Union Bank of India Management Discussions

1. Global Economy

1.1 Global economic activity remained resilient in 2024 although below historical average, with high frequency indicators hinting at slowdown in growth momentum in 2025. Escalating trade tensions led by a slew of tariff impositions impart uncertainty to the growth outlook. Headline inflation though decelerating, remained above the target in many economies owing to the lackluster and uneven pace of disinflation. The divergence in monetary policy pathways across countries has continued. 1.2 In H2:2024, the global economy remained steady amidst accommodative financial conditions and a rebound in international trade. High frequency indicators for Q1:2025, however, suggest a slowdown in global economic growth as the output index of global composite purchasing managers index (PMI) was the weakest since the last quarter of 2023. Amongst the advanced economies (AEs), the US economy grew by 2.4% in Q4:2024 (lower than the Q3 outturn of 3.1%), supported by increases in consumer and government spending and fall in imports, partly offset by a decline in investment. Amongst EMEs, Chinas real GDP growth accelerated to 5.4% year-on-year (y-o-y) in Q4:2024, marking the strongest quarterly expansion in 2024. The ASEAN economies demonstrated resilient growth in Q4:2024 driven by higher new orders and increased output activity. Overall, southeast Asian economies are expected to have grown at a healthy pace in 2024, supported by stronger manufacturing exports and public capital spending in larger economies, with growth expected to remain stable in 2025.

1.3 Financial markets have been on edge due to shifting expectations of monetary policy and fears of tariff wars. Geopolitical uncertainties, ratcheting up of trade tensions and withdrawal of portfolio investors caused retreat in equities from the highs in January 2025. The sell off further intensified due to fears of trade war. Sovereign bond yields in advanced economies (AEs) hardened in Q4:2024 but have softened thereafter due to growth slowdown concerns. Sovereign bond yields across most major AEs hardened since Q4:2024 in response to expectations of a firmer future path of interest rates amidst sticky inflation and rising economic policy uncertainty. In the US, bond yields hardened in Q4:2024 with the 10-year treasury yield rising by 79 bps due to a revision in the dot plot projection to 50 bps rate cut by the end of 2025 as against 100 bps earlier. In Q1:2025, however, yields softened, driven by fears of growth slowdown, market corrections and shifting perceptions of policy rates and fiscal deficit.

1.4 Gold prices surged in October 2024 by 4.9% m-o-m driven by heightened uncertainty regarding the US elections amid rising prospects of Trumps win in US elections and escalating geopolitical tensions. The rally was more than offset by decline in prices in November and December as strengthening US dollar and treasury yields increased the opportunity cost of holding gold, causing gold prices to fall by 1.5% q-o-q in Q4:2024. Thereafter, prices rose sharply in Q1:2025, gaining 19.5% and surpassing the USD 3100 per ounce mark for the first time, over increased safe haven demand and higher gold purchases by central banks.

1.5 Global commodity prices softened somewhat in Q4:2024 but increased sharply in Q1:2025, largely on account of metals and agricultural prices. In Q4:2024, global commodity prices, as measured by the Bloomberg commodity price index, remained volatile with a downward bias, softening by 1.6% due to moderation in metal prices. The correction was, however, more than offset in Q1:2025, when prices rose sharply by 7.7% as energy and metal prices increased.

1.6 Crude oil prices rose in the first fortnight of October, surpassing $80 per barrel due to heightened tensions in the Middle East and Hurricane Milton in the US. Prices softened and remained subdued thereafter in Q4:2024, hovering in the range of $74-76 per barrel, driven by a mix of geopolitical and economic factors. While receding tensions, less than expected Chinas stimulus measures and ceasefire discussion in the Middle East continued to pull down prices, anticipation of sanctions and escalating geopolitical & other trade tensions led to occasional price surges.since March Prices rose sharply from late December 2024 till mid-January 2025, reflectingsanctions on Russias energy sector, threats of tariff imposition, and cold weather conditions. It has softened since then following a moderation in geopolitical risk premium and improved supply response from Organization of the Petroleum Exporting Countries plus (OPEC+). Of late, energy and metal prices have softened after the tariff imposition owing to uncertain global economic outlook.

1.7 Consumer price inflationremained above the target in many countries as the progress of disinflation lost momentum. While core goods inflation has eased, services inflation remains above pre-pandemic levels, especially in advanced economies. 1.8 Global growth was projected at 3.1% in 2025 and 3.0% in 2026 by the Organization for Economic Cooperation and Development (OECD) in its Economic Outlook Interim Report released in March 2025. The global disinflation continues, with inflation expected to decline to 4.3% in 2025 and to 3.6% in 2026, according to World Economic Outlook in its April 2025 update by International Monetary Fund (IMF). Global trade growth (goods and services combined) is projected to decelerate from 3.8% in 2024 to 1.7% in 2025 before rebounding to 2.5% in 2026. The recent reciprocal tariff announcements by the US administration and associated policy uncertainty, however, poses headwinds to global growth and inflation.

1.9 The US Fed initiated easing cycle in September 2024, lowering the target range for the federal funds rate by 50 bps to 4.75-5.00 per cent. In its two subsequent meetings, i.e., in November and December, it reduced the federal funds rate by 25 bps each lowering it to 4.25-4.50 per cent. In 2025, however, the policy rate was left unchanged in both the January and March meetings. In its March 2025 meeting, the Fed noted that uncertainty around the economic outlook had increased on Trumps trade tariff hikes. As per the Summary of Economic Projections released in the March meeting, the Federal Open Market Committee (FOMC) expected the target range for the federal funds rates to be at 3.75-4.00 per cent by end 2025, indicating a further 50 bps rate cut in 2025, unchanged from its December 2024 projection. Meanwhile, the European Central Bank (ECB) continued to ease its policy rate, lowering the deposit facility rate (DFR) by 25 bps each in all its four meetings held during October 2024 - March 2025, cumulatively reducing the benchmark rate by 150 bps since it began its easing cycle in June 2024.

2. Domestic Economy

2.1 As per the provisional estimates released by National Statistics Office (NSO) of National Income, Indian economy grew by 6.5% in FY 2024-25 compared to growth of 9.2% in FY 2023-24. The GDP at constant (2011-12) prices in FY 2024-25 is estimated to attain a level of Rs 187.97 lakh crore, as against Rs 176.51 lakh crore in FY 2023-24. From supply side, agriculture, industry and services sector grew by 4.4%, 5.9%, and 7.2% respectively in FY 2024-25 compared to 2.7%, 10.8% and 9.0% respectively in same period previous year. While agriculture growth improved compared to previous year, industry and services sector growth was seen on a lower trajectory.

2.2 The IMF has revised downwards Indias real GDP growth forecast for 2025 by 30 basis points to 6.2% in its April outlook from January due to increased trade tensions and global uncertainty. The Reserve Bank of India (RBI) in its June monetary policy, projected real GDP growth for FY 2025-26 at 6.5% with Q1 at 6.5%; Q2 at 6.7%; Q3 at 6.6%; and Q4 also at 6.3%. Sustained demand from rural areas, an anticipated revival in urban consumption, expected recovery of fixed capital formation supported by increased government capital expenditure and healthy balance sheets of corporates and banks are expected to support growth. Merchandise exports would be weighed down by the evolving global economic landscape which appears to be uncertain at the current juncture, while services exports are expected to sustain the resilience. On the supply side, while agricultural prospects appear bright, industrial activity continues to recover, and services sector is expected to be resilient. However, headwinds from global trade disruptions continue to pose downward risks to the outlook.

3. Price scenario:

3.1 Headline CPI inflation had moderated from an average of 5.4% in 2023-24 to 4.6% in 2024-25, as core inflation cooled while food inflation eased with a lag in late H2:2024-25 on correction in vegetable prices. Headline CPI inflation rose to 4.7% in H2:2024-25, from an average of 4.6% in H1:2024-25. Headline inflation surged from 3.6% in July to 6.2% by October 2024, breaching the upper tolerance threshold, propelled by a jump in food inflation owing to a spike in prices of vegetables, and edible oils. In the ensuing months, as food inflation eased on correction in vegetable prices, headline inflation softened successively to 3.3% in March 2025. Core (CPI excluding food and fuel) inflation in 2024-25 remained muted, and saw broad-based decline, covering both core goods and services categories. It moved in a range of 3.1-3.9 per cent during April 2024 to February 2025, before firming up to 4.1% in March 2025. The pick-up in core inflation during H2:2024-25 was largely contributed by the personal care and effects sub-group reflecting the spike in gold and silver prices apart from base effects. The cooling in headline inflation in FY 2024-25 was primarily led by core inflation as it cooled to 3.5% as against 4.3% in FY 2023-24, even as food inflation stayed relatively flat at 6.7% (7.0% in FY 2023-24). 3.2 Headline inflation remained sticky at around 5% during March to June 2024, fell sharply thereafter buoyed by favourable base effects. Core inflation softened from 3.2% to 3.1% over the same period, the lowest reading recorded in the current CPI (2012=100) series so far. This sustained sequential softening observed for more than a year (since June 2023) was disrupted in July-September 2024 with core inflation averaging 3.4%, primarily reflectingthe impact of mobile tariff revisions.

3.3 During H2:2024-25, headline inflation exhibited significant volatility due However, pre-emptive monetary policy actions have helped to limit their second-round effects on underlying inflation trends and sustain the disinflation process. Supply side measures have also played a role in mitigating the impact of sectoral price shocks on general inflation trends. The significant softening in CPI headline inflation in Q4:2024-25 driven by the sharp correction in food inflation, is likely to sustain on robust agricultural production. However, the impact of the hike in trade tariffs by the US and volatility in commodity prices on persistent geopolitical tensions on domestic inflation outlook remains uncertain. 3.4 Headline inflation is expected to moderate and enter the RBIs target range. Inflation trajectory for FY 2025-26 would be shaped by both domestic and global factors. The RBI projects CPI inflation at 3.7% for FY 2025-26, with Q1 at 2.9%, Q2 at 3.4%, Q3 at 3.9% and Q4 at 4.4%, with risks evenly balanced. The upside risks emanate from continuing geopolitical conflicts and resultant supply disruptions; volatility of commodity prices; and adverse weather events. The downside risks could emanate from an early resolution of geopolitical conflicts; adherence to fiscal consolidation and debt path; further correction in global crude and commodity prices in case of slowdown in global demand; and improvement in supply conditions.

4. Stock market performance

4.1 Indian equity markets maintained an upward trajectory in H1:2024-25, with the BSE Sensex surpassing the historic 80,000 mark in July 2024. In May, the market capitalisation of Indian listed companies surpassed US$ 5 trillion in the wake of positive market sentiments on improved domestic and global cues. Domestic equities continued to rally in September amid a US Fed rate cut of 50 bps and reached new highs, with the weight of Indian equities surpassing that of China in a key global MSCI index. Overall, the BSE Sensex gained 14.5% during H1:2024-25 to close at 84,300 at end-September 2024. The broader market indices continued to outperform the benchmark Sensex, with the BSE

MidCap and the BSE SmallCap index increasing by 25.5% and 32.4%, respectively, during H1:2024-25.

Foreign investors remained overall net buyers in equities during Rs.1:2024-25. Support from domestic institutional investors (DIIs), on the other hand, remained robust. Overall, DIIs and FPIs were net buyers to the tune of Rs 2.26 lakh crore and Rs 0.82 lakh crore, respectively, in Rs.1.

4.2 Domestic equity market experienced a persistent decline in Rs.2:2024-25 amidst uncertainty over global tariff wars (post Trumps win in US elections in to food November) and geopolitical tensions that triggered price shocks. risk-off sentiment and steep FPI outflows. Net FPI flows in the domestic equity markets turned negative in H2:2024-25. In flowsfrom domestic contrast, institutional investors (DIIs) continued to remain robust. Overall, FPIs were net sellers to the tune of Rs 2.2 lakh crore while DIIs were net buyers to the tune of Rs 3.6 lakh crore in H2. The benchmark Bombay Stock Exchange (BSE) Sensex declined by 8.2% during H2:2024-25 to close at 77,415 at end-March 2025. All the BSE sectoral indices registered losses during the second half. The broader market indices underperformed the benchmark with the BSE

MidCap and BSE SmallCap index shedding 15.8% and 18.4%, respectively.

5. Yield Movement:

5.1 During Rs.1:2024-25, G-sec yields softened. At the beginning of the financial year, yields hardened, tracking movements in US yields and the increase in crude oil prices. Thereafter, they eased with the softening of US yields and easing crude oil prices and the buyback of government paper. Yields continued to moderate in August and September on lower inflation prints and the start of the policy easing cycle in the US.

5.2 During Rs.2:2024-25, the 10-year G-sec yield moved in the range of 6.62 to 6.86%. Yields rose following the Federal Open Markets Committees (FOMC) indication of a slower pace of rate cuts, and thereafter remained steady. Yields came down in the latter half of January due to lower-than-expected US CPI inflation print, fall in crude oil prices and the inclusion of Indian government bonds in the emerging market local currency index (EMLCI). Yields traded in a narrow range during February and remained steady during end-February on account of release of Q3 GDP data which showed growth recovery. During March, the yields softened on account of lower-than-expected CPI print, liquidity measures by RBI, lower than expected Apr-Sep24 central government borrowing calendar, and expectations of another rate cut. 5.3 Yields on T-bills moderated during H1:2024-25 as liquidity continued to remain in surplus. Yields on T-bills hardened during Q3 amidst increasing volatility in the global financial markets, tight liquidity conditions and reduced expectations of rate cuts. During January and February, T-bill rates softened across tenors, tracking the decline in domestic yields, and buoyed by the expectations of policy easing. T-bill rates softened tracking global and domestic developments in March. of US$ 2.4 billion in

6. External Sector

6.1 During 2024-25, merchandise exports saw a modest growth of 0.1%, while merchandise imports recorded a rise of 6.2%. During Rs.2:2024-25, Indias merchandise exports contracted by 0.9%, while imports rose by 3.9%. As a result, the merchandise trade deficit widened to US$ 137.5 billion during Rs.2:2024-25 from US$ 121.9 billion in the corresponding period of the previous year. Services exports grew by 13.6% during 2024-25, a notable increase from 4.8% recorded in the same period of last year, reflect ingro bust global demand for Indian services. In Rs.2:2024-25, services exports surged by 16.0%, compared to a modest 4.7% growth in the previous year. Services imports rebounded from contraction and recorded a 11.4% growth during 2024-25, with a significant increase back of buoyant domestic demand.

6.2 The current account deficit (CAD) turned into a surplus of 1.3% in Q4:2024-25 from a deficit of 1.1% of GDP in the previous quarter and a surplus of 0.5% of GDP in Q4:2023-24. The CAD widened to 0.6% of GDP in FY

2024-25 from a deficitof 0.7% of GDP in FY 2023-24, mainly due to higher merchandise trade deficit. Balance of Payment (BoP) in FY 2024-25 switched to a deficit of $5 bn from a surplus of $63.8bn. This is despite narrowing of CAD in absolute terms in FY 2024-25 to $23.4 bn from $26.1 bn in FY 2023-24.

6.3 The current account deficit (CAD) widened marginally to 1.1% of GDP in Q1:2024-25 from a deficit of 1.0% in Q1:2023-24 and a surplus of 0.5% in Q4:2023-24, mainly due to higher merchandise trade deficit. Further, CAD widened to 1.8% of GDP in Q2:2024-25. Before moderating to 1.1% in Q3:2024-25 and switching to surplus in Q4 6.4 Net foreign direct investment (FDI)flowsto India declined to US$ 1.0 billion during 2024-25 from US$ 10.1 billion in 2023-24, mainly due to a surge in repatriations and increased outward FDI. Major sources of FDI inflows included Singapore, Mauritius, the USA, UAE, Netherlands and Japan, which together accounted for 80% of total FDI. Foreign portfolio investment (FPI) moderated in Q1:2024-25 mainly due to net outflows in equities, though debt inflows have remained robust after the announcement of inclusion of Indian government bonds in the JPMorgans benchmark emerging market index. FPI inflows, however, registered a turnaround in Q2:2024-25 with continued surge in debt inflows and a revival in equity flows. FPI inflows of US$ 20.1 billion were recorded in H1:2024-25 as against net inflows of US$ 20.3 billion a year ago. Foreign portfolio investment (FPI) to India recorded a net outflow of US$ 18.3 billion in Rs.2:2024-25, as portfolio investors turned net sellers in equities mainly due to heightened global trade & geopolitical uncertainties. Overall, FPI recorded a net -25, a sharp decline from inflow the net inflow of US$ 44.6 billion in the same period of the previous year. The uncertain global economic outlook, rising US bond yields, and moderation in corporate earnings seem to have dampened FPI sentiment. 6.5 In the currency market, the Indian rupee (INR) traded in a range-bound manner with a depreciating bias during the first and end-September 2024, the INR depreciated by 0.5% against the US dollar, although it outperformed several EME peer currencies. During the latter part of 2024-25, the Indian rupee faced downside pressure primarily because of US dollar appreciation. Moreover, persistent FPI outflows, increasing global economic uncertainty, and widening trade deficit added to the downward of 12.9% during Rs.2 on pressure on the rupee. However, the rupee staged a recovery in March 2025, supported by FPI inflows and improved risk sentiments. The rupee also experienced heightened volatility, particularly in Q4:2024-25, mirroring the fluctuations in the global foreign exchange market. Several global events contributed to foreign exchange market volatility during Rs.2:2024-25, including the US elections, tariff announcements and slightly hawkish signals from US Fed meetings. Between end-March 2024 and end-March 2025, the rupee depreciated by 2.6% against the US dollar, with major depreciation occurring in H2:2024-25. Despite this, the rupees depreciation during 2024-25 was relatively modest compared to some peer EMEs.

6.6 As of March 28, 2025, Indias foreign exchange reserves stood at USD 665.4 billion, equivalent to eleven months of annualized merchandise imports in 2024-25 and 92.7% of the outstanding external debt as of December 2024.

7. Liquidity conditions:

7.1 The Reserve Bank of India remained nimble and flexible in liquidity management and conducted two-way operations during H1:2024-25 in view of the shifting liquidity dynamics, to ensure orderly evolution of financial markets. System liquidity transited from deficit in H2:2023-24 to surplus in H1:2024-25. Within H1, system liquidity was in deficit in Q1 with seasonal expansion in currency in circulation (CiC), buildup of government cash balances, and the increase in excess cash reserve ratio (CRR) balances held by banks. As a result, average daily net injection under the LAF (including MSF) stood at Rs. 0.5 lakh crore in Q1:2024-25. The liquidity dynamics changed in Q2 with the return of currency to the banking system, the Reserve Banks forex purchases and the pickup in government spending after the elections. The Reserve Bank modulated excess liquidity through open market operations (OMOs) in Q2. Consequently, average daily net absorption under the LAF stood at

Rs. 1.3 lakh crore in Q2.

7.2 During Rs.2:2024-25, the monetary policy committee (MPC) changed the stance from withdrawal of accommodation to neutral in October 2024 given the confidence that inflation was progressively aligning to the 4% target, while need to support growth emerged. To ease liquidity conditions, the cash reserve ratio (CRR) of banks was reduced by 50 bps to 4.0% of net demand and time liabilities (NDTL) in December 2024, restoring the CRR to its pre-pandemic level while releasing primary liquidity to the tune of Rs 1.16 lakh crore to the banking system. To assure markets and instill confidence about the availability of adequate liquidity to meet the productive requirements of the economy, the Reserve Bank undertook a slew of liquidity augmenting measures in Q4:2024-25. It introduced daily variable rate repo (VRR) auctions on all working days with reversal taking place on the next working day effective January 16, 2025. In addition, the Reserve Bank injected durable liquidity through term repo auctions, open market purchase operations and USD/INR Buy/Sell swaps. The Reserve Bank increased the aggregate limit available to Standalone Primary Dealers (SPDs) under the Standing Liquidity Facility (SLF) from Rs. 10,000 crore to Rs. 15,000 crore, starting from April 2, 2025, and announced a monthly calendar of open market purchase operations for April 2025. Furthermore, the MPC reduced the policy repo rate by 25 bps to 6.25% in February 2025. 7.3 System liquidity, as measured by net balances under the liquidity adjustment facility (LAF), transited from surplus in H1:2024-25 to deficit in H2:2024-25. Changes in the Government of India (GoI) cash balances, expansion in currency in circulation (CiC) and volatile capital flows emerged as the major drivers of liquidity during H2. The leakage of banking system liquidity due to the increase in currency demand and the Reserve Banks forex market operations was partly offset by the drawdown of GoI cash balances, reduction in CRR and the Reserve Banks liquidity augmenting measures during H2 including OMOs, FX swaps apart from GoI bond buybacks.

8. RBIs policy decisions:

8.1 After retaining the policy repo rate at 6.50% since February 2023, the Monetary Policy Committee (MPC) embarked on monetary easing in H2:2024-25. It changed the stance from withdrawal of accommodation to neutral in October 2024, and cut the policy repo rate by 25 basis points (bps) to 6.25% in its February 2025 meeting. In December 2024, the Reserve Bank reduced the cash reserve ratio (CRR) maintained by banks by 50 bps.

8.2 During Rs.1:2024-25, as liquidity conditions transitioned to surplus, overnight money market rates softened and generally remained within the Liquidity Adjustment Facility (LAF) corridor. At the end of Rs.1 (September 30), however, the weighted average call rate (WACR) increased by 15 bps on account of banks reducing their exposures in the uncollateralised market which incur higher Capital to Risk (Weighted) Assets Ratio (CRAR) requirements in the ensuing quarter. On an average basis, the WACR remained 5 basis points (bps) above the policy repo rate during H1, as compared with 21 bps in H2:2023-24.

8.3 During H2:2024-25, the WACR, which remained within the policy corridor and hovered close to the policy repo rate during October-November, hardened, moving close to and occasionally breaching the ceiling of the LAF corridor (MSF rate) during the second half of December and early January. The WACR moderated since mid-January with the introduction of daily VRR, the policy repo rate cut in February and the RBIs liquidity augmenting measures. The average spread of WACR over the policy repo rate declined to 7 bps in March 2025 from a high of 15 bps in December 2024.

