RBL Bank Ltd
Chairman Speech
R Subramaniakumar
MANAGING DIRECTOR & CEO
Dear Stakeholders,
It is indeed a proud moment for me to present to you RBL Bank's
Integrated Annual Report for FY 2022-23, which signi es a momentous milestone as we
celebrate the 80th anniversary of our Bank's foundation. In doing so, I am equally
inspired and awed. Inspired by my journey in this organisation - which began a little more
than a year ago, and awed by the significant strides we have made together.
I am pleased to share that we have achieved our highest annual profit
this year. This achievement was made possible through the successful implementation of
various initiatives, including new product launches and the scale up of granular retail
products. I extend my heartfelt gratitude to the dedication and persistence of our 18,000+
team members, whose hard work has been instrumental in achieving this. As we move forward,
we plan to scale up existing products and introduce new ones, both digitally and through
our branches, in the coming year. This approach will contribute to a more comprehensive
and widespread growth. This marks just the beginning of our journey towards RBL Bank 2.0.
Numerous more steps will follow as we work diligently to accomplish our strategic roadmap
for Vision 2026.
Guided by our esteemed Board and with the collective efforts of
everyone associated with RBL Bank, we have significantly strengthened our franchise and
positioned ourselves as a trusted partner for our customers and stakeholders.
FY 2022-23, an Overview
FY 2022-23 was the first full year of the post-pandemic era. We
exhibited undaunted determination towards recovery and business growth.
Despite the immense pressure stemming from the global macroeconomic
situation and the ongoing impacts of the Russia-Ukraine con ict, both the Indian banking
sector and the economy displayed remarkable resilience and surged ahead steadily. The BFSI
sector has admirably served the country through this challenging period by reimagining its
services and products digitally.
Being a proud participant in the BFSI space, we demonstrated our
abilities as a strong and agile institution. We made sincere efforts during the year to
steer the Bank's return to pro tability and growth. Our efforts have been recognised in
ways that are reflected not just in our financial performance but also in an overall
enhancement of our relationships with each of our key stakeholders. Our journey over the
past year evidences the value of teamwork with 'One Bank, One Approach', truly making us
'Apno ka Bank'.
Our growth and performance have also been acknowledged by various
institutions and this recognition really motivates us to march ahead with renewed vigour.
In 2023, we re-entered the Top 100 most valued brands in India list as per Brand Finance,
world's leading brand valuation and research agency which values over 5,000 brands
globally. Additionally, UMEED 1000, our agship CSR initiative won us India's Best Bank for
CSR at the International AsiaMoney Best Bank Awards, 2023.
Our vision is focussed on achieving significant growth while
maintaining a strong commitment to delivering excellent service. We view FY 2022-23 as a
pivotal period for establishing the groundwork of our aspirations, as we continue to focus
sharply on:
| Strengthening our balance sheet and franchise |
| Focussing on customer-centricity |
| Enhancing our financial performance |
| Optimising operational efficiency through technology |
| Building a diversi ed bank |
Here are some of the key highlights of the year that have shaped our
path forward:
? Growing customer acquisition and retention have led to a significant
boost in our CASA (14% year-on-year) to reach `31,717 crore, while deposits grew by 7.4%
to `84,887 crore.
? Our balance sheet strength improved significantly, with net advances
growing by 17% to reach `70,209 crore. Out of this, retail - our key focus area - showed
significant growth of 21% at `37,778 crore
? We registered the highest ever Pro t After Tax of `883 crore,
compared to a loss of `75 crore reported in FY 2021-22.
? Our other income increased to ` 2,490 crore.
? Our key financial ratios such as Return on Assets, CASA, Net
Interest Margin stood at 0.83%, 37.4%, and 4.67% as against - 0.07%, 35.3%, and 4.45%,
respectively.
? Our asset quality continued to witness steady improvement, with GNPA
and NNPA at 3.4% and 1.1%, respectively, as against 4.4% and 1.3% in FY 2021-22.
New Business Verticals
I would also like to draw your attention to the robust growth of our
new business verticals, viz. tractor, home loans and mortgage loans since these new
verticals accounted for 8% of our advances during the year. I am delighted to share that
we have successfully launched additional retail asset products, including gold loans,
business loans, two-wheeler & four-wheeler loans and used car loans. Most of these
products are set to scale in FY 2023-24.
Our primary focus has been on widening our product suite to cater to
our 13 million plus customer base. Through conscious efforts, we are driving these secured
retail asset products, which will significantly strengthen our balance sheet. Already, two
of our retail agship products - credit cards and micro nance loans - are scaling as per
the plan. Besides, our consistent focus on cross-selling through data analytics will
further contribute to achieving our targets.
Digital Journey
Our digital journey is focussed on improving customer experience and
services. This agenda is underpinned by robust data governance and information security
while enabling our people to achieve higher levels of productivity by automating
repetitive tasks and processes.
We continue to prioritise investments in technology that help us target
a wider customer base across all segments. We have also automated several processes, which
have helped free up the bandwidth of our people, enabling better engagement with
revenue-positive activities.
We continued to launch solutions and features to serve our customers
better. Additionally, we have developed the Abacus 2.0 Common Data Platform, which uni es
customer data across all business segments, thereby enhancing our understanding of our
customer's needs.
We are incorporating digital technologies wherever possible to deliver
value at scale. As we continue to re ne our products across various categories, we will
actively seek opportunities to increase cross-sell and upsell.
Customer-Centricity, Our Mantra
Through the year, we have aligned our focus to nurture customer
relationships based on personal engagement, facilitated by our dedicated relationship
managers, and strong user engagement through our digital portals. Our focussed efforts in
this direction, notably the impactful campaigns like #FarzBantaHai, customer-centricity
training initiatives designed for our customer support trainers and our enhanced product
suite, have significantly enriched our connections with our valued customers.
I would like to appreciate our branches for paving the way for enhanced
customer engagement. They have consistently come up with innovative ways to have
meaningful interactions with various customer segments. These include round-the-year
hosting of numerous events, activities and celebrations at our branches to support and
educate our customers across all ages.
Moreover, we have continued to strengthen our partnerships with leading
brands, financial institutions, and start-ups to deliver hybrid products and services that
enrich our customers' experience. A prime example of this is the RBL Bank-RuPay National
Common Mobility Card along with BMRCL, which is set to revolutionise the way Indian
citizens travel, shop, and manage their spending.
Future-Proof Strategies
FY 2022-23 has also characterised certain decisions and activities that
contribute towards making the organisation future-proof. As part of our Vision 2026, we
have devised strategies and identified ve key goals based on our engagements with
stakeholders and the analysis of emerging trends and macro opportunities. These goals are
as follows:
? Strengthening the core business and expanding into nascent verticals
through portfolio diversi cation, product differentiation, and continuous innovation.
? Focussing on distribution-led growth, with a strong emphasis on
cross-selling by leveraging our existing operational investments.
? Building a data led omnichannel approach with a customer- first
focus by utilising digital expertise and technical know-how to deliver personalised and
seamless customer experiences.
? Promoting responsible banking by effectively leveraging RBL Finserve
and focussing on driving scale through sustainability.
? Enhancing workplace diversity and cultivating a future-ready
workforce that is equipped with the skills and knowledge needed to thrive in an
ever-changing business landscape.
Paying Back to the Society
Corporate Social Responsibility (CSR) is a vital aspect of any
responsible organisation. We recognise that genuine success goes beyond financial metrics;
it lies in the transformative impact we make on the lives of those in need. As a part of
our long-term focus, we actively engage in initiatives that promote health, education, and
livelihood opportunities, which we collectively term as 'HELO.' We rmly believe that by
investing in these key areas, we can create a positive and lasting impact on the
communities we serve.
Marching Towards a Sustainable Tomorrow
Our Vision 2026, which encompasses our strategy for the near term, also
spotlights our commitments towards upholding the ESG principles for a more sustainable
tomorrow.
We value our role within the society as an enabler for progress and
growth for our customers, our people, our partners, and the communities we work with.
We are actively taking strides to strengthen the management of our
climate risks by endorsing the 'Taskforce on Climate-related Financial Disclosures (TCFD)'
in August 2022. Furthermore, we are proud to have achieved our first three qualified Green
Loans under IFC's US$ 150 million credit line. Throughout the year, we actively supported
and furthered our existing customer education and awareness programs dedicated to
community development.
