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Bandhan Bank Ltd

BSE Code : 541153 | NSE Symbol : BANDHANBNK | ISIN:INE545U01014| SECTOR : Banks |

NSE BSE
 
SMC up arrow

195.75

5.85 (3.08%) Volume 15449908

31-Mar-2023 EOD

Prev. Close

189.90

Open Price

192.00

Bid Price (QTY)

195.75(601)

Offer Price (QTY)

0.00(0)

 

Today’s High/Low 197.80 - 191.00

52 wk High/Low 349.55 - 182.15

Key Stats

MARKET CAP (RS CR) 31524.07
P/E 9.58
BOOK VALUE (RS) 116.5595435
DIV (%) 0
MARKET LOT 1
EPS (TTM) 20.42
PRICE/BOOK 1.67897019946719
DIV YIELD.(%) 0
FACE VALUE (RS) 10
DELIVERABLES (%) 34.83
4

News & Announcements

24-Mar-2023

Bandhan Bank Ltd - Bandhan Bank Limited - Change in Director

23-Mar-2023

Bandhan Bank Ltd spurts 1.63%

22-Mar-2023

Bandhan Bank appoints Executive Director

22-Mar-2023

Bandhan Bank Ltd - Appointment

22-Mar-2023

Bandhan Bank appoints Executive Director

10-Mar-2023

Bandhan Bank allots 996 equity shares under ESOP

10-Feb-2023

Bandhan Bank allots 1282 equity shares under ESOP

12-Jan-2023

Bandhan Bank to table results

Corporate Actions

Bonus
Splits
Dividends
Rights
Capital Structure
Book Closure
Board Meeting
AGM
EGM
 

Financials

Income Statement

Standalone
Consolidated
 

Peers Comparsion

Select Company Name BSE Code NSE Symbol
AU Small Finance Bank Ltd 540611 AUBANK
Axis Bank Ltd 532215 AXISBANK
Bank of Madura Ltd (Merged) 531966 BANKMADURA
Bank of Punjab Ltd(merged) 500070 BANKPUNJAB
Bank of Rajasthan Ltd(merged) 500019 BANKRAJAS
Centurion Bank of Punjab Ltd(merged) 532273 CENTBOP
City Union Bank Ltd 532210 CUB
CSB Bank Ltd 542867 CSBBANK
DCB Bank Ltd 532772 DCBBANK
Dhanlaxmi Bank Ltd 532180 DHANBANK
Equitas Small Finance Bank Ltd 543243 EQUITASBNK
Federal Bank Ltd 500469 FEDERALBNK
Fino Payments Bank Ltd 543386 FINOPB
Global Trust Bank Ltd (Merged) 500161 GLOBLTRUST
HDFC Bank Ltd 500180 HDFCBANK
ICICI Bank Ltd 532174 ICICIBANK
IDBI Bank Ltd(merged) 532235 IDBIBANK
IDBI Bank Ltd 500116 IDBI
IDFC First Bank Ltd 539437 IDFCFIRSTB
IndusInd Bank Ltd 532187 INDUSINDBK
ING Vysya Bank Ltd(Merged) 531807 INGVYSYABK
Jammu and Kashmir Bank Ltd 532209 J&KBANK
Karnataka Bank Ltd 532652 KTKBANK
Karur Vysya Bank Ltd 590003 KARURVYSYA
Kotak Mahindra Bank Ltd 500247 KOTAKBANK
Lakshmi Vilas Bank Ltd(Merged) 534690 LAKSHVILAS
Nedungadi Bank Ltd (Merged) 511264 NEDUNGBANK
RBL Bank Ltd 540065 RBLBANK
South Indian Bank Ltd 532218 SOUTHBANK
Standard Chartered PLC 580001 STAN
Suryoday Small Finance Bank Ltd 543279 SURYODAY
Tamilnad Mercantile Bank Ltd 543596 TMB
Times Bank Ltd (merged) 532252 TIMESBANK
Ujjivan Small Finance Bank Ltd 542904 UJJIVANSFB
United Western Bank Ltd(merged) 500430 UNIWESTBNK
Yes Bank Ltd 532648 YESBANK

Share Holding

Category No. of shares Percentage
Total Foreign 527759657 32.76
Total Institutions 200645628 12.46
Total Govt Holding 1145588 0.07
Total Non Promoter Corporate Holding 99129912 6.15
Total Promoters 644115857 39.99
Total Public & others 138035477 8.57
Total 1610832119 100
  • Total Foreign
  • Total Institutions
  • Total Govt Holding
  • Total Non Promoter Corporate Holding
  • Total Promoters
  • Total Public & others

About Bandhan Bank Ltd

Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. Bandhan Bank is the first instance in India of a microfinance entity transforming into a universal bank. The bank currently offers a variety of asset and liability products and services designed for micro banking and general banking. Its asset products consist of retail loans including a substantial portfolio of micro loans, as well as micro, small and medium enterprise ('SME') loans and small enterprise loans. It has significant presence in under-penetrated East and North East India. In addition to the loan and deposit products, the bank also offers other banking products and services to generate non-interest income and cater towards the additional needs of its customers. These products and services include debit cards, Internet banking, mobile banking, EDC-POS terminals, online bill payment services and the distribution of third-party general insurance products and mutual fund products. Bandhan Konnagar was formed in 2001 as a non-governmental organisation ('NGO') providing microfinance services to socially and economically disadvantaged women in rural West Bengal. Bandhan Financial Services (BFSL) started its microfinance business in 2006 and the NGO transferred its microfinance business to BFSL in 2009 and thereby the entire microfinance business was undertaken by BFSL. By the time BFSL transferred its microfinance business to the bank, it was India's largest microfinance company by number of customers and size of loan portfolio. Bandhan Bank Limited was incorporated as on December 23, 2014 at Kolkata, West Bengal as a public limited company. A licence authorising the Bank to carry on banking business was issued by the RBI in terms of Section 22 of the Banking Regulation Act on June 17, 2015. The Bank began operations on August 23, 2015 when Bandhan Financial Services Limited ('BFSL'), its ultimate parent company, transferred its entire micro finance business to the bank and the bank simultaneously commenced general banking activities. To complement the micro loan business, since obtaining its banking license it has also focused particularly on creating a strong general banking business. To this end, it launched the general banking business on August 23, 2015 by opening a Greenfield network of 501 bank branches and 50 automated teller machines ('ATMs'). In 2016, Bandhan Bank expanded its branch and doorstep service centers (DSC) network to 656 branches and 2,022 DSCs. In 2017, the bank expanded its branch and DSC network to 840 branches and 2,546 DSCs. Bandhan Bank launched an initial public offer (IPO) during the period from 15 March 2018 to 19 March 2018. The IPO was a combination of fresh issue of 9.76 crore shares and an Offer for Sale of 2.16 crore shares from selling shareholders. The IPO was priced at Rs 375 per share. The stock debuted at Rs 485 on BSE on 27 March 2018, a premium of 29.33% over the IPO price. On 28 September 2018, Bandhan Bank informed the stock exchanges that since the bank was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 percent as required under the licensing condition, general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further notice. Bandhan Bank said in a statement that it is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 percent and shall continue to engage with RBI in this behalf. On 12 October 2018, Bandhan Bank informed the stock exchanges that the bank has received an exemption from the Securities and Exchange Board of India with respect to (i) lock-in of one year on the equity shares held by the promoter; and (ii) eligibility condition of one year from listing; as required under regulations 36(b) and 82(b) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009, respectively, in order to comply with the requirements of RBI Licensing Guidelines for Private Sector Banks issued on February 22, 2013.During FY 2018-19, the Reserve Bank of India vide its letter dated September 19, 2018 has imposed two restrictions on the Bank, one is withdrawal of general permission to open new branches whereby the Bank is not permitted to open new branches without the prior approval of the RBI and the other is freezing of remuneration of the MD & CEO at the existing level due to non-compliance of one licensing condition of dilution of excess shareholding of Non-operative Financial Holding Company ('NOFHC') in the Bank to 40% of the paid-up capital of the Bank, within three years from the commencement of the operations of the Bank. The Bank has taken initiatives to comply with the only remaining licensing condition and in that regard amalgamation of GRUH Finance Limited into and with the Bank has been approved by the Board by which the existing shareholding of NOFHC in the Bank will be brought down to 61% (approx.). The Bank along with NOFHC has also initiated several other steps to comply with the only remaining licensing condition at the earliest. The Bank is constantly in touch with the RBI on the matter. During FY 2017-18, the Bank forayed into the gold loan business by commencing gold loan operations at 57 branches in eastern India. The number of these branches increased to 60 in the FY 2018-19. On March 31, 2019, the Bank's outstanding gold loan book stood at Rs 128.28 crore from 22,619 customers. During the year 2019, the Bank set up 50 new branches and 21 new ATMs. As on 31 March 2019, the Bank has 986 Branches, 3014 DSCs and 481 ATMs. During the FY2019, total deposits grew by 27.64% to Rs 43,231.62 crore, of which Rs 17,617.73 crore (40.75%) was Current Account and Savings Account (CASA') deposits. Bandhan Bank was declared as the winner in the Noteworthy Lender to the MSE - Private Sector Bank' category at the SIDBI ET MSE Awards 2018 held on January 2019. Bandhan Bank received the award in Best Performing Bank' in terms of Aadhaar generation and update (using online client) at the Aadhaar Excellence Awards in October 2018. The bank also won the Emerging Company of the Year' at The Economic Times Awards 2019 for Corporate Excellence. Also won Fastest Growing Company' and Excellence in Business Performance' at The Economic Times Bengal Corporate Awards 2020. The Bank has set up 32 new branches, 332 new Banking Units and 4 ATMs and as a result, the branch distribution network went up to 1,018 branches and 485 ATMs in FY 2019-20. With the expanding network of banking outlets and customers, the total deposits increased from Rs 43,231.62 crore as on 31 March 2019 to Rs 57,081.50 crore as on 31 March 2020 registering an increase of 32.04%. The outbreak of COVID-19 pandemic across the globe and in India has contributed to a significant decline and volatility in the global and Indian financial markets and slowdown in the economic activities. The RBI on March 27, 2020, April 17, 2020 and May 23, 2020, announced 'COVID-19 Regulatory Package' on asset classification and provisioning. In terms of these RBI guidelines, the lending institutions have been permitted to grant an effective moratorium of six months on payment of all instalments/ interest as applicable, falling due between March 1, 2020 and August 31, 2020 ('moratorium period'). As at 30 June 2020, the total number of Branches, Banking Units and ATM network stood at 1018, 3541 and 485 respectively. As at 30 September 2020, the total number of Branches, Banking Units and ATM network stood at 1045, 3656 and 487 respectively. As at 31 Decemeber 2020, the total number of Branches, Banking Units and ATM network stood at 1107, 4090 and 487 respectively. The bank's total banking outlets as on 31 March 2021 stood at 5310. The network consists of 1147 branches and 4163 banking units and the total number of ATMs stood at 487 across the country. During the FY'21, the Total Deposits increased by 36.6% to Rs 77,972.2 crore as on 31 March 2021. During the year 2021, the Bank opened 751 new banking outlets, with a focus on geographies outside of East and North-East. Out of the total 5,310 banking outlets, 34% were established in rural, 39% in semi-urban, 18% in urban and 9% in metro locations. It opened 618 new Banking Units (BUs) pan-India with a sole focus on financial inclusion. In FY'21, Bank launched its digital account opening journey - Neo+ Savings account, to digitize the liability onboarding process. It further launched three new Current Account products in FY 2021-22 namely Biz Deluxe Current Account, Biz PRO Current Account and Start-up Current Account. Apart from this, Gold Loan was strengthened as a product during the year. During the year 2022, Bank extended housing loan services to 25 additional centres, thereby expanding its presence to 356 centres across 20 states and two Union Territories. It focused on affordable home loans with the majority of loans being below Rs 20 lakh. It launched a special campaign for higher ticket size loans with rate of interest starting from 6.40%. It started a Direct Sales Agent (DSA) channel for sourcing home loans and distribution of Unit Linked Insurance Plan (ULIP) in FY 2021-22. During the FY'22, the Bank has added 329 new banking outlets. Out of the total 5,639 banking outlets, 35% are established in rural, 37% in semi-urban, 18% in urban and 10% in metro locations. During FY 2021-22, Bank opened 287 new BUs pan-India with a focus on financial inclusion and to enhance portfolio quality by limiting the number of customers served by a BU. A total of 42 branches were added during the FY'22, taking Bank's footmark to 1,189 branches. During the year the Gold Loan portfolio was strengthened and is being offered from 419 branches across the country. During FY 2021-22, Bank installed 1,630 Electronic Draft Capture - Point of Sale (EDC- PoS) terminals, and transactions worth Rs. 5,374.19 crore were carried out on its installed terminals.

Bandhan Bank Ltd Chairman Speech

Dear Shareholders,

I hope you and your loved ones are doing well. The challenges posed by the COVID-19 pandemic continued in the year in review.

I am happy to tell you that your Bank displayed strong resilience, yet again. As the impact of COVID-19 started abating, your Bank's business growth gathered pace along with a sharp improvement in asset quality. Its sustained recovery has once again demonstrated the strength of its business model. With small businesses and those with relatively limited financial resources being severely hit by the pandemic, these extraordinary times have also reiterated the relevance of your Bank's vision: offering convenient and affordable financial solutions for all. Underpinned its dedicated workforce, wide network, growing portfolio, strong stakeholder relationships, and ongoing digital transformation, your Bank remains committed to taking inclusive banking to the next level.

Economic Review

The fiscal year began on a muted note as India battled the second severe wave of COVID-19 that overwhelmed the entire healthcare infrastructure. The situation started improving in the second quarter; however, the Omicron variant-led wave surfaced in the fourth quarter to disrupt economic and social life again, albeit not as significantly. From a contraction of 6.6% during FY 2020-21, India made a strong economic recovery, with GDP growth of

8.7% for FY 2021-22. Supportive fiscal and monetary stances, increased public spending including in infrastructure, a pickup in private investment, along with rapid vaccination progress aided the revival. The pandemic impact was evident in the quarterly GDP growth figures. While growth during the first and fourth quarters was affected by the COVID-19 impact and the related lockdowns, the remaining two quarters achieved strong growth as disruptions eased significantly and life gradually returned to normalcy.

Sector Performance

The pandemic has been a test for the global financial system. The timely measures taken by the Reserve Bank of India (RBI) and the government have helped the economy tread these unprecedented times. The banking industry continued to play a strong role in the revival of the economy.

Bank credit grew by 7.1% in FY 2021-22 against a decline of 0.4% in FY 2020-21.

This growth was led by the micro and small enterprises, whose credit growth was far higher than the large industries. The banking sector has also performed well in capital adequacy ratios and reduction of non-performing assets. Capital to risk-weighted asset ratio (CRAR) of Scheduled Commercial Banks (SCB) rose to a new high of 16.7% in end-March 2022 from 16.03% in end-March 2021, on account of the improvement of CRAR of both public and private sector banks.

The Gross Non-Performing Asset (GNPA) ratio of SCBs decreased from 7.48% in end-March 2021 to a six-year low of 5.9% in end-March 2022.

The RBI announced that 1.5 lakh post offices would get core-banking system.