9. Banking environment:

9.1 Indias banking sector remained sound and resilient, underpinned by ongoing improvement in asset quality, enhanced provisioning for bad loans, sustained capital adequacy and rise in profitability. 9.2 Bank credit y-o-y growth moderated during 2024-25. Public sector banks (PSBs) continued to be the major driver of incremental credit extended by all scheduled commercial banks (SCBs) in 2024-25, while the share for private sector banks (PVBs) declined. Non-food bank credit of SCBs increased at a decelerated pace of 12.0% y-o-y as on March 21, 2025, compared to 16.3% a year ago. Sector-wise, bank credit growth to industry recovered yet stayed muted at 8.0% y-o-y. While agricultural credit growth remained in double-digits at 10.4% in March 2025, it moderated from 20.0% in March 2024. Despite some deceleration in growth of credit to services sector and personal loans segments at 13.4% and 14.0%, respectively, in March 2025, they remained the prime drivers of non-food credit growth during H2:2024-25. Incremental credit in personal loans segments with unchanged risk weights improved progressively, whereas it moderated for the loan categories with increased risk weights. Housing loans grew at a robust pace despite some moderation, while vehicle loans growth slowed down.

9.3 As on 21st March 2025, the y-o-y growth under aggregate deposits of SCBs stood at 10.3% and gross advances y-o-y growth was 11.0%. The wedge between deposit and credit growth of SCBs has widened by 77 bps. The CD ratio of SCBs was at 80.8%, with incremental CD ratio being 86.3%. The combination of sustained credit demand and persistent gap between credit and deposit growth prompted banks (especially PSBs) to increase their term deposit rates to bridge the funding gap. However, deposit growth remained below the credit growth in FY 2024-25.

9.4 Asset quality of SCBs improved during 2024-25, with the overall gross non-performing assets (NPA) ratio declining to 2.3% in March 2025 from 3.0% a year ago. Asset quality improved across all the major sectors. 9.5 During H1:2024-25, banks lending and deposit rates increased, reflecting ongoing monetary policy transmission, with the latter adjusting faster in the wake of persistent credit demand and the widening gap between credit and deposit growth. The share of EBLR-linked loans in total outstanding floating rate loans increased to 57.5% at end-June 2024 from 56.6% at end-March 2024. Concomitantly, the share of MCLR-linked loans declined to 38.6% from 39.2% over the same period. The increasing share of EBLR-linked loans with shorter reset periods aided transmission to WALRs of SCBs in the current tightening cycle. 9.6 During H2, the share of the external benchmark-based lending rate (EBLR)-linked loans in total outstanding floating rate loans of SCBs increased to 60.6% at end-December 2024 from 56.6% at end-March 2024. Consequently, the share of MCLR-linked loans declined to 35.9%. With faster adjustments in lending rates, the EBLR system has quickened the pace of monetary policy transmission. The persistence of loans linked to MCLR and other legacy rates acts as an impediment to overall monetary policy transmission.

10. Resources Mobilization

The Deposit Mobilisation Department in the bank

plays a crucial role in ensuring the financial health and

operational success of the bank. Heres an overview of its

key roles and responsibilities:

10.1 Attracting and Retaining Deposits:

Formulates strategies to attract various types of term deposits

Designs and promotes deposit schemes tailored

to different customer segments (individuals,

businesses, etc.).

10.2 Customer Relationship Management:

Builds strong relationships with depositors to

encourage loyalty and long-term deposits.

10.3 Market Research and Analysis:

Analyses deposit trends, competitor offerings,

and customer behaviour to refine deposit

products and campaigns.

10.4 Coordinating with Branches:

Provides guidance and targets to branches for

deposit mobilization to maintain sustainable

growth.

10.5 Product Development and Innovation:

Develops new deposit products and updates

existing ones to meet changing market needs.

Ensures products in comply with regulatory

requirements

10.6 Monitoring and Reporting:

Tracks deposit growth and generate regular

reports to bring further improvement.

10.7 Compliance and Risk Management:

Ensures all deposit mobilization activities

adhered to banking Regulations.

Initiatives taken during the year:

Launched Union Green deposit: The Bank has launched a new term deposit product named as Union Green Deposit under ESG framework in the Month of April 2024. Bank has mobilized a business of Rs. 11.99 Cr during FY 2024-25.

Launched Union RD Millionaire: To boost the growth of Retail Term Deposit with an attractive interest rate. The Bank has launched a new scheme RD Millionaire targeting the HNI (High Net worth Individuals) customers of the bank. In this Recurring Deposit product, maturity value of the deposit is minimum of Rs. 10.00 Lakhs. Bank has mobilized a business of Rs. 383.92 Cr during the FY 2024-25.

Launched Union Sumvriddhi: To boost the growth of

Retail Term deposit Bank has launched a new scheme Union Sumvriddhi, a Term deposit for a period of 333 days as bank has given higher rates in the said tenure. Bank has mobilized a business of Rs. 39,448 Cr within which NTB (New to Bank) customers 3,140 Cr during the FY 2024-25 for 8 months.

Launched Union Sumpurna: To boost the growth of Retail Term deposit Bank has also launched a new scheme Union Sumpurna, a Term deposit for a period of 456 days as bank has given higher rates in the said tenure. Bank has mobilized a business of Rs. 53,176 Cr within which NTB Rs. 2,043 Cr during the FY

2024-25 within 5 months.

Enabled MIS in VYOM: In order to ease the customers using VYOM (Mobile Phone App), Bank has taken initiative for enabling MIS in VYOM. Total Business mobilized in MIS through VYOM is Rs. 92.88 Cr during the FY 2024-25.

Term Deposit Performance Y o Y
			(Amount Rs. in Crores)
Parameters	Mar - 21	Mar-22	Mar-23	Mar-24	Mar-25
Retail Term	3,93,473	4,47,285	4,41,287	4,58,949	4,98,255
Deposit
Bulk deposit	1,92,562	2,07,716	2,70,837	3,30,178	3,47,248
Term Deposit	5,86,035	6,55,001	7,12,124	7,89,127	8,45,503
Total	9,21,633	10,32,102	11,17,716	11,99,199	12,71,745
Deposit

*As per RBI Directive, bank has changed amount for Retail Term Deposit from existing <2.00 Crores to <3.00 Crores from dated 15.06.2024.

	Term Deposit Growth Y o Y
			(Amount Rs. in Crores)
Parameters	FY 20-21	FY 21-22	FY 22-23	FY 23- 24	FY 24-25
	Absolute	Absolute	Absolute	Absolute	Absolute
Retail Term	33,835	50,279	-5,997	17,662	39,306
Deposit
Bulk deposit	-16,185	15,154	63,120	59,341	17,070
Term Deposit	17,650	68,966	57,123	77,003	56,376
Total	56,650	1,10,469	85,614	81,483	72,546
Deposit

 

Geographical Distribution of Rtd Y o Y
		(Amount Rs. in Crores)
Parameters	FY 21-22	FY 22-23	FY 23- 24	FY 24-25
Branch Category	Mar2022	Mar2023	Mar2024	Mar2025
Rural	37516	40667	44940	51486
Semi Urban	65038	69509	74976	82970
Urban	116448	113040	118771	130067
Metropolitan	228282	218071	220263	233733
Bank Total	447285	441287	458949	498255

Way Forward:

Recurring Deposit Drive

Targeting Total 1st Instalment Collection of Rs.1,500 Cr during Apr 25 FY25-26 - Rs.18,000 Cr (Rs. 1500 Cr per month for 12

Months)

Union Wellness Product

Targeting - Rs. 8000 Cr in FY 2025-26 i.e. Rs. 2000 Cr per quarter STP Journey for FD/RD Accounts Opening for NTB

Customers

Targeting 10,000 No. of A/cs with Funding of Rs. 1000 Cr in FY 25-26

11. Credit Management

11.1Overall Credit:

The Banks total advance was Rs. 9,82,894 as of 31.03.2025, the corporate & others advance stood at Rs. 4,51,215 Crore. 12 Large Corporate Branches (LCB) and 38 Mid Corporate Branches (MCBs) across the country are catering to the needs of corporate clientele. Your Bank has made judicious disbursements to investment-grade projects of the large corporate, thus participating in the growth opportunities in the Indian economy.

11.2Mid Corporate:

MCV have registered growth of 8.25 % on YOY basis in Mid Corporate Vertical Controlled Accounts Total 193 New Business Proposals amounting to Rs. 22211.00 Cr has been approved during FY 2024-25, out of which final sanction has been accorded in 82 accounts amounting Rs. 9369 Cr.

MCV have accorded enhancement in 179 accounts amounting to Rs. 8424 Cr. during the FY 2024-25. Non-Interest Income of MCV registered a growth of 84.47 % on YOY basis, by New sanctions / enhancement / utilisation of Non-Fund base limits(OffBalance sheet exposure).

11.3MSME:

Financial Capital

	Business Growth:
		(Rs.	in crore)
Particulars	March.24	March.25	YOY
			Growth
			(%)
Total MSME Advance	1,21,269	1,36,422	12.50%

Performance under identified MSME Schemes: Bank has formulated specific schemes for targeted MSME segment. Detailed below are the performance of the bank under the identified MSME Schemes during the year.

Name of the Scheme	Sanctioned	Sanctioned
	A/c	Amt.
	(Number)	(Rs. In Crore)
Union MSME Suvidha	4267	3361
Union Nari Shakti	20820	2577
Union Equipment Finance	1127	744
Union Ayushman Plus	483	334
Union Contractor	436	604
Union Textile	882	613
Union MSE Support	512	579

MSME Loan Points: During the financial year our 135 MSME processing centers have sanctioned/appraised credit proposals of Rs. 36,293 Crore out of which Rs. 10,311 Crore was within their own delegation.

Branch Manager Delegation Power Campaign: To achieve sustainable business under MSME, Vertical has launched the drive for usage of branch manager delegation for MSME loans throughout FY24-25. The drive received excellent response from the field with total 3,60,334 loan accounts sanctioned accounts amounting to Rs. 13,597 Crore.

Outreach Camps: Executives from the Central Office have regularly visited their assigned regions to drive the growth under the MSME business. This has resulted in increased monitoring of their regions with improved MSME business numbers.

Cluster Specific Schemes:Bank has 20 approved cluster specific schemes across Pan India. During the financial year the total sanctions under these schemes wasRs. 1,441 Crore.

Union MSME First Branches: For catering MSME Client Base and timely address their credit requirements, Bank has 114 UMFBs across the country with total MSME portfolio of Rs. 12,230 Crore. During the FY 24-25, 2025 sanction amounting to Rs. 6275 Crore were accorded through these UMFBs.

Manufactured Capital

Launch of Nari Shakti Branches: Bank has launched Nari Shakti branches at five locations across the country. These branches were inaugurated by Honble Minister of Finance. Key services offered through these branches are as under

Loan and deposit products suitable for women

entrepreneurs.

Advisory services.

Workshops for Startups.

Skill Development Programs.

Mentorship & Networking

Total business under the Nari Shakti Branches is Rs. 276 Cr (Advances: Rs. 190 Cr & Deposit Rs. 86 Cr) 16 MSME First Branches were opened during the year to cater the financial requirements of the MSME

Customers.

Every Friday of the week is celebrated as the MSME day for conducting the outreach camps at the branch level with involvement of the Regional Offices. To Increase sustainable business volume, following campaigns were conducted from the Vertical for growth in MSME loan book.

Name of the Campaign	A/cs	Sanction
		Amount
Empower MSME Campaign	2443	11,759
Quantum Leap MSME	849	4,290
Campaign
Total	3292	16,049

Sanctions under Credit Guarantee Schemes: Union

Bank of India is at forefront in lending under Credit

Guarantee Schemes for encouraging collateral free lending. Details of sanctions during FY 24-25 are as under.

Scheme	A/cs	Amount
		(Rs. In Crore)
CGTMSE	3,02,552	17,481
CGFMU (Including Agri Allied)	3,88,215	31,613
Total	6,90,767	49,094

Intellectual Capital

Digital Transformations: MSME Customers can now apply loans digitally for their business requirements. In this front, Bank has digital journeys through which loans up to Rs. 1.00 Cr can be sanctioned digitally. Performance of the Bank during FY under each digital product is as below:

Digital journey	Accounts	Sanctioned Amount
STP Shishu Mudra	39,624	189
STP Kishore & Tarun Mudra	65,426	2,740
Nari Shakti STP	8,087	438
MSME Superfast STP	905	266
Union Digital Ease	1,546	70
Working Capital	49	4
Enhancement
Total	1,15,637	3,707

Other Digital Initiatives undertaken at Bank

Digi Renewal of the MSME accounts up to Rs. 25.00 Lacs: During FY 24-25, 12.32 lac MSME accounts were digitally reviewed which forms 98% of the total account under the slab.

Upper ceiling of sanction through digital channel is increased to Rs. 1.00 Cr from Rs. 0.25 Cr.

Human Capital

Learning and Development: For comprehensive development of credit officers posted at MSME

Loan Points (MLP) including the MLP Heads, training was provided within the existing training structure for improving the knowledge level for better implementation at their job role.

Social and relationship Capital

PMMY: To promote entrepreneurship and to enable the micro credit to the aspiring youth Bank has been at forefront in implementing the Pradhan Mantri Mudra Yojna by sanctioning 7,10,680 applications with total sanction of

Rs. 18,649 Crore during the FY 2024-25.

PMEGP: Vertical is playing an instrumental role for implementation of PMEGP Scheme across all the regions with regular monitoring at all levels. During FY 2024-25 bank has enabled 7,072 Individuals for embarking the entrepreneurship journey with total sanctions of Rs. 1010 Crore. PM Vishwakarma: To support the artisans and to preserve their trade, bank has assisted 19,761 artisans with Rs. 173 Crores during FY 2024-25. Standup India: To promote the entrepreneurship among SC/ST/Women, bank has sanctioned 1300 applications with cumulative sanction of

Rs. 249 Crore understand up India Scheme.

Union Solar (New Product): To encourage the businesses for usage of greener energy and contribute towards climate control, 462 units was assisted with sanction amount of Rs. 423.00 Cr.

12. Retail:

Retail lending is one of the thrust areas of lending in the bank and constitutes approx. 23% of the Banks total advances portfolio and within Retail lending Home & Education loans are focused product of the Bank. Bank has demonstrated steady growth under retail segment with a focus on expanding services each strata of society. The Bank provides several variants of Home Loans, Vehicle Loan, Education & Personal loans to cater the needs of different sections of borrowers. In FY.2024-25, the total Retail Loan Advances (excluding PWO) reached 216777 crores, marking an 22.14 % year-over-year (YOY) growth.

			(Rs. in crore)
Retail Loan	FY.2024	FY.2025	Growth	%
Growth				Growth
Home Loan	86079	94825	8746	10.16%
Vehicle Loans	20340	22462	2122	10.43%
Education	14068	15912	1845	13.12%
Loans
Mortgage	15043	16152	1109	7.37%
Loans
Personal	11450	11225	-226	-1.97%
Loans
Others	30508	56202	25693	84.22%
Total Retail	177488	216777	39289	22.14%
Advances
(excluding
PWO)

Personal and Mortgage Loans:

Bank offers personal loans & Mortgage loans with competitive interest rates for salaried and non-salaried class. Personal loans cater the various financial needs such as medical emergencies, education, and travel. Special personal loan is available for pensioners to meet personal expenses including medical treatment, travel, or any unforeseen expenses. The mortgage loan helps the customer to ease their personal & business needs. The committed growth in these segments, reflects Banks role in supporting its customers diverse financial requirements.

Special Initiatives and Scheme

Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0)

In the Union Budget 2024, Honble Finance Minister announced that under PMAY-U 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed in the next 5 years. Accordingly, Pradhan Mantri Awas Yojana - Urban 2.0 (PMAY-U 2.0) has been launched to provide assistance to 1 crore eligible urban families, thus ensuring that eligible citizens of urban India lead a better quality of life.

Pradhan Mantri Awas Yojana -Urban 2.0 (PMAY-U

2.0) ‘Housing for All Mission for urban areas will be implemented for 5 years from 01.09.2024 to provide Central Assistance to all eligible beneficiaries/households/implementing agencies through States/Union Territories (UTs)/Primary Lending Institutions (PLIs) to construct, purchase a house at an affordable cost. New specific housing loan scheme Pradhan Mantri Awas Yojana Urban 2.0 (PMAY-U 2.0) is formulated by bank. Bank is actively doing the publicity campaigns for successful implementation of the scheme and provide financial assistance to the eligible beneficiaries.

HOME LOAN SCHEME for Economically Weaker Section (EWS), Low Income Group (LIG) and Middle-Income Group (MIG): Urban Area

As per the Govt. Initiative of ‘Housing to All, Department of Financial Services, Ministry of Finance, Govt. of India has taken an initiative to devise a mechanism or scheme to extend formal credit for Housing Loans to low-Income Individuals either have minimal or no documented income or income proofs but have digital footprints of banking and other economic activities.

Bank is committed to align the products as per the Government Initiatives, a new specific housing loan scheme for Individuals with regular source of income (not having documentary proof) was formulated to cater the needs of the eligible beneficiaries.

Union Green Home:

In recent years, there is growing awareness of the need to protect the environment and adopt sustainable practices in various aspects of life. One such area where sustainability is gaining significant traction is the "housing sector". People are becoming more conscious of the impact their homes have on the environment and actively seeking ways to reduce their carbon footprints. This shift in mindset has led to an increasing demand for green home loans in India. As part of sustainable finance initiative and to cater the growing demand for green home loans, bank has formulated specific home loans scheme "Union Green Home". Bank is providing the home loan under this segment with lower rate of interest and other incentives.

Union Education Pradhan Mantri Vidyalaxmi (PM- Vidyalaxmi) Scheme:

As per Govt. of India initiatives a special education loan scheme named "PM Vidyalaxmi" is formulated. Under the scheme collateral-free loan is provided to students to have secured admission in top 860 Quality Higher Education Institutions (QHEI) through merit channel. This education loan will be available to students who secured admission on their own merit to 860 QHEIs in India. Students of all family income groups shall be eligible to avail the benefit under the scheme.

Digitalisation of Retail Lending:

Indian Banking Environment is evolving at a rapid pace due to massive use of Digital Platform by various sections of Society. Indias Digital Lending growth is primarily driven by Change in Demographics

(young population below 35 years and aspirational customers), introduction of Account aggregators and peer to peer lending platform, technological advancements as well as Government Initiatives. Bank has invested significantly in digitising its retail services to enhance customer experience and operational efficiency. Digital customer to apply for loans online, reducing the need for paper-based process and expediting approvals. Bank initiated digital lending process for Education Loan Scheme of Premier Institutes & Roof Top Solar Scheme. As per Banks long-term goals several other digital lending initiatives is under development and it will be available to the customer for hassle free loan approval.

12.1Agriculture: Agriculture lending has always been the priority area for your bank. Agriculture advances constituted 18.16% of Gross advances of the bank as on 31.03.2025.

Bank achieved an 18.92% to ANBC, against statutory target of 18% to Adjusted Net Bank Credit (ANBC) under Agriculture Priority as on 31st March 2025. Credit to Agriculture stood at Rs. 1,78,479 Cr as on 31.03.2025.

Credit to small and marginal farmers stood at

Rs. 74,261 Cr, which constitutes 8.68 % to ANBC against the benchmark of 10% of ANBC as of 31st March 2025. Bank sold Rs. 50000 Cr under PSLC-Small & Marginal Farmer. Bank has issued 3.38 lakh fresh Kisan Credit Cards amounting to Rs. 7079 Cr during FY:2024-25.

12.2 Priority Sector Advances:

Bank remains committed towards extending credit facility to the needy segments of the society. Banks priority sector advance stood at Rs. 3,79,092 Cr as on

March 31, 2025, with 44.31% to ANBC against the statutory target of 40% of ANBC including the PSLC sales and the investments in RIDF/SIDBI/MUDRA/ NHB.

Table 5: Priority Sector Advances (Quarter ended
	31.03.2025) POST AUDIT
					( Rs.in crore)
Particulars*	31.03.25	31.03.24	Y-o-Y (%)	% to	Benchmark
				ANBC
Priority	3,79,092	3,27,728	16%	44.31	40%
Sector
Credit
Agriculture	1,61,864	1,57,248	3%	18.92	18%
Priority
Sector
Small &	74,261	1,05,042	-29% #	8.68	10%
Marginal
Farmers
Micro	76,344	72,136	6%	8.92	7.50%
Enterprises

(*Post PSLC sale/ purchase & Including RIDF) (# Post lending platforms allow PSLC sales of 50000 Cr. in SMF)

Specific Lending for Social Upliftment

Your Bank has continued to keep its focus on social development and equal opportunities for all segments of the society. Accordingly, the Bank extended credit facilities to various weak and unserved sections of the society specifically women, minority community and self-help group.

Women Beneficiaries: With a view to promote entrepreneurs among the women and to make them self-reliant, bank encourages credit to women entrepreneurs. During FY 2024-25, Total outstanding loans to women beneficiaries has increased from Rs. 1,29,304 crore as of 31st March 2024 to Rs. 1,39,406 Crore in March 2025, with a growth of 7.8%.

Minority Communities: Bank is extending finance to the minority communities viz. Muslims, Christians, Sikhs, Buddhists, Zoroastrians, and Jains in line with Government of India directives on welfare of minority communities. As on March 31,2025 the outstanding credit to minority stood at Rs. 44,562 crore.

Weaker Section: Bank has been actively participating in financing for weaker sections of society. Finances to weaker section including net sale of PSLC-SF/MF stood at Rs. 79,473 Cr as on 31.03.2025 with 9.29% of ANBC against the benchmark of 12 % to ANBC.

Rural Self Employment Training Institute (RSETI): With the aim of mitigating the employment problem among the rural youth, the Bank has established 32 RSETIs out of which 25 RSETIs in the in districts where the bank has "Lead Bank Responsibility". as of March 31, 2025. Total number of candidates trained in RSETIs are 3,70890, out of which 2,76,475 candidates have been settled with a settlement ratio of 74%.