In addition to this, we have introduced several initiatives within the
Bank speci cally tailored to drive the growth and advancement of our women colleagues.
These include hiring returnee women through our second career program (RETAKE), protecting
the ratings of women on maternity leave, conducting women leadership development programs,
tying up with diversity consultants and conducting gender sensitisation workshops for
campus hires and employees, among others.
Re ecting our performance in sustainability practices, we were recently
recognised under the 'Strong' category of the ESG Risk management band in CRISIL's
Sustainability Yearbook 2022. Similarly, ESG Risk AI has given an overall rating of
ESG-RISK BBB, which signi es that the Bank has a good track record of risk management.
Also, Re nitiv has given us an ESG score of 67/100 in FY 2022.
Badhte Kadam
Going forward, our core priority continues to be granularity and
retailisation of our portfolio, while maintaining our asset quality standards. To this
end, we are innovating and enhancing our products suite, and strengthening our efforts
through wider reach and higher quality customer service and engagement.
During my conversations with our customers, employees, investors ,
partners, and others in this past year,
I was constantly reminded of the potential of an institution like ours
and the expectations that follow. We are the 'Apno ka Bank' and these apne of ours want us
to succeed. I can con dently say on behalf of my people that this expectation gives us the
motivation to march ahead with Badhte Kadam.
To our shareholders and investors once again, I would like to extend a
note of deeply felt gratitude with your continued support and direction, we are building a
Bank that will scale heights and offer testimony to the relationships nurtured through
these 80 years.
Thanking You,
| R Subramaniakumar |
| MANAGING DIRECTOR & CEO |
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RBL Bank Ltd
Directors Reports
DEAR MEMBERS,
The Board of Directors of RBL Bank Limited ("the Bank") take
great pleasure in presenting the 80th Annual Report of the Bank along with the Audited
statement of accounts for the financial year ended March 31,
A. FINANCIAL PERFORMANCE
The comparative standalone financial performance of the Bank for the
financial year ended March 31, 2023 with that of March 31, 2022 is summarized in the
following table:
|
|
|
R |
| Particulars |
FY 23 |
FY 22 |
Change (%) |
| Advances (Net) |
70,209 |
60,022 |
17.0% |
| Deposits |
84,887 |
79,007 |
7.4% |
| Net interest income |
4,451 |
4,027 |
10.6% |
| Other income |
2,490 |
2,340 |
6.4% |
| Net total income |
6,941 |
6,367 |
9.0% |
| Operating expenses |
4,738 |
3,622 |
30.8% |
| Provisions and contingencies |
1,320 |
2,820 |
(53.2)% |
| Net profit |
883 |
(75) |
– |
| Gross NPA ratio |
3.37% |
4.40% |
– |
| Net NPA ratio |
1.10% |
1.34% |
– |
| Capital Adequacy Ratio |
16.92% |
16.82% |
– |
| Business per employee |
14.06 |
15.02 |
(6.4)% |
| Business per branch |
299.99 |
276.95 |
8.3% |
| Appropriations |
|
|
|
| Transfer to Statutory Reserve |
221 |
– |
– |
| Transfer to Capital Reserve |
3 |
43 |
– |
| Transfer to Revenue and Other Reserves |
200 |
– |
– |
| Transfer to Investment Fluctuation Reserve |
187 |
(36) |
– |
| Transfer to Special Reserve |
10 |
– |
– |
| Dividend for the year, including tax thereon |
– |
– |
– |
The Bank posted a net total income of Rs 6,941 crore and net
profit ofRs 883 crore for the financial year ended March 31, 2023 as against a net
total income of Rs 6,367 crore and net loss of Rs 75 crore for the financial
year ended March 21, 2022.
The Bank proposes to transfer an amount of Rs 221 crore to the
Statutory Reserve. An amount of Rs 226 crore is proposed to be retained in the
Statement of Profit and Loss.
Appropriations from net profithave been done as detailed herein above.
B. BUSINESS UPDATE AND STATE OF AFFAIRS OF THE BANK
The details on the business update and state of affairs of the Bank are
separately provided in Management Discussion and
Analysis Report which forms an integral part of the Annual Report.
C. FINANCIAL DISCLOSURES Dividend
In view of the overall performance of the Bank, your Directors are
pleased to recommend a dividend of Rs 1.50 (15%) per Equity (ordinary) Share of the
face value of Rs 10/- each for the financial year ended March 31, 2023.
In terms of the Income Tax Act, 1961, the dividend income is taxable in
the hands of the Members. Therefore, the dividend will be paid to the Members after
deduction of applicable tax, if any.
In accordance with Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended, (SEBI Listing Regulations), the
Bank has formulated and adopted a Dividend Distribution Policy duly approved by the Board
and the same is available on the website of the Bank at
https://ir.rblbank.com/codes-and-policies.aspx.
The Policy aims at balancing the dual objectives of appropriately
rewarding shareholders through dividends and retaining capital in order to maintain a
healthy capital adequacy ratio to support future growth.
Share Capital
During the financial year ended March 31, 2023, your Bank added Rs 0.71
crore (including premium) through allotment of 54,300 equity shares pursuant to exercise
of stock options by the employees of the Bank under various Employees Stock Option Plans.
Consequent to the above, the paid-up Equity Share Capital of your Bank
increased by Rs 0.05 crore and share premium increased by Rs 0.65 crore.
The paid up Equity Share Capital of the Bank as on financial year ended
March 31, 2023 stood at Rs 599.57 crore divided into 59,95,68,063 equity shares of Rs
10/- each.
During the financial year under review, there has been no change in the
Authorized share capital of the Bank. The Authorized share capital of the Bank as at March
31, 2023 stood at Rs 700 crore divided into 700,000,000 equity shares of Rs 10/-
each.
During the financial year under review, the Bank has not issued any
sweat equity shares or equity shares with differential voting rights.
The Equity Shares of your Bank continue to remain listed on BSE Limited
and National Stock Exchange of India Limited.
The Bank has paid the listing fees as payable to BSE Limited and
National Stock Exchange of India Limited for the financial year ended March 31, 2023.
Debt Securities
Pursuant to the authority granted vide the resolution passed by the
Members of the Bank at the 78th Annual General Meeting held on September 21, 2021, for
borrowing / raising of funds by issue of debt securities, the Bank in the first quarter of
financial year ended March 31, 2023 raised funds by issue of USD denominated unsecured
Tier 2 subordinated notes in accordance with the Reserve Bank of India's Master
Circular Basel III Capital Regulations dated April 1, 2022, as amended from time to time
("Basel III Capital Regulations") aggregating up to USD 100 million (equivalent Rs
776.98 crore) [the "Notes"] offered under Section 4(a)(2) of the
United States Securities Act of 1933, as amended to United States International
Development
Finance Corporation ("USDFC").
The Unsecured Redeemable Non-Convertible Debentures ("NCDs")
issued by the Bank on a private placement basis aggregating to Rs 330 crore which
were listed on BSE Limited were fully redeemed on April 15, 2023, with the redemption of
said NCDs, the Bank has redeemed all its outstanding NCDs listed with BSE Limited and as
on date of this report there are no outstanding NCDs listed with the Stock Exchanges.
Capital Adequacy Ratio
Your Bank is well capitalized with a Capital Adequacy Ratio
("CAR") of 16.92 % as on March 31, 2023, as against the minimum requirement of
11.50%. Your Bank complies with the Capital Adequacy guidelines of Reserve Bank of India,
also known as ‘Basel III Guidelines'.
Net Worth
Your Bank's net worth as on March 31, 2023 is Rs 12,996.26
crore. It comprises of paid-up Equity Share Capital of Rs 599.57 crore and Reserves
of Rs 12,396.69 crore (excluding Revaluation Reserve, Foreign Currency Translation
Reserves and Deferred Tax assets).
D. CORPORATE GOVERNANCE
Your Bank's philosophy on Corporate Governance is aimed at
efficient conduct of business operations and meeting its obligations towards the
stakeholders. Your Bank is committed to be transparent and merit-based organization and
ensures fairness, transparency and responsiveness in all its dealings. The Bank
understands its responsibility towards all the stakeholders and strives hard to meet their
expectations. The corporate structure, business, operations and regulatory compliance of
the Bank have been strictly aligned to the Corporate Governance Philosophy of the Bank.
