Punjab & Sind Bank Directors Report.

The Board of Directors has the pleasure of presenting the 12th Annual Report of the Bank together with the Balance Sheet as on 31st March 2022 and the Profit and Loss Account for the year ended 31st March 2022.

MANAGEMENT DISCUSSION AND ANALYSIS

The COVID-19 pandemic that started in 2019 has been the first of its kind the world has witnessed in the 21st century. We all learnt to live with the Covid and faced three waveswith self-belief and courage.

Central Banks and Governments around the world have taken structural and financial reforms to save their economies. Banks especially public sector banks played a major role in carrying forward and implementing the policies announced by the Government and central bank.

In this unfavourable situation, our banks performance was remarkable and achieved a net profitof Rs.1039 crore.

The positive bankresults are possible only with the contribution of each and every one.

GLOBAL OUTLOOK:

At present, economies around the world are facing multiple risks like geopolitical conflicts, supply disruptions, and mounting commodity prices, especially of food and energy, which have fuelled inflationary pressuresaround the World.

Global financial conditions are a bit fragile with the global uncertainties, liquidity tightening, higher inflation, and rising interest rates. Financial stability risks have risen on several fronts, even though so far, no global systemic event affecting financial institutions or markets hasmaterialized.

In many countries, inflation has become a central concern. In some advanced economies, including the United States and some European countries, it has reached its highest level in more than 40 years. Central banks are facing a challenging trade-off between fighting record-high inflation and safeguarding the post-pandemic recovery at a time of heightened uncertainty about prospects for the global economy. Bringing inflation back down to the target and preventing an unmooring of inflation expectations require a delicate act of removing accommodation while preventing a disorderly tightening of financial conditions that could interact with financial vulnerabilities and weigh on growth.

Central banks of major economies around the world have started policy normalisation to lower the inflation rate, but the ongoing geopolitical tension disrupted the global supply chains and has increased input cost pressure. The resurgence of COVID-19 infections in some major economies and the associated lockdowns run the risk of further aggravating the global supply bottlenecks and input costpressures.

With the invasion and rising interest rates in developed economies, capital outflows increased markedly from emerging market and developing economies. Tightening financial conditions, net importers of commodities is putting downward pressure on the currencies of the most exposed countries to the developed economies.

Going forward, rising inflation expectations prompts a more aggressive tightening response from central banks in emerging markets and developing economies.

International Monetary Fund (IMF) in its World Economic Outlook April 2022, projected a slowdown in global growth from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. Inflation is projected on the higher side with rising commodity prices and supply-chain bottlenecks, it is projected at 5.7 % in advanced economies and 8.7 % in emerging market and developing

economies for 2022.

Global growth momentum can be regained with multilateral efforts like maintaining global liquidity, opening economic activities following pandemic protocols, and end of the waras early as possiblewith bilateral talk.

Domestic Outlook:

The Indian economy is not immune to negative externalities. The surge in commodity prices is already posing inflation risks and forcing RBI to policy normalization and leading to a rise in interest rates inthe system.

Domestic growth momentum slowed down a bit in Q3 of FY21-22 with the emergence of the Omicron variant in January 2022 but Growth momentum picked up in February itself. RBI in its Monetary Policy Statement, April 2022 projected real GDP growth of 7.2% in FY2022-23 (revised from 7.8%). IMF, in its World Economic Outlook April 2022 report, has slashed its forecast for Indias gross domestic product growth to 8.2 % from 9% for 2022, saying that higher commodity prices will weigh on private consumption and investment. Even though the growth forecast was reduced, India is still the fastestgrowing major economyin the World.

With the third wave behind us and, with the removal of all restrictions alongside a broadening of vaccination coverage, economic activity is returning to speed. Most sectors of the economy are reaching or have exceeded pre-pandemic levels. Notably, bank credit has gathered pace and the job market is gathering steam. There is acceleration in the travel and hospitality sectors. The construction and real estate sectors havealso registered a pick-up.

Indian economy is expected to expand in FY 2022-23 with rise in rural and urban demand, financial sector resilience, robust export and remittances,and higherGovernmentcapital expenditure.

BANKING SECTOR:

Banking sector successfully overcame the second wave and third wave related risks in 2021-22. This is possible because banks entered the pandemic with relatively strong balance sheets, higher levels and quality of capital and ample liquidity. Timely measures took bygovernmentsand centralbanks to support the economy alsohelped the banks to face thepandemic.

