Yes Bank Ltd Management Discussions

Management Discussion and Analysis Report

Executive Summary

MACROECONOMIC AND INDUSTRY OVERVIEW

Despite having witnessed geopolitical tensions and tightening of the monetary policy stance by majority of the central banks, the global economy remained resilient in CY 2023/FY 2023-24. Prompt actions undertaken by the regulatory authorities helped mitigate potential risks to the financial sector that emanated from the deteriorating health of select banks in the United States and Europe.

Elevated interest rates in the worlds major economies led to inflation falling faster-than-expected from its 2022 peak. Oil prices displayed some moderation in the first half of FY 2023-24 which was followed by some upward bias owing to geo-political tensions, extension and deepening of production cuts by OPEC (Oil Producing and Exporting Countries), US governments announcement to replenish its Strategic Petroleum Reserve. Rising trade barriers, increased sanctions, technology decoupling and migration restrictions were some other highlights of the fiscal.

While the global economy demonstrated broad resilience, significant growth divergences were observed across various economies. According to the International Monetary Fund (IMF), global GDP grew ~3.2% in CY 2023. Advanced Economies grew by ~1.6%, compared to ~4.3% growth in Emerging Markets and Developing Economies.

Going ahead, last-mile efforts to bring the inflation down to target levels is likely to pose further challenges. IMF doesnt expect most major economies to reach their targeted growth levels before CY 2025. Amidst this backdrop, IMF expects the global economy to deliver a growth rate of ~3.2% in CY 2024, similar to that in CY 2023. Growth rate of Advanced Economies is expected at ~1.7%, while on the other hand, emerging market economies are expected to grow by ~4.2%.

On the domestic front, the Indian economy remained one of the fastest growing economies of the world and continued to exhibit strong macroeconomic fundamentals.

Key Economic Indicators: Pointing to a robust economy

Index of Industrial Production (IIP)	5.7%
Manufacturing PMI	59.1
Services PMI	61.2
Passenger Vehicle and Sales	Up 8.4%
Two-Wheeler Sales	Up 13.3%
GST Collection	Rs. 178.5 lakh crore up 11.5% Y-O-Y
Volume of UPI transactions	131.2 billion transactions, up 56.6% Y-O-Y

While urban demand remained relatively robust throughout the fiscal, the rural sector too displayed signs of recovery in the years latter half. Capex spending by the central and state governments played a critical role in driving and sustaining the growth momentum.

Headline CPI inflation remained below 5% in Q1-FY 2023-24 before it peaked to the level of 7.4% in July 2024. However, inflation containment measures undertaken by the government and the Reserve Bank of India (RBI) resulted in bringing down of Headline CPI inflation in the second half, averaging at ~4.9% for FY 2023-24.

RBI remains committed to further bring inflation down to 4% levels, and therefore, kept policy rate unchanged at 6.5%, and maintained its stance of "withdrawal of accommodation".

Further measures such as Incremental Cash Reserve Ratio (I-CRR), Variable Rate Reverse Repo (VRRR) and Variable Repo Rate (VRR) auctions were also undertaken to balance the system-wide liquidity during the year. Core inflation, on the other hand, averaged at ~4.4% in FY 2023-24, drifting from 5.3% in April 2023 to 3.3% by March 2024.

The Indian banking system continued to be resilient as evidenced through the findings of RBIs Financial Stability Report (Dec23) with Scheduled Commercial Banks (SCBs) Capital-to-Risk Assets Ratio (CRAR) remaining at 16.8%, Gross Non-Performing Assets (GNPA) ratio falling to a multi-year low of 3.2%, and Net Non-Performing Assets (NNPA) ratio to 0.8% as on September 30, 2023, even while the Provisioning Coverage Ratio (PCR) steadily increased to 75.3%. RBIs stress test results revealed that SCBs are well-capitalised and capable of absorbing macro-economic shocks, even with no further capital infusion.

With growth conditions being resilient, RBI continues to remain focussed on bringing down inflation to a target of 4% on a durable basis. RBI projects Headline CPI inflation to be below 4% in Q2-FY25, before rising again.

The central bank remains optimistic on domestic growth, and projects Indias FY 2024-25 GDP to grow by 7%, aided by rural demand recovery, buoyant urban consumption, and such other factors. However, external headwinds including protracted geopolitical tensions and trade disruptions could pose risk to domestic growth. As per the official estimates from the government, Indias GDP is stood at 8.2% in FY 2023-24, compared with 7.0% in the earlier fiscal year of FY 2022-23. During the year, the credit needs of the economys productive sectors were comfortably met by the banking sector.

Credit demand in FY 2023-24 (As per Weekly Statistics Report of RBI)

Item	Actuals	Growth
Aggregate	Rs.203.7 lakh crore	Up 12.9%
deposits of SCBs	(excluding HDFC and HDFC Bank merger impact)	Y-O-Y
Non-food credit (NFC)	Rs.159.0 lakh crore	Up 16.3% Y-O-Y
Outstanding NFC	Rs.164.3 lakh crore	Up 20.2% Y-O-Y

 

NFC growth healthy at >16% Y-O-Y	Mar23	Apr23	May23	Jun23	Jul23	Aug23	Sep23	Oct23	Nov23	Dec23	Jan24	Feb24	Mar24
Non-food Credit	15.4	16.1	15.6	16.3	14.8	15.0	15.3	15.2	16.3	15.8	16.2	16.5	16.3
Agri & Allied Activities	15.4	16.7	16.0	19.7	16.8	16.6	16.8	17.5	18.2	19.5	20.1	20.1	20.1
Industry	5.6	7.0	6.0	8.1	5.2	6.1	6.5	5.4	6.1	8.1	7.8	8.6	8.5
Services	19.6	21.6	21.4	26.7	19.4	20.7	21.3	20.1	21.9	19.6	20.7	21.2	20.2
Personal Loans	21.0	19.4	19.2	20.9	18.0	18.3	18.2	18.0	18.6	17.7	18.4	18.1	17.7

[Source : RBI, Industry Reports]

External sector resilience has been a key contributing factor in improved domestic macroeconomic stability. Strong services exports and remittances have been crucial in providing stability to Current Account Deficit (CAD). Importantly, services exports remained resilient amidst the global slowdown fears with the increasing contribution from non-software exports.

The trade gap improved slightly in FY 2023-24 vis-a-vis FY 2022-23 even as moderation was witnessed in both exports and imports. Consequent to the above trends, the ratio of CAD as a percentage of GDP is expected to improve to 0.7% in FY 2023-24, from 2.0% in FY 2022-23. Further, capital flows remained robust, with inflows from Foreign Direct Investments (FDI) increasingly being determined by geopolitical alignments and inward-looking strategies of various economies. Thus, inward FDI declined by 3.6% between April 2023 and January 2024, compared to the corresponding period in the previous year. However, External Commercial Borrowing (ECB) registrations and disbursements improved during the same period. Net Foreign Portfolio Investment (FPI) inflows stood at USD 57.6 billion in FY 2023-24.

The pace of FPI investments picked up significantly on the debt side following the announcement of India being included in JP Morgans widely tracked Government Bond Index-Emerging Markets.

Uncertainties in the global monetary policy dynamics associated with the resilience of the US economy and relative growth paths of the Advanced Economies (AEs) led to wide moves in the U.S. Dollar Index (DXY). In July 2023, DXY touched a low of 99.7, but swiftly turned around to peak at around 107 by early October. Thereafter, it again moved down to around 101 by late-December 2023 before finishing the year at 104.60. However, USD/INR experienced a ranged move, and tended to be on an appreciation mode in the last quarter of FY 2023-24. Consequently, it moved in a narrow range of 81.76-83.40 during the year. By the end of April 2024, foreign exchange (FX) reserves were at a healthy ~USD 638 billion.

RETAIL BANKING

The Retail business in Indias banking sector witnessed robust growth during the year with system-wide share of retail loans (personal loans) at 32.4%, which increased 17.7% Y-O-Y (excluding HDFC and HDFC Bank merger impact).

Retail (Y-O-Y growth %)	Mar23	Apr23	May23	Jun23	Jul23	Aug23	Sep23	Oct23	Nov23	Dec23	Jan24	Feb24	Mar24
Credit Card Outstanding	32.5	29.7	29.9	36.0	31.2	30.0	29.9	28.0	34.2	32.6	31.3	31.0	25.6
Education	17.1	18.0	18.3	19.4	19.9	20.2	20.8	20.6	22.8	21.9	22.9	23.4	23.3
Other Personal Loans	26.7	24.0	23.2	26.1	24.2	23.2	22.7	22.3	21.7	20.5	21.0	19.7	18.7
Housing (incl. Priority Sector Housing)	15.2	14.3	14.6	15.0	13.1	13.8	13.8	14.5	15.0	14.4	16.7	16.7	17.4
Vehicle Loans	24.8	23.1	22.2	22.9	21.2	20.6	21.2	20.0	20.8	20.5	16.3	17.5	17.3
Laons against gold Jewellery	19.7	20.4	22.1	26.0	23.1	22.1	20.1	17.3	18.5	18.6	17.4	15.4	14.9
Total	21.0	19.4	19.2	20.9	18.4	18.3	18.2	18.0	18.6	17.7	18.4	18.1	17.7

[Source : RBI, Industry reports]

The Bank performed well across deposits and retail asset products and continued to provide personalised banking solutions.

The share of YES BANKs Retail Advances remained at the same level as in FY 2022-23, at 46% (45% in FY 2022-23), while the share of Retail and Branch banking deposits stood at ~ 53% of total deposits. The Bank remained focussed on improving the profitability of its Retail business.

Branch Banking

YES BANK offers a comprehensive suite of liability and asset products to its customers under Branch Banking. The strategic focus of Branch Banking vertical remained on affluent and mass affluent customers, as well as on SMEs in the metro cities and urban markets.

Overall, growth in Liability Deposits was 22%, which was primarily driven by a robust growth registered in Retail and Branch Banking deposits.

Retail NTB (New-to-Bank) customer acquisition grew by 16% Y-O-Y, while NAV (New-Acquisition-Value) grew by 28% Y-O-Y.

Growth in the liability book was achieved in the backdrop of:

a) system-wide significant liquidity tightening,

b) sharp rise in interest rates, and

c) heightened competitive intensity in deposits.