A detailed Corporate Governance Report as envisaged under
Regulation 34(3) of the SEBI Listing Regulations is annexed as Annexure
I to this Report. The Certificateissued by M/s. Alwyn Jay & Co., Practicing Company
Secretaries, confirming compliance with the conditions of Corporate Governance as
stipulated in SEBI Listing
Regulations is annexed as Annexure IA and forms an integral part of
this Report.
E. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34 (2) (f) of the SEBI Listing Regulations, a
Business Responsibility and Sustainability Report ("BRSR") has to be furnished
by the top One Thousand listed companies based on market capitalization in the format
prescribed by SEBI. Accordingly, the report describing the initiatives taken by the Bank
from an Environmental, Social and Governance ("ESG") perspective is presented in
a separate section forming part of this Annual Report. The BRSR is also available on the
website of the Bank at https://ir.rblbank.com/.
The Bank has identified sustainability as a key core area of
operations. Therefore, it has decided to come up with an integrated report as per the
International Integrated Reporting
Council's (IIRC) recommendations. The Bank also published
standalone sustainability reports based on GRI framework during financial year ended
2017-18 to financial year ended 2019-20. From financial year ended 2019-20, the
sustainability report is part of the integrated report. This integrated report is a
testament of maturity of Bank's ESG framework over time. The integrated
sustainability report forthefinancialyear ended March 31, 2023, also forms an integral
part of this Report.
Any Member interested in obtaining a copy of BRSR may write to the
Company Secretary of the Bank at the Registered Office of the Bank or by email at
investorgrievances@rblbank.com.
F. STATUTORY DISCLOSURES Annual Return
In terms of Section 92(3) read with Section 134(3)(a) of the Companies
Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014;
the Annual Return of the Bank in the prescribed Form MGT-7, is being made available on the
website of the Bank at https://ir.rblbank.com/.
Conservation of Energy and Technology Absorption
Summary of measures taken by your Bank with respect to conservation of
energy and technology absorption are covered in Management Discussion and Analysis Report
and Business Responsibility and Sustainability Report forming part of this Annual Report.
Your Bank is constantly pursuing its goal of upgrading technology to deliver quality
services to its customers in a cost-effective manner.
Foreign Exchange Earnings and Outgo
During the financial year ended March 31, 2023, your Bank earned Rs 254.40
crore and spent Rs 230.84 crore in foreign currency. This does not include foreign
currency cash flows in derivatives and foreign currency exchange transactions.
Board of Directors
The Board of Directors ("Board") of your Bank is constituted
in accordance with the provisions of the Companies Act, 2013, the Banking Regulation Act,
1949 ("the BR Act, 1949"), SEBI Listing Regulations and the Articles of
Association of the Bank.
The Bank has always embraced the importance of a diverse Board with an
optimum combination of Independent & Non-Independent Directors, equipped with
appropriate balance of both technical and behavioral skills, experience and diversity of
perspectives as relevant for the banking business; thereby ensuring effective Board
governance while discharging its fiduciary obligations towards the stakeholders of the
Bank.
Thus, in line with the above, the Board of the Bank is well structured
and comprises of eminent personalities having wide, diverse and practical experience and
comprehensive professional credentials, has appropriate balance of skill sets and
knowledge, which helps the Bank to gain insights for strategy formulation and direction
setting, thus adding value to its growth objectives.
The Bank adheres to the process and methodology prescribed by the
Reserve Bank of India in respect of the ‘Fit & Proper' criteria as
applicable to Private Sector Banks, signing of deed of covenants which binds the Directors
to discharge their responsibilities to the best of their abilities, individually and
collectively in order to be eligible to be appointed/re-appointed as a Director of the
Bank. The said declarations are obtained from all the Directors on an annual basis and
also at the time of their appointment / reappointment, in compliance with the said laws.
An assessment on whether the Directors fulfil the said criteria is also carried out by the
Nomination & Remuneration Committee and the Board on an annual basis and before
considering their candidature for re-appointment.
As on March 31, 2023, the Board comprised of thirteen (13) Directors,
of these, Eleven (11) were Non-Executive Directors of which Seven (7) Directors were
Non-Executive Independent Directors (one of whom being the part-time Chairman of the Bank
and one being an Independent Woman Director), Three (3) Directors were Non-Executive Non
Independent Directors (including one Woman Director) and One (1) Director was an
Additional Director (appointed by Reserve Bank of India). The remaining Two (2) Directors
were Whole time Directors of which one is Managing Director & CEO and the other is an
Executive Director. Further details have been provided in the below section.
Details of Directors and Key Managerial Personnel
During the financial year under review and upto the date of this
Report, the following changes took place in the composition of the Board and Key
Managerial Personnel:
Appointment of Regular Managing Director & CEO
Mr. Vishwavir Ahuja (DIN: 00074994), Managing Director & CEO of the
Bank proceeded on leave effective December 25, 2021. The Board appointed Mr. Rajeev Ahuja
(DIN 00003545), Executive Director as interim Managing Director & CEO on December 25,
2021. The said appointment of Mr. Rajeev Ahuja as interim Managing Director & CEO was
approved by the Reserve Bank of India and Members of the Bank vide postal ballot on May
27, 2022.
The Board of the Bank initiated the steps to identify and evaluate
candidates for the position of regular Managing Director & CEO and constituted a
Search Committee for this purpose. The Board at its meeting held on April 20, 2022, basis
the recommendations of the Nomination & Remuneration Committee and pursuant to the
provisions of Banking Regulation Act, 1949 and the extant Reserve Bank of India
guidelinesfinalized the names of candidates for the position of regular Managing Director
& CEO of the Bank, application in this regard was duly submitted to the Reserve Bank
of India. The Reserve Bank of India vide letter dated June 10, 2022 approved the
appointment of Mr. R. Subramaniakumar (being one of the candidates as proposed by the
Bank) as the Managing Director & CEO of the Bank for a period of three years with
effect from the date on which he assumes charge as Managing Director & CEO (RBI
Approval).
The Nomination & Remuneration Committee and Board at their
respective Meetings held on June 11, 2022, noted the aforesaid RBI Approval and further at
their meetings held on June 23, 2022 approved / noted the below:
Appointment of Mr. R Subramaniakumar (DIN: 07825083) as an Additional
Director of the Bank, with effect from June 23, 2022.
Appointment of Mr. R. Subramaniakumar as the regular Managing Director
& Chief Executive Officer and Key Managerial Personnel of the Bank for a period of
three (3) years commencing from June 23, 2022 (A/N Afternoon) up to June 22, 2025, subject
to approval of the Members of the Bank.
Mr. Rajeev Ahuja's position as interim Managing Director & CEO
was an interim position approved by the Reserve Bank of India till June 24, 2022 or till
the appointment of a regular Managing Director & CEO whichever is earlier. Hence,
consequent to the aforesaid appointment of Mr. R. Subramaniakumar as regular Managing
Director & CEO, Mr. Rajeev Ahuja ceded the title of interim Managing Director &
CEO effective June 23, 2022 (F/N-Forenoon) and continued to perform his role as Executive
Director on the same terms and conditions as approved by the Reserve Bank of India and
Members of the Bank.
Consequent to the appointment of Mr. R. Subramaniakumar as the regular
Managing Director & CEO of the Bank effective June 23, 2022 (A/N - Afternoon), Mr.
Vishwavir Ahuja's term as Managing Director & CEO of the Bank ended on June 23,
2022 (F/N - Forenoon).
The Nomination & Remuneration Committee and Board at their
respective Meetings held on August 22, 2022, inter alia approved the below: Appointment of
Dr. Sivakumar Gopalan (DIN: 07537575), as an Additional Non-Executive Independent Director
of the Bank w.e.f. August 22, 2022, for a term of five (5) years.
Appointment of Mr. Gopal Jain (DIN: 00032308), as an Additional
Non-Executive Non Independent Director of the Bank.
Appointment/Re-appointment/Retirement by rotation approved/concurred by
the Members at the 79th Annual General Meeting of the Bank held on September 21, 2022:
Mr. Vijay Mahajan (DIN: 00038794), Non-Executive Non Independent
Director whose term of office was to retire by rotation, expressed his desire not to seek
re-appointment upon expiry of his term at the 79th Annual General Meeting.
Appointment of Mr. R Subramaniakumar (DIN: 07825083) as Director of the
Bank and further as Managing Director & Chief Executive Officer of the Bank for a
period of three (3) years, effective June 23, 2022 (A/N - Afternoon) upto June 22, 2025.