Regional Rural Banks (RRBs): Bank sponsors Chaitanya

Godavari Grameen Bank (CGGB), Guntur, Andhra Pradesh state. It has a network of 276 CBS Branches, spread over 8 districts of Andhra Pradesh. Business of CGGB has increased to Rs. 25272.67 Cr with a growth of 17.85% during FY 2024-25. Total Deposits stood at

Rs. 12113.92Cr and Advances at Rs. 13159.28 Cr with Net profit ofRs. 302.25Cr. The Gross NPA is 0.55% and Net NPA is 0% as on 31.03.2025.

Pradhan Mantri Fasal Bima Yojana (PMFBY): Bank is implementing PMFBY for the benefit of farmers who faced climatic adversities very often and suffer a lot. All farmers including sharecropper and tenant farmers growing the notified crops in the notified areas covered under PMFBY.

Area Specific Schemes: The bank has formulated 28 Area Specific Schemes, based on the available potential for the benefit of the farmers in the respective areas to augment lending under agriculture.

Atmanirbhar Bharat Schemes/Emerging Renewable Sectors:

Bank has started capitalizing on huge investment taking place in Agri Infra Structure, Animal Husbandry and Food Processing through various Atmanirbhar Bharat Schemes like Agri Infrastructure Fund, Animal Husbandry Infrastructure Development Fund and Pradhan Mantri Formalization of Micro Food Processing Enterprises.

Bank is also leveraging other schemes under renewable energy like Compressed bio-gas schemes, solar power plant, solarization of pump sets under PM KUSUM

Scheme to help in achieving the sustainable development goals and improving the Green Financing.

Digitization in Agri:

Digital KCC-Fresh

Digital Kisan Credit Card (KCC STP) for fresh sanction

up to Rs. 2.00 lakh rolled out in the following states.

a. Karnataka on 28.03.2023

b. Madhya Pradesh on 19.09.2022.

c. Uttar Pradesh state (pilot basis) on 18.07.2023

d. Odisha state on 22.08.2024

e. Tamil Nadu state on 11.12.2024.

KCC STP for fresh sanction up to Rs. 2.00 lakh will be scaled up gradually to Pan India (In all remaining states where land records are digitized). Bank has rolled out Kisan Credit Card (KCC) Auto Renewal STP (Straight Through Processing) up to

Rs. 1.60 lakhs in the following states. a. Karnataka on 29.11.2022 b. Madhya Pradesh on 30.11.2022

KCC-STP journey through Jan Samarth Portal:

The digital KCC STP with Jansamarth portal for fresh sanction up to Rs. 1.60 lakh made live on 27.09.2024 in Karnataka state (all district), Maharashtra state (Beed dist.), UP state (Farukabad & Varanasi dist.).

Digital Kisan Tatkal:

To augment digital lending business and instant credit for farming community to meet the emergency requirements for Farm activities, Bank has introduced "Digital Union Kisan Tatkal Loan" Scheme through STP (end to end) journey on 24.12.2024 throughout country.

Digital KCC-Renewal and Enhancements

In order to strengthen digital footprints and utilize internal land records repository available in the CBS, bank has developed simplified digital Kisan Credit Cards (KCC) renewal journey up to Rs. 10 lakh made live Pan India on 22.08.2024.

12.3Financial Inclusion:

Pradhan Mantri Jan-Dhan Yojana (PMJDY) Accounts:

Financial Inclusion Initiatives Pradhan Mantri Jan-Dhan Yojana (PMJDY) Accounts Union Bank of India plays a crucial role in the Pradhan Mantri Jan-Dhan Yojana (PMJDY) initiative, which enhances financial inclusion by providing banking services to unbanked populations. The Bank has opened millions of PMJDY accounts, helping individuals access essential financial services. As of March 31, 2025, Union Bank had opened 3.21 crore PMJDY accounts with a balance of Rs. 13,266.06 crores, compared to 2.95 crore accounts with Rs. 10,917.81 crores the previous year.

Our commitment to financial inclusion is evident with over 0.99 lakh street vendors financed through the PMSVANidhi scheme. Thus, the bank is transforming lives and promoting economic development in underserved communities.

PMJDY Accounts	March 2024	March 2025
(No. in Crores)
Total PMJDY Accounts	2.95	3.21
Balances in PMJDY	10,918	13,266
Accounts (Rs. in Crs)

Bank Correspondent Infrastructure:

Union Bank has developed a robust bank correspondent infrastructure to support financial inclusion efforts, particularly in rural and underserved areas. The Bank employs over 24,347 business correspondents who act as intermediaries, providing banking services to remote communities. These correspondents facilitate various banking activities, including account opening, cash deposits, withdrawals, and loan applications, extending the Banks reach and ensuring service accessibility. Enrolments under Social Security Schemes for FY

2024-25

Sl. No.	Scheme	Number of accounts enrolled
1	Pradhan Mantri Jeevan Jyoti Bima	15,81,492
	Yojana (PMJJBY)
2	Pradhan Mantri Suraksha Bima	78,19,103
	Yojana (PMSBY)
3	(Atal Pension Yojana (APY):	7,72,910

13. International Banking

Overseas business of your Bank stood at Rs. 74,918 Crores as March 31, 2025, compared to Rs. 53,583 Crore as on March 31, 2024. Your Bank has two overseas branches in DIFC (Dubai) and Sydney (Australia) and operates in London, United Kingdom, through its wholly owned subsidiary, Union Bank of India (UK) Ltd, and in Kuala Lumpur (Malaysia) through its Joint Venture India International Bank (Malaysia) Berhad, which is a Joint Venture with Bank of Baroda and Indian Overseas Bank. The Gross Advance portfolio of the foreign branches stood at Rs. 36,919 Cr as on 31st March 2025, compared to Rs. 31,252 Cr as on 31st March 2024 and Net Profit of the foreign branches stood atRs. 190 Cr for FY 2024-25, compared to Rs. 109 Cr for FY 2023-24.

13.1 Trade Finance

Your Bank offers a bouquet of Trade -Finance products and services to exporters and importers through an extensive, well equipped branch network that operates in India and abroad. There are 119 Authorized Dealing branches spread across the length & breadth of the country, Centralized Trade Finance Back offices and Centralized SWIFT Back Office, for orderly growth of the Trade Finance portfolio, formulate policies and innovative new products as per the market demands and changing regulatory norms to suit the customer needs.

Your bank improves synergies and trade flow between Domestic Offices and Foreign Offices/ Correspondent Banks and the trading community by forming a strong link between them.

13.2 Global Payments & Services

International Exchange Vostro Branch-Our International Exchange Vostro Branch (IEVB) facilitates Inward Remittances from Overseas locations to India. Your Bank is maintaining 7 Accounts of Foreign Banks under Vostro mechanism, 1 account of Exchange House under Rupee Drawing Arrangement & 2 accounts of foreign banks under Special Rupee Vostro mechanism.

Correspondent Banking Relations – To facilitate international trade & transactions, your Bank is maintaining RMA relationships in 93 countries with 794 banks and Nostro accounts with 34 Banks, in 15 different currencies

13.3 "Trade Finance Set Up"

In the direction of digitalizing the Forex transactions, your bank has digital platform- Trade Nxt". For processing of these transactions Centralized Forex back offices, at Mumbai & Mangalore were operationalized.

Trade Finance Solution – Trade Nxt

Trade Nxt is a Unique Digital Trade Services Platform for our customers to transact Foreign exchange transactions, efficiently & as per their platform supports all type of trade transactions including for Exports, Imports, Guarantees and Remittances.

Key Features:

Convenience - Avail service from your home or

office, no need to visit branches.24x7 Availability

- Trade related transaction can be initiated

round the clock.

Customization- Personalized dashboards,

customized templates.

Paperless Banking via Digitization - Dedicated

portal for managing all trade transactions,

Auto mailer intimations of advices and SWIFT

messages.

Substantial improvement in TAT due

to Digitization and Centralization

Relationship Manager - Improved customer

service through dedicated Relationship

Managers.

Compliance - Complying with Regulatory norms

& Procedures along with International Best

Practices.

Over time, the forex back offices have garnered a significant portion of with customers migrating to the ‘Trade Nxt digital platform, thereby fortifying the forex back office operations

In line with commitment to continual improvement and innovation, your bank has implemented numerous system enhancements and updates within the SWIFT system.

These enhancements are aimed at optimizing operational processes, enhancing security measures, and providing our customers with a superior banking experience

Centralized SWIFT Back Office (CSBO)

SWIFT is an integrated web enabled messaging software that runs centrally and is accessed by the interface channels and branches, facilitating the electronic exchange of financial and non financial messages.

Centralized SWIFT Back office has been set up at Mumbai for handling cross border transactions over the SWIFT network and for ensuring smooth & fully secured transmission of messages.

13.4 Exporters/ Importers meet

Your bank facilitates the growth of Export Credit by actively engaging with branches, trade bodies & other stakeholders. Exporters / Importers meets were conducted across India to increase awareness of the banking products & services offered by your Bank.

13.5 Growth in Market Share in terms of Export Credit

Your banks Export Credit portfolio has shown a significant growth, Crore as on Mar 2024 to Rs. 23684.00 Crore as on Mar 2025, reflecting a growth . by 34 21% Consequently, the Banks market share in Export Credit amongst SCBs has improved from 8.12% (as on Mar 2024) to 10.98% (as on Mar 2025), demonstrating its positioning in the segment.

13.6 Awards / Recognitions i) FIEO has conferred the Bank with "Export Excellence Gold Award" again for 2 consecutive years 2020-2021 & 2021-2022 for our contribution to promote Export growth in country. ii) Your Bank has received Straight Through Processing Excellence Award from CITI Bank and Elite Quality Recognition Award from J.P. Morgan for processing of cross border remittances.

13.7 New initiatives- Processing of Foreign Inward finance Remittances & intimation of Receipt of Foreign transactions, Inward Remittances to beneficiaries through SMS i) Efficient processing of inward remittances is vital for maintaining public trust, supporting economic activities and reinforcing the Banks reputation as a reliable facilitator of international transactions. In this direction, a significant bank to auto credit inward remittances upto USD

5,000, for both resident as well as non-resident individual customers, thereby ensuring seamless and timely credit to beneficiaries. ii) Your Bank has taken initiative to inform customers about the receipt of foreign inward remittances through SMS. This initiative ensures that customers are notified about the receipt of their Foreign Inward Remittances promptly, with SMS alerts. This approach enhances customer awareness and convenience.

14. Treasury

14.1Treasury Operations: l To act as prudent liquidity manager in line with Banks corporate goal. Treasury aims at generating optimum profit while managing the credit, market and liquidity risks as per policy guideline. Better cash management by different short-term money market instruments and forex market. Maintaining a optimum SLR & Non-SLR investment book with appropriate M-duration which will help us to enhance our profitability. l Conserve the Banks capital by reducing high capital-intensive instruments and increase the NIM and ROCE by leveraging the less capital-intensive instruments.

14.2Treasury Strategy:

Create a large investment book during an appropriate from Rs. / conducive17647.00interest rate period and maintain M-duration as per approved policy. This will be a source of Treasury profit.

Explore all available arbitrage opportunities in the financial market, such as forex Vs money market, dated securities Vs interest rate futures (IRF), dated securities Vs overnight index swap (OIS), long term treasury liabilities Vs structured derivatives etc. Strengthening manpower through various in-house and external training like ACI dealing certification, mastering the trading game etc. for improving overall efficiency at every stage. l To strengthen the Treasury sales team for effective utilization in onboarding new customers and provide seamless experience to old and new customers of the Bank. We are also expanding the sale team for mobilizing PD business.

14.3 Summary of performance during 2024 – 25:

Treasury performance target v/s achievement on major parameters during the FY 2024 25 are as under:

		(Rs. in Cr.)
Particulars	Target for	Actual for FY
	2024-25	2024-25
Interest Income	28,900.00	28,689.95
Profit on Sale of	2,150.00	3,285.93
Investment
Exchange Profit (forex)	900.00	907.12
Total Treasury Income	31,950.00	32,883.00

14.4 New Initiatives during the Year:

Debt syndication: Treasury Branch advises the corporates/NBFCs on their Bond issuance and also undertaking Debt Syndication activity by participating in the Bonds / Debenture of Public Sector Undertakings / Financial Institutions / NBFCs / Corporates.

During the FY 2024-25, Bank has earned a total arranger fee of Rs. 5.01 Crore. As per Prime Database (The primary Market Monitor) for the period from 01st April 2024 to 31st March 2025, Bank has been ranked at 13th Position with 31.50% share of total issuances. Banks Ranking has improved from 16th position with 12.14% share of the total issuance, as per Prime Database, during the previous year ended 31st March 2024.

14.5 New Initiatives planned in FY 2025 – 26:

Up gradation of Dealing Room trading systems:

Process of Vendor identification for upgradation of dealing room system is completed and terms & condition with the vendors also finalized. Entire process for upgradation of dealing room system will be complete by end of Second Quarter of FY

2025-26. This will result in smooth functioning of the dealing room with advanced systems to improve the efficiency of Treasury.

Set up of Bond FRA / Future Desk:

Bank has planned to set up a dedicated structured derivative desk which will help customers to hedge their risks more efficiently This has also been helping credit vertical to reduce the cost of borrowing of customers by structured loan products with the help of structured derivatives.

Increasing existing customer business share and on boarding new customers:

Treasury relationship group will drive FX business from existing as well as acquisition of new customers.

White label screen to customer can increase FX volume; Trade Finance Solution (Finastra) will provide more FX business due to flexibility documents handling

15. Asset Quality

15.1 Summary of Performance for FY 2024-25:

NPA Level reduced from Rs. 43098 crores as of March 2024 to Rs. 35,350 Crore as of March-2025. Our cash recovery & upgradation and details of other recovery and reduction figures for financial year 2024-25 is as under:

	(Rs. in crore)
Particulars	FY 2024-25
GNPA as of 31.03.2024	43,098
GNPA as of 31.03.2025	35,350
Cash Recovery	4,926
Dummy Ledger Recovery	2,497
Rec. in written off a/cs	4,311
Gross Cash Recovery	11,735
Upgradation	3,263
Gross cash recovery + Upgradation	14,995
% Gross NPAs	3.60

 

15.2 Recovery Strategies initiated during FY 2024-25

Two SAMV, CO (Annex) have been opened at

Bangalore & Delhi headed by General Manager

for enhanced monitoring and expeditious

disposal

Special Scheme SAM-AARAMBH has been

launched with target of reduction of 4.00 lakh

accounts and reduction of RL by Rs. 4000 Crore.

Efforts are being made to ensure wide publicity

for E-Auction by circulating QR code with link to

the properties under auction.

Mega OTS camps are being held on 1st and 3rd

Saturdays of every month

Rationalization of allocation of SARFAESI Cases

to authorized officers for expediting possession

action and auction of SARFAESI eligible

properties.

and on a real timebasis. Utilizing services of Business Correspondents

holding IIBF certificate for

recovery in small value NPAs (Balance < RS. 10

lakhs

Expeditious examination of Willful Default cases.

Focused monitoring of NCLT cases and providing

quicker solution/Suggestions to field on CIRP

matters.

Holding additional Lok Adalat in consultation

with DLSA and DRT.

Regular Review of ZO/ Specialized Branches

(ARB & SAMB) to monitor performance Vs target.

16. Relationship Banking

Your Bank earned income of Rs. 578.91 crore through the Wealth Management Vertical, during the year 2024-2025

Wealth Management Income Data as of 31.03.2025
				(Rs.in crore)
Business	Actuals	Targets	Actuals	%
Parameter	FY	FY	FY	Growth
	2023-24	2024-25	2024-25	Y-o-Y
Life Insurance	278.40	527.00	451.47	62.17%
Non-Life	29.76	59.00	37.16	24.88%
Insurance
Health	54.49	109.00	53.10	-2.55%
Insurance
Mutual Fund	20.80	39.00	29.74	42.95%
Merchant	5.06	-	7.45	47.23%
Banking
Department
Total Income	388.50	734.00	578.91	49.01%

16.1 INITIATIVES DURING THE YEAR l Wealth Management model (WRM-HNI model) was initiated in Aug24. Wealth Relationship Managers were mapped to HNI customers of the Bank to cater to their investment needs. Process for posting more WRMs and hiring lateral WRMs is under process. l Bundling of products initiated with Core Business Verticals. l IRDAI licence to act as a Corporate Agent was renewed upto 31-03-2028 l HNI meets conducted at Mangaluru, Guwahati, Mumbai, Lucknow, Varanasi and Delhi l SP Certified staff increased from 17150 to 18131.

Trainings provided to staff for better product knowledge and updated regulator guidelines lImproved Branch Activation Higher focus on Large and Very Large Branches. Bima-ASBA process implementation initiated. Development is under process. Monthly In-house magazine ‘Investment Insights was launched for Insurance and Mutual Fund products and related market developments.

l Insurance products from SUD Life, India First Life Insurance Company, Care Health, Manipal Cigna, Bajaj Allianz, Chola MS and United India Ins Co. were onboarded on VYOM app for purchase through digital channels.

16.2 NEW PRODUCTS LAUNCHED IN 2024-25:

New Products / Developments in the Bank network:

1. Life Insurance NFOs: Life Insurance NFOs were launched by SUD Life and India First Life.

2. Union Suraksha: Manipal Cignas Personal accidental Insurance plan was launched with benefits like EMI Covers, Child Education covers etc. at affordable rates.

3. Union Cancer Suraksha: A benefit product launched by Manipal Cigna providing lumpsum benefit on diagnosis of Cancer for the customers of the Bank & its staff.

4. Mutual Fund NFOs: Four NFOs (Union Short Duration Fund, Union Active Momentum Fund, Union Multi Asset Allocation Fund and Union Gold ETF Fund of Funds) were launched.

5. 3-in-1 account (Savings, Demat and trading account) made available through the Banks mobile application VYOM

16.3DIGITAL INITIATIVES:

16.3.1 M/s. Fintech Blue Solutions Pvt Ltd has developed digital platform on mobile app and branch portal. Out of a total of 50 products to be onboarded, 38 Insurance products from SUD

Life, India First Life Insurance Company, Care Health, Manipal Cigna, Bajaj Allianz, Chola MS and United India Ins Co. were made live as on 31.03.2025.

16.3.2 Developments under process for services like renewing the policies, raising Insurance claims, Commission reconciliation etc. through the digital platforms 16.3.3 Branch portal (Union Invest) with schemes from 19 top AMCs available for Mutual Fund . investments.

17. Government Business

Your bank has contributed in the Social Security Schemes and Mobilised 6,20,146 Small Savings Accounts in FY 24-25.

We have been awarded with fresh tie up with Kendriya Vidyalaya Sangathan for fee collection of 14 lakh students across India. Signed MoU with KVS on 20.08.2024. Enabled Custom Duty payment facility through ICEGATE portal for our corporate customers.

Development of Customer Payment Portal for DMRC was completed that went live on 3rd Oct24 Got empaneled with Railway Protection Force (RPF & RPSF) for opening salary accounts of their employees having a total strength of 75000.

Your bank has been awarded approval for payment gateway integration in Parivesh 2.0 Portal. PG integration is under process for collection of CAMPA fee under Ministry of Environment, Forest & Climate Change (Parivesh 2.0 Portal).

Collection account of Prasar Bharti for 32 centres of Doordarshan Kendras across India were opened. Opened collection account of OTT Platform "Waves" of Prasar Bharti. Payment gateway facility also integrated and made live for all users.

MOU Signed with SAIL for opening of Salary Accounts of their employees.

MOU signed with GeM for providing various banking services.

Payment Gateway facility provided to NIFT Headquarter for pan India counselling fee collection from candidates. Enabled Payment Gateway services for NIFT Daman, Patna and Varanasi Campuses.

For PMFME scheme under Ministry of Food Processing, ministry wanted state wise PFMS linked accounts for better MIS & Reconciliation. Accordingly, 36 state accounts have been opened and linked on PFMS Portal.

18. Human Resources Management

At Union Bank of India, we recognize that our employees are our most valuable asset and the driving force behind our success. In FY 2024-25, we continued our unwavering commitment to fostering a dynamic, growth-oriented, and inclusive work environment. Our strategic HR initiatives during the year were focused on empowering our workforce, enhancing their capabilities, and aligning their growth with the Banks strategic objectives. Union Bank of India envisions being a next-generation digitally enabled universal bank known for inclusive, responsive and responsible banking through customer centric business models and significant in employee development. Our Bank is committed to workforce diversity, creating equity across various regions and zones, cultivating and preserving a culture of diversity, equity and inclusion. The Bank cogitates that its human capital is the most valuable asset and respects the fact that individual differences, life experiences, knowledge, inventiveness, innovation, self-expression, unique capabilities and talent that the employees exhibit. The Bank strives to include diversity, equity and inclusion practices at the center of its day to day work and to create an environment of inclusion and belonging for the employees.