It also declared setting up 75 Digital Banking Units in 75 districts of the country by SCBs. These measures will aid the ongoing efforts of financial inclusion and make formal financial services available to the rural population. Another significant announcement by the RBI is the introduction of the digital rupee in the FY 2022-23 by using blockchain and other technologies. This will make India among the select global economies that have their sovereign digital currency.

Your Bank's Progress

Your Bank reported healthy sequential progress across parameters as the operating conditions improved. More importantly, even during these difficult times and, often, emotionally exhausting instances, the Bank's employees never wavered from their focus on supporting its customers.

Your Bank also made good progress towards the realisation of its Vision 2025. Portfolio diversification, geographical diversification, digital transformation, and people empowerment are critical aspects of Vision 2025 as the Bank seeks to continue being a bank of choice for its customers. Under portfolio diversification, the focus is on growing the Bank's nonmicrofinance portfolio - SME loans, housing loans and retail assets- and thus, gradually diversifying from its core microfinance business.

Your Bank's strategic focus will be on accelerating disbursements, maintaining collection efficiency, and driving continuous improvement in asset quality.

Way Ahead

India's GDP growth is projected to grow in real terms by 7.2% in FY 2022-23 . Healthy economic growth, along with budgetary support from the government and the improved resilience of the banking system, provides a robust platform for an upshift in the credit growth trajectory.

The road ahead, however, has its fair share of challenges. Economic growth can potentially be undermined by geopolitical tensions, excessive volatility in global commodity prices, supply-chain disruptions, high inflationary pressures, ongoing monetary tightening by the central bank and withdrawal of some of the fiscal stimuli.

Global central banks have raised rates and tightened monetary conditions to combat the rising inflation. The RBI also raised the policy repo rate and has taken steps to move towards liquidity normalisation to control inflation. Further, with the inflation forecast to remain at high levels of around 5.7% for the year, the RBI has mentioned that it will focus on withdrawing the accommodative policy stance to keep inflation in check.

In Conclusion

The largely successful massive vaccination drive in India has helped in containing the pandemic and restored people's confidence in facing the pandemic.

India has also enhanced its health infrastructure and is well on the way to putting the COVID-19 blows behind. Over the medium term, improving domestic macro conditions, higher investments, and stable consumption growth will support sustained economic recovery.

Your Bank is committed to supporting this recovery by focusing keenly on customers' needs. In this regard, the Bank's Vision 2025, along with its solid and meaningful purpose of financial inclusion, will drive its momentum. The Bank looks forward to your continued support as it works towards creating better value for its customers, all other stakeholders, and our great nation.

Warm regards,
Dr. Anup Kumar Sinha
Non-Executive (Independent) Chairman

   

Bandhan Bank Ltd Company History

Bandhan Bank is a commercial bank focused on serving underbanked and underpenetrated markets in India. Bandhan Bank is the first instance in India of a microfinance entity transforming into a universal bank. The bank currently offers a variety of asset and liability products and services designed for micro banking and general banking. Its asset products consist of retail loans including a substantial portfolio of micro loans, as well as micro, small and medium enterprise ('SME') loans and small enterprise loans. It has significant presence in under-penetrated East and North East India. In addition to the loan and deposit products, the bank also offers other banking products and services to generate non-interest income and cater towards the additional needs of its customers. These products and services include debit cards, Internet banking, mobile banking, EDC-POS terminals, online bill payment services and the distribution of third-party general insurance products and mutual fund products. Bandhan Konnagar was formed in 2001 as a non-governmental organisation ('NGO') providing microfinance services to socially and economically disadvantaged women in rural West Bengal. Bandhan Financial Services (BFSL) started its microfinance business in 2006 and the NGO transferred its microfinance business to BFSL in 2009 and thereby the entire microfinance business was undertaken by BFSL. By the time BFSL transferred its microfinance business to the bank, it was India's largest microfinance company by number of customers and size of loan portfolio. Bandhan Bank Limited was incorporated as on December 23, 2014 at Kolkata, West Bengal as a public limited company. A licence authorising the Bank to carry on banking business was issued by the RBI in terms of Section 22 of the Banking Regulation Act on June 17, 2015. The Bank began operations on August 23, 2015 when Bandhan Financial Services Limited ('BFSL'), its ultimate parent company, transferred its entire micro finance business to the bank and the bank simultaneously commenced general banking activities. To complement the micro loan business, since obtaining its banking license it has also focused particularly on creating a strong general banking business. To this end, it launched the general banking business on August 23, 2015 by opening a Greenfield network of 501 bank branches and 50 automated teller machines ('ATMs'). In 2016, Bandhan Bank expanded its branch and doorstep service centers (DSC) network to 656 branches and 2,022 DSCs. In 2017, the bank expanded its branch and DSC network to 840 branches and 2,546 DSCs. Bandhan Bank launched an initial public offer (IPO) during the period from 15 March 2018 to 19 March 2018. The IPO was a combination of fresh issue of 9.76 crore shares and an Offer for Sale of 2.16 crore shares from selling shareholders. The IPO was priced at Rs 375 per share. The stock debuted at Rs 485 on BSE on 27 March 2018, a premium of 29.33% over the IPO price. On 28 September 2018, Bandhan Bank informed the stock exchanges that since the bank was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 percent as required under the licensing condition, general permission to open new branches stands withdrawn and the bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further notice. Bandhan Bank said in a statement that it is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 percent and shall continue to engage with RBI in this behalf. On 12 October 2018, Bandhan Bank informed the stock exchanges that the bank has received an exemption from the Securities and Exchange Board of India with respect to (i) lock-in of one year on the equity shares held by the promoter; and (ii) eligibility condition of one year from listing; as required under regulations 36(b) and 82(b) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009, respectively, in order to comply with the requirements of RBI Licensing Guidelines for Private Sector Banks issued on February 22, 2013.During FY 2018-19, the Reserve Bank of India vide its letter dated September 19, 2018 has imposed two restrictions on the Bank, one is withdrawal of general permission to open new branches whereby the Bank is not permitted to open new branches without the prior approval of the RBI and the other is freezing of remuneration of the MD & CEO at the existing level due to non-compliance of one licensing condition of dilution of excess shareholding of Non-operative Financial Holding Company ('NOFHC') in the Bank to 40% of the paid-up capital of the Bank, within three years from the commencement of the operations of the Bank. The Bank has taken initiatives to comply with the only remaining licensing condition and in that regard amalgamation of GRUH Finance Limited into and with the Bank has been approved by the Board by which the existing shareholding of NOFHC in the Bank will be brought down to 61% (approx.). The Bank along with NOFHC has also initiated several other steps to comply with the only remaining licensing condition at the earliest. The Bank is constantly in touch with the RBI on the matter. During FY 2017-18, the Bank forayed into the gold loan business by commencing gold loan operations at 57 branches in eastern India. The number of these branches increased to 60 in the FY 2018-19. On March 31, 2019, the Bank's outstanding gold loan book stood at Rs 128.28 crore from 22,619 customers. During the year 2019, the Bank set up 50 new branches and 21 new ATMs. As on 31 March 2019, the Bank has 986 Branches, 3014 DSCs and 481 ATMs. During the FY2019, total deposits grew by 27.64% to Rs 43,231.62 crore, of which Rs 17,617.73 crore (40.75%) was Current Account and Savings Account (CASA') deposits. Bandhan Bank was declared as the winner in the Noteworthy Lender to the MSE - Private Sector Bank' category at the SIDBI ET MSE Awards 2018 held on January 2019. Bandhan Bank received the award in Best Performing Bank' in terms of Aadhaar generation and update (using online client) at the Aadhaar Excellence Awards in October 2018. The bank also won the Emerging Company of the Year' at The Economic Times Awards 2019 for Corporate Excellence. Also won Fastest Growing Company' and Excellence in Business Performance' at The Economic Times Bengal Corporate Awards 2020. The Bank has set up 32 new branches, 332 new Banking Units and 4 ATMs and as a result, the branch distribution network went up to 1,018 branches and 485 ATMs in FY 2019-20. With the expanding network of banking outlets and customers, the total deposits increased from Rs 43,231.62 crore as on 31 March 2019 to Rs 57,081.50 crore as on 31 March 2020 registering an increase of 32.04%. The outbreak of COVID-19 pandemic across the globe and in India has contributed to a significant decline and volatility in the global and Indian financial markets and slowdown in the economic activities. The RBI on March 27, 2020, April 17, 2020 and May 23, 2020, announced 'COVID-19 Regulatory Package' on asset classification and provisioning. In terms of these RBI guidelines, the lending institutions have been permitted to grant an effective moratorium of six months on payment of all instalments/ interest as applicable, falling due between March 1, 2020 and August 31, 2020 ('moratorium period'). As at 30 June 2020, the total number of Branches, Banking Units and ATM network stood at 1018, 3541 and 485 respectively. As at 30 September 2020, the total number of Branches, Banking Units and ATM network stood at 1045, 3656 and 487 respectively. As at 31 Decemeber 2020, the total number of Branches, Banking Units and ATM network stood at 1107, 4090 and 487 respectively. The bank's total banking outlets as on 31 March 2021 stood at 5310. The network consists of 1147 branches and 4163 banking units and the total number of ATMs stood at 487 across the country. During the FY'21, the Total Deposits increased by 36.6% to Rs 77,972.2 crore as on 31 March 2021. During the year 2021, the Bank opened 751 new banking outlets, with a focus on geographies outside of East and North-East. Out of the total 5,310 banking outlets, 34% were established in rural, 39% in semi-urban, 18% in urban and 9% in metro locations. It opened 618 new Banking Units (BUs) pan-India with a sole focus on financial inclusion. In FY'21, Bank launched its digital account opening journey - Neo+ Savings account, to digitize the liability onboarding process. It further launched three new Current Account products in FY 2021-22 namely Biz Deluxe Current Account, Biz PRO Current Account and Start-up Current Account. Apart from this, Gold Loan was strengthened as a product during the year. During the year 2022, Bank extended housing loan services to 25 additional centres, thereby expanding its presence to 356 centres across 20 states and two Union Territories. It focused on affordable home loans with the majority of loans being below Rs 20 lakh. It launched a special campaign for higher ticket size loans with rate of interest starting from 6.40%. It started a Direct Sales Agent (DSA) channel for sourcing home loans and distribution of Unit Linked Insurance Plan (ULIP) in FY 2021-22. During the FY'22, the Bank has added 329 new banking outlets. Out of the total 5,639 banking outlets, 35% are established in rural, 37% in semi-urban, 18% in urban and 10% in metro locations. During FY 2021-22, Bank opened 287 new BUs pan-India with a focus on financial inclusion and to enhance portfolio quality by limiting the number of customers served by a BU. A total of 42 branches were added during the FY'22, taking Bank's footmark to 1,189 branches. During the year the Gold Loan portfolio was strengthened and is being offered from 419 branches across the country. During FY 2021-22, Bank installed 1,630 Electronic Draft Capture - Point of Sale (EDC- PoS) terminals, and transactions worth Rs. 5,374.19 crore were carried out on its installed terminals.

Bandhan Bank Ltd Directors Reports

To

The Members,

Your Board of Directors present the Eighth Annual Report on the business and operations of your Bank, together with the Audited Financial Statements for the Financial Year ('FY') ended March 31, 2022.

Financial Performance of the Bank

The financial highlights for the FY under review, are presented below:

(Figures in Rs crore)

Particulars For the FY ended
March 31, 2022 March 31, 2021
Deposits: 96,330.62 77,972.22
- Savings Bank Deposits 34,616.86 29,260.32
- Current Account Deposits 5,462.32 4,566.99
- Term Deposits 56,251.44 44,144.91
Advances (Net): 93,974.92 81,612.88
- Cash Credits, Overdrafts and Loans repayable on demand 2,330.21 2,395.82
- Term Loans 91,644.71 79,217.06
Total Assets/Liabilities 1,38,866.55 1,15,016.17
Net Interest Income 8,714.02 7,563.35
Non-Interest Income 2,822.82 2,022.25
Less: Operating Expenses (excluding Depreciation) 3,413.40 2,713.81
Profit before Depreciation, Provisions and Tax 8,123.44 6,871.79
Less: Depreciation 110.04 103.06
Less: Provisions 7,884.78 3,820.07
Profit Before Tax (PBT) 128.62 2,948.66
Less: Provision for Tax 2.83 743.20
Profit After Tax (PAT) 125.79 2,205.46
Balance in Profit & Loss Account brought forward from previous year 6,171.00 4,758.71
Appropriations:
Transfer to Statutory Reserves 31.45 551.37
Transfer to Statutory Reserve u/s 36(1)(viii) of the Income-tax Act, 1961 42.45 74.37
Transfer to Capital Reserve 16.00 84.64
Transfer to Investment Reserve 25.24 -
Transfer to Investment Fluctuation Reserve 10.65 82.79
Dividend pertaining to previous year paid during the year 161.07 -
Balance carried over to Balance Sheet 6,009.94 6,171.00
EPS (Basic) (in Rs) 0.78 13.70
EPS (Diluted) (in Rs) 0.78 13.69

State of Affairs of the Bank

Within six years of its operation, the balance sheet size of your Bank had crossed a landmark of Rs 1 lakh crore and continued to grow further during the year under review. The Total Liabilities (including capital and reserves) of your Bank stood at Rs 1,38,866.55 crore and the Total Advances (Net) at Rs 93,974.92 crore whereas banking outlets increased to 5,639 as on March 31, 2022. During the FY under review, the number of banking outlets that have been added to the network is 329. Out of the total 5,639 banking outlets, 35 per cent. are in rural, 37 per cent. in semi-urban, 18 per cent. in urban and 10 per cent. in metro locations. The number of customers has increased from 2.30 crore as on March 31, 2021 to 2.63 crore as on March 31, 2022. With the expanding network of banking outlets and customers, the total deposits grew further from Rs 77,972.22 crore as on March 31, 2021 to Rs 96,330.62 crore as on March 31, 2022 registering a climb of 23.55 per cent. The Current Account and Savings Account ('CASA') deposits have seen an increase of 18.48 per cent. from Rs 33,827.31 crore as on March 31, 2021 to Rs 40,079.18 crore as on March 31, 2022.

During the FY under review, the total income (net) of your Bank has increased by 20.36 per cent. to Rs 11,536.84 crore as against the total income of Rs 9,585.61 crore for FY 2020-21. However, during the FY, your Bank has made additional provisions on NPA accounts resulting from elevated risk observed in certain geographies and the potential impact of the COVID-19 pandemic on certain loan portfolios. These provisions held by the Bank are based on the information available at the time of approval of accounts and are in excess of the RBI prescribed norms. Due to this, the profit after tax ('PAT') for the financial year under review stood at Rs 125.79 crore, a decline of 94.30 per cent. as compared to Rs 2,205.46 crore for FY 2020- 21. Consequently, Return on Average Equity ('ROAE') was 0.76 per cent. for FY 2021-22 as against 13.24 per cent. for FY 2020-21 and Return on Average Asset ('ROAA') was 0.11 per cent. for FY 2021- 22 as against 2.13 per cent. for FY 2020-21. Correspondingly, basic earnings per share ('EPS') decreased from Rs 13.70 to Rs 0.78 whereas diluted EPS decreased from Rs 13.69 to Rs 0.78 as at the end of FY 2021-22 in comparison to FY 2020-21. However, due to various initiatives taken by the Government to support the economy and easing out of the impact of pandemic on the lives of customers, your Bank has seen the best ever quarterly performance during the quarter ended March 31, 2022 backed by robust all round operating performance and lower credit costs. Given the strong recovery and stable operating environment, your Bank is confident of further improving its performances during next fiscal as well.