Branch Banking Fee income also registered a robust 55% growth during the year.

Significant step-up in Retail Assets offering penetration within the branch network resulted in internal sourcing touching 43% (Q4 FY 2023-24), up from <35% about 18-24 months ago. Credit card sourcing through Branch Banking also registered 22% growth Y-O-Y.

During FY 2023-24, YES BANK added 85 new branches and expanded its geographical footprint to 1,234 branches and 219 Business Correspondent Banking Outlets (BCBOs) spread across 700+ locations, with 1,290 ATMs and Bunch Note Acceptor/Recycler.

Spectrum Banking

Spectrum Banking is the Banks new-age channel that manages the entire customer life cycle across the entire suite of retail products through virtual modes of telephony, chat and email. During the year, this channel engaged with 25+ lakh customers.

In FY 2023-24, the channel of Spectrum Banking registered a significant growth of 45% in new liability and credit card customer acquisition. Similar growth was registered in Retail Assets and Credit Card term disbursements.

Digital Banking

Digital Payment System

			Yearly									Monthly (Cumulative)
	FY19	FY201	FY21	FY22	FY23	FY24	Mar-23	Apr-23	May-23	Jun-23	Jul-23	Aug-23	Sep-23	Oct-23	Nov-23	Dec-23	Jan-24	Feb-24	Mar-24
No. of Banks Live on UPI	142	148	216	314	399	572	399	414	445	458	473	484	492	505	516	522	550	560	572
Value of Transctions ( Bn)
UPI	1,335	2,065	5,049	9,606	14,104	19,784	14,104	14,070	14,891	14,755	15,336	15,765	15,791	17,158	17,397	18,229	18,411	18,279	19,784
Debit	530	476	668	641	533	447	533	546	528	510	533	527	469	521	494	479	455	415	447
Credit	577	507	724	1,071	1,373	345	1,373	1,328	1,407	1,372	1,447	1,486	1,423	1,786	1,606	1,651	1,664	312	345
Volume of Transctions (Mn)
UPI
Debit	408	363	381	328	237	159	237	230	224	210	210	208	184	191	177	177	165	152	159
Credit	162	165	189	224	263	344	263	259	273	263	277	291	274	320	297	321	329	311	344
Card Statistics (Mn)
No. of Debit Cards	924.6	828.6	898.2	917.7	961.3	964.9	961.3	967.0	973.9	975.8	970.7	978.1	966.8	980.2	979.1	960.9	957.6	960.7	964.9
No. of Credit Cards	47.1	57.7	62.0	73.6	85.3	101.8	85.3	86.5	87.7	88.7	89.9	91.3	93.0	94.7	96.0	97.9	99.5	100.6	101.8

[Source : RBI, Industry Reports]

YES BANK continues to invest in new-age digital technologies to offer superior customer experience.

The Bank has digital journeys for seamless customer acquisition, servicing and cross-sell in place for retail customers. Today 96% of all eligible savings accounts and 90% of eligible individual and sole proprietor current accounts are onboarded through the digital mode. The Bank has implemented comprehensive digital onboarding journey for Individual, Sole Proprietors, Companies and LLPs for current accounts with an industry first, data backed product recommender to Auto fetch profile information from GST for KYC validation and right product recommendation in real time for new-to-bank current account.

Further, digital co-origination has been enabled across Current and Savings account onboarding, such as co-sourcing of 3-in-1 (demat and trading) account, along with savings account, co-origination of Savings Account with Current Account for sole proprietors in a single journey.

The Bank has enabled self-onboarding (DIY) with video KYC with end-to-end STP journey for digital Savings and Individual Current Account opening, as well as digital journey for government schemes like APY and PMJDY.

There are 95 unique service journeys available on various digital applications of the Bank:

• "iris by YES BANK" - Banks newest digital app (59 services)

• YES Online (77 services)

• YES Robot (43 services)

• WhatsApp Banking (31 services)

End-to-end digital customer journeys across DIY/assisted modes available for:

• Fixed Deposit

• Recurring Deposit

• Credit Card

• Wealth Management (Mutual Funds, Investment Accounts, Sovereign Gold Bonds)

• Insurance

• IPOs

• Card Upgrades

• Quick Loans

• Tax Payments

• 3-in-1 Trading Account

• Government schemes like Atal Pension Yojna, PM JJBY and PM SBY

To augment its offerings, the Bank continues to partner with various FinTechs and corporates. The Bank continues to be a leading player in new-age digital payments, including UPI, AePS, NEFT, IMPS and NACH at 34.5%, 29.3%, 8.6%, 8.9% and 13.6% market share, respectively. YES BANK processes nearly every 3^rd digital payment transaction in the country, which hovers between 12-14 billion on a monthly basis. To grow its digital volumes further and build resilience, the Bank has implemented cloud-native UPI, IMPS processors and alternate AePS processors.

A leading player in new-age digital payments

Over the decade-long journey of YES Money, the Bank has onboarded over 9 lakh outlets which have been aiding customers with simple banking transactions, including domestic money transfer and Aadhaar-based cash withdrawals.

During the year, the Bank launched solutions around new Payment Aggregator and Payment Gateway Guidelines (PAPG Guidelines), which limits only the payment aggregator (PA) licence holder to participate in aggregation services. It solves the collection and payout problems for the network partners who do not participate as PA in the ecosystem. Under this Bank as a PA (i.e. BAPA), 50 partners went live, and transactions valued over Rs.19,000 crore were processed.

Programmes YES Private

YES Private is the Banks full-stack banking solution client programme curated especially for Ultra High Net Worth Individuals (UHNI). The programme is designed to offer a full suite of banking and enterprise solutions for the clients business, wealth management, succession planning and lifestyle needs through a team of relationship and product specialists.

YES Private is a by-invite only programme for clients who maintain average Liabilities balances of Rs.3 crore or total relationship value of Rs.5 crore at a family level.

Curated client engagement at marquee events across diverse lifestyle interests, numerous benefits embedded through the World Elite Debit Card are some of the new initiatives under the programme.

YES First and YES First Business

YES First and YES First Business are the Banks flagship wealth management and business banking programmes curated for HNIs for their personal and business banking needs. These specialised programmes are imbibed with a comprehensive customer-centric approach and offer curated product offerings and services, coupled with a host of lifestyle benefits, to provide a delightful experience to our customers. The portfolio makes significant contribution to Retail and Branch Banking Liabilities and Fees. This programme is further enriched by the implementation of RM Connect, which is a single phone number connecting customers to their RMs seamlessly.

Our Offerings

1) Banking solutions for personal and business needs

2) Wealth Management

3) Exquisite lifestyle benefits

YES Premia

YES Premia offers segmented solutions to the mass affluent segment with an emphasis on making banking seamless and enjoyable for our customers. The programme has been carefully curated to provide banking solutions complementing the lifestyles and expectations of varied customer segments.

Four Pillars of YES Premia

• Priority servicing

• Products and Preferential pricing

• Privileges

• Powerful digital banking platforms and solutions

YES Prosperity

YES Prosperity is the Banks mass retail programme, offering services for customers individual banking needs. This is a feature-packed exclusive segmented savings account proposition to improve granular deposits from segments like salaried, senior citizens, women and regular customers of the Bank. Furthermore, for its business clients, it offers current account variants such as Edge Business, Prime Business and Exclusive Business. This is a first-of-its-kind three-tier product suite with an auto-upgrade and auto-downgrade facility to ensure the right product fit for every stage of the business lifecycle.

Variants offered to Current Account customers

• Edge Business

• Prime Business

• Exclusive Business

YES Family

YES Family is a feature-packed proposition that offers wide-ranging services and rewards to meet the financial needs of the entire family. Packed with unique benefits and exclusive offerings, YES Family has been thoughtfully curated to make banking more unified for the family.

YES Family enables customers to care for the financial and overall well-being of every person in the family. The offering is available across YES Private, YES First, YES Premia and YES Prosperity programme.

NRI Banking

The NRI Banking programme is a power-packed customised offering that provides multiple avenues for Non-Resident Indians (NRIs). It helps the NRIs curate and manage wealth across product categories through in-person and digital fulfilment models. This comprehensive product is complemented by a multi-channel servicing capability and benefits that extend beyond banking.

Comprehensive and superior experiential banking services for NRIs and Persons of Indian Origin (PIOs):

Banking services

Deposits, Portfolio Investment Scheme (PIS), remittances and wealth management products along with best-inclass NRI FX rates

Liability product suite

Savings, fixed and recurring deposit offerings denominated in INR, and fixed deposits in eight foreign currencies

Wealth enhancement and safety goals

Investment and insurance solutions for NRIs and their families in India

International Financial Services Centre (IFSC) Banking Unit (IBU)

Added AED and SGD currencies; now offering savings account and term deposits at IBU in five currencies

Debit Cards

YES BANK offers a complete suite of Debit Card variants across all three networks, Mastercard, Visa and RuPay. The Bank has card variants across all segments of its customers including Mass-affluent, Affluent, Private, and also for segmented offerings such as Women, Salaried Individuals, and NRIs, among others. These Debit Cards are designed and customised to meet the specific needs of its flagship customers in Yes Private, YES First, YES Premia and YES Prosperity.

Unique benefits across categories:

• Reward points on spends

• Complimentary lounge access and golf lessons (on select Debit Cards)

• Exciting offers on retail categories such as entertainment and groceries

• Insurance cover across purchase protection, accidental insurance and lost card liability

During the year, the Bank launched two new upgrade cards targeted at its retail customers with higher embedded card features, such as airport lounge access and movie ticket offers.

Easing customers usage of Debit Cards:

a. Easy access to cards on iris by YES BANK and Internet Banking, helping them manage card spends and control card security specific parameters

b. Easy access to card settings and Debit Card services across WhatsApp Banking/BOT and a dedicated email ID for blocking/hot-listing cards in unforeseen situations

c. Allowed to set Debit Card pin of their choice (green pin) across YES Online, iris by YES BANK and ATMs in order to promote paper-less banking

Credit Cards

YES BANKS Credit Card department is well established for prioritising customer satisfaction, offering a diverse product portfolio, a robust distribution approach and exceptional customer service, well supported by strong risk management systems. The Banks current credit card portfolio consists of 25 products tailored for consumers, small and medium-sized enterprise (SME) and commercial segments.