Appointment of Dr. Sivakumar Gopalan (DIN: 07537575) as Non-Executive
Independent Director of the Bank for a period of 5 (five) years i.e. from August 22, 2022
to August 21, 2027.
Appointment of Mr. Gopal Jain (DIN: 00032308) with effect from August
22, 2022 as Non-Executive Non Independent Director of the Bank, liable to retire by
rotation.
Re-appointment of Executive Director
Basis the recommendations of Nomination & Remuneration Committee,
the Board at its Meeting held on October 10, 2022, approved the re-appointment of Mr.
Rajeev Ahuja (DIN:00003545) as an Executive Director of the Bank for a period of 3 years
effective from February 21, 2023 till February 20, 2026, which was approved by the Reserve
Bank of India on February 7, 2023. The re-appointment was further approved by Members of
the Bank vide Ordinary Resolution passed on April 27, 2023, by means of Postal Ballot.
Key Managerial Personnel
During the financial year under review, there was a casual vacancy
caused in the office of Chief Financial due to sad and untimely demise of Mr. Amrut Palan
who had been associated as a CFO with the Bank since August 2019. The Bank placed on
record its appreciation for his contribution and the benefits gained from his vision and
leadership during his tenure. With respect to the casual vacancy, the Bank with the
approval of the Board, elevated Mr. Deepak Ruiya, Head-Financial Control to the position
of Deputy CFO with effect from March 6, 2023. Till such time a CFO is appointed, Mr.
Deepak Ruiya in his capacity as Deputy CFO is responsible for all the functions as are
executed by a CFO and is also designated as a Key Managerial Personnel of the Bank.
Mr. R. Subramaniakumar (DIN: 07825083), Managing Director & CEO,
Mr. Rajeev Ahuja, (DIN: 00003545), Executive Director, Mr. Deepak Ruiya, Deputy Chief
Financial Officer and Ms. Niti Arya,
Company Secretary were the Key Managerial Personnel of the Bank
pursuant to Sections 2(51) and 203 of the Companies Act, 2013.
Retirement by rotation
In terms of Section 152 of the Companies Act, 2013 and Articles of
Association of the Bank, Mr. Vimal Bhandari (DIN: 00001318), Non-Executive Non Independent
Director of the Bank retires by rotation at the ensuing (80th) Annual General Meeting.
Although being eligible he has not offered himself for re-appointment. Accordingly, he
would cease to hold the office as Non-Executive Non Independent Director of the Bank on
expiry of his term ending at the ensuing (80th) Annual General Meeting and the vacancy so
created be not filled. Consequently, he would cease to be Chairman/Member of the
respective Board Committees from the said date. The Board places on record its made by
sincere appreciation for the significant Mr. Bhandari in guiding and supporting the
management during his tenure with the Bank.
The resolution for the same is included in the Notice convening the
80th Annual General Meeting.
Independent Directors
As on March 31, 2023, Mr. Prakash Chandra (DIN: 02839303), Mr. Ishan
Raina (DIN: 00151951), Ms. Ranjana Agarwal (DIN: 03340032), Dr. Somnath Ghosh (DIN:
00401253), Mr. Chandan Sinha (DIN: 06921244), Mr. Manjeev Singh Puri (DIN: 09166794) and
Dr. Sivakumar Gopalan (DIN: 07537575) are Non-Executive Independent Directors of the Bank.
All the Independent Directors have submitted their respective declarations stating that
they meet the criteria prescribed for independence under Section 149(6) of the Companies
Act, 2013 & Rules made thereunder and Regulation 16 of the SEBI Listing Regulations.
In the opinion of the Board the Independent Directors fulfill the aforesaid ,proficiency
criteriaandpossessrequisiteintegrity,qualifications, experience, expertise and are
independent of the management.
The Independent Directors of the Bank have complied with the
requirements of Companies (Creation and Maintenance of databank of Independent Directors)
Rules, 2019 read with the Companies (Appointment and Qualifications of Directors) Rules,
2014. Further, the Independent Directors who were required to complete the online
proficiency self assessment test by March 31, 2023 have duly completed the same within
required timelines.
During the financial year under review, none of the Independent
Directors of the Bank had resigned before the expiry of their respective tenure(s).
None of the Independent Directors of the Bank is due for reappointment
at the ensuing Annual General Meeting.
Board Level Performance Evaluation
The performance evaluation of the Board as a whole as well as that of
its Committees, Directors (including Independent
Directors) and Chairman of the Board is carried out by the Board based
on the criteria for evaluation / assessment as laid down by the Nomination &
Remuneration Committee, in accordance with the relevant provisions of the Companies Act,
2013, the relevant Rules made thereunder and the SEBI Listing Regulations.
The manner in which the said performance evaluation has been carried
out is outlined in the Corporate Governance Report forming part of this Report as an
Annexure I.
Particulars of Employee Remuneration
A. The ratio of the remuneration of each director to the median
employee's remuneration and other details in terms of Section 197(12) of Companies
Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended, are given below:
1. The ratio of the remuneration of each director to the median
remuneration of the employees of the Bank for the financial year 2022-23 are as under:
| Sr. No. Name of the Director |
Designation |
Ratio |
| 1 Mr. Prakash Chandra |
Non-Executive Independent Director (Part-time Chairman) |
8.08x |
| 2 Mr. R Subramaniakumar |
Managing Director & CEO |
34.54x |
| 3 Mr. Rajeev Ahuja |
Executive Director |
34.07x |
| 4 Mr. Ishan Raina |
Non-Executive Independent Director |
6.04x |
| 5 Ms. Ranjana Agarwal |
Non-Executive Independent Director |
5.70x |
| 6 Dr. Somnath Ghosh (CFO) |
Non-Executive Independent Director |
5.93x |
| 7 Mr. Chandan Sinha |
Non-Executive Independent Director |
4.95x |
| 8 Mr. Manjeev Singh Puri |
Non-Executive Independent Director |
5.13x |
| 9 Dr. Sivakumar Gopalan |
Non-Executive Independent Director |
1.37x |
| 10 Mr. Vimal Bhandari |
Non Executive Non Independent Director |
4.91x |
| 11 Ms. Veena Mankar |
Non Executive Non Independent Director |
4.76x |
| 12 Mr. Gopal Jain |
Non Executive Non Independent Director |
1.63x |
| 13 Mr. Yogesh Dayal |
Additional Director (appointed by RBI) |
Note 2 |
‘x' denotes the median remuneration of the employees.
Note 1 - During the financial year under review, the Bank has not paid
any compensation in the form of fixed remuneration to Non-Executive Directors of the Bank
except for the payment of honorarium to Mr. Prakash Chandra, Non-Executive Independent
Director (Part-time Chairman) as per approval received from RBI and hence sitting fees
paid to other Non Executive Directors (excluding additional director appointed by RBI)
have been considered as remuneration while calculating the ratio of the remuneration to
the median remuneration of the employees of the Bank.
Note 2 - The sitting fees is not paid to the Additional Director
appointed by the Reserve Bank of India.
2. The percentage increase in remuneration of each Director,
Chief Executive Officer, Chief Financial Officer and Company Secretary of the Bank for the
financial year 2022-23 are as under:
| Sr. No. Name of the Director / KMP |
Designation |
% Increase |
| 1. Mr. R Subramaniakumar |
Managing Director & CEO |
Note 3 |
| 2. Mr. Rajeev Ahuja |
Executive Director |
Note 4 |
| 3. Mr. Deepak Ruiya |
Deputy Chief Financial Officer |
Note 5 |
| 4. Ms. Niti Arya |
Company Secretary |
15% |
The percentage increase in remuneration for Mr. Vishvavir Ahuja who
held the position of Manging Director & CEO till June 23, 2022 (F/N) and Mr. Amrut
Palan who held the position of CFO upto September 8, 2022 was Nil.
Note 3 - Mr. R. Subramaniakumar was appointed as the Managing Director
& CEO for a period of three years with effect from June 23, 2022 (A/N), on the terms
of remuneration as approved by the Reserve Bank of India. The said appointment and
remuneration were further approved by Members of the Bank at the 79th Annual General
Meeting held on September 21, 2022.