Your Bank continues to focus on financial inclusion by providing various financial services to the underserved. The Reserve Bank of India ('RBI') has mandated Priority Sector Lending ('PSL') of a minimum 40 per cent. of advances for all banks. During FY 202122, your Bank's PSL was Rs 56,397.10 crore as on March 31, 2022 as compared to Rs 74,369.51 crore (net of IBPC of Rs 2,124.13 crore) as on March 31, 2021. At the end of FY 2021-22, PSL as a proportion of the gross advances of Rs 98,790.70 crore was 57 per cent.

COVID-19 Pandemic

FY 2021-22 started with the second wave of COVID-19 pandemic, which was more severe and infectious, affecting lives of people and resulted in restriction in movements due to lockdowns in various parts of the country. This affected the economic activities considerably, especially the lower income population and businesses requiring physical movement. With the aggressive vaccination drive by the Government and various other measures to contain the spreading of infection, the impact of the pandemic started to recede in the second half of the FY. The Government of India ('GoI') and the Reserve Bank of India ('RBI') continued with its measures to minimize the adverse economic impact on business caused by this pandemic.

Your Bank had diligently abided by the advisories issued by the GoI, State Governments and various statutory and regulatory authorities, from time to time. While enforcing the social distancing protocols and keeping the safety of employees in mind, banking outlets and offices of the Bank operated in accordance with the guidelines/directions issued by various statutory, regulatory and local authorities.

Your Bank continued to leverage its technology wherein the employees were benefitted through availing work from home facilities. Your Bank managed to run its operations smoothly across all its banking outlets. At all times during the COVID-19 pandemic, your Bank had managed to keep its services open to customers. Your Bank has engaged with its customers through digital channels and contact centres with the objective of catering to their banking needs, as well as enquiring about their well-being during these extraordinarily difficult times.

Your Bank continues to take multiple measures to ensure a safe environment for its employees and customers, such as:

• Regular sanitisation of the branches, ATMs, currency notes, temperature checks at premises.

• Maintaining social distancing norms through effective floor management.

• Touch-base with all existing customers and enquiring about their well-being.

• Adopting new digital initiatives from time to time.

• Community outreach initiatives.

• Vaccination drive for employees, through tie-ups with hospitals, based across regions and at Head Office.

Your Bank has implemented necessary packages rolled out by RBI for its different segments of customers to provide the financial assistance, which are enumerated hereinbelow under different heads.

Emerging Entrepreneur Business ('EEB')

The EEB vertical of your Bank has been serving borrowers at the bottom of the pyramid with affordable and convenient loans to help them develop into entrepreneurs and transform their lives. Your Bank's EEB strategy is guided by its long-held philosophy of financial inclusion and economic empowerment of the disadvantaged sections of the society.

Your Bank offers a wide array of loans through Banking Units ('BU') under EEB vertical to benefit small business owners in need of financial assistance. It also helps in the growth of additional income generation avenues and offers enhanced opportunities to small entrepreneurs to achieve their business goals.

Each BU is linked to a bank branch for operational convenience. BUs are self-sufficient and empowered to open deposit accounts using TABs and also open loan accounts after necessary credit checks. The highlight of the BUs' operations is the TABs that are connected to the Core Banking System ('CBS') through cellular data. Your Bank's Relationship Officers ('RO') carry these TABs to their group meetings, and the entire instalment reconciliation for the customer happens through these TABs on real time basis. To ensure timely and effective support to the BUs in their day- to-day functioning, the Bank has a structure comprising Circles, Territories, Divisions, Areas and Banking Unit Catchments. A central operation team maintains oversight of the quality of the operations and adherence to prevalent guidelines at all times. Your Bank lays significant emphasis on processes and controls to help maintain uniform and consistent standards in transaction processing and service delivery, as well as compliance with regulatory and statutory guidelines.

During FY 2021-22, your Bank opened 287 new BUs pan-India with a focus on financial inclusion and to enhance portfolio quality by limiting the number of customers served by a BU. Your Bank's commitment towards financial inclusion is also reflected in the fact that it offered loans to 162,581 new borrowers during FY 2021-22. The growth of 6.9 per cent. in the aggregated EEB asset portfolio from Rs 58,346.34 crore to Rs 62,399.08 crore during 202122, is another indicator of its commitment.

Your Bank now has EEB loans in 11 categories to cater better to the varied demands of the customers:

EEB loan (Group loans)

1. Suchana Loan: Timely funds to start a new business or grow an existing one. Loan size is from Rs 1,000 to Rs 25,000. However, this product has since been discontinued.

2. Srishti Loan: Loan to scale up home-based business. Loan size is from Rs 26,000 to Rs 1,50,000.

3. Subriddhi Loan: Loan amount is up to 50 per cent. of the disbursement amount of running primary loan. Sanctioned to help customers fulfil their extra business requirement during their ongoing loan.

4. Samadhaan Loan: Loan from Rs 5,000 to Rs 15,000 to support existing EEB borrowers by providing liquidity support to their businesses during pandemic.

5. Suraksha Loan: Loan size is up to Rs 15,000 and is sanctioned to help existing customers meet their emergency expenses, e.g.- medical, drinking water and sanitation.

6. Sushiksha Loan: Loan size is up to Rs 10,000 and is sanctioned to help customers meet expenses towards the education of their children.

Small Business and Agri Loans

1. Sahayata Loan: Loan to fund growing business needs of existing EEB customers. Loan amount is from Rs 51,000 to Rs 2,00,000.

2. Samriddhi Loan: Loan to fund growing business needs of existing EEB customers. Loan size is from Rs 75,000 to Rs 3,00,000. However, this product has since been discontinued.

3. Micro Baazar Loan: With a loan size from Rs 26,000 to Rs 1,50,000, this product is for small entrepreneurs, who have an existing super-saver account with your Bank. This loan provides financial support to deposit customers for their working capital needs.

4. Micro Home Loan: Your Bank offers Micro Home Loan ranging from Rs 1,00,000 to Rs 10,00,000 to existing EEB borrowers for construction as well as renovation of their houses so that their dream of their own house does not remain unfulfilled.

5. Two-wheeler Loan: Your Bank offers two-wheeler loans ranging from Rs 30,000 to Rs 1,20,000 to existing EEB borrowers. It brings them a step closer to their aspirations.

During the FY 2021-22, your Bank has taken various initiatives:

• As per COVID protocols to maintain social distancing norms during the COVID-19 pandemic and resulting restrictions, your Bank has split the groups to reduce the number of group members.

• Your Bank conducted awareness programmes to educate customers about the COVID-19 pandemic and needs of COVID Vaccination.

• Your Bank has also given them support to overcome the irregularity and distress caused by the pandemic and assured them that their Bank is always with them in any situation.

• Your Bank has initiated a vaccination drive for its employees and ensured that all employees are vaccinated.

Awareness about using digital solutions, like smartphone based transactions and use of credit/debit cards for online transactions is still a persistent issue to the customers of your Bank under the EEB vertical. To overcome these challenges, your Bank is giving training to make the customers aware about the benefits of digital payments and various other aspects, such as seeding bank accounts with mobile number and Aadhaar. Your Bank has also taken initiative by informing the customers to pay through online transactions.

During the pandemic and post pandemic restrictions, many of the customers of your Bank lost their livelihoods, which made them financially vulnerable. To strengthen the customers, your Bank came up with products specifically designed for these situations and ensured that the customers get the maximum financial assistance during the toughest time in their lives. In addition to lending to customers, your Bank is encouraging them to save in their savings bank accounts and to inculcate healthy financial habits, so that in any uncertain situation in the future, they remain financially stable.

Your Bank has been driving the transformation of customers at the ground level. Your Bank has already started migrating vintage and quality customers to individual loans from their existing group loans by laying out a strategy to increase the share of individual business loans in EEB overall portfolio and extending new product offerings, such as Sahayata Loan, Two-Wheeler Loan, Micro Home Loan as per their changing requirements.

Branch Banking

Your Bank witnessed an overall retail deposit growth of 21 per cent. YoY to Rs 74,441 crore during FY 2021-22, and the overall deposit growth of over 24 per cent. YoY to Rs 96,331 crore. Your Bank also witnessed an overall CASA growth of 18.48 per cent. YoY to Rs 40,079 crore.

The contribution from the Affluent Savings business segment, which consists of the flagship products, like, the Elite and Premium Savings, remained unmatched. This segment contributed to an overall Saving Accounts ('SA') growth of 33 per cent. YoY.

The liabilities proposition of your Bank achieved significant breadth and scale which enabled the Bank to have a competitive edge and deliver the best in class customer experience, and the same is evident from the growth in its Liabilities franchise.

Moreover, to strengthen the current account ('CA') customer base, your Bank has launched 3 variants under its Current Account product offering viz., "Biz-Deluxe", which is designed to cater to the banking and financial needs of customers, like traders, distributors and wholesalers; "Biz-Pro" designed to cater to the self-employed professionals and "Start-up" for addressing the unique banking requirements of entrepreneurs.

Your Bank also introduced Cash@POS facility, which permits cash withdrawal at POS and SoftPOS services, which enables the merchant to accept digital payments using a smartphone.

A total of 42 branches were added during the FY, taking your Bank's footmark to 1,189 branches. Despite challenging circumstances during FY 2021-22, your Bank's branches remained open throughout the lockdown period and your Bank has also introduced offsite ATMs as a pilot project at five of its major locations, viz., Ahmedabad, Salt lake Sector-V, Urbana- Kasba, Shillong and Bhubaneswar, for providing prompt assistance to the customers.

During FY 2021-22, your Bank overcame all the challenging business conditions and offered customers expedient ways to transact, access their savings and current accounts, fixed deposits, make digital payments and grow their wealth.

Commercial Banking

RBI announced the introduction of the 'COVID-19 Regulatory Package' on March 27, 2020 in the wake of disruptions due to COVID-19 pandemic and consequent asset classification and provisioning norms. As part of the COVID-19 Regulatory Package, National Credit Guarantee Trust Company ('NCGTC') introduced operating guidelines on Emergency Credit Line Guarantee Scheme ('ECLGS 1.0') on June 02, 2020. RBI issued subsequent additions/ modifications, clarifications and extensions in respect of the Regulatory Packages during FY 2021-22. The COVID-19 Regulatory Package was included in the Board approved policy of the Bank, with a suitable enabling clause to accommodate any further regulatory instructions on the COVID-19 Package.

NCGTC issued introduction of ECLGS 3.0, modification in ECLGS 2.0 along with extension of all three schemes (ECLGS 1.0, 2.0 & 3.0) until June 30, 2021, vide updated operating guidelines dated April 16, 2021. Further, introduction of ECLGS 4.0 and modifications in ECLGS 3.0 were communicated vide updated operating guidelines dated June 07, 2021, along with extension of all four schemes (ECLGS 1.0, 2.0, 3.0 & 4.0) till September 30, 2021. The last updated operating guidelines on ECLGS was issued by NCGTC on October 20, 2021, including continuation of existing schemes (ECLGS 1.0, 2.0, 3.0 & 4.0) and introduction of separate extension schemes under ECLGS 1.0, 2.0 & 3.0, valid till March 31, 2022. As per latest guidelines, utilisation/disbursement under select schemes/facilities stands extended until June 30, 2022.

The following are the brief details of various schemes under ECLGS, valid until March 31, 2022:

> ECLGS 1.0 refers to the scheme for providing 100 per cent. guarantee to member lending institutions, extending eligible credit facility in the form of additional working capital term loan to its borrowers up to 20 per cent. of their total fund based credit outstanding (max. Rs 50 crore) across all lending institutions, as on February 29, 2020. All borrower accounts classified as NPA or SMA-2 as on February 29, 2020 shall not be eligible. The tenor of loans shall be four years from the date of first disbursement. A Moratorium period of one year on the principal amount for the fund based portion shall be provided to borrowers under the scheme during which interest shall be payable. The principal shall be repaid in 36 instalments (three years) after the moratorium period is over.

> ECLGS 1.0 (Extension) refers to the scheme for providing additional support to existing borrowers of ECLGS 1.0 or new borrowers eligible under ECLGS 1.0 based on revised reference date of March 31, 2021. All borrower accounts classified as NPA or SMA-2 as on March 31, 2021 shall not be eligible. The funding can be in the form of additional working capital term loan facility upto 30 per cent. of their total credit outstanding (fund based only, net of support received under ECLGS 1.0) up to Rs 50 crore as on February 29, 2020 or March 31, 2021, whichever is higher. The tenor of loans shall be five years from the date of first disbursement. Moratorium period of two years shall be provided to borrowers for the fund based portion. The principal shall be repaid in 36 instalments (three years) after the moratorium period is over.

> ECLGS 2.0 refers to the scheme for providing 100 per cent. guarantee to member lending institutions, extending eligible credit facilities in the form of working capital term loan and/ or non-fund based facility or a mix of the two, to its borrowers in the 26 sectors identified by the Kamath Committee on Resolution Framework vide its report dated September 04, 2020 and the Healthcare sector, upto 20 per cent. of their total credit outstanding (fund based only) not exceeding Rs 500 crore across all lending institutions, as on February 29, 2020. All borrower accounts classified as NPA or SMA-2 as on February 29, 2020 shall not be eligible. The tenor of facilities shall be five years from the date of first disbursement of fund based facility or first date of utilization of non-fund based facility, whichever is earlier. Moratorium period of one year on the principal amount for the fund based portion shall be provided to borrowers under the scheme during which interest shall be payable. The principal shall be repaid in 48 instalments (four years) after the moratorium period is over. To be eligible for guarantee cover of the sanctioned nonfund based facility, first utilization must happen on or before June 30, 2022.

> ECLGS 2.0 (Extension) refers to the scheme for providing additional support to existing borrowers of ECLGS 2.0 or new borrowers eligible under ECLGS 2.0 based on revised reference date of March 31, 2021. All borrower accounts classified as NPA or SMA-2 as on March 31, 2021 shall not be eligible. The funding can be in the form of additional working capital term loan facility and / or non-fund based facility or a mix of the two, upto 30 per cent. of their total credit outstanding (fund based only, net of support received under ECLGS 2.0) not exceeding Rs 500 crore as on February 29, 2020 or March 31, 2021, whichever is higher. The tenor of facilities shall be six years from the date of first disbursement of fund based facility or first date of utilization of non-fund based facility, whichever is earlier. A Moratorium period of two years shall be provided to borrowers for the fund based portion. The principal shall be repaid in 48 instalments (four years) after the moratorium period is over. To be eligible for guarantee cover of the sanctioned non-fund based facility, first utilization must happen on or before June 30, 2022.

> ECLGS 3.0 refers to the scheme for providing 100 per cent. guarantee to member lending institutions, extending eligible credit facility in the form of working capital term loan to its

borrowers in the Hospitality (hotels, restaurants, marriage halls, canteens, etc.), Travel & Tourism, Leisure & Sporting and Civil Aviation (scheduled and non-scheduled airlines, chartered flight operators, air ambulances, airports and ground handling units) sectors, upto 40 per cent. of their total credit outstanding (fund based only) across all lending institutions, subject to a cap of Rs 200 crore per borrower. All borrower accounts classified as NPA or SMA-2 as on February 29, 2020 shall not be eligible. The tenor of facilities shall be six years from the date of first disbursement. A Moratorium period of two years on the principal amount for the fund based portion shall be provided to borrowers under the scheme during which interest shall be payable. The principal shall be repaid in 48 instalments (four years) after the moratorium period is over.