During the year, the Bank launched "UPI facility on RuPay Credit Cards". This is a novel concept that offers a unique and engaging proposition to its customers to conduct UPI transactions on their Credit Cards. Since its launch, the Bank has issued more than 4 lakh UPl-enabled Credit Cards to capitalise on this opportunity.

The Bank also launched the MARQUEE Credit Card, a premium card with several benchmark features to further strengthen its positioning in the Ultra HNI segment.

End-to-end digital journeys in Credit Cards:

a. The Banks entirely digital customer onboarding platform, coupled with a real-time credit card approval process and virtual card issuance (for eligible applicants), ensures that customers receive their Credit Card details within 10 minutes of submitting their application. Over 95% of new credit card approvals in March 2024 were processed digitally.

b. The digital onboarding platform supports multiple formats such as DIY, Assisted, Bio-metric and Video KYC.

c. The Bank also introduced a digital co-origination journey of Credit Card bundled with Savings Account, and is expected to contribute significantly to the Credit Card business.

d. The digital strategy has resulted in almost 30% of post onboarding cross-sell business being processed through an end-to-end digital journey.

Retail Banking Assets

The Banks customers can select from a wide range of retail loan products its offers. A diversified Retail Banking assets book across all products witnessed the share of Retail Advances increasing to 46.1% in FY 2023-24 vis-a-vis 45.5% in FY 2022-23.

Retail Banking products offered under a single roof:

• Home loans

• Affordable home loans

• Car loans

- Used car loans

- Two-wheeler loans

- Commercial vehicle loans

• Construction equipment loans

• Loans against securities

• Personal loans

• Secured business loans

• Health care finance

• Printing equipment finance

• Working capital finance

The Bank continued to focus on delivering profitable growth led by business-mix optimisation towards its higher yielding products. It has entered into preferred financing agreements with leading manufacturers of cars and commercial vehicles, and also with construction equipment, thereby enabling access to the wholesale and retail businesses of manufacturers and dealers across the country.

Key developments:

• Enhancing digital capabilities: The Bank has been enhancing its digital capabilities with additional products/offerings such as Loan in Seconds platform as well as front-end automation initiatives using YES Robot, to provide customers with shorter response time and drive higher productivity.

• Investment in Salesforce: With an eye on future retail-led growth ambitions and with the need for a strong technology backbone, the Bank invested in Salesforce, the worlds leading CRM platform, to build a next-generation cloud-based loan origination system that enables concurrent processing, real-time credit decisions and industry-best turnaround time.

• Increasing digital onboarding: During the year, digital loan onboarding powered by Salesforce was made live for Home Loan, Affordable Home Loan, Loan against Property and Personal Loans. This enabled the Bank to enhance new sanctions and disbursements, which stood increased at Rs.40,800 crore as at March 31, 2024.

Today, the Bank has a diversified retail asset book built around analytics-based collection scorecards, which augments performance of the field force and enhances collection cost efficiencies. The Bank has also invested in collections infrastructure such as New Collection System and additional Scorecards to further augment its collection efficiency.

Rural and Inclusive Banking

The Banks Rural and Inclusive Banking division caters to the financial requirements of rural India through its basket of offerings that target the entire agri value chain and also serves the underserved and unserved sections of the society. This division is also responsible for complying with the requirements of lending to the "Priority Sector".

The Rural and Inclusive Banking division encompasses three Business Units, as stated below:

a. Rural Banking Assets

This unit addresses the financial requirements of Indian farmers for crop production and ancillary activities through Kisan Credit Card Loans.

Key Offerings:

• Catering to specific needs of farmers across specialised agri clusters through flagship crop loan product under different variants

• Handling farm mechanisation needs of progressive farmers by financing purchase of tractors, harvesters and agri implements

• Financing of small business entities, selfemployed professionals and entrepreneurs in rural areas for specific business requirements

b. Inclusive & Social Banking

In line with its commitment towards sustainable inclusive growth in the rural and semi urban segment, YES BANK has always focussed on catalytic innovations and key partnerships to create and promote viable business models, while also providing access to finance to its bottom-of-the-pyramid customers. It has a two-pronged strategy involving Inclusive & Social Banking (ISB) and Microfinance Institutions Group (MFIG) for the implementation of various financial inclusion initiatives, albeit in a profitable manner.

Services & Offerings:

• Retail Products: Serving women at the bottom- of-the-pyramid, through distribution channel of Business Correspondents (BCs)

• Wholesale Products:

Providing Term Loans to Micro-Finance Institutions (MFIs) for on-lending, cash management services and other banking and transactional requirements

The Bank also offers optional insurance products which includes a customised loan cover life insurance product and a new tailored hospital cash product for the rural and semi urban segment. These products are aimed at helping them reduce out-of-pocket hospitalisation expenses during unfortunate times.

c. Agribusiness Product Management

Agribusiness Product Management (APM) is the Banks specialised unit, which houses industry and banking professionals with relevant domain knowledge and skill sets. The team closely interacts with Food and Agri clients to create customised lending propositions for the agri value chain participants, including farmers, SMEs and corporates. It facilitates in building of banking opportunities in the agri value chain through suitable financial products, while also mitigating the credit risk. The team is also responsible for ensuring that the Bank meets the regulatory Priority Sector Lending (PSL) norms, in collaboration with the other Business Units that generate PSL assets.

Agri value chain financing: Key services

• The Bank has created a granular portfolio against the pledging of agri commodities, while ensuring adequate risk mitigation

• A specialised team closely monitors commodity pledge financing portfolio and mitigates inherent risks through mark-to-market of commodity prices and in-depth data analysis using various tools and techniques

• The end-to-end process is carried out on digital platforms to ensure faster customer service and superior experience

Merchant Acquiring Services

YES BANK is one of Indias leading providers of Merchant Acquiring Services, with a best-in-class product suite, and backed by high service standards and a robust technological infrastructure. Merchant Acquiring Services cater to more than 1.8 lakh merchant establishments and currently deploy close to 44,000 payment acceptance devices on a quarterly basis. Bank has further enhanced digital onboarding capability or merchants onboarding platform. Close to 80% of the current deployments are processed digitally.

Merchant relationships are managed by:

a. Dedicated Relationship Officer: Managing relationships in the field

b. Virtual Relationship Officer: Continuously working towards developing overall engagement

Merchant Acquiring Services offer state-of-the-art Android-based point-of-sale (POS) devices, SoftPOS solution, same-day and holiday settlements, and an array of other value-added services, including SMS Pay, EMI, Dynamic Currency Conversions (DCC) and best-in-class solutions for Bharat QR (BQR)/UPI payments like BQR Standee and BQR Soundbox. The Bank continues to invest in new products, enhanced services and advanced digital processes for Merchant Acquiring Business.

Key offerings of YES Biz+

(An App for merchants)

• Transaction Analysis

• Raise service request

• Apply for additional TID or Value-Added Services

• Accept transactions on the App

Fintech Partnerships¹

YES BANK engages with multiple fintech partners to enable the acquisition of incremental new-to-bank (NTB) customers across liabilities, assets and credit cards. By collaborating with select Fintech Partners, the Bank is building a sustainable and scalable low-cost acquisition model. Selecting a Fintech Partner is a well-thought out strategy with a segmental-based focus to ensure differentiated product offerings and value-creating propositions.

By leveraging unique propositions with the Fintech Partners superior UI/UX and a robust application programming interface (API)-based technology stack, YES BANK is also able to offer and cross-sell the Banks relevant product and services.

During the year, the Bank partnered with a scaled player in the payment ecosystem as the PSP Payments Bank, reflecting the inherent strength in the Banks capabilities and technology infrastructure. This partnership is expected to further aid our market share in the digital payment ecosystem, merchant acquisition, current account balances and transaction banking flow, thereby resulting in further improvement to the Fee Income.

SME Banking

The Banks Small & Micro Enterprises Banking (SME) business caters to all the financial requirements of the SME ecosystem. There are dedicated Relationship Managers for business origination and relationship deepening across trade, forex, cross-selling of CASA, financing commercial asset requirements through direct coverage in over 400+ branches. The team constitutes Relationship Managers and Product Specialists who are nuanced from the industry.

Delivering an unmatched one-stop service and addressing end-to-end of SMEs requirements through:

The segment provides solutions-oriented financial planning for their working capital and long-term capital expansion requirement. A majority of this business originates from internal channels with parameterised and discretionary lending, thereby enabling faster credit decisioning. This allows the Bank to calibrate its reach and optimise the cost of delivery to the client.

External channels of sourcing are initiated to have an outreach for incremental market share. Dedicated efforts are taken in building alliances in Supply Chain Finance.

With the shift towards digital transactions, the Bank has curated a digital lending platform, especially for MSMEs, to sanction loans by data triangulation obtained with the consent of the borrower. This leads to faster decision-making and optimises effective cost.

Improving productivity and enhancing customer experience through Digital & Analytics solutions:

• Analytics-driven prospective client identification

• Digital Lending Platform

• Seamless customer approval experience

• Self-assist digital tools - SME App, Trade-On-Net, and FX Online, among others

• Robust Early Warning Signal (EWS) framework (early identification of incipient sickness and support frontline in remedial management)

• Faster renewal of the loan facility

Smart Trade/FX online

The Bank has robust expertise in trade and forex management, with a stringent focus on customer engagement to increase penetration on Smart Trade application.

In line with the Banks strategy to institutionalise its Knowledge Banking approach, the Bank has partnered and inked MoUs with various trade and industry associations, including the Government-sponsored bodies. This is aimed at conducting banking knowledge events to create awareness about various schemes and banking products and provide easy and inclusive financial assistance, ensuring that customers have access to best-in-class schemes and benefits.

The Bank continues to explore targeted products aimed at green financing, which includes:

• Offering loans for the adoption of rooftop solar amongst SMEs and financing ecosystem players, such as manufacturers of solar components

• Offering financing for waste management, including setting up of Effluent Treatment Plants/Sewage Treatment Plants

WHOLESALE BANKING

As the Bank accelerates its transformational journey, its strategic focus in maintaining sustainable growth is aimed at developing and driving liability franchises and strengthening its asset business, along with strong governance and compliance as well as prudent risk management.