Note 4 - Mr. Rajeev Ahuja held the position of interim Managing
Director & CEO upto June 23, 2022 (F/N) and thereafter continued to perform his role
as Executive Director of the Bank.
Reserve Bank of India vide its letter dated February 7, 2023 approved
the revision in the annual fixed pay to Mr. Rajeev Ahuja from Rs 2.13 Crore per
annum to Rs 2.34 Crore per annum with effect from February 21, 2022. Further, the
RBI also approved variable pay of Rs 1.7 Crore comprising of cash variable pay of Rs
0.85 Crore and non-cash variable pay (share-linked instruments) of Rs 0.85
Crore for FY2021-22 to Mr. Rajeev Ahuja. The above revision in remuneration and variable
pay was approved by the Members of the Bank vide postal ballot on April 27, 2023.
Accordingly, on receiving Members' approval, the revision in his Fixed Pay with
effect from February 21, 2022, along with Variable Pay -Cash (as per deferral schedule in
line with the Bank's Policy) was paid in the month of May 2023.
Note 5 - Mr. Deepak Ruiya was appointed as the Deputy CFO and Key
Managerial Personnel w.e.f. March 6, 2023 and is responsible for all the functions as are
executed by CFO (till such time a regular CFO is appointed). From the date of his
appointment as Deputy CFO till March 31, 2023, there was no increase in his remuneration.
There is no percentage increase in the remuneration paid to
Non-Executive Part time Chairman, who apart from being paid sitting fees for the
Board/Committee meetings attended by him is eligible to a honorarium of Rs 18 lakh
per annum as per approval of the Reserve Bank of India. The other Non-Executive Directors
(excluding additional director appointed by Reserve Bank of India) were only paid sitting
fees for the Board/Committee meetings attended by them during FY2022-23.
3. The percentage increase in the median remuneration of
employees in the financial year
The percentage increase in the median remuneration of employees in the
financial year was 9%.
4. The number of permanent employees on the rolls of Bank
The number of permanent employees on the rolls of the Bank as on March
31, 2023 was 10,759.
5. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial year and its
comparison with the percentile increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circumstances for increase in the
managerial remuneration.
Average increase in remuneration is 11.4% for employees other than
managerial personnel and 6.07% for managerial personnel (including Managing Director &
CEO, Executive Director, ChiefFinancialOfficer .Secretary) and Company
It is hereby affirmed that the remuneration paid to Directors and KMPs
is as per the remuneration policy of the Bank and where applicable has been approved by
the Reserve Bank of
India.
B. The statement containing particulars of employees as required under
Section 197(12) of Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, forms part
of this report. In terms of Section 136 of Companies Act, 2013 read with second proviso of
Rule 5 (3) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
the Annual Reports are being sent to the Members of the Bank, excluding the information as
required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended, as mentioned aforesaid and the same is open for
inspection electronically on all working days between 11:00 a.m. to 01:00 p.m. upto the
date of Annual General Meeting. A copy of this statement may be obtained by the Members by
writing to the Company Secretary of the Bank at the Registered Office of the Bank or by
email at investorgrievances@rblbank.com.
Remuneration Policy
Remuneration policy for employees
Your Bank's compensation policy keeps in mind the strategy, ethos
and financial performance of the Bank and market compensation trends at any given time.
Your Bank recognizes that talent is critical to the long-term growth and success of the
Bank, and it is a pre-requisite to have a compensation structure comparable with the
industry.
Your Bank has set out its Compensation Policy based on the concept of
CTC (Cost to Company) and TEC (Total Employee Compensation), to make compensation packages
for across all grades, competitive enough to attract, nurture and retain high caliber
professionals in the Bank and have an organization structure that reflects scale.
Your Bank's Compensation Policy is designed and aimed at
attracting and retaining best possible / available talent that it requires to effectively
grow the business and be considered a highly respected institution. It comprises of a
balanced mix of Fixed & Variable cash and non-cash compensation and benefits /
perquisites to deliver maximum value to the employee and other stakeholders.
Your Bank strongly believes that an equity component in the
compensation goes a long way in aligning the objectives of employees with those of the
Bank. The underlying philosophy of stock options is to enable the employees, present and
future, to get a share in the value that they help to create for the Bank over a certain
period of time. This Policy is available at the Bank's website at the web-link:
https://www.rblbank.com/pdf-pages/ bank-policies.
Policy on appointment & compensation to Non-Executive Directors
(including Independent Director) and Criteria for evaluation of Board and its Directors
In terms of the provisions of Companies Act, 2013 and SEBI Listing
Regulations, the Board has, on recommendations of the Nomination & Remuneration
Committee framed a Policy on appointment & Compensation to Non-Executive Directors
[including Independent Director and Criteria for evaluation of Board and its Directors
("Policy")] which inter alia specifies the criteria for identifying persons who
are qualified to be appointed as Non-Executive Directors (including Independent Director)
and the appointment and the remuneration structure of the aforesaid p>
Directors, along with criteria for evaluating their performance.
The Policy is based on the principles of Board diversity with respect
to representation on the Board of the mandatory areas of special knowledge/practical
experience and also other areas of expertise that would be beneficial to the Bank. The
Nomination & Remuneration Committee will thus determine the optimum size of the Board
which would be commensurate to the size, scale and operations of the Bank. The Nomination
& Remuneration Committee while shortlisting candidates will be guided by fit and
proper credentials, criteria of independence and other aspects as prescribed by the
Reserve Bank of India guidelines, Companies Act, 2013 and SEBI Listing Regulations as
amended from time to time.
The Policy as mentioned above is available on the website of the Bank
at https://ir.rblbank.com/.
Remuneration of Managing Director and Executive Director
The Board considers the recommendations of Nomination &
Remuneration Committee and approves the remuneration of officers the
Managing Director and Executive Director, with or without modifications, subject to the
approval of Members of the Bank and applicable regulatory approval. specialization, focus
and The remuneration payable to the Managing Director and Executive Director is subject to
prior approval of the Reserve Bank of India and hence the remuneration or revision in
remuneration is payable to them only post receipt of the approval from the Reserve Bank of
India.
Remuneration of Chairman
The Nomination & Remuneration Committee recommends the remuneration
(honorarium) of the Chairman to the Board which is considered and approved by the Board
subject to the approval of Members of the Bank and applicable regulatory approval.
The remuneration (honorarium) payable to the Chairman is subject to
prior approval of the Reserve Bank of India. Therefore, the remuneration (honorarium) or
any revision therein is payable to the Chairman only post receipt of the approval from the
Reserve Bank of India.
The Chairman is also entitled to reimbursement of expenses for
participation in the meetings of the Board and Committees thereof. Apart from the payment
of sitting fees for attending meeting of the Board of Directors or any Committees thereof,
the Chairman is also entitled to a honorarium of Rs 18 lakh per annum as per the
last approval granted by the Reserve Bank of India and the Members.
Remuneration of Non-Executive Directors (NEDs)
The remuneration payable to Non-Executive Directors (NEDs) is governed
by the provisions of Banking Regulations Act, 1949,
Reserve Bank of India guidelines issued from time to time and
provisions of the Companies Act, 2013 and rules made thereunder to the extent it is not
inconsistent with respect to provisions of the Banking Regulations Act, 1949 or the
Reserve Bank of India guidelines.
The NEDs (other than Additional Director appointed by RBI) are paid
sitting fees for attending each meeting of the Board of Directors or any Committees
thereof. NEDs are paid sitting fee of Rs 1 lakh for attending meetings of the
Board, Rs 50,000 for attending meetings of Audit Committee, Risk Management
Committee and Nomination & Remuneration Committee, respectively and Rs 30,000
for the remaining Committees, names of which are mentioned in the section on Audit
Committee and other Board Sub-Committees. All NEDs are entitled to reimbursement of
expenses for participation in the meetings of the Board and Committees thereof. The Bank
does not grant any Stock Options to NEDs.