> ECLGS 3.0 (Extension) refers to the scheme for providing additional support to existing borrowers of ECLGS 3.0 or new borrowers eligible under ECLGS 3.0 based on revised reference date of March 31, 2021. All borrower accounts classified as NPA or SMA-2 as on March 31, 2021 shall not be eligible. The funding can be in the form of additional working capital term loan facility, upto incremental credit eligibility based on outstanding of February 29, 2020 or March 31, 2021, whichever is higher. The tenor of facilities shall be six years from the date of first disbursement. Moratorium period of two years shall be provided to borrowers for the fund based portion. The principal shall be repaid in 48 instalments (four years) after the moratorium period is over.

> ECLGS 4.0 refers to the scheme for providing 100 per cent. guarantee to member lending institutions, extending eligible credit facility upto Rs 2 Crore, in the form of fund based (term loan) or non-fund based (LC for import of capital goods) facility to existing hospitals/nursing homes/clinics/ medical colleges/units engaged in manufacturing of liquid oxygen, oxygen cylinders, etc., for setting up on-site oxygen producing plants. All borrower accounts classified NPA as on February 29, 2020 shall not be eligible. The tenor of facilities shall be for a maximum of six years from the date of first disbursement of fund based facility or first date of utilization of non-fund based facility, whichever is earlier. Moratorium period of six months on the principal amount for the fund based portion shall be provided to borrowers under the scheme, during which interest shall be payable. The principal shall be repaid in 54 instalments (four and half years) after the moratorium period is over. Last date of disbursement under fund based facility and utilization of LC under nonfund facility shall be June 30, 2022.

RBI also issued Resolution Framework 2.0 dated May 05, 2021 for resolution of COVID-19 pandemic related stress of Micro, Small and Medium Enterprises (MSMEs). Further, RBI issued subsequent instruction on the said framework on June 04, 2021. The framework is an extension of existing resolution framework introduced by RBI on August 06, 2020, in view of continued need to support viable MSME entities on the fallout of COVID-19 pandemic. As per the framework, eligible borrowers with aggregate exposure, including non-fund based facilities, of all lending institutions shall not exceed Rs 50 Crore as on March 31, 2021. The borrower should be classified as a MSME as on March 31, 2021 in terms of the Gazette Notification S.O. 2119 (E) dated June 26, 2020. The borrowing entity shall be GST-registered (other than exempted MSMEs as on March 31, 2021) on the date of implementation of restructuring. The borrower's account should be a 'standard asset' as on March 31, 2021, and not restructured in terms of earlier applicable MSME restructuring circulars issued by RBI.

In line with the Board-approved Credit and related Policies, your Bank extended support (ECLGS, Resolution Framework 2.0, etc.) to the deserving and eligible borrowers based on requests.

In order to ensure inclusive book growth along with effective portfolio monitoring, the SME Segment under Commercial Banking was further categorised into two groups, i.e., one with borrower exposures upto Rs 5 Crore and the other with exposures above Rs 5 Crore, each led by independent Heads.

Small Enterprise Loan (SEL)

Small businesses regularly need support in the form of short-to- medium term funding. Small Enterprise Loan ('SEL') vertical of your Bank empowers small entrepreneurs by extending them business loans so as to enable them grow their businesses.

The pandemic has been an extremely difficult time for small businesses, which impacted their cash flows owing to lockdowns, reduced business hours and market demand.

Your Bank ensured its team worked relentlessly and flexibly to serve the customers by working in line with their requirements and guiding them to overcome their challenges.

Together we learnt that hard times can be overcome if we collaborate, handhold and be empathetic towards our customers by understanding their needs. Your Bank understands SEL vertical is now more agile and raring to grow with positivity and hard work, with close customer connect and bringing on new products offering based on the market feedback we have received.

The following products are presently offered under SEL:

• SEL Term Loans (Rs 1 lakh to Rs 10 lakh)

These loans with tenure of one to four years are towards business requirements pertaining to working capital or asset creation for business or other short-term business requirements. These loans range from Rs 1 lakh to Rs 10 lakh.

• SEL MAX Loan

Businesses can avail this loan for meeting requirements pertaining to working capital or asset creation for business or other short-term business requirements. The tenure of this loan is from one year to four years. This loan is from Rs 10 lakh to Rs 25 lakh.

NBFC Lending

Your Bank considers Institutional Lending to Non-Banking Financial Companies ('NBFCs')/Housing Finance Companies ('HFCs') and NBFC-MFIs, primarily, for on-lending activities. The NBFC-MFI business includes lending to Microfinance Institutions ('MFIs'), Societies and Trusts engaged in microfinance activities. While most of these loans are extended as Term Loans, your Bank also has credit exposure through Direct Assignments and investment exposures through Pass Through Certificates ('PTCs') and NonConvertible Debentures ('NCDs'). The NBFC (including Housing

Finance Company) business primarily includes Term Loan product for on-lending purpose, and is also foraying into working capital loan, Direct Assignments and co-lending activities. The book-size was at Rs 2,690.74 crores as on March 31, 2021, which has grown to Rs 4,998.84 crores (including TLTRO of Rs 238 crores) as on March 31, 2022. The Institutional book, comprising lending to NBFCs and MFIs, has grown by 86 per cent. Your Bank has expanded its reach while building Books through diversified asset class as well as geographies during the FY under review.

Housing Finance

Your Bank offers loans for the purchase, construction, repairs and renovation of dwelling units. Loan against property ('LAP'), as well as loans against rent receivables, are also offered against selfoccupied residential/commercial property. In line with your Bank's objective of increasing financial inclusion, Home Loans and LAP loans are offered to Salaried as well as Self-Employed customers, including New to Bank ('NTB') customers.

Post amalgamation of erstwhile GRUH Finance Limited with the Bank, your Bank has expanded its scope of housing activities and has, additionally, started offering home loan products from more than 160 bank branches across the nation. Your Bank continues to focus on the affordable housing segment and has tied-up with various Government projects as well as projects in the private sector in the Affordable Housing segment. Consequently, a majority of the housing loans are also eligible under the PSL category.

During the FY under review, your Bank had launched a special campaign "Jeet Hi Lenge Baazi Ab Hum" with a very competitive rate of interest and has received good response.

As on March 31, 2022, your Bank had a total Housing and LAP exposure of Rs 23,560.12 crore, constituting 24 per cent. of the total assets.

Retail Asset

With an objective to serve the financing needs of a larger population and to maximize the profits by diversifying the risk, your Bank has launched and strengthened several retail asset products during FY 2021-22. Customers can now avail various loans, like gold loans, personal loans, two-wheeler loans and car loans from the Bank.

• Gold loan aims at fulfilling urgent monetary needs with ease of access, simplified documentation process and quick turnaround time. Gold loans are given from a ticket size of Rs 10,000 to Rs 25,00,000.

• Personal Loan: Your Bank has revamped the product and changed the model of sourcing by a dedicated sales team, catering to existing customers and to start sourcing for New to Bank customers as well. The Personal Loan product has started channel partner sourcing from the year 2021 to extend distribution network in major markets to diversify and expand the portfolio. Personal loans are given for ticket size from Rs 50,000 to Rs 15,00,000 for tenure up to 5 years at a competitive rate of interest. Your Bank has been quickly ramping up this book during FY 2021-22.

• Two Wheeler Loans: Erstwhile Two Wheeler Loans were sourced by Bank Branches for existing customers only. Your Bank redesigned the product as per market standard with introduction of dealer/ channel based distribution model. The objective of the program is to provide financing to existing as well as New to Bank customers for purchase of new Two Wheelers. Your Bank leveraged on the digital capabilities and using digital means, approves two wheeler loans in just 5 minutes for more than 90 per cent. of cases. The two wheeler loan caters to the customer's needs by giving loans starting from Rs 5,000 to Rs 5,00,000.

Car Loan was launched by your Bank during the Q2 of FY 2021-22, to meet the customers' aspirations of owning a car. Your Bank designed various product schemes for loan amounts ranging from Rs 50,000 to Rs 1 crore, in order to cater to various customer profiles viz. salaried, self-employed as well as non-individual entities. With the help of its extensive manufacturer and dealer network, your Bank aims to provide the best deals to existing as well as new customers.

Third Party Products

Your Bank currently distributes mutual funds, life insurance, general insurance, including health insurance products, and co- branded credit cards. The FY under review has been a year of transformation and emergence. Your Bank continues to have unabated focus on offering a robust and comprehensive retail health insurance solution based product proposition for the retail customers who bank with us. To strengthen the product suite being offered, your Bank has tied up with a leading Health Insurance player during the course of the year. In the life insurance business, your Bank has further enhanced the product proposition offering by adding a third partner for distributing retail insurance through its branches. In addition, your Bank has added Unit Linked Insurance Products ('ULIPs') in the product basket being offered for solicitation. In mutual funds distribution, your Bank has started the distribution of funds in the New Fund Offer ('NFO') stage with a vision of providing its customers additional flexibility while planning for investments. Your Bank continues to invest towards building a research and technology driven product distribution proposition, across all Third Party Products and continues to seek out opportunities to add new product suites to serve customers financial needs holistically.

The total mutual fund AUM managed under your Bank's code during FY 2021-22 was Rs 527.07 crore, earning an income of Rs 3.74 crore. A total of Rs 166.04 crore and Rs 439.60 crore of general and retail life insurance business, respectively, was garnered through the retail network during FY 2021-22, earning a fee income of Rs 19.76 crore and Rs 128.19 crore, respectively. During FY 2021-22, the life insurance business through the existing arrangement in all asset verticals amounted to Rs 1,298.55 crore, earning an income of Rs 61.50 crore. Your Bank has distributed the co-branded credit cards and earned Rs 0.06 crore as commission during FY 2021- 22. Your Bank has also earned Rs 0.32 crore as commission for distribution of Atal Pension Yojana, NPS Lite Swavalamban schemes of PFRDA and others during the FY 2021-22.

Corporate Social Responsibility

Your Bank's core commitment to creating an inclusive growth is reflected in its Corporate Social Responsibility ('CSR') initiatives, which focuses on the empowerment of the marginalised sections of the society. To address its societal commitments, your Bank

has adopted a comprehensive CSR Policy that outlines the CSR programmes, in line with Schedule VII to the Companies Act, 2013 (the 'Companies Act'). These programmes are being undertaken in the vicinity of your Bank's operational areas.

For the seamless implementation and monitoring of the CSR programme, your Bank has constituted the CSR Committee of the Board of Directors ('CSRCB'), in accordance with the provisions of Section 135 of the Companies Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ('CSR Rules'), as amended. The composition of the CSR Committee is given in the Report on Corporate Governance as well as Annual Report on CSR forming part of the Board's Report.

The marginalised communities residing in the vicinity of your Bank's operational areas are confronted with multidimensional and inter alia, vulnerabilities, at the core of which is the challenge to secure sustained livelihoods. Accordingly, the interventions of your Bank's CSR initiatives are appropriately designed to build their capabilities for securing sustainable livelihoods.

Your Bank continued to engage itself with the marginalised sections of the society for inclusive growth. Your Bank has contributed Rs 78.43 crore towards 23 CSR programmes implemented through 10 Project Implementing Agencies ('PIAs'). The CSR programmes were spread across 671 project locations in 71 districts of 13 states in India, reaching out to 2,76,262 individuals during the FY under review, thereby taking the total outreach to 20,74,603 individuals.

In terms with the provisions of Rule 8 of the CSR Rules, your Bank appointed KPMG Assurance and Consulting Services LLP ('KPMG') to carry out an independent Impact Assessment of the CSR Programmes of your Bank. In terms with provisions of para no. 9.6 of the General Circular No. 14 /2021 dated August 25, 2021, issued by the Ministry of Corporate Affairs, the Impact Assessment Report by KPMG on the CSR programmes of your Bank, is available at the Bank's website https://bandhanbank.com/beyond-banking, and the programme wise summary of the same is mentioned in the subsequent sections.

The details of CSR activities/projects undertaken during the financial year are provided in the Annual Report on CSR forming part of the Board's Report as Annex - 1. During the year under review, the CSR Policy was suitably amended to align it with the recent amendments to the provisions relating to CSR under the Companies Act and CSR Rules, which was duly recommended by the CSR Committee and approved by the Board. The updated CSR Policy is available on your Bank's website at: https://bandhanbank.com/pdfViewerJS/index.html#../sites/default/files/2021-07/CSR-Policy-2021_1.pdf

Some of the key programmes of your Bank's CSR initiatives are:

Targeting the Hardcore Poor Programme

During the FY under review, your Bank has contributed Rs 27.88 crore (Rs 18.20 crore in FY 2020-21) towards Targeting the Hardcore Poor ('THP') programme of Bandhan Konnagar, an organization registered under the Societies of West Bengal Registration Act XXVI of 1961, Implementing Agency. The programme is designed for the ultra-poor women-headed households, providing them with a range of gainful micro-enterprises (in the form of farm, non-farm and mixed assets, non-cash), along with handholding support and training on confidence building, enterprise skills, consumer interaction, marketing and financial skills. They are also provided with sustenance allowance to meet their daily needs till they start generating substantial income from the assets provided. In a period of 18 to 24 months, these ultra-poor women start graduating, uplifting themselves from extreme poverty1 and get linked to mainstream society2.

During the FY under review, 27,600 ultra-poor women were provided farm-based, non-farm and mixed assets to sustain their livelihoods. These women belonged to 18 districts of Assam, Jharkhand, Madhya Pradesh, Odisha and West Bengal.

An Impact Assessment Study carried out by KPMG indicated that more than 29,000 women were alleviated from below poverty line to above the national poverty line (Rs 1,059.42 for rural and Rs 1,286 for urban areas) with a significant increase in their business assets and household income, having a monthly income of at least Rs 4,000 and average of Rs 7,456 per month. Additionally, 29,487 women had improved savings habits and access to safe and secure shelter.

Further, a long term study done by the Nobel Laureate Dr. Abhijit Banerjee et.al.,3 based on Randomised Control Trials ('RCT') method, suggests that in seven years after the assets were first distributed, livestock revenue, income from non-agricultural entrepreneurial activities and daily wage income was 286 per cent., 100 per cent. and 25 per cent., respectively, higher in the treatment group as compared to the control group mean, and it was not because of more working hours, but because the income per hour went up and they diversified their businesses and invested part of the gains from livestock into other activities.

The monthly consumption of those assigned to treatment increased by 25 per cent., as compared to the consumption of those assigned to control, which increased by 12 per cent., and the amount deposited in the savings account by the beneficiaries was more than double as compared to the control group. There was also an increase in formal borrowings.

The study highlights the positive effects across all categories of outcomes. Compared to non-beneficiaries, the beneficiaries' households of the programme have more assets, food security is higher, more earnings, and are financially better off. The results for the adult-level indexed variables of the study indicated that the individuals are healthier, happier, and less stressed. Furthermore, the effects (except for productive assets) almost always grows over time, suggesting that the programme may have put beneficiaries' household on a different trajectory.