As HR functions are rapidly evolving, and rather than just a serving as a support function, HR has taken a step into a new role as a strategic partner that is pivotal in garnering business for the bank. The entire employee journey ranges in three stages, Introductory Stage, Specialization Stage and Leadership Development Stage and accordingly we have provided interventions for their career growth at all the three levels. The Leadership Development Program aims at preparing future ready leaders for the industry as a whole. Through the Banks HR Transformation Project bank is committed to enhance the employees experience by seamlessly adapting and integrating talent, performance and technology to create greater business value by driving both operational excellence and strategic impact

18.1 Key Strategic HR Initiatives in FY 2024-25:

18.1.1 Investing in Learning and Development: l A Master Policy on Learning & Development was actively implemented, encompassing various training methodologies, including e-learning, virtual training, and staggered programs l The bank continued with its initiative to improve the knowledge levels of employees across different banking domains. The new LMS portal Union Vidya was launched and keeping in view the need for Banks workforce to remain well-informed, adaptable and equipped with the latest knowledge and skills, the bank increased number of mandatory e-learning courses/ modules to be completed by all officers to ten courses. l Emphasis was placed on mandatory e-learning courses covering crucial areas such as KYC/AML, Cyber Security Awareness, Responsible Use of Social Media, Prevention of Sexual Harassment, Vigilance, Risk Management, Climate Risk, EASE

Reforms, Ethics in Banking, and the Banks Strategic Initiatives. To provide impetus to the culture of learning the top performers with respect to completion of e-learning were appreciated. investment Role-based training modules were also delivered to enhance job-specific competencies for officers at various levels l Training Management System (TMS) in Union Vidya was also launched. This pioneering initiative marks a new era in training and development, redefininghow we approach learning by making efficient, and future-ready.itmore accessible, The TMS will serve as a one-stop digital platform that captures the entire training lifecycle, ensuring structured learning pathways for all employees. This initiative is a strategic move towards enhancing our workforces competency, agility, and adaptability, aligning with the future goals of our Bank. As part of this initiative, every staff member will be provided with at least one structured training program in every financial year, ensuring continuous learning and skill enhancement. The Learning & Development Division of the Bank has launched a Digital Accessible Library under its Digital Learning Unit (DLU) reinforcing the Banks commitment to an inclusive workplace. The Bank has recently partnered with DAISY Forum of India (DFI) and joined Sugamya Pustakalaya, Indias largest accessible online digital library. This partnership is exclusively for employees and customers with visual impairment a print disability. Integration with DFl and Sugamya Pustakalaya offers a wide range of accessible books and learning materials for employees with visual impairment a print disability. The digital accessible Library is available through the Union Vidya platform with access strictly restricted to employees with visual impairment and print disability. l The "META Learning" framework, built on four pillars Query Based Training Sessions, Staggered Training Program, Union Manch (knowledge sharing platform), and UBIQUE

(creative problem-solving), was strengthened to foster a continuous learning culture. The bank continued to leverage its training facilities to provide a competitive and forward-thinking approach to prepare our workforce for emerging opportunities. Banks commitment to training excellence was recognized for the tenth time with the prestigious Golden Peacock National Training Award. The "Union Advith" Leadership Development Program (LDP) commenced with the initiation of a thorough selection process, wherein the Bank finalized 510 participants during the first year. Mission of the program is to empower leadership excellence and cultivating visionary leaders who drive innovation and adaptability. This program will comprise various learning interventions like diagnosis tools to identify the competency gaps, classroom programs, one-to-one mentoring, coaching, feedback on a continuous basis to develop desired skills and competencies in the form of long term learning engagement. Now, considering the success of the first year of Union Advith and its impact on various levers it is proposed to conduct the program for 600 more executives in Senior Management and Top Management cadre.

HR Conclave "IGNITE25": This significant event highlights Union Banks commitment to advancing HR practices. It focuses on collaboration, knowledge-sharing, and the adoption of technology in training amongst the various PSB, Pvt Banks and training institutions This initiative shows that the bank is working to modernize the way leadership training is to be undertaken along with its peers. It also shows that the bank is working to create a culture of continuous learning and sharing of knowledge.

Women Leadership Development Programs:

Our bank also organizes specific programs like the LDP program dedicated to women leadership development. These programs aim to address the under-representation of women in leadership roles and break down barriers to their advancement. These programs also bring in outside speakers to help inspire and educate the participants to navigate through various challenges in life. l A new initiative called Study Circle was launched during the year wherein domain experts were invited by the bank to speak on their domain specific educative/informative series of knowledge sharing, peers from nearby banks were also be invited for the same. Union Bank of India has a formal training and awareness mechanism in place to sensitize staff on disability inclusion and customer support. This initiative is coordinated by a dedicated accessibility cell within the Human Resources and IT departments, ensuring that all related training programs are systematically implemented in collaboration with the Banks training system. Disability sensitization is an integral part of the induction process for new employees. E-learning Course on "General Awareness on Disability, Inclusion and Accessibility" is available in Union Vidya. LMS portal". This awareness course helps employees gain essential understanding of Inclusion, Equity, and Accessibility, enhancing customer service for senior citizens and persons with disabilities, and promoting an inclusive work environment for colleagues with disabilities within the bank.Other List of Accessibility related e-learning Courses available in Union

Vidya are : Disability Etiquettes.

Introductory Course on Indian Sign Language.

Mobile Accessibility Essentials for Android Developers in the Banking Sector. Mobile Accessibility Essentials for iOS

Developers in the Banking Sector. JAWS Screen Reader Training for Visually Impaired Employees.

An awareness session on inclusion and support for persons with disabilities is conducted for all newly inducted staff. This session is curated by the Accessibility Cell in coordination with the HR and Training Departments. It includes: Introduction to various types of disabilities.

Dos and Donts while interacting with persons with disabilities.

Digital accessibility basics. Use of assistive technologies

Real-life scenarios and inclusive customer service approaches.

Union Bank of India has organized several capacity-building initiatives focusing on digital accessibility and inclusive banking practices.

18.1.2 Enhancing Performance Management and Recognition: The Bank believes in a transparent, objective, and credible Performance Management System (PMS) that is integrated with career progression and training needs. The existing PMS was further refined to ensure fair and accurate assessment of employee performance, with a focus on linking individual contributions to organizational goals. The Rewards & Recognition framework was actively utilized to acknowledge and appreciate employees contributions, reinforcing a culture of high performance. There were 36507 employees (49.37%) were rewarded under Rewards & Recognition framework during the year. The "Star Performer Reward" was also introduced during the year linked with performance appraisal score of employees achieving a score of 80% and above to be rewarded under this category. Felicitation and recognition of services: The ‘Milestone Award recognized significant achievements and contribution of employees by rewarding employees depending on the years of services completed in the bank such as completion of 15 years (Crystal Award) , 25 years (Silver Jubilee Award) and Superannuation Award.

18.1.3 Focusing on Talent Acquisition and Development:

The bank believes that attracting and retaining the right talent is crucial for its long-term success. l The bank continued to streamline its recruitment processes, leveraging technology to reach a wider pool of candidates. l Recruitment of Local Bank Officers (LBOs): To meet the gap of non-linguistic officers in various states of the country; for the first time the bank hired around 1500 local bank officers having proficiency in local language of they are selected and posted so that they can effectively communicate with especially in rural and semi-urban areas, leading to better understanding of their issues and hence improvement in customer services. Emphasis was placed on recruiting domain experts at senior and middle management positions on to bring in specialized skills l In line with the Apprentices Act, the bank engaged apprentices at all India level and this apprenticeship program remained a key source for building a pipeline of future talent by providing practical, on-the-job training to impart knowledge and practical skills related to BFSI and products of Bank. l The bank has a well-defined succession planning policy to ensure a robust pipeline of leaders ready to step into critical roles as needed. The Succession Planning process for FY 2025-26 was completed and the Bank has identifiedsuitable successors for the critical roles.

18.1.4 Promoting Diversity, Equity, and Inclusion (DEI): The bank is committed to creating a workplace where every employee feels valued, respected, and has equal opportunities to grow. The Bank has firmly in place its policy on POSH, Equal Opportunity and DEI. The Bank strives to include diversity, equity and inclusion practices at the center of its day to day work and to create an environment of inclusion and belonging for the employees. Policies on POSH (Prevention of Sexual Harassment), Equal Opportunity, and Diversity, Equity, and Inclusion were actively implemented and awareness programs were conducted. l The bank strived to create a supportive environment for all employees, including providing reasonable accommodations for members, such as the differently-abled staff provision of JAWS screen-reading software for visually impaired colleagues.

In a move to enhance the well-being of its disabled employees, the bank proactively revised and increased the conveyance allowance rate during the year. This decision underscores the banks dedication to creating a workplace where every employee feels valued and supported and where financial considerations related to accessibility do not hinder their professional lives. The facilitating ease of travel is crucial for employee morale and productivity. The Bank takes care of the women and other employees belonging to reserved categories by giving due weightages in Transfer, Promotion and Other welfare policies. The women employees are given preferential convenient postings and their transfers are also considered on spouse grounds so that they can remain with family. The Bank has established SC/ST/OBC and Inclusion cells at apex level to redress the grievances of the employees belonging to these categories. The Bank has also appointed Chief Liaison Officers of the level of General Manager at Central Office for SC/ST, OBC and Persons with Disabilities.

Inclusion Cell: Being a committed organization on diversity, equality, accessibility and inclusion; bank has set up an "Inclusion Cell" in May 2022 at the HR Department in Central Office to cater to Persons with Disabilities (PwD) employees/ officers in the Bank. The key responsibilities of the Inclusion Cell shall include: Coordinating with relevant verticals to spread awareness and raise empathy by organizing activities to celebrate various annual disability days through employee engagement.

Collaborate with Union Access team, who works toward making the digital banking offerings more user friendly for the senior citizens and improving the accessibility of digital banking products for the customers with disabilities to enhance digital accessibility features and functionalities in employee facing portals, documents and system.

Promoting awareness through employee engagement initiatives like monthly newsletters, online quizzes, etc. with content including global best practices, latest guidelines, etc.

Coordinating with training system to drive awareness initiatives including sharing of inputs to design exclusive training sessions to impart knowledge about accessibility features in Banks digital products / internal platforms.

Addressing the grievances/queries of Persons with Disabilities employees/officers in coordination with Nodal Officers at Zonal Offices.

Ensuring that all Acts, Rules & Regulations, Guidelines & Directives of the Government of India / State Governments / Reserve Bank of India / IBA on the subject, related to PwD employees/officers, are followed.

Representation of various reserved categories as also that of Women and Minority Communities in the Bank as on 31.03.2025 was as under:

Inclusion Metrics

Particulars	Officers		Clerks		Sub-staffs		Total
Total Employees	44107		23818		6020		73945
Scheduled Castes (SCs)	7651	17.35	4523	18.99	2230	37.04	14404	19.48
Scheduled Tribes (STs)	3424	7.76	1875	7.87	500	8.31	5799	7.84
Other Backward Classes	13458	30.51	7610	31.95	1984	32.96	23052	31.17
(OBCs)
Ex-Servicemen	861	1.95	3147	13.21	404	6.71	4412	5.97
Women	12061	27.34	7628	32.03	1907	31.68	21596	29.21
Minority Communities	2995	6.79	1610	6.76	429	7.13	5034	6.81

 

TOTAL	73945
Within which ..
Category	COUNT Percentage
EWS	1051	1.42
GEN	29639	40.08
OBC	23052	31.17
SC	14404	19.48
ST	5799	7.84
Blind	901	1.22
Deaf and Dumb	350	0.47
Intellectually Disabled	40	0.05
Orthopaedically	1349	1.82
Handicapped
Ex-servicemen	4412	5.97

18.1.5 Strengthening Employee Engagement and Communication: Fostering a sense of belonging and ensuring open communication channels are vital for a motivated workforce. Initiatives like "Union SWAR" were in place to facilitate internal communication on mental/ physical health of employees and many employee engagement activities like desk yoga, webinars on important topics etc were undertaken. Employee engagement programs, such as Suicide Prevention Awareness campaigns and Mental Health Day observances, are held regularly to foster emotional resilience. Various internal publications, including "Union Dhara," Union Srijan", " "The Vidya Times," and "Banking Updates," (magazines/e-magazines by vertical) along with audio-visual mediums like "Union Radio" and "Union Podcast," were utilized to keep employees informed and engaged. The "Union Manch" platform encouraged staff members to share their experiences and success stories, fostering a collaborative environment. Community Connect is Banks internal Community engagement platform to drive active discussions between employees on a diverse set of topics be it office -wide events, work anniversaries, employee promotions or anything else.

18.1.6 Enhancing Employee Well-being: Bank prioritises the health and safety of employees through comprehensive workplace safety programs and health initiatives. Bank has launched Union SWAR

through which Bank shall be able to provide avenues to its employees to get help and support for physical and mental wellness as and when required by them.

Several key initiatives are regularly conducted to promote employee engagement and well-being, as outlined below l 24/7 counselling services were made available for a wide range of issues, with a system to classify cases as low, medium, or high risk following the counselling session. Emergency Crisis Teams have been established across all Zonal, Regional, and Central Offices to ensure seamless handling of such cases. These teams are trained to effectively manage crises. l Diet and nutrition consultations are provided to all employees and their dependents, promoting physical health alongside mental well-being. l Webinars led by industry experts are regularly organized to address topics such as stress, anxiety, depression, and other related challenges. l Daily online yoga sessions are available for employees and their dependents, offering flexible scheduling to accommodate different routines. l Chair desk yoga and standard yoga sessions are conducted in person at all offices, including Central, Zonal, and Regional offices, to promote physical and mental wellness. l Medical advice for all employees and their dependents were made available 24/7.

18.1.7 STP Journeys for Staff Loans: Straight Through

Processing (STP) is a key technological advancement used by Banks to digitally process loan proposals end-to-end with minimum or no manual intervention. STP has set a new benchmark for processing & seamless approval of loans, thus reducing the turnaround time from 10-15 days to fewer minutes. To reap the benefits of STP for welfare of all employees, Bank has developed STP journeys to sanction Overdraft and Vehicle loans, introduced during the year and manual processing/ sanctioning of these loans has been dispensed off with.

18.1.8 Reimbursement for Cervical Cancer Vaccination:

All permanent employees having girl children in the age group of 9 to 14 years can claim reimbursement towards vaccinating their girl children (in the age group of 9 to 14 years of age). Bank is sensitizing all employees about the deadly foe i.e. cervical cancer and to ensure that the girl child of all the employees in the age group of 9 to 14 years are fully vaccinated against the disease.

18.1.9 Code of Ethics: Maiden code of ethics document as framework for ethical decision has been formulated by the Bank to provide employees with clear guidelines and expectations, empower them to make sound decisions that align with the banks values and principles. It improves employee morale, productivity, and enhanced customer satisfaction and is essential for mitigating risks and ensuring compliance with applicable laws and regulations.

18.1.10Awards and Recognition during FY 2024-25

Name /Category	Presented by (Organization Name)
Second Position in EASE	Government of India
Reforms Index under HR
Theme
HDM Awards for Best	Indian Conventions
Workforce Planning 2024
Excellence in Continuous	Asia L&D: Employer
Learning & Development	Branding Conference &
	Awards by International
Leadership Development	Business Conferences
program of the Year
HR Excellence Award	Apex India Foundation
(Platinum Award)
Training Excellence
Award (Gold Award)
Organization with	Asian Leadership Awards
Innovative HR Practices
Exemplary Leader Award
Excellence in Leadership	People Excellence and
Development	Leadership Awards by
	International Business
Excellence in Learning &	Conferences
Development
Digital Learning
Transformation Awards

In the coming year, the bank will continue to build upon these strategic initiatives, adapting to the evolving needs of our employees and the dynamic banking environment. The focus will remain on creating a future-ready workforce that is equipped with the skills, knowledge, and passion to drive Union

Bank of India towards greater heights. The bank believes that by investing in its people, it is investing in the future success of our organization and our ability to serve our customers effectively.

18.2 Official Language: (RAJBHASHA) l RAJBHASHA and Publication of Magazine: Union

Bank of India continues to emphasise the promotion & publicity and use of Hindi across its operations, ensuring compliance with the Rajbhasha guidelines and fostering a bilingual work environment. Here is an overview of initiatives and achievements in promoting the official language, Hindi.

Promotion of Hindi in Banking Operations:

Union Bank of India actively promotes the use of Hindi in its daily operations. The Bank ensures that Hindi is used extensively in official communications, including internal circulars, notices, and reports. The Bank also encourages employees to use Hindi in their day-today work, fostering a bilingual environment.

Multilingual Publications: The Bank publishes various materials in Hindi to cater to a wider audience. Notable publications include the quarterly bilingual corporate in-house journal Union Dhara and the Hindi magazine ‘Union Srijan. These publications feature articles, stories, and poems contributed by employees, promoting literature and culture within the organisation. During the financial year special issue important subjects like Information Technology, NPA management, Language and Literature, RUSU Banking have been published.

Employee Participation and Training: Union Bank conducts regular training programs to enhance the Hindi proficiency of its sessions cover the effective use of Hindi in official documentation, communication, and customer interactions. Additionally, the Bank organises competitions and workshops to encourage the use of Hindi among employees. The bank has trained more than 500 staff members under the ‘Union Bhasha Sauharda Indradhanush Programme to impart practical language skills to the staff members in South/East Indian Languages. The said training will help in establishing cordial relations with the customers. Coordination of Town Official Language

Implementation Committees (TOLIC): The bank is fulfilling the responsibility of coordinating TOLIC assigned by the Government of India, Ministry of Home Affairs, Department of Official Language very well. The bank has 29 TOLICs across India. These TOLICs promote the use of language while organizing meetings and competitions on time.

Recognition and Awards: Union Banks efforts in promoting Hindi have been recognised with several awards. The Bank has received a total of 507 Rajbhasha Awards in the year.

Regional Office, Mau has received the prestigious ‘Rajbhasha Kirti Puraskar for coordinating TOLIC. Regional Office, Baroda has received the ‘Kshetriya Rajbhasha Puraskar from the Department of Official Language, Ministry of Home Affairs, Government of India for outstanding performance in Hindi implementation.

Second position in implementation of official language Hindi in Linguistic Region ‘B during FY 2023-24 from the Department of Financial Services. Various offices and branches of the Bank have received 86 shields from NARAKAS.30 staff members of the Bank have received awards in Hindi competitions organised at the All India level.

The Banks Corporate House Magazine ‘Union Srijan has received the ‘Silver Award from PRCI and ‘Union Dhara has received the ‘Ashirwad Best House Magazine Award.

Digital and Multilingual Support

Union Bank has made significant providing multilingual support across its digital platforms: Mobile Banking: Available in 13 languages, ensuring accessibility for a wide range of customers.

Internet Banking: Available in 2 languages, enhancing user experience.

Call Centre: Supports 11 languages, offering personalised assistance.

SMS Facility: Available in 13 languages, ensuring effective communication with customers. Selected STP Journey: Available in Hindi and Indian languages which eases online loan approval process for customers.

UVCON: Banks WhatsApp Banking service is available in 06 major Indian languages which gives our stakeholders a whole new experience of connecting with Bank.

Letter of thanks: Printed in Hindi, English & 09 regional languages.

Official Language Implementation Committees: To monitor and promote the use of Hindi, Union Bank has established Official Language Implementation Committees (OLICs) at various levels. These committees regularly review the progress of Hindi implementation and suggest measures to enhance its usage in the Banks operations.

Publications and Knowledge Dissemination:

Union Bank disseminates knowledge through its publications, which are released in multiple languages to cater different employees and customers. The publications cover banking updates, industry insights, and employee contributions, fostering a culture of knowledge sharing and inclusivity. During the financial year, the Bank has published useful booklets for customer interaction in major Indian languages such as Assamese, Bangla, Odia, Kannada, Tamil, Telugu, Malayalam, Marathi etc. To increase the awareness of staff members and customers on cyber security a cartoon booklet titled Cyber Mayajal has been published in Hindi, Bangla, Kannada, Tamil, Telugu, Malayalam. Similarly, a book titled various Dimensions of customer service excellence has been published to promote Bharatiya Bhasha through ‘Union Bhasha Sauharda Indradhanush Programme.

19. Network

The branch network of our Bank is widely spread across the country with 8619 branches and 2 overseas branches (Sydney, Dubai DIFC) as on March progress in 31, 2025 out of these 59 percent of the branches are in rural and semi-urban centres. l As on 31.03.2024 we were having total 8464 branches, during FY 2024-25 total 46 branches were rationalized and 201 new branches were opened.

The category-wise Branch Network on 31.03.2025

is as follows:

ROW LABELS	RURAL	SEMI- URBAN	URBAN	METRO	GRAND TOTAL
Total Branches as of	2540	2436	1728	1760	8464
01.04.2024
Rationalised during	-1	-13	-15	-17	-46
F.Y. 2024-25
Opened During F.Y	53	95	31	22	201
2024-25
Change in Category	-3	-3	-10	-1	-17
by RBI	+8	+6	+1	+2	+17
Total As of	2597	2521	1735	1766	8619
31.03.2025

Your Bank has also total 23,500 Business Correspondents, 8910 ATMs, 7 Digital Banking Units (DBU), 5 Owned Subsidiaries, 3 Joint Ventures and 1 Associate Organisation.

20. Information Technology

Your Bank is a leading public sector Bank with latest technology based robust IT systems. Bank takes pleasure in providing I.T. driven convenient and adaptable banking products and services where IT plays a key role in establishing them. In the current business environment, organizations are reinventing themselves and emerging stronger by becoming more data-driven, digitizing their operations for cost reduction and greater efficiency, greater flexibility and delivering greater employees and customers. To support Business and in view of the changing business landscape and in order to grab the emerging opportunities for growth, Bank had devised Information Technology Strategy for FY 2024-2025.

IT Strategy of the Bank has been aligned with overall

Digital and Analytics strategies to achieve overall Business objective of Bank. IT Strategy for FY 2024-25 was broadly categorized in three major themes i.e. Run the Bank, Change the Bank and Transform the Bank. Run the bank focussed on the Resilient Infrastructure, Governance, Risk & Cyber Security, Change the Bank focussed on New Ways of Working, Upskilling & HR Transformation, Modern Infrastructure & Agile Technology and Innovation & New Age Banking, Transform the Bank focused on Digital Transformation and Data Insights.

In the fiscal year 2024-25, the organization achieved significant milestones across demonstrating its commitment to excellence and innovation. The infrastructure was bolstered, ensuring its resilience to meet the evolving demands of operations. The major milestones achieved in FY 2024-25 under various categories are as follows:

20.1 Innovative Banking Solutions:

Bank has distinguished itself through its proactive adoption of emerging technologies, aimed at enriching the customer journey and overall experience. Bank has demonstrated unwavering commitment to prioritizing customer convenience and experience.

Various innovative Banking solutions/initiatives are as follows:

20.1.1 For Improved Customer Experience a) Union Virtual Connect (UVConn) – WhatsApp Banking : Bank had launched UVConn -WhatsApp banking initiative as a conversational banking platform for its customers with 6 Enquiry/Service features such as: Balance Enquiry, Cheque Book Request, Cheque Status, Mini Statement, Doorstep Banking, EMI Calculator, Apply for a loan, Account Opening, ATM Search, Branch Search etc.

