in the best interest of the Bank and its stakeholders.

The terms and conditions of appointment of Independent Director are available on the website of the Bank at . Your Banks Nomination and Remuneration Committee (NRC) oversees matters of succession planning of its Directors, Senior Management and also Key Managerial Personnel. The Board of the Bank ensures that proper plans are put in place for

orderly succession of appointment to the Board and to Senior Management of the Bank including KMPs.

Policy on Remuneration of Directors

Your Bank has adopted a comprehensive Compensation Policy in line with the Reserve Bank of India (Commercial Banks - Governance) Directions, 2025, the provisions of the Companies Act, 2013, and the SEBI LODR, as amended from time to time. The Policy covers aspects of remuneration payable to the Board of Directors, Whole-time Directors / Chief Executive Officers

/ Material Risk Takers, Key Managerial Personnel, Control Function Staff, and all other employees. The Policy is available on the Banks website at .

Pursuant to Section 149(7) read with 149(6) of the Companies Act, 2013 and Regulation 25(8) read with Regulation 16(1)

(b) of the SEBI LODR, all the Independent Directors of the Bank have provided the necessary declarations that they have met the criteria of independence laid down thereunder. As required under Schedule IV of the Companies Act, 2013, Board has reviewed the declarations submitted by the Independent Directors and opined that, they have fulfilled all the conditions specified in the Companies Act, 2013 and SEBI LODR, and are independent of the management.

The Independent Directors along with all other Directors are made familiar with their rights, roles and responsibilities in the Bank at the time of appointment and on a recurrent basis.

Pursuant to regulation 46 of SEBI LODR, details of familiarization programmes attended by all Directors including Independent Directors are provided at . Other details on the same are also covered in Corporate Governance Report forming part of this Annual Report.

The details on Corporate Governance standards followed by your Bank and the relevant disclosures as stipulated under SEBI LODR and the Companies Act, 2013 and the rules made thereunder are deliberated in Corporate Governance Report that forms part of this Annual Report. A certificate from M/s S.A.E. & Associates LLP, Company Secretaries, confirming compliance to the conditions of Corporate Governance as stipulated under SEBI LODR is annexed to Corporate Governance Report which

forms part of this Annual Report.

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Pursuant to Section 134(3)(C) of the Companies Act, 2013 with respect to the Directors Responsibility Statement, it is hereby confirmed that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; and

f) The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively.

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Your Bank received the following awards during FY 2025-26:

S. NO	NAME OF THE AWARD	AWARDED BY	CATEGORY
1	The Business Today (BT) - Banking & Economy Summit and Best Banks Awards 2026 (30 th edition)	Business Today	Best Small Indian Bank of the year 2026 - 3 years in a row
2	18 th edition of the BFSI & Fintech Summit 2026	Dun & Bradstreet	Indias Leading Private Bank (Mid)
3	12 th Global SME Excellence Awards 2025-26	Assocham	MSME Bank of the Year-Private - Winner
			Best SME Lending - Runner Up
4	Indian Chamber of Commerce (ICC) Banking awards	Indian Chamber of Commerce (ICC)	Best Bank -Winner-Private Sector Bank (Mid size)
			Best Performance on Asset Quality Winner-Private Sector Bank (Mid size)
5	4 th IBA CISO Summit & Citations 2025	IBA	Cyber Security Team of the year-Winner
			Cyber Security Transformation of the year-Winner
			Cyber Security Incident Response Maturity-Special prize
			Cyber Security Compliance Champion-Special prize
			CISO Elevator Pitch-Special mention for our Cyber Risk Scoring Model
6	21 st Annual Technology conference, Expo & Citations 2024- 25	IBA	Best Digital Financial Inclusion- Runner Up
			Best IT Risk Management - Runner Up
7	17 th SFBCK Banking Excellence and Businessman of the Year Awards, 2024-25	State Forum of Bankers Clubs Kerala (SFBCK)	Best Private Sector Bank National Level (Large Category)
			Best Private Sector Bank Branch in Kerala
8	Asianet News Healthcare Awards 2025	Asianet News	Best CSR Activity on Healthcare

The Board of Directors takes this opportunity to place on record its sincere appreciation to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs (MCA), National Stock Exchange

of India Limited, BSE Limited, Rating Agencies, Statutory Auditors, Secretarial Auditors, the various State Governments and Union Territories, and other regulatory authorities in India for their continued guidance and unwavering support.

The Board also places on record its sincere appreciation to the Banks valued shareholders, esteemed customers, all other stakeholders, and well-wishers for their continued faith, confidence, and patronage, and looks forward to their ongoing support in the years ahead.

Your Board also extends its profound gratitude to the other Auditors, Lawyers, and other financial institutions for their valuable support and acknowledges the dedicated efforts and contribution of the Banks staff towards the Banks overall performance during the year. The Board looks forward to their continued commitment and cooperation in achieving the Banks future goals.

	For and on behalf of the Board of Directors
Dr Meena Hemchandra	B Ramesh Babu
(DIN: 05337181)	(DIN: 06900325)
Non-Executive Independent (Part-time) Chairperson	Managing Director & Chief Executive O_cer
Place: Karur
Date: 07 th July 2026