Health, Nutrition, Drinking Water and Sanitation

During the FY under review, your Bank has contributed Rs 18.49 Crore (Rs 15.67 crore in FY 2020-21) towards seven health programmes of five PIAs, covering 35 districts in nine states of India. The health programmes of the PIAs supported by your Bank covered 88,019 beneficiaries during the year.

1 Poverty Line benchmarked according to the Suresh Tendulkar's Committee Poverty Lines per capita monthly expenditure, 2011-12, Niti Aayog, Government of India

2 India SDG Index Score for Goal 1 - No Poverty; Goal 2 - Zero Hunger and SGD 5 - Gender Equality

3 Abhijit Banerjee, Esther Duflo, Raghabendra Chattopadhyay and Jeremy Shaprio (2016). The Long Term Impacts of a "Graduation" Program: Evidence from West Bengal. Working Paper, September, 2016. J-PAL, MIT, Cambridge, Massachusetts. USA

Health

Your Bank contributed towards creating health and hygiene- related awareness and behaviour change through a network of 4,518 village-level female health volunteers, known as "Swasthiya Sahayikas", who reached out to 2,16,918 pregnant women and lactating mothers. The Swasthiya Sahayikas held 38,266 health awareness forums. These sessions were attended by 7,71,600 female participants belonging to the reproductive age group. The Swasthiya Sahayikas and the Health organisers made 14,81,310 home visits to follow-up on the health status of pregnant women, lactating mothers and children below five years, and have taken 2,278 women for institutional deliveries during ante-natal check-ups ('ANC') and other health check-ups.

The Swasthiya Sahayikas of the health programme inducted menstrual hygiene behaviour change communication amongst the women, especially, the adolescent girls and infant care behaviours to the pregnant women and lactating mothers. They provided sanitary pads during door-to-door visits and have also started to supply infant diapers, soaps, hand sanitizers, moisturisers, etc.

These efforts resulted in improving the institutional deliveries to 90.25 per cent., (compared to the national average of 78.90 per cent.4) and complete ANC to 91 per cent. (compared to the national average of 51.20 per cent.4).

An Impact Assessment study conducted by KPMG indicated that the programme contributed in the improvement by 2 per cent. to 10 per cent. for Institutional deliveries ranging between 94 per cent. to 98 per cent., improved by 4 per cent. for complete ANC ranging between 94 per cent. to 97 per cent., and an improvement by 10 per cent. to 21 per cent. for immunisation ranging between 98 per cent. to 99 per cent.

A study conducted by Grameen Foundation and Freedom from Hunger India Trust from 2015 to 20 185, concluded that the programme has a visible positive impact amongst the participants of the health awareness programme, on the level of awareness and health-related behavior, between baseline from lower than 10 per cent. to end-line with more than 90 per cent. of women know about Mother and Child Health ('MCH') and from 20 per cent. to 80 per cent. of adolescent girls managing menstrual complications.

Healthcare

Apart from the public health programme, during the FY under review, 76,945 patients were provided treatment for various diseases, like cataracts, hypertension, diabetes, cough and cold, etc., in three districts of three states of India through the PIAs, taking the total to 2,47,602 patients being treated.

Nutrition

During the FY under review, 2,75,922 children under the age of five years were enrolled in the nutrition initiatives of the Bandhan Health Programme. Out of these, 2,100 children were identified with severe acute malnutrition ('SAM') and were supported for nutrition rehabilitation, whereas, 11,607 children under the age of five were found with moderate acute malnutrition ('MAM') and were provided with nutritional supplements, including support for a nutritional garden. 94 per cent. of the children over 24 months completed their primary immunization and 83.25 per cent. (National Average 54.90 per cent.4) of children from 0-6 months were exclusively breastfed.

To provide round the year nutrition support, 27,444 households were provided planting materials of fruits and vegetables for setting-up their nutrition gardens. These nutrition gardens helped families, especially, women and children, to consume pesticide-free fresh fruits and vegetables round the year. This initiative has helped in reducing the protein-energy malnutrition ('PEM') amongst the children who are less than five years of age and is evident from the fact that the wasting of children under-five has gone down to 9 per cent. (as against the national average of 35.7 per cent.4). The awareness regarding a balanced and adequate diet during pregnancy, coupled with the availability of fruits and vegetables from the nutrition garden, resulted in reducing the low birth weight incidences to a mere 2 per cent. of the live births, as compared to the national average of 18.2 per cent.4 live births being under 2.5 kg.

An Impact Assessment Study conducted by KPMG estimated that there has been reduction in malnutrition among children below five years of age from 14 per cent. to 4 per cent.

Drinking Water

During the FY under review, 62 community-level reverse osmosis water treatment plants were operational, which provided 29,577 kiloliters of purified safe drinking water to 33,749 households.

Sanitation

Your Bank has contributed towards developing the community-led sanitation and school sanitation programme of two PIAs, covering three districts in three states of India. The initiatives helped in improving the sanitation infrastructure of 502 households, 19 government schools, which included separate toilets for Boys and Girls, using child-friendly engineering, RO drinking water stations, mid-day meal platform with shades, dishwashing stations, roof rainwater harvesting system, etc. The programme induced behaviour change amongst the school teachers and children through classroom sessions and demonstrations regarding sanitation and personal hygiene, including hand-washing using soaps after using toilets, before and after a meal, before holding infants, after arriving, after playing outdoors, after playing with animals, after coughing, sneezing or blowing nose, cleaning toilets, flushing toilets after use, using sanitary pads for menstrual hygiene, etc. The programme also supported monitoring of the operation and maintenance of the facilities created.

Education

Your Bank's education programme provides quality education to the children belonging to the marginalised sections of the society in your Bank's catchment area(s). The education programme enables the children to improve their learning outcomes, especially in Science, Technology, English and Mathematics ('STEM') subjects and increase their retention and classroom engagement. The programme also provides training to the teachers belonging to the communities, government schools and schools run by the various charitable trust, who are providing free education to transform their pedagogy, and integrated various teaching and learning tools in their lesson plans and track the comprehensive continuous assessment of each child.

Your Bank contributed Rs 17.01 crore (Rs 14.80 crore in FY 202021) towards the education programme of three PIAs, benefiting 67,575 marginalised children in 33 districts of six states of India.

An Impact Assessment study conducted by KPMG indicated that according to the situational assessment conducted by Asian Institute for Sustainable Development ('AISD') in 2021, it was indicated that over 85 per cent. of the parents across the states applauded the good quality of education provided at Bandhan Education Centre ('BEC'). The respondents highlighted that there had been an improvement in the academic performance in English and Mathematics of their wards in formal schools due to the support provided at the BECs. The parents and guardians shared that the staff at BEC provided them with hand-holding support during the enrolment of their children in formal schools. The report further indicated that the prolonged closures due to the COVID-19 pandemic had affected the learning capabilities of the students.

Support to Person with Disabilities

In line with the commitment to inclusive growth, your Bank has contributed Rs 38.25 Lakh (Rs 38.85 Lakh in FY 2020-21) to the initiatives of three PIAs, who are dedicated to providing equal opportunities and a conducive environment to persons with disabilities ('PwD'). During the FY under review, the initiatives have supported 270 PwDs in three districts of three states of India taking the total to 1,332 PwDs supported through these initiatives.

Skill Development

Your Bank's skill development initiatives provide market-linked and job-ready employable skills to the youths from marginalised sections of the society in various domains. This initiative not only provides on-job training and job placement facilitation in the organised sector but also a follow-up on the placements so that the youths are settled in their job post-training.

During the FY under review, your Bank contributed Rs 4.79 core (Rs 4.89 crore in FY 2020-21) towards the skill development initiatives of two PIAs in 16 districts of six states of India. These PIAs operated 16 training centres in domains, like, Warehousing and Logistics, Retail and Customer Care, Sales and Marketing, ITeS and BPO, Refrigeration and Air Conditioning, Computer Accounting, Hardware and Networking, BFSI, Tailoring, Mason, Electrical, GDA (Nursing), Manual Metal Arc Welding, Fitter Fabrication, etc.

During the FY under review, 3,738 youths were trained, of which more than 75 per cent. were placed with net salary ranging from Rs 8,000 to Rs 15,000 plus other performance-based allowances and social security benefits, like, Provident Fund ('PF') and Employee State Insurance ('ESI').

An Impact Assessment study conducted by KPMG indicated that between 2016 to 2021, 11,478 youth were trained with a placement rate of over 68 per cent. These youth earned salaried income in organised sector, with average salary of Rs 13,591.

Water Conservation

The water conservation initiative aims at water security and drought-proofing to some of the high moisture stressed regions of India, thereby providing a safety net to agriculture and livestock- based livelihoods. The initiatives facilitate participatory watershed management by empowering the communities to participate in the planning and implementation of local water resource development. Measures, such as, building, reviving and maintaining waterharvesting structures, prioritisation and judicious use of water for every community member, crop planning and water-efficient farming, use of drought-resistant varieties, cultivation of high- value crop requiring less water, etc., creates a multiplier effect in drought-proofing and climate change adaptation measures and higher income generation. The programme has supported the construction of 23 water harvesting structures with a storage capacity of over 120,000 kiloliters of water in two states, which not only provided drinking water to over 1,500 families but also supported participatory irrigation of various crops and helped in generating an income of more than Rs 123 Lakh.

Afforestation

Your Bank's afforestation initiatives have contributed towards the project on establishing "Bio-shield" to save the mangroves in the Bharuch district of Gujarat. Mangrove plantation of 67,540 saplings, carried out in 20 Hectares in a stretch of 1 kilometer of coastline, was done along with plantation of other medical plant species and fodder species, sequestering over 4,400 tonnes of CO2 annually. The fodder bank was created to offset the biotic pressure from the mangrove area. The project created 4,629 person-days of employment and benefited 9,123 beneficiaries with additional income generating avenues from fodder and medicinal plants harvesting.

Dividend

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR'), the Board of Directors of your Bank has adopted a Dividend Distribution Policy that, inter-alia, balances the objectives of appropriately rewarding shareholders and retaining capital to maintain a healthy capital adequacy ratio. In addition to the Dividend Distribution Policy, the dividend payout ratio of the Bank is guided by the Circulars on dividend issued by RBI, from time to time. The Policy is available on the Bank's website at https://bandhanbank.com/pdfViewerJS/index.html#../sites/default/files/2021-07/Dividend_Distribution_Policy.pdf

In order to conserve capital, the Board of Directors has not proposed any dividend (Previous Year Rs 1 per share) for the financial year ended March 31, 2022.

Transfer to Reserves

In line with the RBI regulations, your Bank has transferred an amount of Rs 31.45 crore to the statutory reserve during the financial year ended March 31, 2022.

Issuance of Equity Shares & Capital Adequacy Ratio

During the FY under review, your Bank has allotted 1,66,666 equity shares of Rs 10 each fully paid-up pursuant to exercise of stock options by the eligible Employees of your Bank, aggregating to Rs 16,66,660.

Post allotment of aforesaid equity shares, the issued, subscribed and paid-up share capital of your Bank stood at Rs 16,10,76,58,670, comprising 1,61,07,65,867 equity shares of Rs 10 each fully paid-up as on March 31, 2022.

Your Bank has not issued any equity shares with differential voting rights during the FY under review.

The authorised share capital of the Bank was Rs 32,00,00,00,000, comprising 3,20,00,00,000 equity shares of Rs 10 each, as on March 31, 2022.

Your Bank's capital adequacy ratio ('CAR'), calculated in line with the RBI Circular on Capital Adequacy Framework, stood at 20.10 per cent. as on March 31, 2022, well above the minimum regulatory requirements of 10.875 per cent., out of which Tier 1 CAR was 18.89 per cent. and Tier 2 CAR was 1.21 per cent.

Performance and Financial Position of the Subsidiaries, Associates or Joint Venture

Your Bank did not have any subsidiary, associate or joint venture company during the FY 2021-22. Accordingly, no statement is required to be reported in Form AOC-1.

Awards and Recognitions

Over the years, your Bank has received multiple prestigious awards from respected institutions. During the FY under review, your Bank has been bestowed with the 'Best Growth Performance- Banks' award by Dun & Bradstreet as part of Dun & Bradstreet's Corporate Awards for India's Top 500 Companies 2021.

Rating of Various Debt Instruments

Details of rating of various debt instruments of the Bank as on March 31, 2022 are as under:

Instruments Rating Rating Agency Amount (^ in Cr.)
Term Loan from Banks [ICRA]AA(Negative) ICRA 80
Certificate of Deposit [ICRA]A1+ ICRA 6,000(1)
CRISIL A1+ CRISIL
Non-Convertible Debentures? [ICRA]AA(Negative) ICRA 2,052.50 ?
CRISIL AA/Negative CRISIL
Fixed Deposits Programme? FAAA / Negative CRISIL 1,600

(1) rating of ICRA is for Rs 3000 crore only

(2) rating of ICRA is for Rs 196.40 crore only

(3) transferred from erstwhile Gruh Finance Limited pursuant to the effectiveness of the Scheme of Amalgamation.

During the FY 2021-22, your Bank has fully repaid the Subordinated Tier II Non-Convertible Debentures amounting to Rs 160 crore listed on BSE Limited on its maturity, to the Debenture holder. Accordingly, ICRA Ltd and CARE Ratings Ltd have withdrawn its rating of Subordinated Tier II Non-Convertible Debentures. CRISIL Ratings Ltd has also withdrawn Subordinated Debt amounting to Rs 35 crore, as there was no outstanding amount due against the Subordinated Debt.

Board of Directors

The composition of the Board of Directors of the Bank ('Board') is governed by the provisions of the Companies Act, the Banking Regulation Act, 1949 (the 'BR Act'), the SEBI LODR, other applicable laws and the Articles of Association of your Bank. At the end of March 31, 2022, the Board of your Bank had twelve Directors, out of which nine were Independent Directors, two were Non-Executive Non-Independent Directors, including one Nominee Director of Caladium Investment Pte. Ltd, and the Managing Director and CEO.

Appointments

Ms. Divya Krishnan (DIN: 09276201)

The Board of Directors of the Bank, at its meeting held on May 11, 2022, on the basis of the recommendations of the Nomination and Remuneration Committee of the Bank ('NRC'), has approved the appointment of Ms. Divya Krishnan (DIN: 09276201) as an Additional Non-Executive Non-Independent Director [Nominee of Bandhan Financial Holdings Limited ('BFHL' or 'NOFHC'), promoter of the Bank] on the Board of the Bank, with effect from May 11, 2022, in place of Mr. Ranodeb Roy (DIN: 00328764), erstwhile Nonexecutive Non-Independent Director of the Bank. Ms. Krishnan shall hold office of additional director up to the date of the ensuing Annual General Meeting ('AGM') or upto three months from the date of her appointment, whichever is earlier. Further, the NRC and the Board have recommended the appointment of Ms. Divya Krishnan as a Non-executive Non-Independent (Nominee) Director of the Bank, liable to retire by rotation, to the Shareholders for their approval at the ensuing AGM.

Ms. Divya Krishnan is a finance and investment banking professional and currently a visiting faculty at Ashoka University. Ms. Krishnan was formerly a Chief Investment Officer ('CIO') and Head of Investment at SBI Mutual Fund. Prior to becoming CIO, Ms. Krishnan worked as a fund manager at SBI Funds. Post her voluntary exit from SBI in 2001, Ms. Krishnan has served as a consultant to a number of leading non-profits and NGOs. She worked closely with non-profit institutions, catalysing growth through impactful programs.