UVConn has now been enhanced to provide approximately 70 services including Account Statement, Interest Certificate Card Green Pin, form 15 G/H, Form 16/16A, Loan Details, Credit Card Statement, Credit Card Green Pin etc. Customers can access UVConn by sending "Hi" to 9666606060. Over 45 lakh customers are registered on UVConn (WhatsApp banking). UVConn has till date serviced over 2.45 crore customer enquiries/requests resulting in better customer service experience.

b) Google Business Messages (GBM): Our Bank is the first Public Sector Bank to be live on GBM platform. GBM is a chat platform available on Googles webpages, which allows Banks customers to directly communicate with Banks Virtual Assistant "UVA". Customers can also opt for the facility of chatting with a live agent for resolution of their queries. Bank can also engage with customers through GBM. GBM can be accessed by searching for UBI or Union bank or Union Bank of India etc. on Google through Android devices. GBM is currently being used to generate leads and also to enable customers to reach out to live agents through a chat conversation directly. Through GBM, bank has the opportunity of cross-selling and upselling the banks products. Total Users till date 5.30 lac approximately Users Availed live Agent services approx. various domains, 2.31 lac

Business Benefits: GBM offers the unique advantage of cross-selling/upselling to customers including NTB (New to Bank) customers through different Google end points such as Google Search, Google Maps etc . GBM will help drive sales, improve customer satisfaction and loyalty through assistive experience and rich features .

c) Metaverse: Leading the way in innovation, Our Bank is making use of emerging technologies to transform both its internal operations and customers experience in Banking. Our Bank is the first Indian bank to foray onto the Metaverse platform by launching Metaverse Virtual lounge, "Uni-verse" thus enabling an immersive way for the customers to use Banking Services. Total Hits in Metaverse are approx. 3.69 lakhs (as on 31st March, 2025).

d) VR based immersive training modules: Our

Bank has also developed VR based immersive training modules to resolve various concerns such as tackling workplace challenges, maintaining secure social media presence etc. to enhance customer service. All the training generation,Debit modules have been inculcated with assessment through Q&A/ feedback pertaining to specific modules for evaluation. The training modules are a testament to banks commitment to continuous learning and improvement of staff members by leveraging emerging technologies to provide an immersive and interactive training sessions to the employees focusing on real world applications.

The VR based training is being provided by

3 ULAs across the country and a total of 575 employees have been trained as on 31st March, 2025

e) Union Voice Assistant: The bank has implemented Union Voice Assistant - voice banking through Alexa channel powered by AI and Natural Language Processing (NLP). This allows customers to access account related information through simple voice commands, offering a convenient and hands-free banking experience. Total transactions in UVA are approx. 33,265 as on 31st March,2025.

f) Hyperautomation: Bank has also Implemented hyper automation project under which 27 processes were automated as on 31st March, 2025.

g) Integration of Kendriya Vidyalaya Fees collection through BBPS

Bank has integrated Kendriya Vidyalaya Sangathan (KVS) Fee Collection on BBPS Platform which is the biggest in educational history. KVS fee Collection on BBPS will benefitted students from 1250+ KV schools for convenient fee payment on BBPS. Total successful transactions 6,67,214 (as on 31st March,2025) amounting Rs. 131.03 Crore

Business Benefits:

Reduces the cost per transaction. Help in Increasing CASA of the Bank .

h) Uni Pay Plus

Uni Pay Plus is designed to integrate with

Corporate Systems for Automatic Payment Processing. Uni Pay Plus portal is developed to provide payment services to Corporate Clients, CRCs are making use of this portal to get business from several Corporate Clients. 150+

Corporates have been onboarded with Uni Pay

Plus, prominent ones are:

MVRPL (Maharastra Vikrikar Rokhe

Pradhikaran Limited)

Tirumala Tirupati Devasthanam (TTD)

Odisha State Police Housing & Welfare

Corporation (OPHWC)

GIC Housing Finance Limited

UBI Employee Cooperative Credit Society

TP Central Odisha Distribution Limited

Shakambhari ISPAT And Power Limited

Railtel Corporaton Of India Ltd

Konkan Fincap Co Operative Bank

Megha Engineering & Infrastructure

National Informatics Centre Services Inc

West Bengal Housing Infrastructure

Development Corporation WBHIDCO

Total No. of Transactions =3,46,798 Total transaction value = Rs. 23,458.47 Crores Monthly average transactions = 28,900 Monthly average value = Rs. 1,954.87 Crores

Business Benefits:

Total 150+ Corporates are on-boarded on Uni Pay Plus till 31-03-2025 having 222 accounts. Current & Saving Accounts 84 (In Numbers) with Balance of Rs. 442.77 crores. Cash Credit & Overdraft Accounts 138 (In Numbers) with balance of Rs. 930.67 crores.

i) Enablement of Debit Card Tokenisation in Internet Banking

In line with RBI guidelines, Card on File Tokenisation (CoFT) option has been provided to customers in Internet Banking. Tokenisation terminates the need for storing customers card details in online transaction at merchant website. CoFT in Internet Banking facilitates customers to view the debit card token details pertaining to all the merchants in a single platform, earlier it was done by visiting individual merchant website. Using this facility customer can enable/disable the token. This is enabled for both Rupay & Visa cards.

Business Benefits:

One stop solution is provided to customers to view / manage their token details instead of visiting multiple merchant websites, which further helps to reduce cyber frauds.

j) NCMC Wallet

Under the initiative of Ministry of Urban

Development (MoUD), a National Common Mobility Card (NCMC) model was framed to enable seamless travel by different metros, toll plaza and other transport systems across the country. Facility is enabled for recharging National Common Mobility Card (NCMC R-wallet) accounts through Net Banking. Customer can also add money to their wallet account from POS terminal either by cash or account debit. It is a NPCI Initiative which is only for Rupay NCMC Debit Card.

Business Benefits: l Rupay Debit Card issuance can be increased as customers can use the same card as prepaid wallet. l Customers can recharge the wallet upto maximum of Rs. 2,000/- through Internet Banking which in turn facilitates offline payments by customers at various POS points for example: metro stations, toll plaza etc.

k) Interoperable Card-less Cash Withdrawal (ICCW):

In line with digital revolution and to enable customers for more secure & seamless transactions on ATM terminals, Cash withdrawal through UPI is enabled which displays a dynamically generated QR code which can be scanned & authorized through major UPI supported apps. Post successful authorization of transaction in UPI APP by using UPI PIN, withdrawal can be triggered at the ATM terminal by selecting the appropriate Option/ Button assigned.

Business Benefits: l Prevents Card Cloning to offer secure and seamless transactions l No need to carry cards to access the accounts through ATMs. l ICCW is enabled in 1,309 NCR ATMs all over India.

l) Account Aggregator:

Our Bank has become the first public sector lender to go live on the account aggregator ecosystem as financial information user (FIU) & Financial Information Providers (FIP) both, a part of the governments digital initiatives to improve credit delivery.

The account aggregator ecosystem helps lenders leverage digital data acquired with the customers consent to provide seamless service without physical documentation.

Any financial information user (FIU) can request data based on a consent given by the customer on their account aggregator handle. Bank has implemented the technology stack as per the Reserve Bank Information Technology (ReBIT) guidelines.

Presently Bank has integrated with 13 Account Aggregator and FIU solution is integrated with

Software AA Branch portal, LAS STP journey and MSME Journey. 13 Account Aggregators are:

NESL Asset Data Limited (NADL)

Perfios Account Aggregator Services Pvt Ltd

(Anumati)

Cookiejar Technologies Pvt Ltd (Finvu)

Finsec AA Solutions Pvt Ltd (One Money)

CAMSFinServe

Dashboard Account Aggregation Services

Pvt. Ltd (SAAFE)

NSDL E-governance (Protean SurakshAA)

Yodlee Finsoft Pvt Ltd

Tally Edge AA

Crif Connect

Unacores AA Solutions Pvt. Ltd

Agya Setu AA

Digio Internet Pvt. Ltdl)

m) Inclusive and Accessible Banking

Union Bank of India remains committed to creating banking experiences that are truly inclusive. Our flagship accessible banking initiative ‘Union Access, launched in 2022, is designed to remove barriers faced by individuals with disabilities and senior citizens, making banking accessible and user-friendly for all. In recognition of these efforts, Union Access received international acclaim at the Qorus Infosys Finacle Banking Innovation Awards held in Portugal in October 2024. The Bank was conferred the Bronze Award in the Social, Sustainable & Responsible Banking. In the financial year 2024 25, Union Bank of India deepened its commitment to accessible banking through a series of impactful initiatives designed to make financial services inclusive for all:

Accessible Digital Rupee mobile applications that supports assistive technologies, enabling visually impaired users to conduct CBDC transactions independently and with confidence. A redesigned corporate website developed as per global WCAG accessibility guidelines, featuring dedicated sections for accessibility services.

A partnership between our Digital Learning Unit and Sugamya Pustakalaya to make knowledge resources available to persons with visual and print disabilities.

A custom e-learning module titled Banking Services for Persons with Disabilities, to train staff in inclusive service delivery. Accessibility support is embedded across Banks service channels including email, WhatsApp, customer care centres and driven by dedicated in-house support with the inhouse capability of accessibility professionals, including those with lived experience of disability.

Accessible and inclusive banking is our leaderships strong commitment and at Union Bank of India, we believe that truly inclusive banking is not just about access its about dignity, independence, and financial inclusion of all the customers that the Bank serves.

20.1.2 For Improved Governance

DIT is Establishing comprehensive governance frameworks and practices to facilitate effective decision-making, risk management, and compliance with regulatory requirements, ensuring transparency and accountability across all levels of the organization.

Bank is having strong data governance and privacy practices in place which are defined in the IT Policy & Data Governance policy of the Bank. Additionally, Bank is also certified with Privacy Information Management System (PIMS) ISO 27701:2019, ISO 27701 which outlines framework for PII (Personally Identifiable Information) Controllers & PII Processors to manage data privacy. This reduces risk to the privacy rights of the individual and to the organization by enhancing the existing ISMS

(Information Security management System). ISO 27701 certification also enhances the trust with stakeholders/ customers by demonstrating a commitment to privacy, mitigating privacy risks, ensuring legal compliance by prioritizing the protection of personal information. It also ensures Data integrity, accuracy and reliability of data, which is crucial for decision-making and maintaining trust with users and customers. Combining ISO 27701 and robust data integrity practices reinforces a comprehensive approach to safeguarding sensitive information.

Enterprise Solution Architecture Practice)

Bank has setup Enterprise Architecture (EA) office using TOGAF Framework to reduce organizational risk from outdated and misaligned tools and systems, streamline the IT application landscape for optimal performance and decommission redundancies. The Enterprise Architecture (EA) Office & Architecture Governance Board (AGB) has been operationalized with effect from 01-04-2024 onwards to review, recommend and approve the architecture change requests falling in the IT landscape. It has benefited the Bank to establish the business & IT Collaboration and driving the business strategy through IT.

Data Privacy Framework:

It includes DPDP Organization Structure and Data Privacy Impact Analysis. Banks IT systems at Data Centre, Powai and DR site, Bengaluru are compliant to the requirements of ISO 27701:2019 certification (PIMS- Privacy Information Management System). Our Bank is the first Financial Institution in the country to achieve ISO

Certification in data privacy to meet the regulatory requirements and manage privacy risks. ITSM/ITAM/ITOM:

As IT functions become increasingly critical part in the day-to-day operations of Bank it is imperative to adopt ITSM and ITAM best practices to meet the rapidly changing needs of the business. It deals with the areas like Service Request Management, Change & Release Management, Incident Management, Workflow & orchestration.

PCI PIN Certification:

Payment Card Industry Personal Identification Number Certification is a set of Security Requirements for the secure management, processing, and transmission of Personal Identification Number (PIN) data during online and offline payment card transaction processing at ATMs and POS point-of-sale Terminal. Our Bank is the second PSB in the country to achieve PCI PIN certification..

PCI DSS Certification:

The Payment Card Industry Data Security Standard (PCI DSS) is a globally acclaimed standard with internationally accepted set of policies and procedures intended to optimize the security of card-based transactions and protect card holder information against the misuse and breaches. Our Bank is the second PSB after SBI to achieve this milestone in a record time span of 9 months.

20.1.3 For Resilient Infrastructure

Building a solid foundation of infrastructure that is robust, adaptable, and resilient, ensuring uninterrupted operations and continuity even in the face of unforeseen challenges and disruptions .

20.1.3.1 Data Centre Modernization: l Green Data Centre

Bank has set up a Green Data Centre, that can operate with maximum energy efficiency, reducing carbon emission and minimum environmental impact by using sustainable technologies and resource management.

4-way Architecture to Achieve Zero Data Loss

Near Disaster Recovery site is successfully established to ensure zero data loss in case disaster at DR Site and to maintain business continuity. It benefits the Bank through improved customer service by achieving maximum availability and reduced data loss in case of disaster at DR Site. Hollowing the Core – CBS modernization

Hollow the core means componentization. Breaking the monolith system into smaller components by building series of smaller application by using microservices thus adding to agility.

Hollowing the core infrastructure is required to streamline operations, reduce complexities, and enhance scalability, ensuring the foundation is agile and adaptable to future demands. Ransomware Recovery Solution

Bank is setting up a Ransomware Recovery solution to enhance its ability to quickly recover from ransomware attacks, minimizing downtime and financial losses. The solutions typically include features like immutable backups, which ensure that data cannot be altered or deleted by ransomware, thus protecting critical information. The solution also offers rapid recovery capabilities, allowing bank to restore operations swiftly and reduce the impact of an attack. Bank is implementing a robust Ransomware Recovery solution to safeguard its data, maintain customer trust, and ensure business continuity in the face of cyber threats.

20.1.3.2 Next Generation Security Operation Centre

Bank is in process of upgrading existing Security Posture with Next-Gen SOC which integrates advanced security information and event management (SIEM) with AI and machine learning to detect and respond to threats more efficiently. By continuously monitoring network traffic and analyzing patterns, Next-Gen SOC can identify anomalies and potential security breaches in real-time, allowing for rapid incident response and minimizing the impact on operations.

20.1.3.3 Robust CBS & Cloud Infrastructure

Bank has automated DR Switching Operations for secured BCP using DR Automation tool. Additionally, the Bank leverages a comprehensive cloud infrastructure that includes Private, Hybrid, and Public Cloud environments. This multi-faceted approach allows the Bank to optimize resource utilization, enhance data security, and maintain flexibility applications and services. By integrating these advanced technologies, the Bank ensures a superior customer experience, operational efficiency, agility to adapt to evolving market demandsBank has automated DR Switching Operations for secured BCP using DR Automation tool. Additionally, the Bank leverages a comprehensive cloud infrastructure that includes Private, Hybrid, and Public Cloud environments. This multi-faceted approach allows the Bank to optimize resource utilization, enhance data security, and maintain flexibility applications and services. By integrating these advanced technologies, the Bank ensures a superior customer experience, operational efficiency, agility to adapt to evolving market demands.

20.1.3.4 Real Time performance Monitoring through

APM Tool:

Application Performance Monitoring Centre of Excellence (APMCoE) at DIT, Hyderabad is a single integrated Application Health & Performance management solution for all servers/devices and application monitoring needs - end user applications and underlying infrastructure components such as application servers, databases, web servers, virtual systems and cloud resources.

Bank is using HEAL APM Tool for Real time monitoring of the applications and its infrastructure. 23 critical applications such as Internet Banking, Mobile Banking, IMPS, CBS Domestic, CBS Overseas, FI Gateway, UPI, NEFT, RTGS, SWIFT, Lending Automation System (LAS), SMS Gateway, Credit Card Host System, ATM

Switch, E2FA (2nd Factor Authentication System), API (Application Programming Interface) Middleware, BBPS, DEMAT, UVConn, Union Prerna ,Union Saras Metaverse and Video KYC are live on the HEAL APM platform.

Major Activities carried out at APMCoE:

24x 7 Application Monitoring of the various

channels.

Supporting the concerned Business departments

for any production issues reported in channel

functioning.

Critical applications like Mobile Banking, Internet

Banking, UPI, IMPS, NEFT/RTGS, LAS, CTS, DMS

& CMS are being monitored 24x7 and the

team follow up with the respective vendor for

resolution of issues reported, if any and posting

Hourly Stats.

Concerned application owners are alerted

immediately for further follow up with the

respective vendors if the problem is not resolved by vendor team at Level 1.

Detailed Root Cause Analysis (RCA) is shared for major application performance incidents, as a result, the performance stability of the applications are enhanced.

Execution of all hourly batches of Internet Banking pertaining to corporate bulk upload.

Major KPIs monitored using HEAL APM Tool: Service Delivery Map (SDM): SDM provides a single pane view of services configured in HEAL.

Real Time Transaction Monitoring: Dashboards on usage patterns, SLA violations, response time, total volume, failed transactions, etc. Component KPI Monitoring: Deep dive screens to show detailed KPIs from critical components. Automated Forensics /Remedial actions: Alert generation based on existing workflow parameters.

Application monitoring specific features: Monitor application- specific custom KPIs Configuration Watch: Correlating configuration changes to performance degradation for accurate root cause.

Log Analyzer: Error tracing though analysis of logs maintained by applications.

Intrusive Monitoring: Intrusively Monitor and

Trace the Code piece at the JVM level. End User Monitoring: Monitor the end-user experiences based on browser interactions (Dashboards).

Custom Reports: Based on the Banks requirement, custom dashboards are placed.

20.1.3.5 Resilience Operation Centre (ROC):

Bank is in the process of setting up IT Resiliency Operation Centre which will enhance the Banks operational resiliency goal by integrating unified monitoring and Artificial Intelligence (AI) into IT operations (ITOps). This approach uses Machine Learning (ML) to improve performance monitoring and event analysis, enabling IT Teams to predict and prevent outages and quickly resolve issues, ensuring minimal disruption and a seamless customer experience.

20.1.3.6 Software Defined Network:

Bank has migrated its DC, NDC and DR from traditional network structure to SDN Fabric to ease the network operations and improving security. The following benefits are achieved: Centralised Monitoring and control of Network Devices /Routers. 100% Network uptime Capability to monitor and analyse the Data Traffic.

20.2 Other Major Initiatives for Improved Performance

a) CMMI Maturity Level 3 Certification

Our Banks In-house software development facility has been appraised at ISACAs CMMI Maturity Level 3. The major objectives of CMMI includes- Process Improvement, Performance Management, Quality Assurance, Resource Optimization and Customer Satisfaction. It also consists of best practices and models for enhancing product development, service delivery, and overall organizational performance.

Key benefits of CMMI Maturity Level 3 appraisal include: Provide high quality solutions. lStandardization of process across different teams leading to consistency in deliverables. Predictable and timely delivery of products and Services. Streamline processes and reducing rework leads to effort and cost savings in the long run. Predefined process for risk handling leads to identification and addressing the weaknesses in a timely manner. Brand image and goodwill. b) Kubernetes and DevSecOps

In order to achieve Agile Methodology and keeping security in focus, Bank has setup End-to-End DevSecops Platform along with Container Orchestration Layer (Kubernetes Platform) on Banks on-premises private cloud. Bank has adopted App Modernization platform (Kubernetes) based on DevSecOps for development of Micro Services based Banks applications. Micro-services (or micro-service architecture) are a cloud native architectural approach in which a single application is composed of many loosely coupled and independently deployable smaller components, or services. It is useful for modernizing existing monolithic applications and harnessing the power of cloud and to develop market standard applications as per latest software development methodology.

Currently, 13 In-house developed applications are converted in to containerization and hosted on Kubernetes platform along with the CI/CD pipeline. In addition to this, 6 COTS applications are also deployed on Kubernetes Platform c. CRM (ZOHO) Integration with LAS

CRM (ZOHO) is integrated with LAS in which Processing Officer can view Lead generated through CRM in LAS

Application which simplifies the processing of the leads generated through CRM application.

Bank is receiving leads from various sources like Corporate Website, ACOE, ATM, Internet Banking, Vyom, Social Media, Fintech partners, BC Agents, Call Centre, DBU etc. It is often observed that these leads are unattended and are not monitored. Hence, bank has introduced CRM Edge Application which channelizes leads from various sources. This integration enables to process these leads from various sources at LAS and the status of processing of these leads is updated back

20.3 Awards and Recognitions

Bank has received following Awards & Accolades in FY 2024-25.

S. No.	Awarded by	Award Name	Award Category
1	Inosys	Infosys	Ecosystem led innovation-
		Finacle	1) STP Journeys
		Innovation
		Award 2024	2) BBPS Loan Repayment
			3) Interoperable Cardless
			Cash Withdrawals
			ESG-led Innovation-
			Embracing Paperless
			Journeys
			Modern Technologies-led
			Innovation:
			1) Hyperautomation
			2) Finacle deployment on
			Kubernetes
			Product Innovation:
			1) Deploying PM SvaNidhi
			Micro-credit Facility
			2) Digital Pre-approved
			Personal Loan
			Corporate banking
			Innovation:
			Union Pay Plus
2	Banking	Finnoviti	VR-based learning solution
	Frontiers	Awards	& Operation Vajra
		2024
3	Open	Open	Togaf Standard/Enterprise
	Group	Group	Architecture
		India
		Awards
		2024
4	Quorus	Quorus	Union Access
		Finacle
		Infosystem
		Banking
		Innovation
		Awards
5	Global	Global	Excellence in Cyber Security
	fintech	Fintech
	festival	Festival
6	IBA	IBA	Best Technology Bank-
		Awards	Winner
		2024-25	Tech Talent & Organisation-
			Winner
			IT Risk aand Management-
			Runner Up
			Fintech & DPI Adoption-
			Runner Up
			Digital Sales and
			Engagement- Runner Up
			Digital Financial Inclusion-
			Runner Up
7	IBEX India	IBEX India	IT Risk & Management-
		BFSI Tech	Winner
		Award	Excellence in Operational
		2025	Efficiency- Special Mention
			Enhanced Customer
			Service-Special Mention

20.4 Future Digital Initiatives

To position itself as the premier banking institution of choice, the Bank has diligently engaged in emerging technologies to elevate both customer experience and operational efficiency. communication with customers, the Bank is leveraging Personalized Interactive Statements and Videos. The Bank is considering the implementation of AI-based CTS clearing to digitize the clearing process, thereby reducing staff workload and processing time for cheques, enhancing operational efficiency.