To further develop these objectives, the Wholesale Banking Group continues to play a key and pivotal role for the Bank, serving the below segments:

• Large Corporates

• Mid-Corporates

• Indian Financial Institutions

• International Banking

• Government Banking

• Multinational Corporates

The Banks Wholesale Banking strategy is to build scale and positioning through new client acquisition, up-tiering proposition and cross-selling to cater to the evolving needs of the customers, with a laser focus on Risks & Returns.

Offering comprehensive client-focussed services across:

• Working Capital Finance

• Term Loans

• Project Finance

• Transaction Banking Products

• Trade Finance

• Cash Management Services

• Supply Chain Finance

• Debt Capital Markets, Treasury Services (Foreign Exchange Risk Management)

• Foreign Currency Loans including ECBs

• Overseas Financing (via IFSC Banking Unit in GIFT City), and

• Liquidity Management Solutions

Large Corporates

YES BANKs Large Corporates segment provides comprehensive financial and risk management solutions to large corporate clients. With the Banks theme of Ecosystem Banking and its service-centric approach, the segment focusses on the entire ecosystem of corporates by also catering to their dealers, vendors and customers.

The Bank is committed to making continuous improvement through research, benchmarking and client orientation with the key objective of strengthening its existing relationships and gaining market share. With the goal of offering a one-stop solution to its corporate clients, the Large Corporates business unit also works in partnership with the Retail Banking team to offer a bouquet of services to the employees of Large Corporates.

Some of these services are:

• Personal Banking Services (E.g.: Savings Accounts)

• Wealth Management Services

• Credit Cards

• Salary Accounts

• Retail Assets

Mid-Corporates

The Mid Corporates segment focusses on corporates with a turnover between Rs.100 crore and Rs.1,500 crore. The segment lives up to its philosophy of supporting local corporates by being closer to its customers, developing a thorough understanding of their banking needs and delivering tailored solutions across the entire spectrum of banking services.

The Mid Corporate segment is on the path of growth through its two-pronged approach of acquiring New-to- Bank (NTB) clients and deepening its existing relationships.

The Mid Corporate team, which currently runs its operations from 39 locations pan-India, will continue to build this portfolio with a stringent focus on Cross-Sell through synergies with Transaction Banking, Digital Banking, Food and Agribusiness Strategic Advisory and Research (FASAR), and Treasury and Retail Banking.

The Mid Corporate segment is also deeply entrenched in Indias new-age entrepreneurship ecosystem through its bespoke digital solutions, incubation and networking platforms provided to E-Commerce, Fintech, and Agritech businesses. The Bank has a dedicated team providing innovative banking solutions to cater to the unique requirements of start-ups.

Indian Financial Institutions

The Indian Financial Institutions segment offers correspondent banking solutions to domestic banks, digital and transaction banking solutions, including market leading API Banking stack for NBFCs, mutual funds, and stockbrokers. It commands a dominant position in co-operative banks space.

The unit has built a sustainable asset book with retail focussed NBFCs and strategic Priority Sector Lending (PSL) through Micro Finance Institutions. It also facilitates Co-lending/Direct Assignment (DA) partnerships to build the retail book further. There are superior offerings for Professional Clearing Members (PCM) and Custodial Businesses, along with banking facilities for stockbrokers and exchanges.

The unit engages with domestic financial institutions like National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI), the Export-Import Bank of India (EXIM Bank) and the National Housing Bank (NHB) to avail refinance. It also connects with overseas branches of Indian banks to avail Foreign Currency Borrowings and Trade Credit.

International Banking

The International Banking segment maintains relationships with an extensive network of International Banks, Multilateral Financial Institutions and Exchange Houses. It provides a complete suite of products and solutions. The unit leverages its strong correspondent-banking network to create access for its corporate customers and also for internal stakeholders, providing access to the international markets for availing financing and international banking services. The unit leverages the Banks market-leading API banking stack to integrate with Banks and Exchange houses to offer real-time instant settlement services for its cross-border remittance business.

Products & Solutions:

• Trade Finance

• Treasury Services

• Investment Banking Solutions

• Remittance Solutions

• Financial Advisory

Government Banking

The Government Banking segment aims to provide financial, banking, technology-led solutions and strategic advisory services to ministries under the Union Government, State Government, Central and State Public Sector Undertakings, Boards and other affiliates. The unit delivers innovative, structured and comprehensive solutions, and has also concluded several landmark transactions with Maharatnas, Navratnas, Mini-Ratnas and other apex institutions.

The Bank has deployed innovative and customised digital solutions for various Central & State Development and Procurement Agencies. It has also provided support to educational, religious and sporting institutions across India via its unique transaction banking offerings, which are aimed at creating operational and financial working capital efficiencies. The Bank also partners with the State Governments through the Public Financial Management System (PFMS) mode of payment to ensure seamless tracking of last-mile beneficiary disbursement and create operational efficiencies through the Single Nodal Account (SNA) model.

Multinational Corporates

The Bank has established strong relationships with various multinational corporates across key trade corridors and positioned itself to extend its network for their India-linked

businesses. The Multinational Corporates unit also engages with various strategic influencers to originate current account leads by leveraging its thought-leadership and transaction banking capabilities. The team also leverages the Banks strong digital and transaction banking capabilities to generate solution-led current account liabilities across all the corporate segments.

Key focus areas:

a. Becoming preferred host-country bank to global clients

b. Source solution-led current account from corporates

Product Expertise Transaction Banking

The Transaction Banking is a specialised product group providing Trade Finance, Cash Management and Supply Chain Financing services to Corporates, Governments and Financial institutions. It also engages with strategic business groups to provide customised solutions directly and to their clients through its B2B2C approach.

YES Transact is Transaction Bankings comprehensive product suite that caters to the working capital and liquidity management requirements of businesses across sectors and to a spectrum of MSME and wholesale client segments.

The product suite includes:

(Cash Management Services )

• Cash Management Services for managing receivables and payables

• Customised and innovative digital solutions, including market-leading API banking solutions

• Digital solutions for domestic/international correspondent banking and NBFCs

• Specialised products and solutions for government entities, including Central and State bodies

• Fiduciary services, e.g., escrow, nodal and RERA

• Capital market-related products, including settlement and custodian services

• Curated solutions for Trusts, Associations,

Societies and Clubs (TASC)

(Trade and Supply Chain Finance )

• Trade finance, e.g., Letters of Credit, bank guarantees, export and import credit, and remittances

• Structured trade and supply chain solutions including digitisation initiatives

• Fintech engagements, providing its market leading API Banking stack, or to leverage its connected banking approach and generate acquisition leads

• Foreign exchange services, e.g., cross-border remittances for exchange houses and authorised dealers and foreign currency notes

• Bullion Sales and Gold Metal Loans

The Transaction Banking leverages its product and technology expertise to offer innovative digital solutions by designing, developing and co-creating products with corporate clients, fintech/technology partners, banks and exchange houses. The Group effectively drives digitisation in the entire financial supply chain of businesses across sectors, and leverages its flagship API banking, fintech partnerships and product knowledge base through its product and sales teams.

The Group also manages Internet Banking and API channels for its corporate clients. As the pioneers of API Banking for a decade, the API Banking solution today provides 450+ API-related services. Transaction Bankings supply chain unit works with its strategic corporate clients and Lending Service Providers (LSP), using technology to harness anchors supply chain linkages and provide critical liquidity solutions to their MSME/SME partners. It also offers the YES Connect platform, an API marketplace that brings together banking (products and services offered by the Bank) and beyond banking (solutions from third-party partners) solutions in a simplified manner.

Project Finance & Loan Syndication

The unit facilitates underwriting of project finance exposures across business segments and has built sectoral expertise over the years, across sectors such as energy, ports and logistics, transport, real estate, roads, refineries, metals, warehousing and data centres, amongst others. It has demonstrated its distribution capabilities across Banks, NBFCs and Financial Institutions. The unit provides knowledge inputs to key stakeholders to deepen their understanding of these sectors, market conditions and industry developments, and help devise sector specific strategies. This distinctive approach also helps in improving our mindshare and deepen client relationships. The unit further extends support to the Banks ESG initiatives by lending to sustainability sectors.

Financial Markets

The financial markets segment offers a full range of products and services to Large Corporates, SMEs, Government, Retail and Institutional Clients. Whether it is providing comprehensive advisory services, macroeconomic research or debt capital market services, its focus continues to be on maintaining client relationships and ensuring their growth. The Bank currently has 110+ professionals serving the needs of clients at various branches across the country.

FX Sales: The Bank provides customised solutions for FX (foreign exchange) risk management to more than 35,000 clients pan India, including large and mid-sized corporates, PSUs, MNCs, banks and private equity funds. The Banks well-developed retail franchise for FX business caters to SMEs, HNIs and NRIs, among others. The Bank provides spot and derivative products for efficient hedging of foreign currency and interest rate exposures for its institutional, corporate, SME and retail customers. The Bank also offers solutions in complex derivative products to its clients.

The segment offers products such as FX advisory for trade flows, foreign direct investments (FDIs), capital flows, external commercial borrowing (ECBs), American Depositary Receipts (ADRs) and hedging solutions for currency and interest rate exposures. Every account has a dedicated Treasury Sales Manager that provides key personal services such as timely market insights and sectoral expertise. The Bank provides hedging solutions to its clients outside India through IFSC Business Unit in GIFT City, Gujarat.

Primary Dealership: YES BANK is one of the 21 Primary Dealers (PDs) designated by the RBI to actively trade, underwrite and bid for Government Securities, T-Bills and State Government Bonds in auctions, providing a complete suite of sovereign debt. The Bank has dedicated sales personnel for dealing with mutual funds, insurance companies, foreign portfolio investors (FPIs), cooperative banks, provident funds and retail customers.

Debt Capital Market (DCM): This business is responsible for origination of onshore rupee debt mandates including Non-Convertible Debentures (NCDs), Commercial Papers, PTCs and execution and distribution of these mandates. The Banks clientele in this segment comprises large and mid-market corporates, PSUs, central and state government entities and NBFCs.

On the distribution front, the DCM desk has developed deeply entrenched relationships across various investor segments, including mutual funds, insurance companies, provident and pension funds, FPIs, banks, private wealth managers and NBFCs. It has successfully executed deals ranging from vanilla transactions to highly structured debt solutions, including a renewable asset pooling structure, securitisation of infrastructure assets, lease rental discounting and NCDs issued by InvITs (Infrastructure Investment Trusts). The Banks DCM team has consistently been ranked in the prestigious league table rankings and has also received several awards and accolades over the years.