Mr. Philip Mathew (DIN: 09638394)

Pursuant to the recommendations of the NRC, the Board approved the appointment of Mr. Philip Mathew (DIN: 09638394) as an Additional Director (Independent) of the Bank, effective June 15, 2022, after ascertaining his fit and proper status and independence from the management of your Bank. Pursuant to the provisions of Section 161 of the Companies Act, read with Regulation 17(1C) of the SEBI LODR, he will continue to hold office as an Additional Director of the Bank, up to the date of the ensuing AGM or upto three months from the date of his appointment, whichever is earlier. Your Bank has received a notice in writing from a member proposing his candidature as Director on the Board of the Bank. Further, the NRC and the Board have also recommended his appointment as an Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM, for a period of three years, effective June 15, 2022.

Mr. Mathew, a HR practitioner, has almost 30 years of work experience. He left HDFC Bank as the Chief People Officer in 2018 after his association of around 16 years. During his tenure at HDFC Bank, he was involved in various HR related initiatives such as successful transition to a cloud-based enterprise-wide HR application, amongst the first to adopt the new governance and risk management standards set by Compensation Guidelines by RBI, recognition as 'Best Employer' in the BT Survey in 2016, etc. His experience as a HR practitioner spans across organisations involved in manufacturing and financial services. His career journey has been through the entire landscape of HR with significant depth. He was Plant HR In charge at Rallis India Ltd and Marico Industries Ltd, Project Lead for roll-out of new PMS at ANZ Grindlays Bank, a brief corporate stint at Colgate-Palmolive before becoming Head HR at Sharekhan.com and thereafter, moved to HDFC Bank in 2002.

Dr. Aparajita Mitra (DIN: 09484337)

Pursuant to the recommendations of the NRC, the Board approved the appointment of Dr. Aparajita Mitra (DIN: 09484337) as an Additional Director (Independent) of the Bank, effective July 13, 2022, after ascertaining her fit and proper status and independence from the management of your Bank. Pursuant to the provisions of Section 161 of the Companies Act, read with Regulation 17(1C) of the SEBI LODR, she will continue to hold office as an Additional Director of the Bank, up to the date of the ensuing AGM or upto three months from the date of her appointment, whichever is earlier. Your Bank has received a notice in writing from a member proposing her candidature as Director on the Board of the Bank. Further, the NRC and the Board have also recommended her appointment as an Independent Director, not liable to retire by rotation, to the Shareholders at the ensuing AGM, for a period of three years, effective July 13, 2022.

Dr. Aparajita Mitra, a Doctorate in Agriculture (Dept. of Plant Molecular and cellular Biology, Bose Institute), has extensive experience and expertise of more than three decades in the field of agricultural sciences. She has done extensive research and published articles in the field of commercial micropropagation of Horticulture/tree and medicinal species, DNA extraction and sequencing, DNA fingerprinting (plants), gel electrophoresis, protein and isozyme analysis, etc. Dr. Mitra is a recipient of the CSIR Fellowship and the 'Women Scientist Award' from the Department of Science and Technology, Government of India, 2005 for the project "Identification of Disease Resistant Genetic Markers in Bamboo Spp." She has also guided various postgraduate students from well-known universities on their projects in the domain of Plant Tissue culture part. She has been associated with various organizations.

Re-appointments

Dr. Holger Dirk Michaelis (DIN: 07205838)

In terms of the provisions of Section 152 of the Companies Act, Dr. Holger Dirk Michaelis, Nominee Director of Caladium Investment Pte. Ltd. on the Board of the Bank, being longest in office, shall retire at ensuing AGM and being eligible, has offered himself for re-appointment.

Mr. Narayan Vasudeo Prabhutendulkar (DIN: 00869913) and Mr. Vijay Nautamlal Bhatt (DIN: 00751001)

Mr. Narayan Vasudeo Prabhutendulkar and Mr. Vijay Nautamlal Bhatt were appointed as Independent Directors of the Bank, effective May 08, 2020, for a period of three years each and their respective current terms are expiring on May 07, 2023. Accordingly, considering the outcome of their performance evaluation, notices received under Section 160 of the Companies Act from member(s) proposing their candidature for the office of Directors and the recommendations of the NRC, the Board, at its meeting held on June 15, 2022, has approved their re-appointment as Independent Directors of the Bank, not liable to retire by rotation, for the second term of five years each, effective May 08, 2023, subject to the approval of Shareholders of the Bank, by way of special resolutions, at the ensuing AGM.

The resolution(s) in respect of appointments and re-appointments of the Directors, as aforesaid, have been included in the Notice convening the 8th AGM of the Bank. Brief profiles of these Directors, together with other requisite disclosures/details, have been annexed to the said Notice. None of the Directors as proposed for appointment / re-appointment will cross the age of 75 years during the continuation of their tenure on the Board of the Bank.

Shareholders approved appointments/ re-appointments

During the FY under review, the following appointments/re- appointments were approved by the Shareholders at the 7th AGM of the Bank held on August 06, 2021:

• Appointment of Mr. Suhail Chander (DIN: 06941577) as an Independent Director of the Bank, not liable to retire by rotation, for a period of three years, effective March 19, 2021.

• Appointment of Mr. Subrata Dutta Gupta (DIN: 08767943) as an Independent Director of the Bank, not liable to retire by rotation, for a period of three years, effective March 19, 2021.

• Dr. Holger Dirk Michaelis (DIN: 07205838), Nominee Director of Caladium Investment Pte. Ltd., being longest in office and liable to retire by rotation, retired at the 7th AGM of the Bank, and who, being eligible, had offered himself for reappointment, was duly re-appointed.

• Re-appointment of Dr. A. S. Ramasastri (DIN: 06916673) as an Independent Director of the Bank, not liable to retire by rotation, for the second term of five years, effective August 08, 2021.

• Re-appointment of Dr. Anup Kumar Sinha (DIN: 08249893) as an Independent Director and Non-Executive Chairman of the Bank, not liable to retire by rotation, for the second term from January 07, 2022 up to July 04, 2026, i.e., up to the date of his attaining the age of 75 years. RBI approved tenure as Non-Executive Chairman is upto January 06, 2025.

• Re-appointment of Mr. Santanu Mukherjee (DIN: 07716452) as an Independent Director of the Bank, not liable to retire by rotation, for the second term of five years, effective January 07, 2022.

• Re-appointment of Mr. Chandra Shekhar Ghosh (DIN: 00342477), MD & CEO of the Bank, for a period of three years, effective July 10, 2021, not liable to retire by rotation.

Cessations

During the FY under review, none of the Directors on the Board of the Bank ceased to hold office.

The Board of Directors of the Bank, at its meeting held on May 11, 2022, has taken on record, the cessation of Mr. Ranodeb Roy (DIN: 00328764) as Non-executive Non-Independent Director of the Bank, pursuant to withdrawal of his nomination by NOFHC from the Board of the Bank. Accordingly, Mr. Ranodeb Roy ceases to be a Non-Executive Non-Independent Director of the Bank, with effect from May 11, 2022.

Further, Mr. Snehomoy Bhattacharya, Independent Director of the Bank, completed his second term of four years as an Independent Director on the Board of the Bank on July 08, 2022. Accordingly, Mr. Bhattacharya ceased to be the Director of the Bank effective July 09, 2022.

Necessary disclosures in this regard have been made to the Stock Exchanges, RBI and the Ministry of Corporate Affairs. The Board places on record its sincere appreciation for the contributions made by Mr. Roy and Mr. Bhattacharya during their tenure as Directors of the Bank.

Key Managerial Personnel

Mr. Chandra Shekhar Ghosh, MD & CEO; Mr. Sunil Samdani, Chief Financial Officer; and Mr. Indranil Banerjee, Company Secretary of the Bank are the Key Managerial Personnel of the Bank, as per the provisions of the Companies Act and rules made thereunder. Further, during the FY under review, the Board, at its meeting held on June 25, 2021, while approving the re-appointment of Mr. Ghosh as the MD & CEO of the Bank, had also approved his re-appointment as Key Managerial Personnel of the Bank, for a period of three years, effective July 10, 2021, pursuant to the provisions of Section 203 of the Companies Act.

Meetings of the Board and Board Committees

The Board met fourteen times during the FY 2021- 22, on April 12, 2021; May 06, 2021; May 08, 2021; June 25, 2021; July 30, 2021; September 29, 2021; October 26, 2021; October 29, 2021; January 13, 2022; January 21, 2022; February 11, 2022; February 19, 2022; February 24, 2022; and February 25, 2022. The details of the Board meetings held during the FY, attendance of Directors at the meetings, and other details have been provided separately in the Report on Corporate Governance forming part of the Board's Report, enclosed as Annex 4.

Your Bank currently has the following nine Board Committees:

1. Audit Committee;

2. Nomination & Remuneration Committee;

3. Stakeholders' Relationship Committee;

4. Risk Management Committee;

5. IT Strategy Committee;

6. Customer Service Committee;

7. Corporate Social Responsibility Committee;

8. Committee of Directors;

9. Special Committee for Monitoring High Value Frauds.

Additionally, meeting(s) of Independent Directors, without the attendance of non-independent directors and members of management, were also held during the FY under review.

The details with respect to the composition, terms of reference, numbers of meetings held, attendance of members, etc., of these Board Committees are provided in the Report on Corporate Governance forming part of the Board's Report.

Declaration from Independent Directors

The Bank has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act and Regulation 25(8) of the SEBI LODR that they meet the criteria of independence laid down under Section 149(6) of the Companies Act, read with allied rules, and Regulation 16(1)(b) of the SEBI LODR, respectively. The Board has reviewed the disclosures of independence submitted by the Independent Directors and is of the opinion that the Independent Directors of the Bank fulfil the conditions specified in the Companies Act and SEBI LODR and are independent of the management. In the opinion of the Board, all the Independent Directors possess requisite expertise, experience, integrity and proficiency as required under the applicable laws and policies of the Bank.

Familiarisation Programmes for Independent Directors

The details of the familiarisation programme(s) for the Independent Directors of the Bank are disclosed in the Report on Corporate Governance forming part of the Board's Report.

Board Evaluation

Pursuant to recommendation of the NRC, the Board has framed the 'Performance Evaluation Policy for the Board, Committees, NonIndependent / Whole Time Directors and Independent Directors' (the 'Board PE Policy'), in accordance with the relevant provisions of the Companies Act, the SEBI LODR and SEBI Guidance Note on Board Evaluation. In terms of the Board PE Policy, performance evaluation of the Board and its Committees, Chairman and individual Directors are done on various parameters. Parameters for the Board include various aspects, such as, structure, meetings, appointments, agenda, discussions, roles and responsibilities, evaluation of risks, strategy, governance and compliance, conflict of interest, etc.

Parameters for Board Committees include various aspects, such as, mandate and composition, effectiveness, meetings, agenda, minutes, discussion and dissent, independence, etc.

Parameters for the Directors include various aspects, such as, knowledge and competency, integrity, functioning, commitment, contribution, attendance, initiative, teamwork, communication, corporate governance, updates, etc., and in case of Independent Directors, additional parameters include fulfilment of the independence criteria and their independence from the management.

The evaluation process has been carried out electronically. The Board of Directors has done the evaluation of Independent Directors, excluding the Independent Director being evaluated. Similarly, Independent Directors have done the evaluation of the Board as a whole, Non-Executive Chairman and NonIndependent Directors, including the MD & CEO. The respective Chairmen of Board Committees have done performance evaluation of their respective Committees. Thereafter, the report on performance evaluation of Directors, excluding NRC members, and Chairman was submitted to the NRC, whereas the report on performance evaluation of the Board as a whole, Board Committees and Directors who were NRC members was submitted to the Board for necessary action. The

NRC, after considering the performance evaluation report of Directors, excluding NRC members, made its recommendations to the Board for continuation / re-appointment of Directors. Thereafter, the Board considered the recommendations of the NRC, and report on the performance evaluation of the NRC members, the Board as a whole and the Board Committees. The Board evaluation has provided some valuable inputs for optimising the roles and responsibilities, quality, quantity and timeliness of flow of information between the Bank's management and the Board.

The Board of Directors of the Bank is satisfied with the outcome of the performance evaluation process. They were of the view that the Directors have been discharging their roles and responsibilities as expected by the Board and as required under the applicable regulatory provisions. The Board continues to be duly constituted representing various expertise, skill sets, knowledge and qualification required for the banking business. There was no observation during the performance evaluation of the previous years; and so is the case with the current year.

Appointment of Directors

Appointment of Directors on the Board is guided by the provisions of the BR Act and the guidelines/ circulars issued by the RBI, from time to time, the Companies Act and the SEBI LODR. In view of these provisions, your Bank has adopted a 'Policy on Appointment and Fit & Proper Criteria for Directors'. In terms of this Policy, while appointing directors, the NRC / Board considers fit and proper criteria, various skill sets, professional knowledge, practical experience, integrity, gender diversity and additionally, status of independence in case of Independent Directors. The details of the same have been included in the Report on Corporate Governance forming part of the Board's Report. The Policy on Appointment and Fit & Proper Criteria for Directors was reviewed and suitably amended, by the Board on the recommendations of the NRC, to align it with the regulatory/ statutory changes. The updated Policy is available on the Bank's website at: https://bandhanbank.com/pdfViewerJS/index.

html#../sites/default/files/2022-03/Policy-on-Appointment-and- Fit-and-Proper-Criteria-for-Directors.pdf.

Remuneration Policy

Your Bank has formulated and adopted a comprehensive 'Compensation Policy' for its Directors, Key Managerial Personnel and Employees, in terms of Section 178 of the Companies Act, read with the relevant Rules made thereunder, Regulation 19 of the SEBI LODR and the Guidelines /Circulars issued by the RBI, in this regard, from time to time. The details of the same have been included in the Report on Corporate Governance forming part of the Board's Report. The Compensation Policy was suitably amended, by the Board on the recommendations of the NRC, to include the provision of payment of fixed remuneration to the Non-Executive Directors excluding the Chairman of your Bank, in terms of the RBI Circular dated April 26, 2021. The updated Compensation Policy of your Bank is available on the Bank's website at: https://bandhanbank.com/pdfViewerJS/index.html#../sites/default/files/2022-02/Compensation_Policy_2022.pdf.

Employees Remuneration

As on March 31, 2022, your Bank had 60,211 employees. The statement containing particulars of employees as required under Section 197(12) of the Companies Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are appended separately as Annex - 2(a) and forms part of the Board's report. The ratio of the remuneration of each Director to the median remuneration of the employees of your Bank and other details in terms of Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of the Board's report as Annex - 2(b).

Employee Stock Options

Your Bank has instituted Employees Stock Option Scheme ('ESOP'), i.e., Bandhan Bank Employee Stock Option Plan Series 1 ('ESOP Scheme') to enable its employees to participate in your Bank's future growth and financial success. Your Bank provides its employees with a platform for participating in important decision making and instilling long-term commitment towards the future growth of the Bank by way of rewarding them through stock options. ESOP Scheme of your Bank is in compliance with the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ('SEBI SBEBSE') and no change has been made therein during the financial year under review. The ESOP Scheme is administrated by the NRC. In terms of the ESOP Scheme, the Options would vest not earlier than one year and not later than four years from the date of grant as decided by the NRC /Board. The Options granted shall be equally vested over four years. The exercise period shall be a maximum of five years from the date of the respective vesting of Options. Since your Bank has been allotting fresh equity shares upon exercise of Options, the source of the shares is of primary issuance.