Additionally, the Bank is exploring potential use cases of Generative AI to streamline processes and enhance user experience.

Focusing on creating a Robotic Process Automation (RPA) Center of Excellence (CoE), the Bank aims to monitor, optimize, and customize various operations and automated processes. Prioritizing Green Office Automation, the Bank will emphasize the meticulous preparation, escalation, and digital signing of documents, Inter Office Letters, and Proposals. This not only enhances operational aligns with delegated authority, fostering a culture of compliance and accountability.

In pursuit of unwavering operational resilience, our IT strategy focuses on fortifying infrastructure resilience with key initiatives such as NDR for the Bangalore DR Site and BCP strengthening. After establishing the Analytics Center of Excellence (ACoE), the Bank has strengthened its analytics team by inducting the right talent and upskilling them through internal and external training to harness the power of data. The Bank is setting up a next-gen, state-of-the-art data infrastructure a Data Lake to drive advanced analytics using structured and unstructured data from both internal and external sources. This will enable the Bank to make more informed decisions and improve customer experiences.

Furthermore, the Bank is leveraging data analytics to enhance customer engagement, support informed decision-making, and lower risks through descriptive analysis and various machine learning-based use cases across categories (Retail, MSME, Agri, etc.).

For decision-making, the Bank utilizes Descriptive Analytics and Visual Dashboards to provide insights to Top Management and Verticals, enabling data-driven decision-making. To improve customer retention, the Bank harnesses predictive modeling to identify potential instances of customer attrition by analyzing historical data and reaching out to identified customers.

The Bank generates personalized offers for customers through analytics-based use cases using predictive modeling, leveraging customer data to identify potential leads and support various functions of the Bank such as Retail, MSME, Agri, etc., thereby contributing to business enhancement.

For risk management, the Bank has implemented various potential stress account models, leveraging historical data of customers (repayment behavior, account utilization, transaction behavior, and account maintenance) to detect patterns and predict early signs of stress in regular accounts.

Major Focus Areas l Generative AI:

Generative AI presents a transformative opportunity for bank, offering multiple avenues by empowering bank to foster deeper customer relationships, driving customer satisfaction and loyalty. To leverage this technology, bank intended to onboard vendor to implement Generative AI through floating of RFP. Frontline Assistant & HR Mitra has been deployed under CUG (Closed User Group) Model.

HR Mitra – Gen AI powered chatbot for HR manuals, policies, circulars etc. with further integration with existing HRMS platform. Staff shall inquire HR related functionalities of HRMS platform from the chatbot itself.

Frontline Assistant – Gen AI chatbot focused on providing relevant information to banks field staff related to banks products and services, FAQs, SOPs, resolving staff queries related to IT/ Application Support/operations etc.

Resilience Operation Centre (ROC):

Bank is in the process of setting up IT Resiliency Operation Centre which will enhance the Banks operational resiliency goal by integrating unified monitoring and Artificial Intelligence (AI) into IT operations (ITOps). This approach uses Machine Learning (ML) to improve performance monitoring and event analysis, enabling IT Teams to predict and prevent outages and quickly resolve issues, ensuring minimal disruption and a seamless customer experience.

Core Banking Modernization:

Bank is upgrading its Core Banking System from Finacle 10.2.18 to 10.2.25 to enhance system performance, improve security features, and support new functionalities that align with the banks evolving business needs. Upgrading Finacle to version 10.02.25 significantly aids in enhancing the systems resilience, performance, and scalability. This version introduces advanced features such as improved real-time processing capabilities and enhanced support for microservices architecture, which are crucial for hollowing the core.

Cloud Centre of Excellence:

Bank is envisaging to setup a Cloud Center of

Excellence (CCoE) that drives cloud adoption and optimizes cloud operations. The CCoE will play a crucial role in managing and governing cloud strategies across different types of cloud environments: private, public, hybrid and SaaS. All the critical applications will be hosted on the Private Cloud Infrastructure. In Hybrid Cloud, App & Web

Servers of Non-Critical Applications will be hosted on Public Cloud and DB Servers will be hosted on Private Cloud infra. Fintech Applications will be hosted directly on Public Cloud Infrastructure. Bank will also envisage towards hosting cloud native SaaS Applications such as Microsoft 365 etc. for faster deployment and Service.

Digital Business Platform:

Digital Business Platform: Bank is implementing a comprehensive digital business platform to enable seamless interactions and transactions across various channels, fostering agility and adaptability in the digital landscape.

Four liability journeys for ETB customers viz. FD, RD, PPF & SSA are live on Assisted portal; and Three lending journeys viz. Vehicle Loan, Personal Loan and Pre-Qualified Business Loan are live across Open-Web and Assisted Portal.

Data Lake:

Bank is modernizing its data capabilities with a transformative Data Lake & Analytics platform. This next-generation Data Repository Solution will store large sets of structured & unstructured data from various sources, offer advanced analysis, improve data exploration, cut costs and act as a single source of truth. This will lead to better insights, improved Internal/ Regulatory Reporting, easier data access, more accurate analysis, business agility and eventually improving decision-making, customer service, regulatory compliance and our market position.

Digital Contact Center:

To provide uninterrupted and seamless above-mentioned banking services, Bank is also implementing Digital Contact Center to improve Customer Experience via personalization, call resolution, customer connect, quick response and embracing technology. It will widen the customer base supported by the contact center and migrate contacts from branch service mode to contact centre mode.

21 Risk Management

Risk Management Department

Risk management is the strategic process of identifying, assessing, and mitigating uncertainties that could affect an organizations objectives. Its critical role became increasingly evident as global financial markets evolved, leading to heightened complexity and volatility. Your Bank has a proactive approach towards risk management. Its risk philosophy involves developing and maintaining a healthy portfolio within its risk appetite and regulatory framework. Your Bank constantly endeavours to ensure that business function partners with the risk management function to enhance shareholder value and to ensure judicious use of available capital.

Risk Management is a Board driven function in the bank with the Risk Management Committee (RMC) at the apex level supported by operational level committees of top executives for managing various risks. The Board of Directors of the Bank approves the Risk appetite and Risk policies of the Bank. The RMC supervises implementation of the risk strategy and policies, reviews the level and direction of risk, prudential ceilings, portfolio diversification and monitors the risk reporting. The risk strategy and policies are effectively communicated to all branches and offices of the Bank.

Your Bank addresses Credit, Market and Operational risk through appropriate policies, organization structure, risk management techniques, adequate systems and procedures, monitoring and reporting mechanisms. Your Bank has created a dedicated ESG Cell to incorporate ESG risks-related considerations in strategies and objectives, integrating ESG risks in governance structures and implementation of various ESG aspects. Your Bank has also created dedicated Vendor Risk Management Cell to mitigate risks arising from third party vendors due to outsourcing of critical functions. IT Risk Management Cell has been set up to ensure banks operational resilience against IT risks and compliance with regulatory guidelines. Risk management activity in your bank has also been extended to field level units by posting Risk Officers at Zonal Offices and Regional Offices. Primary responsibility of these Risk Officers is to identify, assess, monitor, report and suggest mitigants.

Your Bank has a well-defined an independent risk function to ensure that the Bank operates within its risk appetite.

Credit Risk Management

Credit risk management involves identifying, assessing, and mitigating the risk of financial loss due to borrowers failure to repay a loan or meet contractual obligations. It ensures to maintain asset quality and capital adequacy through effective risk controls and monitoring.

Your Bank has well-defined credit appraisal mechanisms and risk management frameworks in place for identification, measurement, monitoring and control of the risks in credit exposures. In your Bank, overall responsibility of managing credit risk lies with the Credit Risk Management Committee (CRMC). The CRMC meets regularly for portfolio analysis, setting and monitoring exposure ceilings, refine rating and scoring models, identify stress sectors etc.

Your Bank has various instruments like Credit Risk Management Policies, Prudential Exposure Limits, Risk Rating system, Risk Based Review of Credit Appraisal (RBRCA) for big ticket advances and Risk-based pricing for Credit Risk/Portfolio Management. Your Bank has a standardised and well-defined approval process for all advances. It adopts a committee approach for credit sanctions and has credit approval committees at various levels.

Your Bank also has dedicated Credit Policy Cell for formulating, implementing, and updating policies and guidelines that govern banks credit activities. The primary objective is to ensure that the banks lending practices align with regulatory requirements, risk management principles, and the banks strategic goals. Credit policy team is an integral part of product development and innovation. It collaborates with other verticals to design new loan products & for modification in existing products based on market needs and credit trends.

Your bank has also subscribed to industry research/ analysis reports from top research companies for internal consumption. Risky sectors are monitored continuously and wherever warranted; exposure concerned is reviewed immediately.

Your Bank also conducts Stress Tests every quarter on its Credit portfolio. Stress Scenarios are regularly updated in line with RBI guidelines, industry best practices and changes in macroeconomic variables.

Your Bank has put in place an Early Warning Signal (EWS) system based on a predictive analytical approach, which helps to identify the stress signals well in advance and helps to take appropriate mitigation measures to maintain the desired credit quality of borrowers on a regular basis. appetite statement and Your Bank uses various Credit Risk Assessment Models and scorecards for assessing borrower-wise credit risk. Your Bank also has in place a ‘Dynamic Rating framework, which facilitates early identification and adoption of appropriate mitigation mechanisms. Bank has also introduced the ‘Risk Based Review of Credit Appraisal Framework for large value accounts to strengthen the loan underwriting.

Your Bank has adopted an IT platform for credit appraisal processes through Lending Automation Solutions (LAS). Internal Rating models are hosted on these platforms, which are interfaced with CIBIL, RBI defaulters lists etc.

While arriving at Banks CRAR, capital charge on credit risk is computed based on Standardized approach. Your Bank has adopted the RAROC Framework for optimal risk-reward considerations, wherein RAROC computation for all fresh sanctions/reviews/renewals of Agriculture, MSME and Corporate proposals above a certain cut-off limit is mandatory. Credit decisions related to the concession in Rate of Interest (ROI) are linked to the RAROC help in maintaining profitability of the bank and value creation for the stakeholders. While taking decision on pricing of loan, RAROC framework is used to assess risk adjusted profitability from individual transaction, which helps the bank in ensuring sustainable profitability and value creation for the stakeholders.

Operational Risk Management

Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. Effective management involves identifying risks, implementing controls, and monitoring to minimize financial and reputational impact To manage operational risks, your bank has put in place a comprehensive Operational Risk Management Framework, whose implementation is supervised by the Operational Risk Management Committee (ORMC) and reviewed by the Risk Management Committee of the Board. The primary goal of ORMC is to mitigate operational risk by establishing a structured risk management process within the bank.

An independent Operational Risk Management Cell implements the framework. Under the framework, the Bank has three lines of defense. The first line of defense the business unit (including support and operations) which is primarily responsible for managing Operational Risk on a day to day basis. The second line of defense is the Risk Management Department and Compliance Department, which develops policies, procedures and techniques to assess the risk and monitor the effectiveness of your Banks internal controls. Internal Audit is the third line of defense.

The team reviews the effectiveness of governance, risk management and internal controls within your Bank. The comprehensive systems and procedures, internal control system and audit are used as primary means for managing Operational risk. The bank has in place a Board approved Operational Risk Management Policy based on Reserve Bank of India guidelines.

All new products/ processes introduced by the Bank pass through a Product & Process Risk Evaluation Committee (PPEC), this process helps to identify and address the operational risk issues.

The Bank has compiled data of the operational losses and is analyzing the operational losses incurred for taking corrective measures. The process has also been put in place to conduct Risk and Control Self-Assessment (RCSA) for assessing the residual risks in the products/ processes of the Bank. Key Risk Indicators (KRIs) have been identified for various processes, and the threshold limits have been fixed. Your Bank is currently following the Basic Indicator Approach (BIA) for capital computation under Operational Risk.

Your Bank is also creating a risk-awareness culture by embedding it through the existing training system at all levels. Internal as well as external training is conducted in the Bank for the Risk Officers. To imbibe the risk culture in the Bank across various functions and fieldfunctionaries, e-learning module on Risk Management have been made mandatory.

Your Bank has a robust Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) that is periodically tested to ensure that it can meet any operational contingencies. A well-documented Board approved Business Continuity plan is in place to minimize business disruptions and system failure, and potential impact on its business, employees and customers during any unforeseen adverse event or circumstances. The plan is designed in accordance with the regulatory guidelines and is reviewed regularly.

Further, Bank has also constituted a BCP Quick Response Team (QRT) for IT and Non-IT related Disruptions. QRT monitors the disruption and gives necessary directions to various Verticals/fields and also monitors the situation till normalcy is restored.

Asset Liability Management (ALM)

ALM is defined as strategic process of managing risk that arise due to mismatches between assets & liabilities of the bank and matching them as per maturity pattern or duration, by hedging and securitization. The objective of ALM is to have a comprehensive system of management of assets and liabilities through a strategic approach and scientific blending of price, appropriation, mix and duration of funds to minimize the inherent risks that might creep into the system, intentionally or unintentionally.

In your Bank, overall responsibility of managing asset liability lies with the Asset Liability Committee (ALCO). The Asset Liability Committee meets regularly to review and decide on the size, mix, tenor and composition of various assets and liabilities. It primarily does identification, measurement, monitoring and management of liquidity and interest rate risk. Pricing of asset and liability products is also decided by ALCO. The fundamental focus is to add value both from the earnings perspective and the economic value perspective. Your Bank dynamically reviews various benchmark lending rates by considering various cost factors to manage its interest rate risk effectively.

Your Bank is having Asset Liability Management Policy which aid in management and mitigation of interest rate risk, liquidity risk in the banking and trading books. Your Bank ensures proactive liquidity management, develops stress scenarios, conducts behavioural studies and also has a contingency funding plan in place. Bank has adopted the liquidity risk management guidelines issued by RBI pursuant to the Basel III framework on liquidity standards. These include the intraday liquidity management, Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). Monitoring of liquidity is proactively done both through the stock approach and flow approach.TheALMDeskandMid-Office measure and monitor the market risk in the Banking and Trading books respectively.

Market Risk Management

Market risk refers to the potential loss arising from adverse movements in market prices, such as interest rates, foreign exchange rates, equity prices, or commodity prices. It is managed through techniques like value-at-risk (VaR), stress testing, and hedging strategies to protect the institutions earnings and capital.

In your Bank, overall responsibility of managing market risk lies with the Asset Liability Committee (ALCO). The mechanism to deal with Mid-the Market Risk Management functions by monitoring the positions vis-a-vis limits and coordinating with the office reports directly to the TreasuryDepartment.Mid-Chief Risk Officer (CRO). It provides necessary inputs / information to the ALCO on Market Risk.

Your Bank is having Treasury Policy and Market Risk Management Policy which aid in management and mitigation of interest rate risk, liquidity risk and market risk in the trading books.

The Risk measures are further supplemented by a Board approved ‘Stress Testing Policy, which guides the Bank in assessing the potential impact of adverse scenarios on the Banks Investment book, including forex exposures and their impact on the Banks Profit & Loss. The Stress Testing results are being submitted to the Board on a periodic basis.

The Market Risk capital charge of the Bank is being computed using the Standardized Measurement Method (SMM) by applying the regulatory factors.

Internal Capital Adequacy Assessment Process (ICAAP)

Your Bank also conducts a comprehensive Internal Capital Adequacy Assessment Process (ICAAP) wherein the material risks faced by the Bank are listed, and their measurement and management methodologies are enumerated. Besides the Pillar-I risks, the Pillar-II risks are also assessed. The adequacy of the capital under normal & stressed conditions to meet future business requirements are also assessed.

Your Bank review ICAAP framework every year, the framework ensures sufficient capitalBank maintain for risks. ICAAP validation is performed annually by a Validation Committee. Scope of ICAAP includes: l Risks partially or not captured under Pillar 1 l Assessment methods for different types of risks. l Estimating capital needs under stress scenarios (Stress Testing). l Capital requirements for future growth (Risk Appetite Statement) Your bank has board approved capital plan for capital needs, desired levels, utilization and contingency measures. Your Bank integrates capital planning with business growth, ensuring optimal utilization and regulatory compliance. Staff is trained on capital management, and stress testing is conducted to assess potential risks. Capital is raised proactively based on projected business requirements.

ESG & Climate Risk

ESG and climate risk refer to environmental, social, and governance factors that can impact a financial institutions long-term performance and resilience. Managing these risks involves integrating sustainability considerations into risk frameworks to address issues like climate change, regulatory shifts, and reputational impacts. Your Banks Board has acknowledged the need to address the impact of ESG & Climate change risk. The Bank is committed to address the challenges to the environment by creating a positive impact through its businesses and addressing the challenges to the environment. Risk Management Committee looks into all the ESG & Climate Risk related matters of the Bank. The Bank constituted ESG Steering Committee (ESGSC) for overseeing ESG transition in the Bank. The Bank has formulated a Board approved ESG Risk Framework & Climate Risk Policy. The Bank has also formulated a Board approved sustainable financing framework to cover resource mobilisation & financing framework and aspects related to assurance.

Your Bank has established a separate ESG Cell to act as a nodal department for ESG related risk & opportunities. The Bank has identified vertical wise ESG related action points and timelines. A Sub-committee has been formed comprising of verticals looking after the premises of the Bank, Information Technology & Operations to formulate action points to achieve net zero emission in the Banks own operations. Further, another Subcommittee has been formed under the credit verticals of the Bank which will be the driving force behind transition of the credit portfolio of the Bank towards sustainable/ green finance. The Committee is working on finding out new avenues and opportunities for sustainable finance by measuring & mitigating the percentage of credit exposure to carbon-intensive sectors. The Bank has started assessment of physical risk and transition risk using financed emission in credit underwriting, identified physical risk of collaterals at district level of granularity and has also evaluated physical and transition risk for corporates at customer level under different climate scenarios.

Your Bank has become the first major Bank in India to become signatory to the Partnership for Carbon Accounting Financial (PCAF), which has provided the bank access to the PCAF database and methodologies. The Bank has also signed MoU with the Council on Energy, Environment and Water (CEEW), which provides access to advanced modelling and scenario analysis tool namely Global Change Analysis Model (GCAM) India model developed by CEEW. Your Bank has also signed MoU with theDeutscheGesellschaft furInternationale Inherent Risk Assessment, Due Diligence, Zusammenarbeit (GIZ), for technical assistance and capacity development. These partnerships with international organisations demonstrate your banks strong ESG and climate commitment. Your Bank has also started integrating Climate Risk Solution in its lending operations. The Bank has also started integration of ESG related topics in its training programmes.

Your Banks training centre at Bangalore "Union Bank Knowledge Centre" has been certified with Platinum rating by Indian Green Building Council (IGBC). Your Bank has launched several products such as Union Green Home, Union Green Vehicle, Union Green Deposits promoting sustainable development.

Your Bank is working towards setting a time-bound quantitative target for reduction in emissions/ emissions intensity and carbon neutrality. Your Bank has set Net Zero target in Own Operations by 2035. Your Bank is well aligned to national goals and targets in the nations collective transition to a low carbon economy.

Vendor Risk Management Cell

Third-party vendors have become integral part of banking operations. Over time, bank has recognized that outsourcing is a critical function within the bank. Risk and failures at a vendor can directly impact a banks operations, financials, customers, and reputation. Bank has established a dedicated Vendor Risk Management Cell within RMD, for managing risks arising from outsourcing activities. To manage outsourcing risk, the has board approved Vendor Risk Management policy in place.

Centralized data base of vendors is managed by Bank through inhouse portal called "Centralized Vendor Risk Management System" (CVRMS). Your bank has deployed outsourcing lifecycle in CVRMS for the effective monitoring of vendors. Your Bank is regularly reviewing its vendors and their services once at pre-onboarding stage and thereafter on periodic basis post-onboarding. Review of Service providers includes Activity Classification, Enhanced Due Diligence, Cyber Risk Assessment, Due Diligence and Police Verification of Vendor Employees, Key Performance Indicator, Business Continuity Plan and ESG (Environment, Social and Governance) Assessment. To ensure the vendor maintains adequate security measures at operating environment and required BCP in place. Your Bank has a system to inspect the vendor site on regular basis.

IT Risk Assessment Cell

Bank has formulated IT Risk Assessment Cell under Risk Management Department to support the banks Operational Risk Management function by evaluating technological changes, new implementation, and customizations to ensure that IT-related risks are getting identified, assessed, and product development. The Cell operates under the direct oversight of the Chief Risk Officer (CRO).

Your Banks IT Risk Assessment Cell collaborates with key stakeholders, including DIT (Department of Information Technology), CISO (Chief Information Security Officer), Compliance, Audit, and Digitization verticals, to ensure a comprehensive approach to IT risk management and comply with RBI guidelines, banks internal policies and IT

Governance framework.

The IT Risk Assessment process includes, Risk Identification, Risk Evaluation, Risk Prioritization, Risk Mitigation, Control Effectiveness, Change Identification and Assessment, Periodic Review of Business Impact Analysis (BIA) reports.

Transaction Monitoring and Fraud Management

Transaction Monitoring and Fraud Management vertical was formed with the vision to have better monitoring of fraud cases and early detection of the modus operandi followed in perpetrating the fraud. These will enable the bank to provide a robust system for prevention, early detection and timely reporting of fraud using various tools such as OTMS alerts, EFRMS alerts, Early Warning Signals to name a few.

Your Bank has started Real Time Monitoring System (RTMS), with an objective to detect & arrest transaction related frauds, at source system i.e., CBS (Finacle) on real time basis.

This is a unique concept wherein newly opened Saving and Current accounts are being monitored for initial first year and have facility to record Enhanced due diligence (EDD) in CBS on 24/7 basis.

Newly opened CASA accounts are being monitoring based on velocity checks on outlier basis. Such velocity checks include no. of transactions, transaction amount as per customer profile etc.

Your Bank is having a comprehensive surveillance mechanism for monitoring the transactions and events on a continuous basis at source system (CBS) and in near at initial stage of real time basis from the conclusion of transaction/event/ activity; alerting designated users instantly via SMS & e-mail. Thus damage, if any, can be arrested immediately. Bank has developed machine learning models which are capable in detecting mule accounts proactively on a real-time /near real-time basis. Many of the accounts identified through Machine Learning are also being reported through cyber-crime complaints from I4C and other Law Enforcement Agencies. This measure helps to protect genuine customers who may unknowingly fall prey to cyber-fraudsters by identifying and acting against mule accounts promptly.