Banks Credit growth and asset quality improved with the growth in key sectors. Credit off-take picked up during 2021-22, with the gradual return of normalcy after the pandemic.

Banks entered the financial year 2022 -23 with risks like geopolitical tensions, input price inflation, the spike in crude oil and a global rate hike cycle which could put some pressure on growth / NIMs in the near term.

During the financial year 2022-23, the banking sector may register double-digit credit and deposit growth with the green shoots in the economy provided geopolitical risk ends.

WORKING RESULTS:

Highlights of Banks financial performance are given below:

• Total business of the Bank increased by 5.25% reached at Rs.172524.10 crore as on 31.03.2022, from Rs. 163919.35 crore as on 31.03.2021.

• CASA deposits increased by 9.51% on Y-o-Yand stood at Rs.34528.42 crore as on 31.03.2022, as compared to Rs. 31530.39 crore as on 31.03.2021.

• Total deposits of the Bank stood at Rs.102137.10croreason 31.03.2022 as compared to Rs. 96108.18 crore as on 31.03.2021. The average costof deposits ofthe bank stood at 4.28%(FY 2021-22) ascomparedto5.06% (FY2020-21) in previous year.

• Banks Advances registered a growth of 3.80% from Rs. 67811.17 crore as on 31.03.2021 to Rs.70387.09 crore as on 31.03.2022. The average yield on Advances stood at 7.20% (FY 2021-22) as compared to 7.78% (FY 2020-21) during the last year.

• Total Priority Sector Advances increased from Rs. 28228 Crore (43.95% of ANBC) as on 31.03.2021 to Rs.31178 crore (50.20% of ANBC) as on31.03.2022, registering a growth of 10.45 %. Bank has also surpassed regulatory lending target of 40%.

• Retail Lending portfolio of the Bank grew to Rs.11737 crore as on 31.03.2022 and registered a growth of 15.29 % over the previousyear(Rs. 10180crore).

• The percentage of Retail credit (Rs.11737 crore) to Gross Advances (Rs.70387 crore) was 16.68 % as on 31.03.2022 compared to 15.01% as on 31.03.2021.

• MSME Credit grew by 13.25% from Rs. 11497 crore as on 31.03.2021 to Rs. 13021 crore as on 31.03.2022. The share of MSME Credit to total Advanceswas 18.5%ason 31.03.2022.

FINANCIAL PARAMETERS:

• Operating profit stood at Rs.1330.09 crore as on 31.03.2022 against Rs. 772.03 crore as on 31.03.2021.

• Net profit stood at Rs. 1039.05 crore as on 31.03.2022 as compared toa Net Loss of Rs. 2732.90 crore as on 31.03.2021.

• Return on Assets(ROA) stood at 0.85%(FY 2021-22) as compared to that at (-2.55)% (FY 2020-21).

• The Net Worth ofthe Bank stood at Rs.5051.90 crore as compared to Rs. 5126.25 crore as on 31.03.2021.

• Capital Adequacy Ratio (Basel III) of the Bank is 18.54 % as on 31.03.2022 against the minimum stipulated requirement of 10.875%.

• Gross NPAs of the Bank is Rs. 8564.82 crore (12.17%) as on 31.03.2022 as compared to Rs. 9334.00 crore (13.76%) as on 31.03.2021

• Net NPA ofthe Bankis Rs.1742.27 crore as on 31.03.2022 as compared to Rs. 2461.95 crore as on 31.03.2021.

• Net NPA percentage improved to2.74% as on 31.03.2022 from 4.04% as on 31.03.2021

• The Board of Directors ofthe Bank has recommended a dividend of Rs.0.31 per equity share (i.e. 3.1%) of face value of Rs.10/- eachto the Shareholdersfortheyear 2021-22, subject totheapprovalof the Shareholdersat the AGM.