In terms of the Compensation Policy of your Bank and the Shareholders' approved ESOP Scheme, fresh grants have been made during the financial year under review to the eligible employees. Except the MD & CEO, none of the Directors was issued the stock options during the financial year under review.

The information pertaining to the ESOP Scheme as prescribed under SEBI SBEBSE is available on the website of the Bank at https://bandhanbank.com/annual-reports.

Further, as required under SEBI SBEBSE, a certificate from the Secretarial Auditor of the Bank certifying that your Bank has implemented the ESOP Scheme in accordance with the applicable provisions of the SEBI SBEBSE and resolution(s) passed by Shareholders, will be made available electronically at the AGM.

Deposits

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Companies Act, 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 FY ended March 31, 2022, forming part of this Annual Report.

Internal Financial Controls, Audit and Compliance

Your Bank has an Internal Audit Department ('IAD') and a Compliance Department ('CD'), which independently carry out evaluation of the adequacy of all internal controls. These departments ensure that operating and business units adhere to the laid down internal processes and procedures as well as to the regulatory/statutory and legal requirements.

The Compliance Function is one of the key elements in your Bank's corporate governance structure. The compliance starts from the top, and the Board and Senior Management play an important role in driving the compliance culture. Your Bank remains committed to adhere to the highest standards of compliance vis-a-vis regulatory prescriptions and internal guidelines. Your Bank has a robust Compliance Policy, outlining the compliance philosophy, and roles and responsibilities of the CD.

The CD assists the Board and Senior Management in managing the compliance risk of your Bank. The CD ensures that overall business of your Bank is conducted in strict adherence to the guidelines issued by RBI and other regulators, various statutory provisions, standards and codes prescribed by FEDAI, FIMMDA, etc. by evaluating the products / processes, guiding business departments on the various regulatory guidelines with a special emphasis on better understanding of the perspective. It closely works with operational risk and internal audit functions and monitors various activities of your Bank with more emphasis on active risk management.

As the focal point of contact with RBI and other regulatory entities, the CD evaluates the adequacy of internal controls and examines any systemic correction that is required, based on its analysis and interpretation of regulatory guidelines and deviations observed during monitoring and testing. Your Bank has a robust Anti Money Laundering ('AML') framework and tools to manage the AML risk. It periodically apprises the Audit Committee of the Board ('ACB'), the Board and the Senior Management on compliance levels, based on the changes in the external regulatory environment. The CD submits the compliance report to the ACB at regular intervals providing the compliance status with the laws/rules and regulations applicable to the Bank.

The IAD independently carries out audit of various functions in the Bank, primarily to assess the effectiveness of internal control processes and compliance with regulatory guidelines. The Bank has put in place extensive preventive and detective controls including segregation of duty, dual controls, monitoring processes, checking of audit trails, supervisory reviews, etc., to mitigate the various risks emanating from banking business. IAD further ensures independent checks and balances, and adherence to laid down policies and procedures of your Bank and also recommends improvements in operational processes and systems proactively.

To maintain the independence of these departments, the performance evaluation of the Chief Compliance Officer ('CCO') and the Chief Audit Executive ('CAE') is carried out by the ACB.

Considering the internal financial controls, audit and compliance systems of the Bank and the work performed by the auditors, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management under the supervision of the ACB, the Board of Directors is of the opinion that the internal financial controls established and maintained by the Bank are adequate.

Related Party Transactions

There were no materially significant transactions with related parties during the FY 2021-22, which could lead to a potential conflict of interest between your Bank and these parties. Prior omnibus approval is obtained from the ACB for the related party transactions, which are of repetitive nature as well as for the normal banking transactions which cannot be foreseen. The quarterly update on the details of transactions with the related parties, pursuant to the omnibus approval, are placed before the ACB. The Related Party Transactions that were entered, during the FY under review, were on an arm's length basis and were in the ordinary course of business, pursuant to the approval of the ACB. Further, there are no Related Party Transactions required to be reported in Form AOC-2. However, necessary disclosure as required under the Accounting Standards (AS 18) read with RBI's Master Direction No.: RBI/DOR/2021-22/83DOR.ACC.REC. No.45/21.04.018/2021-22 dated August 30, 2021, as may be updated from time to time, has been made in the note no. 18.11 to the annual financial statements for the FY 2021-22. Your Bank has a Policy on dealing with Related Party Transactions, which was suitably amended, by the Board on the recommendations of the ACB, to align it with the changes made in the SEBI LODR. The updated Policy is available on the Bank's website: https:// bandhanbank.com/pdfViewerJS/index.html#../sites/default/files/2022-04/Related_Party_Transaction_Policy_0.pdf.

Particulars of Loans, Guarantees or Investments

In terms of the provisions of Section 186(11) of the Companies Act, the provisions of Section 186 of the Companies Act, except sub-section (1) thereof, do not apply to any loan made, any guarantee given, security provided, or any investment made by a banking company in the ordinary course of its business. However, the particulars of investments made by the Bank are disclosed in the Financial Statements for the FY 2021-22, forming part of this Annual Report, as per the applicable provisions of the BR Act.

Whistle Blower Policy/Vigil Mechanism

Your Bank has adopted the Board approved 'Policy on Vigilance and Whistle Blower Mechanism', as required under Section 177 of the Companies Act, Regulation 22 of the SEBI LODR and applicable circulars issued by the RBI. This Policy aims to provide an avenue to raise concerns on Ethical, Legal or Regulatory violations and promptly addressing them while assuring the confidentiality and protection of the Whistle Blower against any form of retaliation. Your Bank is committed to conduct all its business operations and transactions by maintaining highest ethical, moral and legal standards. Your Bank encourages its employees, all stakeholders and members of general public, who have concerns about suspected misconduct, to come forward and express these concerns without fear of retaliation or unfair treatment.

This Policy aims at putting in place a detailed Protected Disclosure Mechanism based on RBI directions ('Protected Disclosures Scheme for Private Sector and Foreign Banks') and in compliance with the provisions of Whistle Blowing / Vigil Mechanism under the Companies Act, read with the Companies (Meetings of Board and its Powers) Rules, 2014, and the SEBI LODR.

Significant and Material Orders passed by Regulators or Courts or Tribunals

During FY 2021-22, no significant or material orders were passed by any Regulators or Courts or Tribunals against your Bank impacting its going concern status and operations in future. However, during the FY 2021-22, the Reserve Bank of India, vide its order dated July 06, 2021, in exercise of the powers conferred under Section 47A(l)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, had imposed a penalty of Rs 1 Crore on the Bank, on account of contravention of directions contained in Circulars on "Lending to Non-Banking Financial Companies (NBFCs)" and "Bank Finance to Non-Banking Financial Companies (NBFCs)". Your Bank has enhanced its review and monitoring mechanism to avoid such incidents in future.

Statutory Auditors and their Report

In terms of the 'Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs)' dated April 27, 2021 ('RBI Guidelines') issued by RBI, banks shall appoint the Statutory Auditors for a continuous period of three years, subject to the firms satisfying the eligibility norms each year and the approval of RBI on an annual basis. Further, in terms of the RBI Guidelines and the Bank's Policy for Appointment of Statutory Auditors, your Bank is required to appoint two statutory Auditors. Accordingly, the Members of the Bank at the 7th AGM held on August 06, 2021 had approved the appointment of M. M. Nissim & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 107122W/W100672), as the Joint Statutory Auditors of the Bank for a period of three years, to hold office from the conclusion of the 7th AGM until the conclusion of the 10th AGM of the Bank to be held in 2024. M. M. Nissim & Co. LLP is holding the office of Statutory Auditors along with Deloitte Haskins & Sells, Chartered Accountants (ICAI Firm Registration Number 117365W), who will hold office till the conclusion of 8th AGM.

Therefore, the Bank is required to appoint one more audit firm to act as a Joint Statutory Auditor of the Bank in place of retiring auditors, Deloitte Haskins & Sells. Accordingly, on the basis of recommendation of the ACB, the Board of Directors has recommended the appointment of M/s. Singhi & Co., Chartered Accountants (ICAI Firm Registration No. 302049E), as Joint Statutory Auditors of the Bank, for a period of three years to hold office from the conclusion of the 8th AGM until the conclusion of the 11th AGM of the Bank, for the approval of the shareholders at the ensuing AGM, subject to approval of RBI on an annual basis. Approval of RBI has already been received for appointment of M M Nissim & Co. LLP, Chartered Accountants (FRN 107122W/ W100672) and M/s. Singhi & Co, Chartered Accountants (FRN 302049E) as the Joint Statutory Auditors of the Bank for the year 2022-23 for their second year and first year, respectively.

The Report, given by the Joint Statutory Auditors on the financial statements of the Bank for the financial year ended March 31, 2022, forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. Also, no offence of fraud was reported by the Joint Statutory Auditors of the Bank under Section 143(12) of the Companies Act.

Secretarial Auditor and its Report

Pursuant to the provisions of Section 204 of the Companies Act and Regulation 24A(1) of the SEBI LODR, the Board has appointed CS Anjan Kumar Roy, Practising Company Secretary (FCS No.: F5684, C.P. No.: 4557), as the Secretarial Auditor to conduct Secretarial Audit of the Bank for FY 2021-22. Accordingly, the Secretarial Audit Report for FY 2021-22 is enclosed to the Board's Report as Annex - 3. There are no qualifications, reservations, adverse remarks or disclaimers in the Secretarial Audit Report. However, the Secretarial Auditor has made an observation in its report that "The Reserve Bank of India, vide its order dated July 06, 2021, has imposed a penalty of Rs 1 crore on the Bank, in exercise of its powers conferred under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949, on account of contravention of the directions contained in circulars on 'Lending to Non-Banking Financial Companies (NBFCs)' and 'Bank Finance to NBFCs'." This has also been mentioned under the para 'Significant and Material Orders passed by Regulators or Courts or Tribunals'. Further, no offence or fraud was reported by the Secretarial Auditor of the Bank under Section 143(12) of the Companies Act.

Cost Records

In terms of the provisions of Section 148(1) of the Companies Act, read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014, your Bank is not required to maintain cost records and accordingly, is not required to undergo cost audit.

Corporate Governance

Corporate Governance is based on the principles of conducting business with integrity, fairness and being transparent in all transactions, making necessary disclosures. Decisions are made in compliance with the laws of the land, with full accountability and responsibility towards the stakeholders, and a commitment to conducting all business in an ethical manner. Your Bank is committed to achieving the highest standards of Corporate Governance and adhering to the Corporate Governance requirements set by the regulators. A separate section on Corporate Governance standards followed by your Bank and the relevant disclosures, as stipulated under the SEBI LODR, the Companies Act and rules made thereunder, is enclosed to the Board's Report as Annex - 4.

A Certificate from CS Anjan Kumar Roy, Practising Company Secretary (C.P. No. 4557), confirming compliance by your Bank to the conditions of Corporate Governance as stipulated under SEBI LODR, is annexed to the Report on Corporate Governance, which forms part of the Board's Report.

Annual Return

Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of the Companies Act, the draft Annual Return of the Bank, in Form No. MGT-7, as on March 31, 2022, is available on your Bank's website at https://bandhanbank.com/annual-reports. Further, the final Annual Return of the Bank, as on March 31, 2022, will be available on your Bank's website at the said link, upon filing of the same with the Registrar of Companies under Section 92(4) of the Companies Act.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the FY 202122, as prescribed under the SEBI LODR, forms part of the Board's Report, and is enclosed as Annex - 5.

Business Responsibility Report

In terms of the provisions of SEBI LODR, a Business Responsibility Report describing the initiatives taken by your Bank from an environmental, social and governance perspective, forms part of the Board's Report, and is enclosed as Annex - 6.

Integrated Reporting

Your Bank has prepared an Integrated Report based on the principles enunciated by the International Integrated Reporting Council, which has been hosted on the website of your Bank and can be accessed at https://www.bandhanbank.com/annual- reports. The report provides information including financial and non-financial parameters, which would enable the members to make well informed decisions and have a better understanding of your Bank's performance. It also deals with various aspects such as organisational strategy, governance framework, performance and prospects of value creation, based on the six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital, and natural capital.

Compliance with Secretarial Standards

The Board of Directors affirms that your Bank has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India, viz., SS-1 relating to Meetings of the Board and its Committees; and SS-2 relating to General Meetings.

Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Bank has adopted zero tolerance towards any action on the part of any of its employees, which may fall under the ambit of 'sexual harassment' at workplace and is fully committed to uphold and maintain the dignity of every woman constituent associated with your Bank. It takes all necessary measures to ensure a harassment free workplace and has instituted an Internal Committee for redressal of complaints and to prevent/ prohibit sexual harassment, in compliance with the guidelines enumerated in the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. At the beginning of the FY under review, three complaints were pending and during the FY, 13 complaints were received, out of which 14 complaints had been closed during the FY. Two complaints were pending at the end of the FY, which have since been closed.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In our endeavour to achieve aggressive goals to reduce carbon footprints, the conservation of energy has been integrated with the vision of the organisation and its operations. Your Bank has made it mandatory to use BEE Standard Energy Efficient equipment and promote Energy Efficient Building Design ('ECBC') in the upcoming projects. Some of the steps undertaken by your Bank towards conservation of energy are as under:

• Smart building systems to achieve the highest level of efficiency;

• At banking outlets, the focus is on insulation on walls and roof, optimum window wall ratio, premises shape and orientation, and re-engineering and retrofit of equipment;

• Tracking of energy consumptions at all levels and comparing with the best international benchmarks;

• Incorporation of smart meters for energy use monitoring and engagement with key stakeholders, at regular intervals, to drive energy conservation in the organisation culture;

• Inclusion of the latest technologies in air-conditioning and inductive equipment in terms of variable drives and improved IKW (Consumption per Ton) in HVAC;

• Lighting: Incorporation of 100 per cent. LED for lighting, daylight harvesting, timed illumination of signage through central monitoring system. Natural daylight utilization is encouraged in your Bank buildings;

• Daily operations and usage - Conservation through basic hygiene practices on energy usage through occupancy sensors, zoning of electrical circuits and master switches for premises;

• Water Conservation: Ground water recharge facilities through rain water harvesting in upcoming projects, volume flow controls at each sink point, water recycling through STPs.

The details on the Information Technology used by your Bank in its operations have been provided under the section on 'Information Technology at the Bank' in this Report.

The foreign exchange earnings of the Bank was Rs 62.38 lakh (including the net gains arising in all exchanges/derivatives transactions) whereas the foreign exchange outgo was of Rs599.26 lakh during the Financial Year 2021-22.

Human Resource Management

Amidst the tumultuous pandemic phase, your Bank has focused in rapidly adapting the new normal to ensure business continuity in these uncertain times. It has been consistently focused towards adapting Digitization, new e-learning modules across genre and specifically emphasized on its expansion of Branches and Verticals for better penetration across the Country reaching out to every prospective customer. It has set an exemplary example of "Human Empathy" providing COVID-CARE support and work from home facilities for its fellow employees.

During FY 2021-22, your Bank has increased the manpower strength by 22 per cent. from 49,445 in FY2020-21 to 60,211. Your Bank has Pan India network of 1,189 Retail Bank Branches, 4,252 Banking Units and 198 Home Loan Centers. Since inception of your Bank, the manpower has increased by 224 per cent. and your Bank has added 124 per cent. new branches since 2015.