RBI vide its Circular RBI/2021-22/24 DOR.GOV. REC.8/29.67.001/2021-22
dated April 26, 2021 prescribed that, in addition to sitting fees and expenses related to
attending meetings of the Board and its Committees as per extant statutory norms/
practices, the bank may provide for a payment of compensation to Non-Executive Directors
of the Bank, other than the Part Time Non-Executive Chairperson, in the form of fixed
remuneration not exceeding Rs 20,00,000 (Rupees Twenty Lakh Only) per annum which
is commensurate with the individual director's responsibilities and demands on time
and which are considered sufficient to attract qualified competent individuals
Pursuant to the above regulatory provisions, the Members of the Bank at
their 78th Annual General Meeting held on September 21, 2021 had accorded their consent to
pay compensation to each Non-Executive Director of the Bank (other than the Part Time
Non-Executive Chairman) in the form of fixed remuneration not exceeding Rs 20,00,000
(Rupees Twenty Lakh Only), per annum, for a period of five (5) years, with effect from the
financial year 2021-22. The Board determines the amount of fixed remuneration to be paid
to the Non-Executive Directors within the above overall limit.
The fixed remuneration for the financialyear ended March 31, 2023 which
will be paid during financialyear ending March 31, 2024 is appropriately disclosed in the
Corporate Governance Report annexed as Annexure I to this Report.
Employees Stock Option Plan (ESOP)
The Bank has formulated and adopted Employee Stock Option Plans (ESOP)
in terms of the Regulations/Guidelines issued by the Securities and Exchange Board of
India.
The underlying philosophy of the Bank's ESOP is to enable the
present and future employees to share the value that they help to create for the Bank over
a period of time. ESOP is also expected to strengthen the sense of ownership and belonging
among the recipients. ESOP has been designed and implemented in such a manner that the
compensation structure goes a long way in aligning the objectives of an individual with
those of the Bank. In addition, during the year your Bank continued with its plan of
rewarding long-serving employees with ESOPs thus making them true partners in the
Bank's growth.
The Nomination & Remuneration Committee inter alia administers and
monitors the ESOP. The Bank has two active ESOP schemes viz. Employee Stock Option Plan
2013 (ESOP 2013) and Employee Stock Option Plan 2018 (ESOP 2018) under which stock options
are issued to the employees of the Bank.
In terms of Regulation 7(1) of the Securities and Exchange Board of
India (Share Based Employee Benefits and Sweat Equity) Regulations 2021 (SBEB & SE
Regulations), the Nomination & Remuneration Committee and the Board at their
respective meetings held on August 22, 2022 also approved certain amendments to ESOP 2013
as well as few amendments to ESOP 2018 which required approval of Members and few other
amendments not being of a nature requiring approval of Members which was only for the
purpose of meeting the regulatory requirements of SBEB & SE Regulations. The
amendments made to the ESOP 2013 and ESOP 2018, respectively are not detrimental to the
interest of the existing option grantees.
The Members of the Bank at the Annual General Meeting held on September
21, 2022, approved the amendment to ESOP 2018 relating to definition of Employee, Exercise
Price and the .enhancement in the quantum of equity stock options for the purpose of
grant. The Members of the Bank approved to create, offer, issue and grant / allot
1,75,00,000 additional equity stock options exercisable into not more than 1,75,00,000
equity shares of face value of Rs 10 each. Post this approval, the maximum limit
with respect to the aggregate number of equity shares upon exercise of options under ESOP
2018 available to be granted to eligible employees of the Bank and its subsidiary is
5,50,00,000 Equity Shares of face value of Rs 10 each.
ESOP 2013 and ESOP 2018 schemes of the Bank are in compliance with the
SBEB & SE Regulations and there were no material changes made to the said Schemes
except as described above. The certificate from the Secretarial Auditors of the Bank
certifying that the Bank's Employees Stock Option Plans are being implemented in
accordance with the provisions of the SBEB & SE Regulations and the respective
resolutions passed by the Members of the Bank, shall be available for inspection
electronically by the Members at the ensuing Annual General Meeting.
Further details of the ESOP are given in the notes to accounts in the
attached financial statements and the statutory disclosure as mandated under Regulation 14
of SBEB & SE Regulations forms part of this report and the same is available
electronically on the website of the Bank at https://ir.rblbank.com/.
Board Meetings
Your Bank holds atleast four Board meetings in a year, one in each
quarter, inter-alia to review the financial results of the Bank and the dates of the Board
meetings are finalized well in advance after seeking concurrence of all the Directors. All
the decisions and urgent matters approved by way of circular resolutions are placed and
noted at the subsequent Board meeting. In case of urgent matters, additional Board
meetings are held in between the quarterly meetings to address business or regulatory
requirements.
During the financialyear under review, Eighteen (18) Board meetings
were convened and held. The intervening gap between the Board meetings was within the
period prescribed under the Companies Act, 2013 and SEBI Listing Regulations. The details
of the Board composition, its meetings held during the year alongwith the attendance of
the respective Directors thereat are set out in the Corporate Governance Report forming
part of this
Report as Annexure I.
Audit Committee and other Board Sub-Committees
Your Bank has a duly constituted Audit Committee as per the provisions
of Section 177 of the Companies Act, 2013, provisions of the SEBI Listing Regulations and
the Reserve Bank of India Guidelines.
As on March 31, 2023, the Audit Committee comprised of six Directors of
which four were Independent Directors including the Chairman of the Committee and the
remaining two were Non-Executive Non Independent Directors of which one was an Additional
Director appointed by the Reserve Bank of India.
The Board of Directors have also constituted other subcommittees.
During the financial year under review, certain changes, apart from the changes to the
composition of the Committee, were approved by the Board to some of the subcommittees as
detailed hereinafter. The Board at its meeting held on May 6, 2022, considered, and
approved the segregation of the Customer Service, Branding & Marketing Committee into
two different Committees of the Board, with the nomenclature "Customer Service
Committee (CSC)" and "Branding, Marketing & Communications Committee"
(BMCC), respectively. The Board at its meeting held on September 29, 2022 inter alia
approved merger of Wilful Defaulter Review Committee ("WDRC") and
Non-Cooperative Borrower Review Committee ("NCBRC") into a single committee with
the nomenclature "Review Committee for Wilful Defaulters and Non-Cooperative
Borrowers". The Board at its meeting held on January 19, 2023 approved the change in
the nomenclature of Anti Fraud Committee to "Fraud Monitoring Committee".
As on March 31, 2023, there were twelve sub-committees of the Board
namely - Audit Committee, Stakeholders' Relationship Committee, Board Investment
& Credit Committee, Fraud Monitoring Committee, Nomination & Remuneration
Committee, Risk Management Committee, Capital Raising Committee, Corporate Social
Responsibility Committee, IT Strategy Committee, Customer Service Committee, Branding
Marketing & Communications Committee and Review Committee for Wilful Defaulters and
Non-Cooperative Borrowers.
The details of composition of the Board sub-committees, their terms of
reference and other details are set out in the Corporate Governance Report forming part of
this Report as Annexure I.
The Audit Committee and other Board sub-committees meet at regular
intervals and ensures to perform the duties and functions as entrusted upon them by the
Board.
Related Party Transactions
Your Bank has in place a Policy on Dealing with the Related Party
Transactions as per the provisions of the SEBI Listing Regulations and the Companies Act,
2013 read with the rules made thereunder.
The Bank obtains approval of the Audit Committee before entering into
any Related Party Transactions and subsequent material modifications, if any. Approval of
the Board of Directors in terms of the Companies Act, 2013 is also obtained for entering
into Related Party Transactions by the Bank, as applicable. A quarterly update on the
Related Party Transactions is provided to the Audit Committee and the Board of Directors
for their review and consideration.
All Related Party Transactions entered during the financial year under
review were in the ordinary course of business and on an arm's length basis. There
were no material transactions entered into by the Bank with any related party during the
financial year under review. Pursuant to Section 134 (3) (h) of the Companies Act, 2013,
read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, there are no transactions to
be reported under Section 188 (1) of the Companies Act, 2013. Accordingly, the disclosure
of Related Party Transactions, as required under Section 134 (3) (h) of the Companies Act,
2013 in Form AOC-2 is not applicable to the Bank.
Details of related party transactions as per Accounting Standard 18
(AS-18) entered into during the financial year ended March 31, 2023 are given in Note No.
14 in Schedule 18, forming part of ‘Notes to Accounts'.
The Policy on Dealing with the Related Party Transactions of the Bank
is available on the website of the Bank at https://ir.rblbank.com/.
Subsidiary Company
As on March 31, 2023, your Bank has one wholly owned subsidiary i.e.
RBL FinServe Limited (RFL) (formerly Swadhar Finserve Private Limited), which is not a
material subsidiary as per the SEBI Listing Regulations. RBL Finserve Ltd; headquartered
in
Mumbai, India, is a Business Correspondent, distributing various
financial services and products for the Bank, in the rural and semi urban markets.