These initiatives, positions your bank as a pioneer in the

Indian Banking Industry, enhancing fraud detection and mitigation capabilities.

Group Risk Management

Group Risk entails the risks faced by any of the group entities that have a common resonance across the group, which may have a group-wide impact. Your Bank, through its group entities, participates in diversified services like banking, securities and capital markets, insurance, mutual fund and retail asset businesses. Bank has put in place a framework/ policy for the assessment of risks for its Group entities, internal controls, mitigants and capital assessment under normal and stressed conditions.

Enterprise Risk Management (ERM)

Enterprise Risk Management (ERM) is a structured approach adopted for identifying, assessing, managing, and monitoring risks across the organization. Unlike traditional risk management, which often focuses on specific threats in isolation, ERM provides a holistic framework that integrates risk considerations into strategic decision-making. ERM is a process of addressing these risks on a bank-wide level instead of managing in silos.

Your Bank has put in place an ERM framework which enables the Bank to gain a clear view of its overall risk level. ERM is designed to address a broad range of risks, including financial, operational, strategic, regulatory, and reputational risks. Your Bank has a Board approved Enterprise Risk Management policy in place

22. Compliance

Your Bank has established a robust and well-documented compliance framework, guided by a comprehensive Compliance Policy. The Compliance Function is focused on ensuring adherence to regulatory and statutory guidelines, fair practice codes, internal policies, government directives, and the prevention of money laundering and financing of unlawful activities. The Compliance Department operates through dedicated teams specializing in various domains, including regulatory compliance, risk-based supervision, operational compliance, compliance test checks, and policy reviews. These teams work closely with business verticals and other assurance functions to manage and monitor compliance risks effectively. The regulatory compliance team also plays a pivotal advisory role for internal stakeholders on evolving regulatory requirements.

Your Bank continues to leverage technology to streamline compliance processes, reduce manual interventions, enhance coordination with regulators, and strengthen monitoring mechanisms to improve operational efficiency.

A structured process is in place for identifying, assessing, monitoring, and managing compliance risks, along with mechanisms for escalation and resolution of any instances of non-compliance. Compliance requirements are embedded into products and processes right from the design stage.

Recognizing the critical role of human capital, your Bank has invested in continuous education and capacity building of employees through training programs, workshops, and updates on regulatory changes and best practices in compliance risk management.

To ensure alignment across the Group, the Group Chief Compliance Officer (GCCO) oversees compliance adherence for the Bank and its subsidiaries. The Bank has further strengthened its compliance structure at the Corporate Office, as well as at Regional and Zonal levels, for enhanced field-level monitoring group comprising the Chief Compliance Officer, Chief Risk Officer, Heads of Internal Audit, Information Security, and Transaction & Fraud Monitoring regularly reviews key compliance issues and status of major regulatory directives.

In its ongoing efforts to embed a strong compliance culture, your Bank has launched targeted training programs across business verticals and field units.

Special initiatives such as Compliance Awareness Week, distribution of flyers, capsules, and awareness sessions have been conducted to enhance regulatory knowledge and promote a compliance-first mindset. Additionally, the KRAs for officers across all levels now include increased weightage on compliance, thereby ensuring greater accountability.

Your Bank conducts regular compliance test checks across Central Office Departments, controlling offices, and branches to assess implementation of regulatory directives. A centralized Compliance Package is in place to manage responses to communications from regulatory bodies such as RBI, SEBI, Ministry of Finance, and the Indian Banks Association (IBA). The roles and responsibilities of the Compliance Function are clearly defined across all tiers of the Bank. A structured self-certification process, supported by Zonal Compliance Officers and Zonal Compliance Monitoring Committees, ensures regulatory and statutory compliance at the field level.

The Bank has developed and deployed Compliance Monitoring Tool to facilitate individual-level compliance monitoring, certification, and verification, thereby enhancing accountability and transparency.

Long-term compliance requirements have been integrated with the Banks business strategy. Compliance considerations are embedded into decision-making processes, product design, IT systems, and digital lending operations. Systematic checks and controls at policy, process, and technology levels have been institutionalized to ensure sustainable compliance. Enhanced transparency, risk governance, and disclosure practices have been adopted to uphold stakeholder trust. Your Bank remains fully committed to reinforcing its compliance, risk management, and governance frameworks, and continues to align with industry best practices to support the overarching goals of financial stability and institutional integrity.

23. Internal Audit

Following key activities are carried out by the Audit &

Inspection vertical:

i. Risk based Internal Audit of Branches and other units

ii. Concurrent Audit of select Branches and other units

iii. Management audit of controlling offices and CO

. A dedicated Assurance Verticals

iv. IS Audit

v. Foreign Branches Audits

vi. Special Audits and Special Reports

vii. ACE, CAOC

viii. Data Dump Analysis

ix. Providing data for examination of Staff Accountability-

DFS Guidelines.

Risk based Internal Audit of Branches and other units:

During FY 2024-25 total audits commence of 6080 branches, out of which wrap up completed in 5938 branches and rating of 5904 Branches is finalized as on

31.03.2025. The number of branches under Low Risk are 4299 (72.82%), Medium Risk are 1533 (25.97%), High Risk are72(1.22%) & Extremely High Risk are Nil. Further,798 other units audit commenced, out of which 763 Audit wrapped up during FY 2024-25. Forex Audit of 114 B category branches done during the period.

Concurrent Audit of select Branches and other units:

Department has initially appointed (Fresh/ Renewal)1873 concurrent auditors for FY 2024-25 and as on 31.03.2025, 1,848 Concurrent Auditors covered 1843 branches/Verticals/Units. Out of Total 1843 branches/Verticals/Units 1341 are business Branches ,these branches covers54.64% of total Deposit and 77.99 % of Advances of the Banks total business as on 31.03.2024.Total 39 Verticals /Sub Verticals covered under Concurrent Audit.

Revenue Audit (leakage of Income)

Leakage of income has direct effect on the profits. With a view to curb the tendency of negligence on the part of the staff, a format has been devised wherein the names of the officials are required to be mentioned against the leakage in each case to enable the Bank to take suitable corrective action. Three (3) Revenue Audit (leakage of Income) Special Campaigns conducted during FY 2024-25. Total amount detected 502.08 crore and recovered 408.87 crore as on 31-03-2025.

Management audit of controlling offices and CO

Verticals

Management audit involves the review of managerial aspects like organizational objective, policies, procedures, structure, control and system in order to check the of the management over the activities of the Bank. Management Audit is to assess effectiveness of management in accomplishing tasks and in achieving overall corporate objectives. It would strive to help the auditee unit to accomplish its objectives by bringing a systemic and disciplined approach to evaluate the effectiveness of management procedures, control and governance processes, for better results and quality. Offices,18 Zonal Offices ,18 Zonal Audit 134 Regional Offices, 34 Central Office Verticals, 7 Other offices are covered under Management Audit.

IS Audit:

Information Systems audit is an examination of controls within Information Technology (IT) infrastructure. Bank has adopted hybrid model for conducting IS Audit of IT assets wherein by Banks internal IS Audit team along with selected CERT-in empaneled IS Audit service provider is undertaking the IS Audit, as per the approved annual IS

Audit Plan.

100% Target achieved during the period as IS Audit has been undertaken for 289 IT applications / processes and

74 Administrative offices & 3 foreign instances. Along with these regular IS audit, 35 pre-implementations IS audit were undertaken to provide IT control status to CISO & owner auditee team to decide go live. 25 special focus IS audits were also undertaken as per regulatory / Internal guidelines like SWIFT CSCF, comprehensive SWIFT, RBI KRI data, UIDAI compliance, RA audit etc.

Foreign Branches Audits:

The bank is having branches at Dubai, Sydney and subsidiary at UK. The annual audit of all the three places is completed as per time schedule. The periodic audit is also completed at Dubai and Sydney branches.

Special Audits and Special Reports:

Special Audit: It is being conducted on receipt of specific requests from controlling offices like ZAO/RO/ZO and/or the respective Functional Department of Central Office Including Audit & Inspection vertical. Such request for conduct of Special Audit shall invariably contain specific reasons for the recommendations, nature and seriousness of the issues and specific area where the audit is to be focused. During FY 2024-25, 114 special audits approved, out of which 111 special audits completed & released.

Special Report: The purpose of submission of Special Report is to draw the immediate attention of the Management / Controlling Offices to the irregularities in branch/account further to initiate corrective steps for rectification/regularization of such irregularities and to safeguard the interest of the Bank. During FY 2024-25, 103 special reports issued.

Audit committee of Executives (ACE) & Central Office Audit Committee (COAC): During FY 2024-25, up to 24th July 2024, 4 ACB meetings conducted by A&I vertical, afterwards ACB shifted to board secretariat as per instruction received from RBI SSM.

ACE shall meet at least once in a quarter and at least six time in a year. During the FY 2024-25, 7 ACE meetings conducted During FY 2024-25, 7 Central Office Audit Committee meetings conducted.

Data Dump Analysis

Data Dump Analysis is an important in-house activity to analyse the data available in the system to identify the data gaps, deviations from policies / guidelines of products/ processes defined by the bank and regulator (RBI). This activity is put in place to help the field functionaries to maintain the accuracy & completeness of data captured in line with the policies. Data analysis team (DAT) at audit & inspection CO, undertakes analysis on various scenarios for identifying the control gaps.

Since the beginning of Data Dump Analysis i.e. December 2021, A & I vertical conducted analysis of 152 scenarios. Data Dump Analysis conducted on 26 new scenarios in FY 2024-25 (Till March 2025) and their observations/findings were placed before ACE.

Providing data for examination of Staff Accountability-

DFS Guidelines:

Accountability framework Revised guidelines on Staff for NPA accounts up to Rs. 50.00 crore (other than fraud cases) was issued by Department of Financial Services. Accordingly, A system is placed at Zonal Audit Offices to provide Audit Reports for accounts above Rs. 0.10 crore to Rs. 1.00 crore to Staff Accountability Committee within 7 working days and similarly for accounts above Rs. 1.00 crore to Rs. 50.00 crore by A&ID, CO within 15 working days.

Future Outlook:

Remote audit:First phase Implementation of remote audit for branches is completed. 280 Audit points constituting 10% of 2385 RBIA Master checklist points in eTHIC module have been brought under first phase of implementation. Remote Audit integration with Finastra:Creation of interface with Finastra is under process. Under this phase, another 388 checklist points (13%) will be brought under the scope of remote audit.

Remote Audit integration with DMS:The remaining master checklist points will be implemented under remote audit once DMS module is fully functional and integrated with eTHIC.

With implementation of the Remote Audit module, Vertical envisages the following benefits: Saving in cost and effort Improvement in the quality of the Audit.

24. Cyber Security

24.1 Cybersecurity Governance Framework and Action Plans

Union Bank of India has implemented a comprehensive Cybersecurity Governance Framework and robust data governance and privacy practices, which are detailed in its IT Policy and Data Governance Policy. The Bank holds ISO

27701:2019 certification for its Privacy Information Management System (PIMS), enhancing its Information Security Management System (ISMS) and ensuring the management of Personally Identifiable Information (PII). This certification builds stakeholder trust, mitigates privacy risks, and ensures legal compliance, reinforcing data integrity, accuracy, and reliability. The Bank adheres to several key regulatory frameworks, including the

RBI Cyber Security Framework 2016, RBI Master Directions on Digital Payment Security Controls 2021, and RBI Master Directions on IT Governance, Risk, Controls, and Assurance Practices 2023. Its IT systems comply with international risk management frameworks, notably ISO 31000:2018, and include detailed Risk Assessment and Risk Treatment plans. Furthermore, the Bank meets the standards of ISO 27001 (Information Security Management), ISO 22301 (Business Continuity Management), ISO 27701 (Privacy Information Management), PCI DSS (Payment Card Industry Data Security Standard), and PCI PIN (Payment Card Industry PIN Security). Since November 14, 2022, several key systems, such as CBS, RTGS, NEFT, IMPS Switch, ATM Switch, and UPI Switch, have been designated as "Protected Systems" by the Ministry of Electronics and Information Technology. Consequently, the Union Bank of India complies with the Information Technology (Information Security Practices and Procedures for "Protected Systems") Rules, 2018, ensuring robust cybersecurity and data protection measures.

24.2 Cybersecurity Infrastructure & Strategies for Threat Mitigation l Policies and Action Plans: Harmonised with Digital Payment Security Controls for internet banking, mobile banking applications, ATM operations, and other generic security controls. l 24x7 Cyber Security Operation Centre (C-SOC): A cornerstone of the Banks cybersecurity infrastructure, staffed by a dedicated team of experts using advanced tools and technologies to monitor, detect, and respond to cyber threats. l Defence in Depth Strategy: Provides holistic protection with a comprehensive, multi-layered security architecture. l Ethical Hacking Lab: Identifiesgaps in the Banks perimeter or internet-facing applications/assets daily. Vulnerability Assessment/Penetration Testing (VA/PT) Lab: Conducts regular VA and PT of applications and systems. Red-Teaming Exercises: Conducted with external vendors to identify vulnerabilities and business risks, simulating the actions of an attacker to test existing controls.

24.3 Customer Awareness Activities

Union Bank of India continues its unwavering commitment to educating customers on secure banking practices and digital safety. The Bank has implemented a series of initiatives to ensure customers are well-informed about potential cyber threats and how to mitigate them. Here are the key activities undertaken for customer awareness:

a) Secure Usage Guidelines: The Bank provides comprehensive, secure usage guidelines, terms, and conditions for using digital channels and products. These guidelines are prominently displayed across various platforms to ensure maximum visibility and awareness.

Internet Banking and Mobile Banking

App Vyom: Secure usage guidelines are integrated into the user interface of the Banks internet banking portal and the Mobile Banking App Vyom. This ensures that customers are aware of best practices and security measures every time they use these digital channels.

Passbooks and ATM Slips: Security messages are printed on the passbooks issued to customers and on ATM slips generated after successful transactions. This continuous reminder helps reinforce safe banking habits among customers. Videos and Social Media Posters: The Bank uses engaging videos and informative posters on social media platforms to educate customers about cybersecurity. These materials cover various topics, from identifying phishing attempts to securing personal information.

b) Public Awareness Campaigns: Union Bank of India continuously engages in public awareness campaigns to inform customers about the types of threats and attacks they may encounter while using digital payment products. These campaigns highlight precautionary measures that customers can take to protect themselves.

Emails and SMS: Regular communications are sent via email and SMS to alert customers about potential threats and provide tips on how to stay safe online.

c) Cybersecurity Awareness Displays: In addition to digital communications, the Bank ensures that cybersecurity awareness is a visible part of the physical banking experience.

Network Electronics Display Units (NEDU): Creative cybersecurity awareness messages and posters are displayed on NEDU screens in branches. These visual reminders help keep cybersecurity at the forefront of customers minds as they conduct their banking activities.

A strong focus on cybersecurity resilience drive Union Banks initiatives across people, processes, and technology.

d) Monthly Cybersecurity Tips: The Bank collaborates with the Centre for Development of Advanced Computing (CDAC) Hyderabad, a key partner, to provide monthly bulk mailings of cybersecurity tips to all customers. CDAC Partnership: Through this partnership, the Bank sends out regular communications with practical cybersecurity tips, helping customers stay informed about the latest security practices and potential threats

e) Online Webinars: To reach a broader audience and provide in-depth cybersecurity education, the Bank conducts online webinars in coordination with CDAC Hyderabad.

Monthly Webinars: These webinars are held monthly and are available to bank customers across India. The sessions cover a range of topics, including the latest cybersecurity threats and how to protect against them, providing an interactive platform for learning and engagement f) Multi-Channel Communication: Union Bank of India employs a multi-channel approach to ensure that cybersecurity messages reach all customers, regardless of their preferred communication medium.

Internet and Mobile Banking: Important cybersecurity information is displayed on the Banks internet banking portal and Mobile Banking App Vyom.

Credit Card Statements: Customers receive security messages with their credit card statements, reinforcing the importance of cybersecurity with their financial documents.

SMS and Emails: Regular alerts and tips are sent via SMS and email.

Social Media Channels: The Bank utilises LinkedIn, Instagram, Facebook, X and YouTube to share cybersecurity awareness content.

Network Electronics Display Units (NEDU): Physical displays at branches ensure that customers are reminded of cybersecurity best practices during their visits. Through these comprehensive initiatives, Union Bank of India is dedicated to building a well-informed customer base capable of navigating the digital banking landscape securely.

24.4 A strong focus on cybersecurity guides Union Banks initiatives across people, process and technology

Union Bank of India puts cybersecurity front and center to safeguard banks stakeholder interests while growing its digital business with omnichannel presence. Bank has cultivated a strong cybersecurity culture to increase the digital trust among its stakeholders. Bank has established Cybersecurity Centre of Excellence (CCoE) at its premises at Hyderabad, tasked with learning, imbibing, and implementing industry-leading new generation cybersecurity technologies that will not only protect the Banks cybersecurity assets but also focus on a comprehensive awareness and education program for its employees and customers. CCoE has signed MoU with external institutes such as the Centre for Development of Advance Computing (CDAC), Hyderabad and Cyber Security Centre of Excellence, Department of IT & Electronics, Government of West Bengal (WB-CS-CoE) for using their expertise in conducting cybersecurity awareness webinars/ training for stakeholders.

The Bank has also developed a Comprehensive Cybersecurity Awareness Programme (CCSAP) for customers and employees. The Bank reaches out to customers with awareness campaigns across multiple channels, such as SMS, Multilingual emails, ATMs, display units in branches, social media and the Bank website. Cybersecurity awareness webinars for customers are being conducted pan India at Banks all zonal office locations. A unique, first of its kind initiative has been the introduction of cybersecurity mascots "U SuRs. Ksha" and "U Rs.Kshak" to personalize and promote educational cybersecurity safety tips to its people.

In addition, the Bank drives initiatives to further the Ministry of Home Affairs, Government of Indias Cyber Jaagrookta Diwas (CJD), which is observed on the first Wednesday of every month. On this day, Union Bank sends e-mails on cybersecurity topics to customers, posts creatives on social media, and invites eminent speakers from the cybersecurity domain to conduct engaging webinars. In sync with international practice, annual National Cybersecurity Awareness Month (NCSAM) is celebrated throughout the month of October with a daily webinar on different cybersecurity topics. Bank during its training programs is also disseminating the information regarding reporting of Cybercrime in National Cyber Crime portal of Govt of India by visiting https://cybercrime.gov.in or dialing 1930.

Bank is strengthening and promoting cybersecurity culture amongst its staff members by implementing an annual action plan for various cybersecurity activities which includes conducting townhall meetings pan India, daily mail with cybersecurity tips, interactive puzzles, and crosswords.

Bank regularly publishes internal booklets and news snippets to update staff members on the latest cybersecurity news and trends. A monthly phishing simulation exercise for all employees creates awareness and identifies vulnerabilities among the staff that can be addressed with additional training and handholding. Union Bank has also formulated the Cybersecurity Executive Development Program (CSEDP) to offer in-house certification for senior management in IT and Cybersecurity. The Bank has also created a robust cybersecurity governance structure comprising policies, procedures, guidelines and committees at the executive and Board levels.

24.5 State of the Art technologies

Union Bank has harmonized its policies and action plans in line with Digital Payment Security Controls for internet banking, mobile banking applications, ATM operations and other generic security controls. The Banks Data Centre (DC) & Disaster Recovery (DR) site has ISO certifications for Information Security Management Systems (27001) and Business Continuity Management System (22301). The Banks Enterprise Risk Management System is ISO 31000 certified.The Bank has PCI-DSS certification for all card payment systems and ATM Switch operations. Multiple measures are in place to protect systems and confidential Bank/customer data, such as a defence in-depth architecture with layered defensive mechanisms and a data loss or leakage prevention strategy. This includes protecting data processed on end-point devices, data in transmission as well as data stored on systems. Data security and protection is also mandated at the Banks vendor-managed facilities. Union Bank of India has also implemented a cybersecurity framework and established a 24x7 Cyber Security Operation Centre (C-SOC) with a dedicated, skilled team that works around the clock. The C-SOC helps to identify, detect and prevent cyber threats. It is tightly integrated with critical business applications to monitor attack vectors at various layers. Bank has adopted the ‘Security by design approach to strengthen the cybersecurity posture of the Bank by automating its data security controls and developing a robust IT infrastructure.

To provide holistic protection for its cyber infrastructure, Bank has adopted ‘Defence in depth strategy with a comprehensive, multi-layered security architecture in place. The Bank has also implemented cybersecurity solutions at each level, like perimeter security, network security, application security, end point security, identity and access management, threat Intelligence and data security to protect its IT assets. The Ethical Hacking Lab, set up by the Bank under its CCoE, is tasked with identifying the gaps in perimeter or internet-facing application/ assets of Bank on daily basis.

The Vulnerability Assessment/Penetration Testing Lab (VA/PT) is also under CCoE, and it conducts periodic VA and PT of applications. With the help of external vendors, the Bank also conducts red-teaming exercises to identify the vulnerabilities, business risk, efficacy of the defences, etc. in its IT infrastructure These simulate the actions of an attacker and test the mitigating controls that are already in place. Bank has put in place Attack Surface Management Solution, with Continuous Automated Red Team Exercise Platform, Breach attack Simulation and Digital Risk Monitoring. This project also enables bank Support Banks Digital Journey to bring down risk to minimal level, Continuous monitoring of perimeter, Enhancement in threat detection and incident response & Identify Banks sensitive information such as card data, customer credentials exposed in the public domain.

Our Bank has inhouse Cyberdrill arrangement to assess and improve the banks readiness in detection capabilities to cyber threats and incidents. The goal is to improve detection capabilities, response times, enhance communication, and ensure that all team members understand their roles during an actual cyber incident.

Bank has setup Digital Forensic and Malware Analysis Lab for review of Digital Forensic Readiness of applications, infrastructure, security and network devices, Malware Analysis of ATMs/CRMs, Suspicious emails., etc. Further this enables in Detecting and analyzing anomalies to prevent and respond to potential breaches.