Balance Sheet Management Group (BSMG): The

Banks BSMG team is the custodian of its cash, liquid assets and government securities portfolio. It manages day-today liquidity within the centralised treasury function with governance oversight by the Asset Liability Management Committee (ALCO). It also manages the Banks investments in securities and is responsible for meeting statutory reserve requirements like Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Liquidity Coverage Ratio (LCR) and Net Stable Funding Ration (NSFR).

The BSMG team is responsible for management of liquidity risk and interest rate risk exposures within the Banks Balance Sheet. It also provides guidance on funds transfer pricing based on movement of funds within the Bank, which is an essential input for pricing of all the asset and liabilities products offered to its customers.

Bullion: YES BANK imports bullion on a consignment basis to meet outright purchase and gold loan requirements of bullion dealers and jewellery manufacturers (both domestic and export purpose). The Bank has emerged as a dominant player in the Indian bullion market and established itself among the top three bullion importing banks in India. Today, it is one of the leading banks that successfully meets the demand of small and medium-sized manufacturers.

IFSC Banking Unit - GIFT City (IBU)

YES BANK was the first Bank in India to commence operations at the IFSC in GIFT City, Gujarat, in October 2015. IBU provides comprehensive solutions to the Banks corporate and retail clients to meet their foreign currency banking requirements across liability and investments, cross-border trade offerings, external commercial borrowings and foreign currency loan syndications.

Knowledge Banking Business Economics Banking

Business Economics Banking is the research and knowledge arm providing critical analytical perspectives on domestic and global financial markets. The team produces cutting-edge reports on macro issues and public policy perspectives with an aim towards enabling clients with requisite knowledge base required for their business, backed by adequate research.

Food and Agri Business Strategic Advisory Research (FASAR)

The specialised Food and Agri Business Strategic Advisory and Research (FASAR) unit houses industry specialists with sectoral knowledge and experience in the food and agri business domain. FASAR rolls out strategic initiatives and generates innovative banking opportunities from existing and prospect clients on the back of its knowledge-led banking services.

The unit works closely with corporates, SMEs, multinationals, industry chambers, multilateral bodies and Central and State Governments. All these entities are involved in the overall food and agri ecosystem. They focus on executing mandates ranging from strategic and policy advisory, project and working capital financing, and digital solutioning. The FASAR unit also publishes regular strategic reports and research papers on key trends and developments in the food and agriculture sector.

Corporate and Government Advisory

To further the Banks commitment towards Indias holistic and inclusive growth, the Corporate and Government

Advisory segment works across the emerging sectors of Indias economy by executing knowledge and advisory mandates of social and economic importance.

The Group leverages its in-depth sectoral expertise, research skills and apex-level relationship capital across government and industry ecosystems to assist clients, including Central and State governments, multi-lateral bodies, industry chambers and private sector players, in their development and growth agenda. Our focussed sector-oriented approaches such as Smart Cities and e-mobility has created new banking opportunities for the Bank and helped in deepening our relationships with key customer segments.

Stressed Asset Management

YES BANKs Stressed Asset Management (SAM) team leads management (including resolution, early exit, sustaining operations and recovery) of stressed loans (however Standard) and non-performing assets (NPAs) originating largely from the Banks Corporate segments including SME. The SAM team provides effective solutions for resolution of these assets by leveraging its understanding in rehabilitation, restructuring, regulatory, legal, and recovery subjects.

Post transfer of stressed assets portfolio to JC Flowers ARC, while the exposure under SAM has shrunk, the relevant expertise remains housed with the Bank to make sure that ongoing resolutions are optimal and effective.

SUPPORT FUNCTIONS

Human Capital Management

Implementing a "people-first" culture truly works towards the sustainable competitive advantage for any bank. It not only helps attract and retain the best talent, but also drives more equitable outcomes. At YES BANK, we enjoy a culture that promotes meritocracy and career enhancement. The Bank has a total of 28,001 employees as at March 31, 2024 of which a net number of 484 employees were added in FY 2023-24. YES BANKs 5C engagement model (Culture, Communication, Connect, Career and Care) provides a consistent and enhanced employee experience.

The Bank implements developmental learning initiatives tailored for its top and senior management leaders. Amongst these are the Executive Coaching Leadership Programme and the Inner Engineering Programme aimed at leveraging personal transformation. These intensive programmes target the identification and cultivation of key leadership competencies.

In pursuit of fostering a diverse, equitable, and inclusive environment, the Bank has facilitated the YES Inspire Mentoring Programme, a mentorship initiative for women at a pan-Bank level. The initiative was introduced to nurture a cadre of women leaders who can inspire and mentor the next generation of YES BANKers, enabling them to make meaningful impact in their professional journeys.

Aligning with the organisations commitment to responsible banking practices and ensuring employee engagement, the Bank conducted the 3^rd edition of the Voice of YES - Employee Survey in FY 2023-24. Additionally, to sustain a pipeline of top-tier talent, the Bank continues to invest in recruiting high-caliber individuals from premier educational institutions through its flagship YES Professional Entrepreneurship Programme.

The Banks dedication to fostering a positive workplace culture has been recognised with its certification as a Great Workplace by The Great Place to Work Institute for the second consecutive year in India. YES BANK also received a recognition by Great Place to Work for being among the Top 50 in Indias Best Workplaces in BFSI 2024 for the second year in a row. This recognition by the GPTW Institute not only reaffirms our commitment to excellence in people practices, it also highlights our dedication to nurture a High Trust Culture.

Women participation in the Banks workforce increased from 21.0% in FY 2022-23 to 21.8% in FY 2023-24. The Bank is committed to achieving 25% gender diversity by FY 2024-25. The Banks attrition rate for FY 2023-24 stood at 38.2%, compared with 42.7% for FY 2022-23.

Risk Management

The Banks long-term financial security and success is built on its risk management architecture. The Banks risk management is based on three lines of defence: (a) business units, (b) independent control functions, and (c) and internal audit.

Further, the Banks Board has the overall responsibility of risk management, with the risk management architecture being overseen by the Risk Management Committee (RMC) of the Board. Additionally, risk management is undertaken by four Board-level committees for respective risks, wherein risk assessment and management are undertaken within the Banks Board-approved risk architecture.

The Bank is exposed to three Pillar 1 risks in the course of its business: credit risk, market risk, and operational risk. With the evolving banking landscape, the Bank is also exposed to Pillar 2 risks such as liquidity risk, interest rate risk in banking book, and cyber security risk. These risks are also critical as they not only have a bearing on the Banks

financial strength and operations, but also on its reputation. A detailed description of various risks faced by the Bank, their respective governance framework, management and mitigation strategies, and their implication to the Bank is presented on -?] Page 68.

The Bank has Board-approved risk policies that define its risk framework. The RMC and the Board monitors the compliance of various risk parameters and risk exposures on a periodic basis. The RMC also ensures that frameworks are established for assessing and managing various risks faced by the Bank. It ensures that the Banks framework is adequate and appropriate for changing business and economic conditions, structure and needs of the Bank and is well within its risk appetite.

Further, the Bank has a structured strategy assessment and management framework in the Internal Capital Adequacy Assessment Process (ICAAP) to identify, assess and manage the risks that may have a material adverse impact on its business strategy, financial position and capital adequacy. It also has in place a Board-approved risk appetite statement for key risks identified under ICAAP. There are internal policies and processes to ensure that the Bank operates within its risk appetite thresholds.

The Bank has also implemented a Board-approved stress testing framework that forms an integral part of ICAAP and risk assessment. Stress testing involves the use of various techniques to assess the Banks potential vulnerability to extreme, but plausible, stressed business conditions. The Bank evaluates the impact of various stress testing scenarios on account of various Pillar I and Pillar II risks.

Internal Audit

The Banks Internal Audit Department (IAD), which is ISO 9001:2015 certified (Quality Management System), provides an independent and objective assurance and consulting services to add value and improve its risk and control environment. The IAD monitors the adequacy, effectiveness and adherence to internal controls, processes and procedures instituted by the Banks management and extant regulations.

The Internal Audit team reports to the Audit Committee (ACB) of the Board for audit planning, reporting and review, and the Head of the IAD reports directly to the ACB of the Banks Board of Directors. The IAD has unlimited and unrestricted access to all relevant data, systems, personnel and information to achieve its objectives. It is staffed with qualified team members with relevant certifications, and its training programme ensures that all team members are upskilled at frequent intervals.

The IAD has adopted a risk-based approach towards internal auditing, as per regulatory guidelines and internationally established best practices. A risk-based audit plan (RBAP) is prepared annually and is duly approved by the ACB. The IAD audits various businesses, operations, information security (IS), information technology (IT) systems and support units as per the RBAP. The IAD prepares a report for each audit, recommends mitigation plans for the risks identified and ensures compliance with all the recommendations. The ACB monitors the progress of the RBAP on a quarterly basis.

The Bank also subjects its operations to concurrent auditing by reputed audit firms to complement its internal auditing function. Concurrent auditing covers core activities, including operations (including credit), financial markets, data centres (including IT & IS systems) and branches in compliance with regulatory guidelines. All audit reports are circulated to the relevant management teams and the ACB.

Compliance

Ensuring compliance with regulatory requirements, promoting a robust culture of compliance among YES BANKers and building trust among all the stakeholders is an overarching consideration at the Bank. The dedicated Compliance Department strives to be at the forefront of regulatory changes and continues to work closely with all the Banks businesses and operations to be compliant with existing and new requirements. To further this objective, the Chief Compliance Officer at the Bank reports directly to the ACB.

The key functions of the Compliance Department align with various RBI guidelines, which includes identifying effective procedures, corresponding controls to support the Banks business divisions and the dissemination of key regulatory updates affecting the Banks various businesses. The Compliance Department also reviews new products and processes from a regulatory compliance perspective, provides guidance on compliance-related matters, conducts compliance reviews and delivers training to employees on different aspects on compliance.

In addition, the Bank has also put in place the KYC and Anti-Money Laundering policy approved by the Board and transaction monitoring procedures, as per the regulatory guidelines.