The Financial performance of the Bank for the year 2021-22 is summarized below:

(Rs. Crore)
Particulars 2021-22
Net Interest Income 2651.32
Non-Interest Income 959.38
Operating Expenses 2280.61
Operating Profit 1330.09
Provisions / Contingencies 291.04
Net Profit 1039.05
Earnings per share (Rs.) 2.56
Book Value per share (Rs.) 7.54

Key Financial Ratios for the year 2021-22 are as under:

(Percentage - %)
Particulars 2021-22
Yield on Advances 7.20
Yield on Investments 6.69
Cost of Deposits 4.28
Net Interest Margin 2.80
Cost to Income Ratio 63.16

Capital and Reserves:

During the financial year 2021-22 Government of India infused Rs.4600.00 crore towards preferential allotment of Equity shares. Accordingly, the bank has allotted 2725118483 equity shares of Rs.10/- each fully paid up at an issue price of Rs.16.88 (including a premium of Rs.6.88 per equity share) consequently, the Government of Indias holding in the bank has increased to 98.25% as on 31st March 2022.

Date of issue No. of shares Price Amount (Crores) Details
31.03.2022 2725118438 16.88 ( including premium of Rs. 6.88 per equity share) 4600 Preferential issue to the Govt. of India

Capital Adequacy

• As per the Basel III framework, the Banks Capital Adequacy Ratio is 18.54% which is higher than the regulatory requirement of 11.50%

• Details of Capital Adequacy (BASEL III) are:

(Rs. In Crore)

Particulars

BASEL-III

31.03.2021 31.03.2022
CET 1 CRAR 6243 12.05% 6307 12.77%
ATI CRAR 1000 1.93% 1000 2.03%
TIER I Capital 7243 13.98% 7307 14.80%
TIER II Capital 1598 3.12% 1849 3.74%
Total Capital 8841 17.06% 9156 18.54%
Risk Weighted Assets 51790 49381

Business Initiatives:

During the current financial year, Bank has implemented various initiatives to enhance customer convenience and boost its compettve edge. Some of the important among them are:

• Bank has on-boarded its 13 credit schemes on National Portal for Credit Linked Government Schemes, an initiative taken by the Department ofFinancialServices (DFS), forfaster credit decisionsand better monitoring through reports.

• The bank has started a Co-lending arrangement with Non-Banking Financial Institutions for MSME-LAP and Housing Loan (PS).

• Bank has started IVR(Interactive Voice Response) facilitesfor:

i) Cheque status ii) Card Hotlistng iii) MiniStatement up to last 5 transactons

• Bank has implemented "Unified Dispute & Issue Resolution" (UDIR) funct onality for UPI.

• Bank has migratedall the ATMstoEMV for enablingthe acceptance of card plus PIN transactons.

• Bank has implemented SMS Alert services on remote On-Us transactons to provide nearby PSB ATM Machine details to Cardholder.

• Facility to switch on /off and set/modify transaction limits (within the overall Debit card limit set by the bank) for all types of transactons - domestc and internatonal, at PoS / ATMs / online transactons / contactless transactons, etc. is provided through PSBUnICApp/Web toenhance Security of Card Transactons.

• Bank has enabled the acceptance of Rupay Domestic Cards at POS terminals at NETS network in Singapore & ATM, POS and ECOM at RMA network in Bhutan.

• Dispatch of Personalized Debit Cards directlyto the customers address.

• The Bank adopted a Multi-Media Strategy to advertise and build up its image in public. Besides publicity through print, outdoor and electronic media, the Bank has been using social media platforms likeTwitter, Facebook, Instagram, Youtube, and LinkedInto advertise its productsand schemes.

To offer a full range of services to customers Bank has added the following products and services during the year to its existing

bouquet:-

PSB SMART Salary Account for salaried employees oflower-incomebracket i.e. below Rs.25000/-.

• Special Home Loan product for Defence personnel (PSB Apna Ghar-with attractive features including concession in ROI.

PSB Aarogyam scheme for financing various stakeholders engaged in healthcare activities for meeting their working capital requirement and acquisition of fixed assets.

• Separate scheme "PSB E-Vahan" for the financing of Electric Car. The scheme covers the purchase of a new electrical car (e-vehicle) and reimbursement of the cost of a new electrical car (vehicle should not be older than 3 months from the date ofinvoice)

• Special scheme for One Time Settlement of NPA (Doubtful 2, Doubtful 3 & Loss) and TWO Accounts with Book Outstanding up to Rs.5.00Cri.e. PSB RinSamadhanScheme2022.

• New OMNI Solution (common platform for Internet Banking, Mobile Banking, and UPI) "PSB UnIC" and "PSB UnIC Biz" for retail and corporate customers.

Chat-Bot facility for customers. It assists customers in resolving their queries related to the banks various services/information.