Currently, RFL has presence across 18 states and 295 districts with a network of 821
branches. As on March 31, 2023, RBL Finserve Ltd was sourcing the following products for
RBL Bank through its branches: Micro-finance loans
Small savings accounts
RBL Finserve Ltd has an active client base of 2.85 million customers
and an AUM of Rs 6,767 crore across the above businesses.
Pursuant to Section 129(3) of Companies Act, 2013 read with Rules made
thereunder, your Bank has prepared consolidated financial statements of the Bank with its
wholly owned subsidiary company, RBL FinServe Limited, in the same form and manner as that
of the Bank which forms part of this Annual Report and shall be laid before the ensuing
Annual General Meeting of the Bank along with the laying of the Bank's Standalone
Financial Statements under Section 129(2) of the Companies Act, 2013.
A statement containing the salient features of the financial statements
of the wholly owned subsidiary company in Form AOC-1, pursuant to the provisions of
Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed to the
Financial Statements forming part of the Annual Report.
Further, in accordance with the fourth proviso of Section 136(1) of the
Companies Act, 2013 read with the applicable rules, the audited annual accounts of the
said wholly owned subsidiary company of the Bank have been hosted on the Bank's
website at https://ir.rblbank.com/ Any Member interested in obtaining a physical copy of
the said financial statements may write to the Company Secretary at the Registered Office
of the Bank or by email at investorgrievances@rblbank.com. The same is also open for
inspection by the Members of the Bank and Trustees of the Debenture holders electronically
on all working days between 11:00 a.m. to 01:00 p.m. upto the date of Annual General
Meeting.
Names of Companies which have become or ceased to be Subsidiaries,
Joint Ventures or Associate Companies during the year
During the financial year under review, no company has become or ceased
to be a subsidiary, joint venture or associate of your Bank.
Adequacy of Internal Financial Controls with reference to Financial
Statements
Proper internal financial controls were in place and the financial
controls were adequate and were operating effectively. Further, the statutory auditors
have, in compliance with the requirements of Companies Act, 2013, issued an opinion with
respect to the adequacy of the internal financial controls over financial reporting of the
Bank and the operating effectiveness of such controls, details of which may be referred to
in the Independent Auditor's report attached to the financial statements of financial
year ended March 31, 2023.
Material changes and commitments affecting the financial position of
the Bank
There are no material changes and commitments, affecting the financial
position of the Bank that have occurred between the end of the financial year of the Bank
i.e. March 31, 2023 upto the date of the Directors' Report i.e. July 22, 2023, except
as disclosed.
Deposits
Being a Banking company, the disclosures required as per Rule
8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of
Companies Act, 2013 are not applicable to your Bank. The details of the deposits received
and accepted by your Bank as a banking company are enumerated in the financial statements
for the financial year ended March 31, 2023.
Nature of Business
Your Bank has not changed its nature of business during the financial
year under review.
Particulars of Loans, Guarantees and Investments
Pursuant to Section 186(11) read with Section 134(3)(g) of the
Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except
sub-section (1), do not apply to a loan made, guarantee given or security provided or
acquisition of securities by a banking company in the ordinary course of business. The
particulars of investments made by the Bank are disclosed in note number 8 of Schedule 18
of the financial statements for the financial year ended March 31, 2023, as per the
applicable provisions of the Banking Regulation Act, 1949.
Auditors
The Reserve Bank of India vide its Circular No. RBI/2021-22/25
Ref.No.DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 had issued Guidelines for
Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial
Banks (excluding RRBs), UCBs and NBFCs (including HFCs) (‘RBI Guidelines'). The
provisions prescribed that Statutory Auditors shall be appointed for a continuous period
of three years, subject to the Audit firms satisfying the eligibility norms as stipulated
therein, each year. Further,Clause year 2023-24 forof theirsaid third RBI
Guidelines provided that the Statutory Audit of banks with asset size above Rs 15,000
Crore as end of previous financial year should be conducted under joint audit with a
minimum of two eligible audit firms. Pursuant to these Associates LLP, Chartered
Accountants, (Firm Registration No. 101961 W/W100036) and M/s G.M. Kapadia & Co.,
Chartered Accountants, Mumbai, (Firm Registration Number:104767W) are the joint statutory
auditors of the Bank as per the details of their appointment being mentioned hereinafter.
The Members of the Bank at the 78th Annual General Meeting held on
September 21, 2021 approved the appointment of M/s. CNK & Associates LLP, Chartered
Accountants, (Firm Registration No. 101961 W/W100036) as Joint Statutory Auditor for a
period of three (3) years to hold office till the conclusion of the 81st Annual General
Meeting. M/s. Haribhakti & Co LLP who was the other joint Statutory Auditor whose
appointment was approved by the Members of the Bank at the 77th Annual General Meeting
held on July 17, 2020 to hold office upto the conclusion of the 79th Annual General
Meeting had been debarred by Reserve Bank Limited vide their Press Release dated October
12, 2021 from undertaking any type of audit assignments in the entities regulated by RBI
for a period of two years, effective April 1, 2022.
Accordingly, the Bank had sought and obtained the approval of the
Members of the Bank at the 79th Annual General Meeting for appointment of M/s G.M. Kapadia
& Co., Chartered Accountants, Mumbai, (Firm Registration Number:104767W), as the other
Joint Statutory Auditor for a period of three (3) years to hold office from the conclusion
of the 79th Annual General Meeting until the conclusion of 82nd Annual General Meeting,
subject to the approval of the Reserve Bank of India every year and on such terms and
conditions, including remuneration, as may be approved by the Audit Committee.
M/s. CNK & Associates LLP, Chartered Accountants and M/s. G.M.
Kapadia & Co., Chartered Accountants have confirmed their eligibility under Section
141 of Companies Act, 2013 read with the relevant rules made thereunder and the RBI
Guidelines, to the effect that they are eligible to continue with their appointment and
that they have not been disqualified in any manner from continuing as Statutory Auditors
of the Bank. Further, as required under the relevant provisions of the SEBI Listing
Regulations, both the Joint Statutory Auditors have also confirmedthat they had subjected
themselves to the peer review process of the Institute of Chartered Accountants of India
(ICAI) and they hold a valid certificate issued by the Peer Review Board of ICAI. Further,
they have confirmed that they fulfill for appointment of Statutory Auditor of Private
Sector Banks as prescribed by the Reserve Bank of India.
Reserve Bank of India vide its letter dated June 27, 2023 has approved
the appointment of M/s. CNK & Associates, LLP and M/s. G. M. Kapadia & Co as the
Joint Statutory Auditors of the Bank for the financial year, respectively.
Pursuant to Section 204 of Companies Act 2013, the Board had M/s.
CNK& appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries, Mumbai as its
Secretarial Auditors for the financialyear ended March 31, 2023. The Bank provided all
assistance and facilities to the Secretarial Auditor for conducting their audit as
prescribed under Companies Act, 2013. The Secretarial Audit Report for the financial year
ended March 31, 2023 is annexed to this report as Annexure II.
During the financial year under review, your Bank has complied with the
applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
During the financial year under review, neither the Statutory Auditors
nor the Secretarial Auditors have reported any matter under Section 143 (12) of the
Companies Act, 2013 to the Audit Committee or Board, therefore no detail is required to be
disclosed under Section 134 (3) (ca) of the Companies Act, 2013 in connection with frauds
reported by auditors.
During the financial year under review, there was no revision of
financial statements and Director's Report of the Bank.
Qualifications/Reservation in Statutory and Secretarial
Audit Reports
There were no qualification, reservation or adverse remark or
disclaimer made by the Statutory Auditors or the Secretarial Auditors in their respective
Reports.
Disclosure under Section 22 of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Bank has Zero tolerance towards any action on the part of any
executive which may fall under the ambit of ‘Sexual Harassment' at workplace and
is fully committed to uphold and maintain the dignity of every woman executive working in
the Bank. The Bank has formulated a Policy and has complied with provisions relating to
the constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy provides for
protection against sexual harassment of women at workplace and for prevention and
redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank
created a mandatory e-learning module for all the employees called "Prevention of
Sexual Harassment (POSH)". The information relating to complaints received and
disposed- theeligibilitynorms off / resolved during the financial year ended March 31,
2023 is disclosed under Corporate Governance Report annexed as
Annexure I to this Report.