Company Secretarial (CS)

The Banks Company Secretarial Function is ISO 9001:2015 certified for its functions and processes based on the key attributes which includes risk-based approach, ability to consistently meet customer and regulatory requirements, standard operating procedures across the business process, monitoring and control mechanism and continual improvement framework.

The Bank is committed to achieving highest standards of Corporate Governance and the dedicated Company Secretarial (CS) Function of the Bank, endeavours to follow the best secretarial practices in order to uphold the governance standards of the Bank. The CS Function is responsible for the Regulatory Compliances under various Laws/Acts/Regulations/Guidelines/Standards prescribed by SEBI, RBI, MCA and other stakeholders of the Bank.

Being the Board Governance facilitator, the CS Function plays a critical role in organising and implementing the Boards decisions, its Committees and General Meetings. It handles the regulatory correspondence and ensures the fair, prompt, uniform and transparent dissemination of information to the stakeholders through stock exchanges. The designated Company Secretary is the KMP under the Companies Act and reports directly to the MD&CEO, and the Chairman of the Board.

Sustainable Finance

The Sustainable Finance (SF) function at YES BANK is responsible for integrating environmental, social and governance (ESG) considerations into the Banks business. It is also responsible for aligning it with the objectives of global and national, sustainability-linked frameworks such as the National Guidelines for Responsible Business Conduct (NGRBC), Sustainable Development Goals (SDGs), the Paris Climate Agreement and the Principles for Responsible Banking (PRB), amongst others. The team works with Sustainability SPOCs (Single Point of Contact) across the Bank to implement its sustainability strategy and achieve its ESG-related targets, as set out by the Sustainability Council (chaired by the MD and CEO). The SF team is also responsible for updating the Board-level Corporate Social Responsibility (CSR) Committee and ESG Committee on the Banks overall ESG performance and progress.

The SF team acts as the custodian of the Banks Environment and Social Policy (ESP) which serves a structured approach towards responsible lending. The ESP is an integral part of the Banks Environment and Social Risk Management System (ESMS) which sets out the overarching framework for identification and management of potential and/or existing environment and social (E&S) risks commensurate with the nature and scale of transactions and their potential impacts. Through this policy, the Bank integrates environmental and social risks into its overall credit risk assessment framework.

The team also acts as the custodian of YES BANKs Environmental Management Policy which guides the implementation of Bank-wide Environmental Management System (EMS). This EMS is designed to monitor and minimise the negative environmental risks and impacts of the Banks operations by driving continuous improvement in areas such as natural sustainable supply chain and emissions reduction.

In FY 2023-24, the Bank expanded the scope of its EMS to 1,186 facilities which have been certified as per ISO 14001 EMS Standard. This is the highest number of facilities that have been certified as per ISO 14001, in the Banking & Financial Services and the Insurance sector, globally.

The SF function plays a key role in implementing the Banks commitment to align its business strategy to the Paris Climate Agreements goal of limiting global temperature rise. YES BANK continues to be the only Indian banking signatory to UNEP FIs Principle for Responsible Banking. The Bank has pledged to reduce Green House Gas emissions from its operations to a Net Zero by 2030. To achieve this, the Bank plans to migrate most of its facilities to renewable sources of energy.

Currently, three of the Banks offices, YES BANK House, YES Fintech Center, Airoli and Vaman Centre, Andheri, along with 43 of the Banks 92 Branches in Mumbai have been switched to renewables. In FY 2020-21, YES BANK emerged as the first Indian Bank to measure and report financed emissions of its fund-based electricity generation portfolio. In FY 2022-23, the Sustainability Council approved decarbonisation targets to reduce the financed emissions intensity of the Banks fund-based electricity generation portfolio, in line with the Science-Based Targets initiative (SBTi) well below 2 degrees, striving for 1.5-degree scenario. The Bank continues to support climate-aligned sectors like renewable energy, through its green bonds, and aims at developing targeted products for green financing. E.g.: YES Kiran, the rooftop solar loans dedicated to SMEs.

The SF function works with teams across the Bank to enhance ESG and climate-related disclosures. In FY 2023-24, for the second year in a row, YES BANK achieved the highest ESG score amongst Indian banks, in the S&P Global Corporate Sustainability Assessment (CSA) 2023.

The Bank scored 73 (out of 100) in the 2023 (CSA Score as of December 1, 2023), reflecting a marked improvement of 5 points over its score of 68 in 2022. For the second consecutive year, the Bank was also rated A- Leadership Band by CDP for its 2023 Climate Change disclosures, retaining its position as the highest rated Indian Bank for climate disclosures.

Corporate Social Responsibility (CSR)

The Bank implements various programmes to create and enhance shared value through its unique, scalable and sustainable models to achieve its Corporate Social Responsibility (CSR). The Bank delivers internal and external positive socio-environmental impacts by following a unique approach that focusses on:

• Promoting principles of social responsibility and inclusive growth through awareness and support;

• Investing in socially and environmentally responsible activities to create a positive impact;

• Engaging with stakeholders to further the sustainability agenda of the Bank and empower them with knowledge; and

• Collaborating with like-minded institutions and forging partnerships to address the needs of the stakeholders.

This unique, multi-pronged approach has enabled the Bank to forge meaningful associations with its stakeholders, including community groups, non-profit organisations, governments, corporate peers and civil society, while delivering an exponential impact and concentrating on the Sustainable Development Goals (SDGs).

In FY 2023-24, the Bank continued to implement its five-year CSR strategy, which aims to inspire Indias youth to lead economic and social development by skilling themselves for market-oriented jobs and by taking to enterprise. This strategy is implemented by YES Foundation, the Banks social development arm, which aims to catalyse employment and entrepreneurship opportunities for 100,000 people by 2026, while retaining its focus on environment sustainability. While the Foundation continued to support ongoing projects across its 3Es focus, the Bank gave additional CSR funds of Rs.10 crore to YES Foundation for expanding the scale of its projects. Summary of the impact achieved is given below:

Employability:

The Bank aims to capitalise on the demographic advantage India has in its younger generations. In FY 2023-24, through YES Foundation, over 4,000 young people were trained for different sectors, with 2,200 being trained from the CSR funds received from the Bank in the said financial year. At least 70% of these trainees received gainful employment. Skills training provided to the trainees included work readiness and soft skills, which were delivered by employee volunteers through scheduled and structured sessions.

Entrepreneurship: To strengthen the local economies, YES Foundation promotes nano-enterprises with a distinct focus on enhancing income of farmers and empowering women in the rural areas. In FY 2023-24, rural population of over 13,000 people enhanced their income through training and capacity building, market linkages and productivity enhancement initiatives for multiple crops, including watershed management and micro irrigation systems, wherever needed. Of these, 6,000 farmers enhanced their income through the CSR funds received in the said financial year.

Environmental Sustainability: Through YES Foundation, the Bank works on enhancing energy efficiency of the MSME sector and reduce their overall carbon footprint. As a result of which 100 MSMEs benefited from the walk-through energy audits conducted in FY 2023-24. Further, the Bank, through the Foundation, planted 2 lakh trees across 11 states and geotagged the same to monitor them for growth and survival. The plantations were carried out on farmers lands with a dual objective of enhancing the green cover as well as enabling an additional income for the farmers.

Central Data Analytics Group (CDAG)

The Bank continues to invest in the analytics function and maintains an ongoing focus in driving value through data-driven decisions. During the year, the Banks captive analytics group was successful in achieving the below-mentioned targets:

• Building a unified underwriting framework using statistical nodes across all sourcing channels to enable straight-through processing and creating a unique customer experience

• Exploring new areas where ML models can be deployed such as EWS, AML and transaction fraud monitoring

• Partnering with credit information companies to build and deploy scorecards for delinquency/portfolio management

• Delivering analytics as a service wherein offers to both customers/prospects on our digital platform can be served real-time and

• Creating a talent pool of data scientists for scaling up analytics adoption across the Bank

Business and Digital Technology Solutions (BDTS)

The technology team aligns its capabilities around five key themes (01) enabling business growth drivers combined with innovation (02) driving operational & cost efficiencies (03) enhancing our risk & governance posture (04) delivering sustainable and secure services (05) nurturing and developing talent competencies.

These objectives have translated into thematic activities.

• API/Microservices-based architecture: API-

first approach enables scale embedded with a combination of speed & security. The combination of API/Microservices/ESB architecture provides the optimal scale model to accelerate organic and inorganic acquisition and servicing capabilities whilst granularising the service components.

• AI and Machine Learning (ML): Technology agenda around AI & Robotic Process Automation continue to hover around speeding up processes, improving accuracy and efficiency, and reducing costs. Coupled with Artificial Intelligence (AI), Optical Character Recognition technology, and Machine Learning (ML), the Bank continues to explore more challenging applications for Robotic Process Automation (RPA) within the Bank. As a part of its innovation agenda, the Bank is in early stages of Proof-of-Concept approach in the use of Generative AI to address customer service queries.

• Platforms: As the industry moves towards a more open banking architecture, the Bank is continuously developing more robust and enhanced platforms that contribute to the Banks customer onboarding journey and open banking outlook. The Bank is in the process of investing in sustainable platforms that enable its customer-centric journeys be agile and provide rich experiences to its onboarding and servicing interactions.

• Partner ecosystem: As the Bank grows, it needs differentiated partners to create the best ecosystem of support; hence, the organisations is deeply connected to creating value-based partnerships with various players that will support diversity and inclusivity to manage its depth of technical knowledge. This will help scale the cloud and adopt low code-no code practices, hyper-automation frameworks and new-age technology support on the doorstep.

• Data and analytics: Keeping the data-driven decision-making aspiration in mind, the Bank infuses its business strategy with data and analytics, which helps accelerate its digital plans. The Bank is making a relentless effort to focus on business value by linking all data and analytics initiatives to overall enterprise business strategy and stakeholder objectives. The Bank is also enhancing its data governance capabilities in line with the forthcoming regulations.

During FY 2023-24, various new initiatives were completed successfully, while existing systems were upgraded to their latest versions to support the growing needs of the Bank.

Top Bank-wide projects completed during the year include:

• Digital Onboarding & Service Digitalisation:

The Digital Onboarding and Service digitisation programme ensures a 24/7 availability of self-servicing channels for customers and non-customers across the Banks different lines of businesses. This project is aimed to reduce time and improves customer experience thereby improving the overall satisfaction of the interaction. It will also simplify onboarding of new customers and serve the existing customers on the go.