Scheme for Financing Solar Power Projects Under PM KUSUM for setting up decentralized ground-mounted grid-connected solar power plants/procuring necessary gadgets for individual plant sizes up to 2 MW (Component A). The scheme also provides collateral-free credit for the portion other than a subsidy to the beneficiaries under PM KUSUM (Components Band C).

Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) for providing finance to eligible projects in the healthcare sectorwith guarantee coverage from NCGTC.

PSB Scheme for Storage Infrastructure" to meet term loan and working capital requirements of the farmers/ eligible organizations in the construction/ running of Scientific Storage Facilities such as Godowns, Dry Warehouse, Cold Storage, Cold Chain, Silos, Market Yards.

Indira Gandhi Urban Credit Card Scheme- 2021 for the State of Rajasthan for providing financial assistance to Street vendors, and people providing essential services in the informal sector such as hairdressers, rickshaw-pullers, potters, carpenters, cobblers, masons, tailors, washermen, painters, tap-electricity repairmen, etc.& unemployed youth in the urban area for their rehabilitation.

AWARDS & ACHIEVEMENTS

Bank has been awarded with

Exemplary Gold Award under "Leadership Capital (4.0)" campaign organised by PFRDA for Atal Pension Yojna (APY) Enrolments.

Runner-up in Best digital FinancialInclusion Initiative categoryaward declared by IBA.

3rd Top Performing Bank in Theme 3 i.e. Collaborating for synergistic outcomes under EASE 4.0 as on 31.12.2021

3rd Position in DSB (Doorstep Banking) Udaan Campaign launched by PSB Alliance Pvt. Ltd. From 01.02.2022 to 02.03.2022

• Highest Rajbhasha Kirti Puraskar (Second) of the Official Language for the best implementation of Official Language Policy 14.09.2021

Third prize in the Rajbhasha Shield Competition from Delhi Town Official Language Implementation Committee for the best implementationof the Official Language Policy oftheUnion.

• Banks Hindi magazine RajbhashaAnkur got the IncentiveAward inthe category of Hindi homemagazine by the DelhiTOLIC.

DIRECTORS RESPONSIBILITYSTATEMENT:

The Directors confirm thatin the preparation of the annual accounts for the year ended March 31,2022:

a) The applicable accounting standards have been followed in the preparation of the annual accounts along with proper explanation relatingtomaterial departures, ifany

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgements and estimates were made to give a true and fair view of the state of affairs of the Bank at theend ofthefinancialyearand oftheprofitand loss ofthe Bank for the year ended March31,2022.

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities,

d) Annual accounts have been prepared on a going concern basis,

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively,

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

HUMAN RESOURCE MANAGEMENT

The Bank is having proactive HR management practices where Employees are considered as Assets. The Bank is having Total of 8735 Employees as on 31.03.2022 out of which 6606 are in Officer Cadre, 1878 are in Clerical cadre and 241 are Sub-staff. Out of total 8735 employees 2621 employees are women Employees.

Promotions: Bank is regularly promoting its employees almost in all the cadres every year to keep on rewarding its top performers and enabling them to assume higher responsibilities. Following promotions have been effected during the year 2021-22:-

Promotions from DGM to GM AGM to DGM CM to AGM SRM to CM MGR to SRM OFF to MGR CLK to OFF
Total 4 15 43 79 148 335 179

Training & Human Resources Development: The Bank endeavored to provide maximum trainings to its employees through various modes (Online, Offline & Hybrid Modes) during the Financial Year 2021-22. With this in view, 282 Training programmes were conducted by using expertise of National Institute of Banking Studies and Corporate Management (NIBSCOM), Noida & Staff Training College (STC), Delhi. Also, Bank had conducted specialized training programmes on Attitude, Behaviour and other various modules in the current FY by using expertise of external institutions.

A total of 8067 staff members have attended the training programmes on different coursemodules from 1st April 2021 to 31st March 2022 through 427 Training Programmes, out of which, 145 Training programmes were conducted by Apex Institutions (like NIBM, Pune, IDRBT Hyderabad, CAB Pune, etc). 756 staff members (including top executives) have attended training programmes/webinars from ApexTraining Institutions.