Whistle Blower Policy (Vigil Mechanism)
Details required to be disclosed in this regard have been provided
under Corporate Governance Report annexed as Annexure I to this Report.
Significant and material order passed by regulators or courts or
tribunals impacting the going concern status and operations of the Bank
During the financial year under review, there were no significant/
material orders passed by the Regulators / Courts/ Tribunals etc. which would impact the
going concern status of the Bank and its future operations.
There is no application or proceedings pending against the Bank under
the Insolvency and Bankruptcy Code 2016 during the financial
Risk Management Policy
The Board of the Bank has constituted a Risk Management Committee in
accordance with the provisions of Regulation 21 of the SEBI Listing Regulations and the
Reserve Bank of India Guidelines. The details with respect to its terms of reference,
composition and meetings held during the year under review are set out in the Corporate
Governance Report forming part of this
Report as Annexure I.
Your Bank has a robust Risk Management framework with dedicated
policies to manage specific risks, in place. The details of the Credit Policy and its
framework are separately provided in Management Discussion and Analysis Report which forms
an integral part of this Annual Report.
G. OTHER DISCLOSURES Code of Conduct for Employees
For a financial institution, trust is the most important asset. To this
end, your Bank strives to ensure that its actions are in accordance with the highest
standards of personal and professional integrity and highest level of ethical conduct.
Your Bank has adopted a Code of Conduct which all its employees have to adhere to. The
employees have to conduct duties according to the aforesaid Code and avoid even the
appearance of improper behaviour. Some of the areas which are covered by the Code of
Conduct are fairness of employment practices, protection of intellectual property,
integrity, customer confidentiality, conflict of interest, prevention of insider trading,
etc.
Bribery and Corruption
Your Bank has a responsibility both towards the Members of the Bank and
to the communities in which we do business to be transparent in all our dealings. Your
Bank's Code of Conduct requires that we do not engage in bribery or corruption in any
form and explicitly mentions that the Bank will not pay or procure the payment of a bribe
or unlawful fee to encourage the performance of a task or one which is intended or likely
to compromise the integrity of another. Your Bank & its employees will not accept any
payment, gift or inducement from a third party which is intended to compromise our own
integrity. The Code of Conduct also includes procedures dealing with Gifts &
Entertainment, Conflicts of Interest and other important matters.
Corporate Social Responsibility (CSR)
Your Bank strives to proactively encourage inclusive growth and
development, thereby participating towards building a sustainable future.
Your Bank also has a Board approved Policy on Corporate Social
Responsibility ("CSR Policy") in place. In alignment with the CSR Mission
Statement, the Bank has focused on various initiatives
Integrated Annual Report 2022-23 for the financial year ended March 31,
2023, the details of CSR activities with the brief outline of CSR Policy including
overview of the programs/ Projects undertaken by the Bank, amount spent and other relevant
details are furnished in Annexure III to this report.
The CSR Policy of the Bank is available on the website of the Bank at
https://ir.rblbank.com/.
Corporate Social Responsibility Committee (CSR Committee)
The Bank has duly constituted a CSR Committee in accordance with
Section 135 of the Companies Act, 2013 to assist the Board and the Bank in fulfilling the
corporate social responsibility objectives of the Bank.
As on March 31, 2023, the CSR Committee comprised of five members
including three Independent Directors including the Part time Non-Executive Chairman who
is the Chairman of the Committee and Managing Director & CEO and Executive Director.
The composition of the CSR Committee and its terms of reference are detailed in the
Corporate Governance Report forming part of this report as Annexure I.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the financial year
under review, as per Regulation 34(2)(e) of the SEBI
Listing Regulations is presented in a separate section forming part of
this Annual Report.
Awards and Recognitions
During the financialyear under review, your Bank was recipient of the
following awards:
IBA Banking Technology Awards 2022 - Best Technology
Bank
Asiamoney Best Bank Awards 2022 - Best Bank For Digital
Solutions In India
Digital Payments Award by MeitY - Onboarding maximum merchants on
digital payment modes in Jammu & Kashmir
Ratings
Your Bank's Basel III Tier II Bonds have been rated as
"AA-" with Stable Outlook by CARE Ratings Limited (CARE) and ICRA Limited
(ICRA). Instruments rated with this rating are considered to have high degree of safety
regarding timely servicing of financial obligations.
Your Bank's Certificate of Deposits carries a rating of
"A1+" by ICRA which indicates the lowest short term credit risk. Further, your
Bank's Fixed Deposit programme carries rating of "AA-" with Stable Outlook
by ICRA which indicates low credit risk and the
Bank's short term fixed deposit programme carries a ratingof care
"A1+" by ICRA which indicates lowest credit risk.
Your Bank's ratings were reaffirmed by ICRA in September 2022 and
by CARE in October 2022
Know Your Customer (KYC)/Anti-Money Laundering
(AML) Measures
Your Bank complies with the RBI's KYC/AML guidelines. The
Bank's KYC/ AML Policy is prepared in accordance with the Prevention of Money
Laundering Act, 2002 and RBI/IBA (Indian Banks' Association) guidelines. Various
regulatory reporting requirements, as set out by the Financial Intelligence Unit (FIU) of
the Government of India, are complied with by the Bank. Your Bank uses automated
transaction monitoring system under supervision of centralised AML team. Further, your
Bank's employees are imparted training on KYC/AML aspects on a regular basis.
Executives of the Bank also attend periodic workshops/seminars organised by FIU, RBI, IBA,
Centre for Advanced Financial Research & Learning (CAFRAL) and College of Agricultural
Banking (CAB), Pune to enhance their awareness in evolving KYC AML issues.
Requirement for maintenance of cost records
The Bank is not required to maintain cost records as specified by the
Central Government under section 148(1) of the Companies Act, 2013.
Certificate CEO/CFO
Pursuant to the provisions of Regulation 17(8) of SEBI Listing
Regulations, the certificate issued by the Managing Director & CEO and Deputy CFO of
the Bank (appointed as KMP responsible for the role & responsibility of a CFO till the
appointment of a regular CFO), for the financial year ended March 31, 2023 was placed
before the Board of Directors at its meeting held on April 29, 2023.
The said certificate is forming part of this Report as an Annexure IC
to Corporate Governance Report.
H. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) and 134(5) of the
Companies Act, 2013, with respect to the Directors' Responsibility Statement, it is
hereby confirmed that:
i. The applicable accounting standards have been followed in
preparation of the annual accounts for the financial year ended 2022-23 and there have
been no material departures;
ii. Accounting policies have been selected and applied consistently and
reasonably, and prudent judgments and estimates have been made to give a true and fair
view of the Bank's state of affairs and of its Profit for financial year ended
2022-23; sufficient hasiii. beenPropertakenand for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013 for safeguarding the
assets of the Bank and for preventing and detecting fraud and other irregularities;
iv. The annual financial statements have been prepared on a going
concern basis;
v. Proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively;
vi. Proper Systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating effectively.
ACKNOWLEDGMENT
The Board is grateful to the Government of India, Reserve Bank of
India, Securities and Exchange Board of India, IBA, other Regulatory Authorities, Rating
Agencies, Financial Institutions, banks and correspondents in India and abroad for their
valuable and unflinching support as well as co-operation and guidance to the Bank from
time to time. The Board acknowledges the trust and confidence reposed by the depositors,
clients and investors and convey their deep appreciation and request for their continued
patronage.
The Board conveys its deep gratitude and appreciation to all the
employees of the Bank for their tremendous efforts as well as their exemplary dedication
and contribution to the Bank's performance. The Board appreciates the healthy
relationship with the Officer's Association and Employee Union, which has facilitated
the growth and development of the Bank and has created a positive work environment.
The Members of the Bank have been the key partners in the Bank's
progress. The Board of Directors appreciates their support and is grateful for the
confidence that they have placed in the Board of Directors and the Bank's management.
The Directors would also like to thank its Customers, Vendors, Business
Partners, Government and all other Business
Associates for their continued support to the Bank and the Management.
|
For and on behalf of the Board of
Directors |
| Prakash Chandra |
R Subramaniakumar |
| Chairman |
Managing Director & CEO |
| (DIN: 02839303) |
(DIN: 07825083) |
| Place : Mumbai |
|
| Date : July 22, 2023 |
|
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