• Modernised Super-App: iris by YES BANK, the next-generation mobile banking platform built on a cloud-native stack, leverages synergies available from APIs, Microservices and workflows created across our digital ecosystem. iris by YES BANK has been developed as a platform to enable the Bank to expand the

onboarding/servicing capabilities across businesses and enrich customer interaction across business lines and needs.

• SME Transformation: SME business growth is a key focus area. Enabling seamless onboarding for SME clients is key to customer engagement. The SME transformation agenda covers the end-to-end journey of "Onboarding to Servicing", along with integration with partners who can enhance the value proposition.

• Central Bank Digital Currency: In FY 2022-23, the RBI launched the Central Bank Digital Currency referred to as Digital Rupee, denoted as e. The Bank played a pivotal role in the central banks vision to enable a digitally-powered economy and has completed the project in a short span of time. Substantial users have been added as part of this initiative.

• Transaction Processing Hub (TPH): TPH is a flexible solution that empowers the Bank to formulate its payments services. TPH also follows the core banking and consolidates all payment infrastructures into a central processing hub that supports multiple bank branches, in multiple countries, using multiple currencies, and in multiple languages. TPH has enabled the Bank to drive scale in its payment processing thus enabling the Bank service its customer base to support the payouts/collections across various segments.

YES Securities (India) Limited (A Wholly-Owned subsidiary of YES BANK)

YES Securities (India) Limited (YSIL), Wholly-Owned Subsidiary of the Bank has reported total revenue of Rs.273.8 crore and profit after tax of Rs.34.1 crore during the FY 2023-24 which represents revenue growth of 24% Y-O-Y and profit growth of 85% Y-O-Y.

YSIL is on course to strengthen its three chosen fields of growth namely: (a) Client acquisition, (b) distribution of wealth solutions, (c) funds management and (d) institutional broking.

Business segment-wise update is as follows:

Investment Advisory and Wealth Broking Overview:

YSILs Wealth Broking business continues to strive to offer the best proposition to its customers. It offers wide-range products, value plans, research services, digital and personalised support.

YSIL has adopted a Digital First approach, which is in line with the Banks approach. It has enabled customers to effortlessly open a Demat and trading account from their web or mobile devices without any need of physical intervention within the applicable regulatory norms.

YSIL is working on further enhancements in its digital trading platforms which shall provide the customers with a best-in-class user experience driven by cutting-edge technology. YSIL shall launch its new web and mobile platforms during FY 2024-25.

The active client base of YSIL has moved up to ~75,000.

Customer Focus:

During FY 2023-24, YSIL has reported 64% growth in its client base by opening ~2.07 lakh new accounts. Considering customers expectations, YSIL offers a customised set of solutions besides other off-the-shelf products & services. YSIL serves varied customer segments through its digital as well as dealer-based investing experience. A strong research and customer-first culture drives product development and engagements, which helps the customers in their wealth creation journey. The range of products caters to various investor segments such as market novices, active traders, HNIs, Family offices and Corporates.

Revenue Growth:

During FY 2023-24, income for the Wealth Broking business grew from Rs.192.9 crore to Rs.251.3 crore, which represents a growth of 30.3% Y-O-Y.

Capability Building for Future:

The strategy for the upcoming years is focussed on building efficiencies and investing in technology and systems to scale in terms of: (i) Acquisition, (ii) Activation, and (iii) ARPU.

Ably supported by an experienced leadership team, robust processes and risk management practices, the Wealth Broking business is poised to maintain its growth trajectory and achieve new milestones.

Institutional Broking Overview:

YSILs Institutional Broking division continues to gain recognition. The team offers incisive research and proficient Sales Trading and dealing capabilities to leading institutional investors such as asset management companies, insurance companies, PMSs, AIFs, banks and corporate treasuries. The business is also growing its presence with foreign portfolio investors.

YSILs research, corporate access and deep-rooted relationships with institutional investors will help to expand its institutional equity businesses. YSIL has added 16 new institutions as clients and is now empanelled with 110 institutions.

YSILs strong Research team brings a combined ~265 years of equity research experience with analysts actively covering 200+ companies, among the largest coverages in the industry. The team is well-recognised for its ability to spot high conviction midcap ideas, contra-to-market ideas through its deep corporate relationships. YSILs institutional business is well recognised for hosting numerous events and roadshows, on-groundwork and channel checks, and governance checks on listed stocks.

Financial Performance:

The revenue from Institutional Broking business increased by 46.1% from Rs.15.2 crore during FY 2022-23 to Rs.22.2 crore in FY 2023-24, driven by increased flow of business through new client onboarding.

Growth Philosophy:

YSIL continues to make astute investments towards augmenting the teams knowledge, leadership position and technical capabilities.

Transfer of Investment Banking and Merchant Banking business

In order to focus on core business activities, during FY 2023-24, YSIL has transferred its Investment Banking & Merchant Banking business to the Bank effective from January 01,2024.

Overview of Financial Performance

Key Ratios:

1 Particulars	FY 2023-24	FY 2022-23
Return on average equity (%)	3.0%	2.0%*
Return on average assets (%)	0.3%	0.2%
EPS - Basic (FV Rs.2)	0.44	0.27
EPS - Diluted (FV Rs.2)	0.43	0.27
Net interest margin (%)	2.4%	2.6%
Book value per share (FV Rs.2)	14.65	14.17
Cost to income*	74.4%	72.6%
Yield on advances	10.2%	8.9%
Cost of funds	6.4%	5.5%
Capital Adequacy Ratio Basel III
CET 1	12.2%	13.3%
Tier - I	12.2%	13.3%
Tier - II	3.2%	4.7%
Gross non performing advances (NPA) % to Total Advances	1.7%	2.2%
Net NPA % to Total Advances	0.6%	0.8%
CASA ratio to % of total deposits	30.9%	30.8%

* For the purpose of determining ROE, the Bank has considered weighted average shareholder funds during the year. Basis simple average for FY 2022-23 of shareholder funds, the ROE is 1.9%.

* Normalised C/I (ex- PSLC & Interest on Income Tax Refund) at 72.2% for FY2023-24 v/s. 72.6%o FY2022-23.

The Bank has CASA ratio of 30.9%. The Banks shareholder returns for FY 2023-24 in terms of basic and diluted EPS were Rs.0.44 and Rs.0.43 respectively. The book value per share was Rs.14.65.

Highlights for FY 2023-24:

• Net Profit for the year is 12,511 million.

• Balance Sheet grew 14.3% Y-O-Y.

• This has been the third year of full year profitability post moratorium on the Bank.

• NNPA ratio significantly improved to 0.6%.

• CET-I ratio is at 12.2% (Proforma CET-I ratio post redemption of share warrants is 13.2%) and CRAR is at 15.4%.

Operating Performance:

			Rs.in million
1 Particulars	FY 2023-24	FY 2022-23	% change
Interest income	275,859	226,974	21.5%
Interest expense	194,913	147,799	31.9%
Net interest income	80,946	79,176	2.2%
Non interest income	51,143	36,851	38.8%
Operating revenue	132,089	116,026	13.8%
Operating expenses	98,227	84,199	16.7%
Operating profit	33,863	31,828	6.4%
Provisions and contingencies	18,863	22,198	-15.0%
Profit before tax	15,000	9,629	55.8%
Provision for tax	2,489	2,455	1.4%
Net Profit/(Loss)	12,511	7,174	74.4%

Net Profit for FY 2023-24 is Rs.12,511 million as compared to profit of Rs.7,174 million for FY 2022-23 higher by 74.4%. The Banks operating profit increased by 6.4% Y-O-Y on the back of NII and higher Non-Interest Income.

Net Interest income (NII) of the Bank increased by 2.2% to Rs.80,946 million during FY 2023-24 as compared to Rs.79,176 million during FY 2022-23. The Net Interest Margin (NIM) was 2.4% in FY 2023-24.

Non-interest income consists of fee, trade income and gain on sale of securities. Non-interest income increased by 38.8% from Rs.36,851 million in FY 2022-23 to Rs.51,143 million in FY 2023-24. Higher non-interest income and NII was largely offset by higher operating expenditure.

Operating expenses increase by 16.7% from Rs.84,199 million in FY 2022-23 to Rs.98,227 million in FY 2023-24. The employee cost increased from Rs.33,627 million in FY 2022-23 to Rs.37,743 in FY 2023-24. Other operating cost increased by 19.6% from Rs.50,572 million in FY 2022-23 to Rs.60,484 million in FY 2023-24.

Provisions and contingencies (excluding provision for taxes) decreased by 15% from Rs.22,198 million in FY 2022-23 to Rs.18,863 million in FY 2023-24.

Net interest income:

The following table sets forth, for the periods indicated, the net interest income and margin:

			Rs.in million
Particulars	FY 2023-24	FY 2022-23	% change
Interest income	275,859	226,974	21.5%
Interest expense	194,913	147,799	31.9%
Net interest income	80,946	79,176	2.2%
Net interest margin	2.4%	2.6%

Net Interest income (NII) of the Bank increased by Rs.1,770 million to Rs.80,946 million during FY 2023-24 as compared to Rs.79,176 million during FY 2022-23.

Non-Interest income:

			Rs. in million
1 Particulars	FY 2023-24	FY 2022-23	% change
Commission, exchange and brokerage	30,743	20,913	47.0%
Profit on the sale of investments (net)	2,271	344	559.8%
Profit/(Loss) on the revaluation of investments (net)	1,043	(35)	NA
Profit/(Loss) on sale of land, building and other assets	(21)	70	NA
Profit on exchange transactions (net)	6,441	7,446	-13.5%
Income earned by way of dividends etc. from subsidiaries, companies and/or joint ventures abroad/in India	-	-
Miscellaneous income	10,666	8,112	31.5%
Total	51,143	36,851	38.8%

Non-interest income consists of commission and fee income, trade income, derivative and foreign exchange income, gain/loss on sale of securities and other income. Non-interest income of the Bank increased by 38.8% to Rs.51,143 million during FY 2023-24 as compared to Rs.36,851 million during FY 2022-23 on the back of strong fee growth through cross sell and transaction banking.