In FY 2021-22, Two General Managers & 1 DeputyGeneral Manager wereundergoing the Leadership DevelopmentProgrammefrom IIM, Bangalore and BBB. Further, the department has also nominated 9 AGMs & 1 CM in the 10th Advanced Management Programme of IIBF in FY2021-22. Also, Bank had nominated 11 officers (1GM, 2 DGM and 8 AGMs) in OnlineTraining Programme on Applied Financial Risk Managementby IIM-Raipur

The PSB Digital Learning Portal was launched in FY 2020-21 to increase Job knowledge and enhance skills of staff members digitally. This portal is accessible to all the Staff Members (Clerks & Above) on 24*7 basis and they can appear in E-Learning modules through their mobiles/laptop/PC as pertheir convenience. In FY 2021-22 we have conducted 60 E-Learning tests.

The bank has renewed its MoU with Centre of Excellence (CoE), SBI Foundation to empower Persons with Disabilities. In FY 2020-21 CoE has conducted onlinewebinars/workshopsforDivyangjans (staff members).

To review training needs and course curriculum of trainings a Training Review and Advisory Committee (TRAC) is constituted at Head Office Level which is headed by Executive Director (HR). In FY 2021-22 three meetings of TRAC were conducted at Head Office.

Creation of Talent Pool through Job Families: In order to create talent pool in different verticals, bank has identified 11 job families for the staff members wherein they can apply to work, on the basis of their professional/academic qualification, experience and are of interest. In FY 2020-21, options were called from Staff members under Job Family and thereafter applications were scrutinized, screened (by interview) and were imparted trainings inthe respected field, before their postings under specializedJob Family.

Recruitment: Bank has consistently looked to address the challenges of superannuation, business growth and expansion. To meet this challenge, Bank has recruited following staff members during financial year2020-21:

POST Allotted (in FY 2021-22) Joined (in FY 2021-22)
SUB-STAFF 00 11*
SWO- CWE-IX (Reserved List) 72 30
SWO- CWE-X 218 139+10*
PO- CWE-X 228 159
AFO 4 4
IT Manager (Scale-II) 16 11
IT Manager (Scale-III) 1 1
Risk Manager (Scale-III) 2 0
Risk Manager (Scale-IV) 2 1
TOTAL 543 366

*CompassionateAppointment.

Industrial Relations: Bank is maintaining cordial & harmonious relations with all the workmen/ officers unions/ associations operating inthe Bank to develop the spirit of co-operation and understanding with the management. IR Cell is conducting Quarterly IR Meetings with both Workmen & Officerunions.

Employment to Reserved Category Employees: The Bank implementsall guidelines stipulated by the Govt. of Indiain respect of Reservation Policyforreservation of posts in recruitments/promotions, whereverapplicable.

The staff strength of SC, ST, OBC & EWS employees stood at 2872, 607, 2382 & 55 respectively on 31.03.2022. The staff strength under various reserved categories is as under-

CATEGORY SC ST OBC EWS EX-SM PWD
OFFICERS 6606 509 1653 25 72 398
CLERKS 1878 57 494 30 180 90
SUB-STAFF 241 12 23 0 8 10
TOTAL 8725 578 2170 55 260 498

Corona Pandemic Initiatives: Bank has provided various relaxations/incentives to staff members who were coming and attending the officeduring the lockdown phase. Some of them were:

• All lactating mothers having infants up to 10 months, pregnant ladies and Divyangjan Employee were sanctioned onetime special leave to insulatethem from any infection or outbreak.

• Zonal Offices/Administrative Offices were advised to ensure 40%-50% of their staff strength to work from home (during lockdown period).

• Introduction of staggered working hours during Covid-19 outbreak.

• An initiative is taken to pay an amount of Rs. 20.00 lakhs to the legal heirs of the employee, as financial assistance in case of death (while in service) of an employee due to infection of Corona Virus (COVID-19).

SportsCell:

Our Bank is having two Hockey teams (Senior Mens Hockey Team, affiliated with Hockey India and one Junior Hockey Academy) and they are performing well in all the major events of their respective categories. In FY 2020-21, our Banks Hockey Team has done well in all the major Tournaments (All India 38th Surjit Hockey Tournament, 57th Nehru Hockey Tournament, National Championship, Obaidullah Khan Hockey Tournament, etc.). However, this year due to COVID-19 restrictions, Bank could not organize "PSB AAO KHELEIN,"an annual sports event ofthe Bank.