Bank has procured Cyberrange simulation platform which facilitates an environment to practice defending against simulated threats in immersive training scenarios, essentially preparing and rehearsing for the event when a breach occurs. Bank has undertaken Proactive Ransomware Readiness Assessment to understand the Protective, Preventive, Detective, Predictive and Recovery controls in the wake of a recent ransomware attacks and to address any findings that can undermine the organizations ability to resist or recover from such Ransomware attacks

New Cyber Security Awareness Initiatives:-

In addition to the existing cybersecurity awareness initiatives to the customers of the Bank the following new initiatives were implemented during the FY

2024-25 Four Cyber Security Awareness Guide, Volume I, Volume II, Volume III, Volume IV containing modus operandi about latest Cyber Frauds and safety tips have been uploaded in Corporate website of Bank Cyber Security Awareness tips have been incorporated in the body of Email being sent to credit card customers. Cyber Security Awareness tips have been incorporated in Email body of monthly Bank Account Statement being sent to customer l Cyber Security Audio jingles/Videos/ Banners/ Safety tips for display at Bank Branches Notice Board for creating awareness among customers.

RBI Cyber Security Framework

Bank has put in place Board approved Cybersecurity policy, duly incorporating robust cybersecurity governance structure, with clear roles & responsibilities for managing cybersecurity risks. Regular risk assessments and vulnerability assessments are essential to identify and mitigate potential cyber threats, our bank is conducting regular cyber security risk assessments to identify and mitigate potential cyber threats.

Bank has formulated and implemented Information Security, Cyber Security and Digital Payment Security policies & procedures covering various aspects of cybersecurity, including data protection, access controls, and incident response. We have clearly defined and documented Incident response & reporting mechanism under cyber security policy. Bank is undertaking periodic security audits and assessments of cyber security solutions/processes through External/ Third party auditors to assess the effectiveness of cybersecurity measures.

Group CISO

Bank has implemented the concept of Group CISO for all the Subsidiaries/Joint venture/Associates of the Bank. Group CISO oversees cyber security risk of the group entities, takes part in risk management committee meetings of the entities & Acts an advisor to the management of entities for their cyber security related functions

25. Analytics Capabilities

Following the establishment of the Analytics Center of Excellence (ACoE), your Bank has made significant strides in its analytics capabilities by bringing in skilled professionals and enhancing their expertise through a combination of internal and external training programs. This initiative aims to unlock the full potential of data-driven insights.

In addition, your Bank is actively leveraging data analytics to boost customer engagement, support informed decision-making, and mitigate risks. This is being achieved through descriptive analytics and a range of machine learning use cases developed using statistical and analytical models across key segments such as Retail, MSME, and Agriculture. Use-cases address wide-ranging areas such as customer retention, personalized offers for new products, risk management as well as stress identification.

Bank is currently in the process of implementing a next-generation, state-of-the-art data infrastructure, Enterprise Data Lake, designed to support advanced analytics. The implementation of a Data Lake offers the Bank a unified and scalable platform to store vast volumes of diverse data sets having structured and unstructured data, thus enabling seamless integration of data from multiple sources internal systems, customer interactions, external feeds, and more facilitating real-time access and advanced analytics. Envisaged benefits of this initiative include faster and more accurate risk management, strengthened reporting & review mechanisms, enhanced regulatory compliance, and the ability to personalize customer experiences. The Data Lake also lays the foundation for future innovations in AI and machine learning by providing high-quality, accessible data for model development, such as Credit Underwriting Scorecards for Retail & MSME portfolio, and Next-Best-Product; an advanced cross-sell and up-sell engine. It serves as a single-source-of-truth, ensuring accurate data lineage and coherence among disparate data sources, empowering your Bank to make more informed choices and deliver enhanced experiences for its esteemed customers.

26. Credit Compliance and Monitoring

Collection Management :

During the F.Y. 2024-25 your Bank has improved the Collection Management through the following: Call Centre: For timely collection of dues in the loan accounts and strengthening the collection mechanism, your Bank has established a full- fledged call centre. Full Time Equivalent (FTE) are posted at the call centre for tele calling to those borrowers whose accounts are in stress. By this the borrower is being reminded about his overdues thus enhance the collection. Further, priority calling and

Virtual Relationship Manager (VRM) callings are also made to borrowers under Retail as well as MSME segments whose account is in stress. Callings are also made to all the borrowers having Days Past Due (DPD)+1 and to those borrowers whose account is restructured. Through this the repayment habit of the borrower is improved and enhance the collection efficiency for the Bank.

Feet On Street (FoS) & Customer Relationship Executive (CRE): In addition to the call centre facility, your Bank has deployed the services of Feet On Street (FoS) through UBI Services Limited (UBISL) and Quess Corp during the F.Y. 2024-25. Ltd. These FoS are physically visiting the borrowers for collection whose accounts are in stress. Your Bank has also posted its own staffs in all the Regions in the form of Customer Relationship Executive (CRE) for physically visiting the borrowers. The customer visit by FoS /CRE is allocated through the Mobile App provided to them and they capture the response of the borrowers after visiting them. Through this the repayment culture among the borrowers is inculcated and collection efficiency improved.

BBPS: In a digital era, customer needs ease in making repayment of their dues in hassle free manner. To address this your Bank is sending SMS to borrowers with

Bharat Bill Payment System (BBPS) enabled Click Pay link.

This SMS is sent to all the borrowers availing EMI based term loans before 7 days of DPD & after 1 day of DPD. This has brough substantial growth in the volume of digital transactions for repayment in term loan accounts.

27. Vigilance

The Vigilance Department of the Bank functions under the supervision of Chief Vigilance Officer (CVO), Additional Chief Vigilance Officers (ACVO), who act as an extended arm of Central Vigilance Commission. The CVO

& ACVOs are assisted by a team of 46 functional vigilance Executives/officers stationed at Central Office and 144 Field Vigilance Officers, mapped to Regional/Zonal Offices PAN India. The team is managed by 02 DGMs and 06 AGMs at Central Office, along with 02 AGMs stationed on each at Delhi and Mumbai. Vigilance functionaries, at each level, act as a preventive task force, ensuring sustainable business growth and contributing towards profitability of the Bank. Being a part of Assurance Functions, it is marked as one of the defence pillars of the Bank, promulgating the environment of integrity, and accountability with transparency at all stages. The department has 03 major functional areas- Preventive, Participative and Punitive. Moreover, department aims at proffering systemic improvements for reformation of systems and procedures for strengthening the fundamentals of the organization. By proactively evincing and addressing potential risks, the Vigilance Department helps in mitigating financial, legal and reputational risks associated with corruption and fraud, protecting the interests of the organization and its stakeholders.

Whistle blower mechanism is considered as a potent medium for organizations to ensure participative vigilance, wherein each employee has an access and avenue to safeguard the Bank against internal/ external threats like frauds, bribery, corruption, abuse of authority, non-compliance of laid down systems & procedures, through reporting such incidences to Top Management. This is under the purview of Executive Director heading Human Resource Department.

To effectuate Participative Vigilance-

1. Vigilance Awareness Day is observed on every Second Thursday of each month to address the ongoing frauds, their modus operandi and remedial preventive actions.

2. With the endeavour to exact awareness, an In-House film was directed showcasing the of involving Middleman in financial system, reemphasizing the commitment of the Bank to its core values of transparency and authenticity in its procedures- Say No to Middleman.

3. 01 Video song reiterating the commitment towards upholding values of integrity and promoting culture of venerability, was launched during Vigilance Awareness Week, 2024.

4. In addition to this, 25 short videos were prepared with the concept of "Culture of Integrity for Nations Prosperity" by CGGB (sponsored RRB).

5. To create awareness, participative vigilance drive is undertaken at all level by conducting periodic preventive vigilance visits at all units of the organisation. This is also a prime objective of observing Vigilance Awareness Campaign every year.

6. The department has also circulated educative series for capacity building of the officials working at Branches and controlling offices i.e. weekly series- "Drishti" 52 issues, Monthly series "Satarkata Se Safalta" -12 issues and 4 issues of quarterly series "Union Vigil".

A total of 8907 Preventive vigilance visits were undertaken, covering all the functional units of the Bank, to create awareness, especially pertaining to fraud prone areas and advise Functional Heads to ensure appropriate systems and procedures are put in place. Concept of Enhanced PVAV was introduced to further solidify the intent of PVAV for those units which were marked high on risk continuum. A total of 626 E-PVAVs were conducted during FY 2024-25.

In the endeavour to leverage IT platforms to strengthen the preventive measures various initiatives were taken in this financial year to contribute towards sustainability principle of the Bank. End-to-end digitization of disciplinary process was launched as "Project Vishwas"- An online user-friendly platform for HR, ER, and Vigilance officers, facilitating online submission and collection of documents, efficient case review, and prompt action-taking. It is designed with integration of existing Human Resource Management Systems and Core Banking Database to ensure seamless data flow and real-time monitoring of disciplinary cases During the year various Systemic Improvements were introduced in three major categories to check & deter actionable occurrences in the organization:

1. Preventive Measures

2. Deterrence Measures

3. Awareness Measures

A concept of Digital Vigilance Dashboard was devised which comprises of details of the different sections of Vigilance such as Preventive, Punitive, CBI, ABBFF, Complaints, etc. with updated status. It is presented to Top Management on fortnightly basis.

As per advisory of Central Vigilance Commission, Preventive Vigilance campaign was observed/ undertaken, as a precursor to Vigilance Awareness Week, 2024, from 16th August, 2024 to 15th November, 2024 and Vigilance Awareness Week 2024 envisaging the theme "Culture of Integrity for Nations Prosperity mel?eefve?e ke?er mebmke=?efve mes je<e? ke?er mece=ef?" was observed in a befitting manner from 28th October to 3rd November, 2024 in, across all branches/ offices PAN-India.

As a part of the celebrations, various Vigilance Awareness Programmes were conducted within the organization and outreach activities on PAN India basis, to spread awareness among the general public and youth of India on eradicating corruption and remedial measures available to them. A Total of 16895 events were conducted under Vigilance Awareness Week 2024. 75,000+ staff members and 10,50,657 citizens had taken Integrity Pledge during the Vigilance Awareness Week 2024. Compendium comprising snippets on Conduct Rules, Cyber Hygiene, Ethics & Governance, Systems and Procedures (Credit & Non-Credit Areas) and Procurement with during the campaign period.

During the year a total of 635 complaints were received by the department & all the 635 complaints are disposed of within the TAT. In compliance with CVC guidelines, Quarterly Structured Meetings are regularly held with MD & CEO. Care is being exercised that the disciplinary process does not result in any demoralization. A rational approach by the Top Management, the disciplinary authorities as well as the vigilance machinery is being adopted so as to ensure uniformity, fairness and transparency in functioning and to uphold the principles of natural justice.

28. Operation

A. Initiative across the Banking Industry: UVConn 3.0:

UVConn is an innovative 24X7 digital Banking tool available on WhatsApp Messenger Chat service on number 9666606060. UVConn 3.0 leverages WhatsApp communication platform to connect with customer for enquiries related to their accounts. UVConn is currently Live in 7 languages (English, Hindi, Kannada, Telugu, Tamil, Bangla and Marathi) and is available with 70 Non-financial services making Banking seamless to the customer. Out of 70 services, 10 services have been made live in the FY

2024-25. UVConn has been enabled for NRI customers in 19 countries. Further Welcome Message is being sent to all newly onboarded customers through WhatsApp with a creative of all services. Currently, over 44.50 Lakhs+ users have been onboarded on UVConn and 249 Lakhs+ enquiries have been triggered by customers. B. Projects Implemented by Operations Vertical: Following are the customer centric/ oriented projects implemented by the Bank or easing of Banking and customer excellence.

Sr. No	Name of the Project	Remarks
1.	Digital Contact	Digital Contact Centre of the Bank is
	Centre	established on 14.11.2024. The new
		digital Contact Centre of the Bank
		aims at faster resolution of queries/
		requests/complaints with robust
		Back Office Management and
		multilingual facility in 19 Languages
		including Hindi & English. It also
		has a separate desk for HNI/NRI
		customers. It facilitates end to
		end digital solutions of Customer
		queries/requests/complaints.
2.	Modification in	Security Awareness Information
	Monthly Account	has been incorporated in the e-mail
	Statement sent	body to create awareness amongst
	through e-mail.	the customers.
3.	Centralization of	Mechanism for sending of
	Locker Overdue	centralized dispatch of locker
	Notice Issuance	overdue notices has been
		implemented.
4.	Improvement	To mitigate frauds and to strengthen
	in Cheque Book	Cheque Book management System,
	issuance process	improvements in Cheque book
	in the CBS system	issuance process and tracking of
		cheque book has been introduced,
		with mechanism to control
		delivered/ undelivered cheque
		book in the CBS system.
5.	Outward Clearing	Cheques can be scanned for
	through tablets	outward clearing, through Tablet
	using Remote	using Remote Deposit Capture
	Deposit Capture	(RDC) App. The App automatically
	(RDC)	reads the MICR band and other data
		through the integrated Artificial
		Intelligence (AI), which helps in
		streamlining the data extraction
		process.
6	Availability of	The following services /portals
	Services / Portals	are added in Tablet Banking for
	through Tablet	customer usage and convenience:
		1) UDGAM
		2) Union Vidya
		3) UIDAI Portal
		4) My NPS
		5) Apply Locker
		6) Enrol for APY
		7) Death Claim Portal
		8) PMEGP Portal
		9) PMFBY Portal
7	Customer	Customer Feedback Capture has
	Feedback Capture	been incorporated for the below
	Mechanism	channels:
		1) Tablet
		2) Monthly Account statement
		sent through e-mail.
		3) UVConn
8	Development	As per EASE 7.0 Agenda, below
	of Services can	services are provided without
	be completed	mandatory branch visit through
	without	Online Grievances Portal in
	mandatory branch	Corporate Website:
	visit
		1) Account Transfer to Other
		Branch
		2) Request for New Passbook
9	NRI Services	Following services have been made
	through Internet	live in Internet Banking specially for
	Banking	our NRI customers:
		1) Address Update
		2) Conversion of account from
		Resident to Non-Resident
		3) Conversion of account from
		Non-Resident to Resident
10	Dedicated Help	A dedicated Helpline number 1800
	Line number	425 2407 is made live for Priority
	for Priority	Customers, Senior Citizen & Visually
	customers,	Impaired persons.
	Senior Citizen &
	Visually Impaired
	customers.
11	Hassel Free	Customers can submit their Re-
	Re-KYC in case	Kyc through digital channels
	no change in	like Corporate Website, Internet
	customer KYC	Banking, ATM, Mobile Application
	details.	(Vyom), or through a link-based
		service made available on WhatsApp
		Banking (UVCONN).
12	8 Digit Toll Free	Bank has introduced new 8 Digit
	Number 1800-	Toll-Free Number 1800-2333 for
	2333	the customers.
13	Real-Time query	Bank has introduced a real time
	portal "Ask-Us"	query portal for the staffs to attend
	for staff.	the day to day banking queries.

c. GRIEVANCE REDRESSAL MECHANISM

The Grievance Redressal Mechanism has been strengthened to cater to the need of the customers. The roles and responsibilities at each level of the Grievance Redressal Mechanism have been clearly identified and defined. Mechanism to resolve the complaints and Standard Operating Practices has been defined at all levels to speed up the process of grievance redressal. Grievance Redressal Policy: - The revised policy outlines the framework for addressing customer grievances; it aims at minimizing instances of customer complaints and grievances through a well-structured escalation matrix and pre-defined TAT / Timeline of the complaint. The purpose is to ensure prompt as well as effective redressal of customer complaints. Up-dation of Grievance Redressal Officer Details on Banks Website: The Bank has now uploaded the contact and other details of Zonal & Regional Grievance Redressal Officers on our Banks website to enable ease to the customer in quick resolution of complaints. Now our website contains the structured Grievance Redressal Mechanism from the Chief Grievance Officer level to ZO and RO levels.

Handling of Customer Grievances: Bank have the Online Grievance Redressal mechanism through Corporate Website, IVR, Call Centre, Mobile Banking, WhatsApp Banking, Emails etc. On lodgement of the complaint by the customer ticket number of the complaint is invariably provided to the customers. Further Cyber Fraud related complaints are handled 24X7. Branches/ customers are made available with QR Codes for lodgement of complaint & capturing feedback.

The details of customer complaints received during the financial year 2024-25 are given below.

Complaints outstanding as of 01st April 2024	6,331
Complaints received during the year	5,66,215
Complaints resolved during the year	5,60,903
Complaints outstanding as of 31st March 2025	11,643

29. Opportunities

29.1 Falling costs of deposit, especially bulk deposits:

RBI led MPC cut repo rate by 25 bps during the FY 2024-25 and additionally, frontloaded another 75bps in Q1 FY2025-26, to resolve the worries around growth slow-down and greater confidence of inflation staying below the 4% target. Along with rate cut, RBI announced slew of liquidity measures approx. (Rs.10.5-11 lakh crore) through CRR cut, OMO purchases and forex swaps. While rate cut cycle led to downward pressure on deposit rates, transmission was witnessed the most in bulk deposits whereas it is still in progress in retail term deposits and savings deposit rates.

29.2 Sector-specific opportunities to see resurgence:

Silver-lining of trade wars can be seen in terms of Indias strategic advantage in some sectors. While gaining comparative advantage in supply-chain, China plus one model would help in Indias manufacturing boost. Within the sector-specific opportunities, MSME credit to see uptick. Union Budget FY 2025-26 emphasized on Rs.7 lakh crore credit guarantee scheme which provide the room for Banks to comfortably lend to MSMEs and help in credit creation. Bank credit to MSMEs is likely to play a dependingonthenature significant role In Indias a strategic advantage amid trade wars. Indias MSMEs can take advantage in competitive sectors such as textile, automobile and electronics sector apart from domestic oriented sectors like infra (especially power), defence etc. gaining traction. However, yet unfolding trade deals and Trumps sector specific bias can have varied impacts on sectoral credit creation. Hence, in this regard, the contours of the US-India trade deal is likely to play a key role in providing sector specific credit opportunities in a volatile world where broad-based private capex recovery has been delayed.

29.3 Treasury gains amid downward pressure on yields: As a part of RBIs liquidity easing measures, the Banks treasuries may see gains on excess SLR holding which stand at -25% of NDTL (SCBs). The sovereign yield curve steepened as short-term rates fell faster than long-term rates supported by the shift in banking system liquidity to surplus from the start of FY 2025-26 and 100bps rate cut in the easing cycle. That said, we expect the Bank treasury gains to be frontloaded, with a small window likely opening up in H2 if inflation trends stay within the 4% target to provide space for further monetary policy easing.

30. THREATS

30.1Interest margins likely to face come under pressure on repo rate cut(s): As per RBIs Financial Stability report, "easing monetary policy cycle could impact the net interest margin (NIM) as growing share of loan book is linked to the external benchmark-based lending rate (EBLR), which is reset more frequently with change in repo rate. On the other hand, term deposits, which are also growing, have fixed contractual rates that change less frequently". However, eventual impact on NIM is contingent on factors like quantum and pace of correction in deposit rates, and MCLR rate revision as -35% credit portfolio is MCLR linked for the banking system and moves at the discretion of Banks, though bound by trends in cost of funds and competitive forces.

30.2 Business growth under pressure due to external shocks to overall growth: Headwinds of Trade wars and global slow-down will put downward pressure on Indias growth through multiple channels. Any decline in overall activities and demand sentiments would adversely affect the credit demand of the economy, putting pressure on business growth of the Banks in India. Rules of Economic cycle state that in times of lower economic growth, credit growth remains low, as was also seen in last Financial Year.

30.3 Unfavourable business environment and slowdown pose risk of rise in asset quality issues in specific sectors: Slowdown in overall economic activity is likely to directly impact the sector-specific growth and business performance. As per Financial Stability Report June 2025, GNPA ratio of banks may rise from 2.3% in March 2025 to 2.5% in March 2027 in baseline scenario with a risk of spike to 5.6% and 5.3%, respectively, under adverse scenarios. Additionally, domestic growth slow-down can affect income flows and push NPAs in both retail and MSME sectors. Also, industry-specific NPAs can been observed due to trade wars related effects. While credit quality of large borrower shows the impact of external shock with a lag, retail and MSME credit show an immediate effect and higher rate of NPAs can be anticipated. That said, the banking system is well capitalised and well provisioned to handle any rise in stress with NPA levels also lowest in more than a decade.

31. Outlook

31.1 During FY 2024-25, Indian economy recorded robust growth amidst external headwinds. Economic activity gained momentum and the provisional estimates (SAE) of national income released by the NSO placed Indias real GDP growth at 6.5% y-o-y in 2024-25 on the back of robust growth in private final consumption expenditure. On the supply side, real gross value added (GVA) expanded by 6.4%, y-o-y, driven by agriculture and services sectors. The headline consumer price index (CPI) inflation have averaged 4.6% during 2024-25, lower than 5.4% recorded for 2023-24 with most of the decline occurring in Q4:2024-25. Economic activity remained strong supported by revival in consumption as well as governments capex push. Pick up in private consumption, upturn in agricultural activity, continuing resilience of the services sector, healthy balance sheets of banks and corporates, and governments continued thrust on capital expenditure augur well for the growth outlook. The measures announced in the Union Budget 2025-26 augur well for improving domestic consumption. However, uncertainty about global trade owing to rising protectionist measures, persistent geopolitical tensions, rising supply chain pressures, and volatile global financial conditions, render the outlook uncertain.

31.2 Bank credit growth is expected to moderate in FY

2025-26 aligning with nominal GDP growth and overall deposit growth. With inflation seen softening below target level and to support the economy amid elevated global geopolitical uncertainty, the RBI has cut policy rates by 75 bps in the quarter of FY 2025-26. Going forward, the RBI has space for further policy easing is limited at the current juncture and it will remain (inflation) dependent to assess future policy actions.

	For and on behalf of the Board of Directors
Place: Mumbai	(Srinivasan Varadarajan)
Date: 25.06.2025	Chairman