Operating expenses:

The following table sets forth, for the periods indicated, the principal components of Operating expenses:

			Rs. in million
1 Particulars	FY 2023-24	FY 2022-23	% change
Payments to and provisions for employees (A)	37,743	33,627	12.2%
Other operating expense (B)	60,484	50,572	19.6%
- Depreciation on own property (including non-banking assets)	5,410	4,291	26.1%
- Other administrative expenses	55,073	46,281	19.0%
Operating expenses (A)+(B)	98,227	84,199	16.7%
Cost to income ratio	74.4%	72.6%	2.5%

Non-interest expenses primarily include employee expenses, depreciation on assets and other administrative expenses. Operating expenses increase by 16.7% from Rs.84,199 million in FY 2022-23 to Rs.98,227 million in FY 2023-24.

Employee costs increased by 12.2% from Rs.33,627 million in FY 2022-23 to Rs.37,743 million in FY 2023-24. The number of employees have increased from 27,517 at March 31,2023 to 28,001 at March 31, 2024. Employee costs accounted for 38.4% of operating expenses of the Bank for FY 2023-24 compared to 39.9% for FY 2022-23.

Other administrative expenses increased by 19% to Rs.55,073 million in FY 2023-24 driven by business volumes, higher IT spends due to escalated annual maintenance charges and support resources and purchase of Priority Sector Lending (PSL) certificates during the year to ensure compliance with PSL targets aggregating to net cost of Rs.3,763 million in FY 2023-24 v/s. NIL in FY 2022-23. Number of branches also increased to 1,234 as March 31, 2024 from 1,192 as at March 31,2023.

Provisions/write back of provision and contingencies (including provision for tax):

Provisions and contingencies decreased by 13.4% from Rs.24,654 million to Rs.21,352 million primarily due to decrease in provision/write back of provision on investment.

The key components of provisions are provisions for NPAs of Rs.24,382 million [FY 2022-23: Rs.(169.46) million], provision for taxation of Rs.2,489 million [FY 2022-232,455 million], and provision for standard assets Rs.(1,011) million [FY 2022-23: Rs.(1,496) million] and provision/write back of provision on investments of Rs.(5,426) million [FY 2022-23: Rs.24,087 million].

During the year ended March 31, 2024, the Bank has transferred two stressed loans of gross value Rs.6,903.20 million to ARCs. The net book value (NBV) of these exposures in the Banks books as on the date of assignment was Rs.1,421 million and the final consideration received was Rs.3,364 million under "100% upfront cash basis". The realised profit amounting Rs.1,943 million due to cash recovery exceeding the net book value of stressed loans was credited to Profit and Loss Account during the year ended March 31,2024.

Financial Condition:

Assets:

			Rs.in million
1 Particulars	FY 2023-24	FY 2022-23	% change
Assets
Cash and bank balances	189,296	192,744	-1.8%
Cash and balances with Reserve Bank of India	181,392	128,641	41.0%
Balances with banks and money at call and short notice	7,904	64,104	-87.7%
Investments	902,351	768,883	17.4%
SLR investments*	806,206	660,754	22.0%
Non SLR investments	96,145	108,129	-11.1%
Advances	2,277,995	2,032,694$	12.1%
In India	2,218,391	1,967,008	12.8%
Outside India	59,603	65,687	-9.3%
Fixed assets	28,565	24,448	16.8%
Other assets	656,722	529,092	24.1%
Total	4,054,930	3,547,861	14.3%

*lrdudes investment in government securities, banks in India are required to maintain a specified percentage, 18.00% as at March 31, 2024, of their net demand and time liabilities by way of liquid assets like cash, gold or approved unencumbered securities. $Includes Rs.30,689.28 million of interbank reverse repo classified as advances as per RBI Master Circular No DOR.ACC.REC. NO.37/21.04.018/2022-23.

Total assets of the Bank increased by 14.3% from Rs.3,547,861 million at March 31, 2023 to Rs.4,054,930 million at March 31, 2024, primarily due to increase in advances and investments.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and balances with RBI and other banks, including money at call and short notice. Cash and balances with Reserve Bank of India increased from Rs.128,641 million at March 31, 2023 to Rs.181,392 million at March 31,2024.

Investments

Total investments increased by 17.4% from Rs.768,883 million at March 31, 2023 to Rs.902,351 million at March 31,2024.

SLR investments increased by 22% from Rs.651,582 million in FY 2022-23 to Rs.806,206 million in FY 2023-24. Non SLR investments decreased by 11.1% from Rs.117,301 million in FY 2022-23 to Rs.96,145 million in FY 2023-24.

Advances

During FY 2023-24, the Bank recorded addition of 12.1% in its loan book with advances increasing to Rs.2,277,995 million.

Net advances of IFSC Banking Unit (IBU) in GIFT City decreased from Rs.65,687 million at March 31, 2023 to Rs.59,603 million at March 31,2024.

Fixed assets and other assets

Net fixed assets is Rs.28,565 million as at March 31, 2024. Increase during FY 2023-24 in gross block of fixed assets was Rs.9,736 million (excluding premises) mainly driven by addition of Rs.609 million in capital work in progress, computer software Rs.1,630 million, leasehold improvement Rs.832 million.

Other assets increased to Rs.656,722 million in FY 2023-24 from Rs.529,092 million in FY 2022-23.

Financial Condition

Liabilities

			Rs.in million
Particulars	As at March 31, 2024	As at March 31, 2023	% change
Liabilities
Capital	57,536	57,510	0.0%
Share Warrants Subscription Money	9,484	9,484	0.0%
Reserves and Surplus	354,434	340,431	4.1%
Deposits	2,663,722	2,175,019	22.5%
Current Deposit Accounts	413,440	336,029	23.0%
Savings Account	409,730	332,999	23.0%
CASA	823,170	669,028	23.0%
Term Deposit	1,840,552	1,505,991	22.2%
Borrowings	799,409	774,520	3.2%
Borrowing in India	677,547	671,550	0.9%
Borrowings outside India	121,861	102,970	18.3%
Other liabilities and provisions	170,345	190,898	-10.8%
Total	4,054,930	3,547,861	14.3%

Equity Issue

During the year ended March 31,2024, the Bank has issued 13,106,772 equity shares (Previous year: 3,666,651 equity shares) of face value of Rs.2 each pursuant to the exercise of stock options by employees under the approved stock option schemes.

During the previous year, the Bank had issued 3,696,155,702 equity shares of face value Rs.2 each fully paid up for cash on a preferential basis.

Movement in Share Capital

		Rs.in million
Particulars	As at March 31, 2024	As at March 31, 2023
Opening Share Capital	57,510	50,110
Addition due to exercise of share option	26	7
Addition due to shares issued on preferential basis	-	7,392
Closing share capital	57,536	57,510

Deposits

Deposits increased by 22.5% from Rs.2,175,019 million as at March 31, 2023 to Rs.2,663,722 million at March 31,2024. Term deposits increased by 22.2% from Rs.1,505,991 million at March 31,2023 to Rs.1,840,552 million at March 31,2024, savings account deposits increased by 23% from Rs.332,999 million at March 31,2023 to Rs.409,730 million at March 31, 2024 and current account deposits increased by 23% from 336,029 million at March 31, 2023 to Rs.413,440 million at March 31, 2024. The current and savings account deposits increased from Rs.669,028 million at March 31, 2023 to Rs.823,170 million at March 31, 2024. Total deposits at March 31, 2024 constituted 76.9% of the funding (i.e., deposits and borrowings). The Banks CD ratio stood at 85.5% as at March 31,2024.

Borrowings

Borrowings increased by 3.2% from Rs.774,520 million at March 31,2023 to Rs.799,401 million at March 31, 2024.

Other liabilities

Other liabilities decreased by 10.8% from Rs.190,898.17 million at March 31, 2023 to Rs.170,345.47 million at March 31,2024.

Regulatory capital

In line with the RBI circular on Basel III Capital Regulations, currently for computing capital requirement, YES BANK has adopted the standardised approach for credit risk, standardised duration approach for market risk and Basic indicator approach for operational risk. The Bank has also put in place a Board-approved policy on Internal Capital Adequacy Assessment Process (ICAAP) which defines and sets processes to review and improve the techniques used for identification, measurement and assessment of all material risks and resultant capital requirements.

		Rs.in million
Capital Adequacy Ratios	As at March 31, 2024	As at March 31, 2023
Total capital ratio (CAR) out of the above	15.4%	18.0%
- CET-1	12.2%	13.3%

• Proforma CET-1 ratio post redemption of share warrants into equity 13.2%

Subsidiary Performance

During FY 2023-24 YSIL reported a net profit of Rs.341 million. Total revenue from operations of YSIL increased by 24.3% from Rs.2,187 million in FY 2022-23 to Rs.2,717 million in FY 2023-24.

As at March 31, 2024, the total capital infused and outstanding is Rs.2,490 million in YSIL.

Implementation of IFRS converged Indian Accounting Standards (Ind AS)

The Indian Accounting Standards (Ind AS), as notified under section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, have been formulated keeping the Indian economic and legal environment in view and with a view to converge with IFRS Standards. The RBI through its notification No. RBI/2018-2019/146 DBR.BP.BC. No.29/21.07.001/ 2018-19 dated March 22, 2019 on "Deferral of Implementation of Indian Accounting Standards (Ind AS)" notified to all the scheduled commercial banks that legislative amendments recommended by the RBI are under consideration of the Government of India. Accordingly, RBI has decided to defer the implementation of Ind AS till further notice.

As per RBI directions, the Bank has taken following steps so far:

• The Bank is submitting half yearly Proforma Ind AS financial statements to the RBI

• Formed Steering Committee for Ind AS implementation (the IFRS (Ind AS) Management Committee). The IFRS (Ind AS) Management Committee (Committee) comprises Chief Financial Officer (CFO) (Chairman), Chief Risk Officer (CRO), Chief Operating Officer (COO), Chief Information Officer (CIO) as members and senior management from Financial Management, Risk Management and Treasury Operations as invitees. The Committee oversees the progress of Ind AS implementation in the Bank and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Committee closely reviews progress of the implementation and related matters

• The Committee gives updates to the Audit Committee of the Board and to the Board on preparedness for migration to Ind AS on a periodic basis

• The Bank will continue to liaise with RBI and industry bodies on various aspects pertaining to Ind AS implementation.