SECRETARIAL AUDIT REPORT

[In Pursuance of Regulation 24A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulation, 2015]

For The Financial Year Ended 31st March 2022

The Members, Punjab & Sind Bank 21, Rajendra Place New Delhi 110 008

We have conducted the Secretarial Audit of the compliances of applicable statutory provisions and the adherence to good corporate practices by Punjab & Sind Bank (hereinafter called "The Bank"). Secretarial Audit was conducted in a manner that provided us a reasonable basisforevaluating the corporate conduct/statutory compliancesand expressing our opinionthereon.

Based on our verification of the Banks books, papers, minute books, statutory registers, forms and returns filed and other records maintained by the Bankand also the information provided by the Bank, its officers, agentsand authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Bank has, during the audit period covering the financial year ended on 31st March, 2022, complied with the statutory provisions listed hereunder and also that the Bank has proper Board Processes and Compliance Mechanism in place to the extent, inthe mannerand subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Bank for the financialyearended on 31st March 2022 according to the provisions of:

(I) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made thereunder;

(ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iii) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(iv) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act,

1992 (SEBI Act):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

(d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;

(e) Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021;

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;

(i) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(v) The following Act, Scheme, Regulations as applicable and other laws as are specifically to the Bank viz. -

(a) The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980

(b) The Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980

(c) Punjab & Sind Bank (Shares & Meetings) Regulations, 2008

Our report is to be read along with the noting as mentioned here-in-under:

1. Maintenance of secretarial records is the responsibility of the management of the Bank. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records, we believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of the financial records and books of accounts of the Bank.

4. Where ever required, we have obtained the management representation about the Compliances of the laws, rules and regulations and happening of events etc.

5. The Compliance of the provisions of the corporate and other applicable laws, rules and regulations, standards is the responsibility of the Management; Our examination was limited to the verification of the procedures on test basis.

6. Wehavenotverifiedthe compliance under various State lawsspecificallyapplicabletothe Bank.

7. The Secretarial Audit Report is neither an assurance as to the future viability of the Bank nor the efficacy or effectiveness with which the management has conducted the affairs ofthe Bank.

During the period under review, the Bank has complied with the provisions ofthe Act, Rules, Regulations, Guidelines, Standards, etc. mentionedabove we report:

1. The Board of Directors of the Bank is duly constituted with Executive Directors, Non-Executive Directors and Independent Directors as perSection 9 of The Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980, and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) subject to the following observations:

a) After the retirement of Dr. Charan Singh (Non-Executive Chairman), Central Government has not appointed any director to fill the vacancy. Accordingly, Bankis notin a position to comply with the provisions of Regulation 17 ofSEBI (LODR).

b) The Bankdoesnothavesufficient numberofIndependentDirectorsasper Regulation 17 ofSEBI (LODR).

c) In viewof point no. 1, the constitution of committee ofDirectors where Independent Directorshould be the Chairman is not as per Regulation 17 ofSEBI (LODR).

As explained by the Bank, the appointment of Directors shall be made by Government of India, and the Bank frequently communicated with Central Government to appoint adequate number of Independent Directors to comply with the provisionsofSEBI (LODR).

The changes in the composition ofthe Board of Directors that took place during the period under review were carried out in compliance with the provisions of theAct.

2. Adequate notices are given to all directors for the Board Meetings and accordingly, agenda and detailed notes on agenda were sent to all directors, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

3. Majoritydecisions are carried through while the dissenting members views, if any, are captured and recorded as part of the minutes.

4. There are adequate systems and processes in the Bank commensurate with the size and operations of the Bank to monitor and ensure compliance with applicable laws, Rules, Regulations and Guidelines.

5. Duringtheyearunderreview:

a) The Bank has passed the Special resolution by way of e-voting to create, offer, issue and allot equity shares up to an amount of Rs. 4600 crore on preferential basis toGovernment of India.

b) The Bank has allotted 2,72,51,18,483 Equity shares of Rs. 10/-each at issue price of Rs. 16.88 per share on preferential basis tothe Presidentof India (Govt. ofIndia) on 31st March 2022.

We further report that during the audit period the Bank has generally complied with the requirements of various Act, Rules and Regulations, guidelines and standards as are applicable to the Bank.

Suchitta Koley
Company Secretary
Place: New Delhi FCS 1647; CP No.: 714
Date: 16th May 2022 UDIN:F001647D000329018