Your Bank understands human motivation and dedicated efforts to achieve the desired goal. Your Bank is intended towards creating a workplace of Resilience, where employees can Re-learn and Reimagine to excel and overcome this phase of turmoil. To provide a platform towards learning and self -growth, your Bank has promoted an aligned architecture as:

• Your Bank has adapted to digital connectivity to connect with talents across the globe with the online mode of interview via MS Team to restrain physical interaction in this pandemic era.

• Competency based grade promotion process to nurture talent and to elevate employee motivation. 14,003 employees promoted during FY 2021-22.

• Succession planning for roles across the Bank. 5,115 employees identified for role elevation during FY 2021-22 in the Bank based on Competency analysis.

• Adaptation towards Digitization for an enhanced employee experience. Introduction of LOS process in Retail Assets, portals like Bandhan Express has also been improvised.

• Revamping the Retail Asset Model, on-boarding more than 1,100 manpower during FY 2021-22 across regions compared to 60 manpower during FY 2020-21. Your Bank proposed 48 Retail Asset centers across the Country to be made Operational.

• Conducting both offline and online mode of Campus Hire creating an energetic talent base. During FY 2021-22, your Bank has covered almost 56 Campus across country hiring 389 Fresh talent recruits across Tiers.

• To nurture and empower the next generation of bankers, your Bank has partnered with Bandhan School of Development Management ('BSDM'), who has obtained affiliation of Maulana Abdul Kalam Azad University of Technology ('MAKAUT') - West Bengal, to offer a Post Graduate Diploma in Banking and Finance. Over 9 Batches Conducted and 603 participants placed across 19 states. Batch X, XI comprising 106 students to be on-boarded by July' 2022. Batch XII comprising 69 students have been initiated in February, 2022.

• Your Bank continued extending empathetic support towards staff, providing HOMECARE facilities towards COVID-19 affected employees. Your Bank has extended support towards 2,146 staffs during FY 2021-22. Besides, it also provided in house COVID vaccination for employees based across regions and at Head Office.

• Empaneled with Organizations like Gallup for a focused emphasis on Employee Survey to further improvise employee experience with your Bank.

Over the journey of more than 6 years, your Bank has strengthened its workforce by 3.2X resulting in an exciting blend of the old and new, in a culture of values-driven growth, professionalism, and ethical governance. A committed and dedicated workforce is the fundamental base towards strengthening the Bandhan Bank approach towards resilience. Our Human Resources Management strategy is focused in emphasizing a supportive, engaging & collaborative work environment, remaining customer-centric, performance driven and absolutely future ready.

Risk Management

Your Bank is in the business of managing the risks inherent to the financial services industry as it aims to create maximum value for shareholders, clients, employees and communities. The ability to manage risk is a core competency of a bank, and is supported by strong risk conduct and risk-aware culture. Your Bank's view of risks is dynamic, reflecting the pace of change in the financial services industry.

Integrated Risk Management Framework

Your Bank operates an Integrated Risk Management Framework, which is centered on the embedding of a strong risk culture. The framework ensures that the tools and capability are in place to facilitate risk management and decision-making across the organisation. Risk appetite, supported by a robust set of principles, policies and practices, defines the levels of tolerance for a variety of risks and provides a structured approach to risk-taking within agreed boundaries.

All Bank colleagues share ownership of the way the risk is managed, working together to make sure business activities and policies are consistent with risk appetite. The methodology for setting, governing and embedding risk appetite has been further enhanced with the introduction of Long Term Risk Appetite with the aim of increasing alignment with strategic planning and external threat assessments.

Risk Appetite

Risk appetite defines the levels and types of risk that are acceptable, within risk capacity, in order to achieve strategic objectives and business plans. It links the goals and priorities to risk management in a way that guides and empowers staff to serve customers well and achieve financial targets.

The risk appetite framework, which is approved annually by the Board, bolsters effective risk management by promoting sound risk-taking through a structured approach, within agreed boundaries. It also ensures that emerging risks and risk-taking activities, which would be out of appetite, are identified, assessed, escalated and addressed in a timely manner.

Your Bank's risk profile is a holistic representation of all risks that it holds at a point in time, in the form of a dashboard. Your Bank monitors its risk profile, and the Board quarterly reviews reports and analysis concerning its risk profile.

Risk Culture

In your Bank, risk culture is at the centre of both the risk management framework and risk management practice. The target culture across is one in which risk is part of the way employees work and think. The desired risk culture behaviours are aligned to your Bank's core values, therefore, forming an effective basis for risk culture since these are used for performance management, recruitment and development.

The Board and Senior Management sets the "tone at the top" by supporting a strong culture, defined by the Bank's expectations, that guides how employees conduct themselves, work with colleagues, and make decisions. Employees are strongly encouraged and expected to speak up as and when they see something that could cause harm to any stakeholder of the Bank, risking its reputation. This is because risk management is everyone's responsibility, all employees are expected to challenge risk decisions when appropriate and to escalate their concerns when they have not been addressed appropriately. Your Bank has a well-defined Whistle Blower Policy in place.

Conduct Risk

Conduct risk is the risk of inappropriate, unethical, or unlawful behaviour on the part of employees or individuals acting on behalf of the Bank or from deliberate or unintentional business actions or business practices that may be detrimental in the interest of the Bank, its customer or market. Your Bank has, since its inception, considered conduct risk as a very important parameter and critical for robust Internal Control Environment. The Risk Management Committee of the Board ('RMCB') reviews the conduct risk components as part of your Bank's risk culture.

Risk Identification and Measurement

In your Bank, the risk identification and measurement within the risk management process comprise:

• Regular assessment of the overall risk profile, incorporating market developments and trends, as well as external and internal factors.

• Monitoring of the risks associated with lending and credit exposures.

• Assessment of trading and non-trading portfolios.

• Review of potential risks in new business activities and processes.

• Analysis of potential risks in any complex and unusual business transactions.

Risk Treatment and Mitigation

Risk treatment and mitigation is an important aspect of ensuring that risk profile remains within risk appetite. Your Bank's risk mitigation strategies are discussed and agreed with the businesses.

When evaluating possible strategies, costs and benefits, residual risks (risks that are retained) and secondary risks (those that are due to risk mitigation actions) are considered.

Stress Testing

Stress testing is a key risk management tool and a fundamental component of your Bank's approach to capital management. It is used to quantify and evaluate the potential impact of specified changes to risk factors on the financial strength of the Bank, including its capital.

Your Bank's Stress testing includes Scenario testing, which examines the impact of a hypothetical future state to define changes in risk factors as also Sensitivity testing, which examines the impact of an incremental change to one or more risk factors. These are reviewed and agreed by senior management through senior committees, including the Executive Risk Committees, the Board Risk Committee (i.e., RMCB) and the Board.

Your Bank has also started to carry out Reverse stress testing, in order to identify circumstances that may lead to specific, defined outcomes.

Internal Capital Adequacy Assessment Process ('ICAAP')

The examination of capital requirements under normal economic and adverse market conditions enables your Bank to determine whether its projected business performance meets internal and regulatory capital requirements. The examination of capital requirements under adverse economic and market conditions is assessed through stress testing. Your Bank carries out an internal assessment of material risks annually to enable an evaluation of the amount, type and distribution of capital required to cover these risks. This is referred to as the ICAAP. The ICAAP consists of a point-in-time assessment of exposures and risks at the end of the FY, together with a forward-looking stress capital assessment. The ICAAP is approved by the Board and submitted to the RBI.

Risk Management Framework

Your Bank's Risk Management Framework sets forth the core principles on how the Bank seeks to manage and govern its risk. Many Bank policies and documents anchor to the risk management framework's core principles.

The Board of Directors has the overall responsibility for your Bank's Risk Management, including culture and governance framework. The RMCB assists the Board in discharging these responsibilities, effectively. The RMCB annually reviews and approves the risk management framework.

Your Bank's utmost priority is to strengthen by building the right risk and control infrastructure. Your Bank continues to enhance its risk management programmes, including the non-financial risk management, in accordance with Industry's best practices and regulatory guidelines. The Board assesses management's performance, provides credible challenges, and holds management accountable for maintaining an effective risk management programme and for adhering to risk management expectations.

The RMCB also oversees the Risk Management Department ('RMD') and the performance of the Chief Risk Officer ('CRO'), who reports functionally to the RMCB and administratively to the MD & CEO.

In addition, the CRO has the authority to escalate risks and issues directly to the RMCB.

Major Risks and Emerging Risks

An important component of your Bank's risk management approach is to ensure that Major risks and emerging risks, as they evolve, are identified, managed, and incorporated into its existing risk management assessment, measurement, monitoring and escalation processes. These practices ensure that a forwardlooking risk assessment is maintained by management in the course of business development and as part of the execution of ongoing risk oversight responsibilities. Senior management and the Board discuss top and emerging risks on a regular basis.

Operational Risk

Operational risk is the risk resulting from inadequate or failed internal processes, people and systems, or external events.

Your Bank is committed to providing uninterrupted service to its customers and therefore, to ensure business resilience and continuity of the various operational units, a Business Continuity Management Framework has been put in place with the objective to recover critical activities and systems within defined timelines; the safety of people and its assets; communicate with stakeholders during an emergency; manage reputation risk, etc.

Your Bank has also initiated model-based approach for measurement of Operational Risk VaR.

Your Bank has also in place, robust Fraud Risk, Outsourcing Risk and Legal Risk Frameworks within its Operational Risk Management.

Regulatory Risk

Your Bank recognizes the increased importance of regulatory risk. It keeps a close watch on the developments in the regulatory environment and analyses the expected impact of new regulatory guidelines on your Bank's businesses and strategy. Your Bank also reviews the trend of regulatory observations for identifying the pattern of observations, major risk areas and emerging risk to keep the risk under control. Your Bank has done a comprehensive analysis of the Regulator's supervisory observations over the years to increase the robustness of its regulatory compliance.

Information Security and Cyber Risks

Information security and cyber risks remain as major risks, not only for the financial services sector, but for other industries worldwide. Your Bank is also subject to heightened risks in the form of cyber-attacks, data breaches, cyber extortion and similar compromises, due to the increase in size and scale in nature of operations as also clients' use of personal devices as the Bank has little or no control over the safety of these devices. As the volume and sophistication of cyber-attacks continue to increase, the resulting implications could include business interruptions, service disruptions, financial loss, theft of intellectual property and confidential information, litigation, enhanced regulatory attention and penalties, and reputational damage.

Your Bank has not experienced any material loss relating to these or other types of cyber-attacks. Cybersecurity risk is a priority for your Bank, and we continue to develop and enhance our controls, processes and systems in order to protect our networks, computers, software and data from attack, damage or unauthorised access. Your Bank is also proactively involved in industry cybersecurity efforts and working with other parties, including our third-party service providers and governmental agencies, to continue to enhance defences and improve resiliency to cybersecurity threats.

Your Bank has set-up its own independent 24x7 C-SOC (Cyber Security Operations Centre) for a state-of-art centralized and consolidated cybersecurity incident prevention, security event monitoring, detection and response capabilities to take into account proactive monitoring and management capabilities with sophisticated tools for detection, quick response and backed by data and tools for sound analytics.

Credit Risk

Your Bank defines credit risk as the risk of loss associated with a borrower or counterparty default (failure to meet obligations in accordance with agreed upon terms). Credit risk exists with many of our assets and exposures, such as, debt security holdings and loans.

Your Bank balances the risk and return by setting certain objectives, e.g., ensuring credit quality is not compromised for growth; mitigating credit risk in transactions, relationships and portfolios; using our credit risk rating and scoring systems or other approved credit risk assessment or rating methodologies, policies and tools; pricing appropriately for the credit risk taken; detecting and preventing inappropriate credit risk through effective systems and controls; applying consistent credit risk exposure measurements; ongoing credit risk monitoring and administration; and avoiding activities that are inconsistent with our values, code of conduct or policies.

Climate-related Financial Risks

Climate-related financial risks refer to the potential risks that may arise from climate change or from efforts to mitigate climate change, their related impacts and their economic and financial consequences. These risks are, typically, classified as physical and transition risks. Physical impacts include the potential economic costs and financial losses resulting from the increasing severity and frequency of extreme climate-change related events, and longer- term progressive shifts in the climate whereas transition impacts relate to the process of adjusting to a low-carbon economy. Your Bank has identified the Physical Risk in the Bank's certain portion of its advance book, which is prone to natural calamities, such as, flood and cyclone. Your Bank is presently having provision in its Credit Policy to support green financing and considering proposals from such segments to encourage green financing. Your Bank's Liability Risks arising from people, businesses seeking compensation for losses suffered from physical, or transition risks, e.g., floods, pollution, etc., is minimal as your Bank's major loan exposure is into retail and micro finance segment and limited portfolio is under large segment.

Market Risk

Market risk is the risk of possible economic loss from adverse changes in market risk factors, such as, interest rates, credit spreads, foreign exchange rates, equity and commodity prices, and the risk of possible loss due to counterparty exposure. This applies to implied volatility risk, basis risk, and market liquidity risk. Value- at-risk ('VaR') is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets. Your Bank uses VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. Treasury Mid-office, under the Risk Management function, aggregates and monitors all exposures to ensure risk measures are within its established risk appetite.

Asset/Liability Management

Asset/Liability Management involves evaluating, monitoring and managing interest rate risk, market risk, liquidity and funding. Interest rate risk, which potentially can have a significant earnings impact, arises because assets and liabilities may mature or reprice at different times, assets and liabilities may reprice at the same time but by different amounts, short-term and long-term market interest rates may change by different amounts, the remaining maturity of various assets or liabilities may shorten or lengthen as interest rates or interest rates may also have a direct or indirect effect on loan demand, collateral values, credit losses, mortgage origination volume, etc. Your Bank assesses interest rate risk by comparing outcomes under various net interest income simulations using many interest rate scenarios that differ in the direction of interest rate changes, the degree of change over time, the speed of change and the projected shape of the yield curve. The objective of effective liquidity management is to ensure that the Bank can meet customer loan requests, customer deposit maturities/withdrawals and other cash commitments efficiently under both normal operating conditions and under periods of Bank-specific and/or market stress. To achieve this objective, the Board establishes liquidity guidelines that require sufficient asset- based liquidity to cover potential funding requirements and to avoid over-dependence on volatile, less reliable funding markets. Your Bank has always maintained healthy Liquidity ratios; Liquidity Coverage Ratio ('LCR'), much above the regulatory minimum LCR requirement by having significant HQLA ('High Quality Liquid Assets') as also the Net Stable Funding Ratio ('NSFR'), which is measured as the proportion of long-term assets that are funded by stable sources.

Strategic Risk

Strategic risk is the risk that the enterprise or particular business areas will make inappropriate strategic choices, or will be unable to successfully implement selected strategies or achieve the expected. Your Bank is monitoring the strategic risk by tracking the continuous validity of the assumptions made in forming the strategic plan and their alignment with the macro-economic environment as also the status of your Bank's strategy plans vis-avis achievements. Your Bank has conducted a mid-term risk review of its five-year strategic plan during the year under review and the Board has directed for the required directional changes.

Business Risk

Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than taking a profit. Your Bank has a robust Business Risk Management Framework in place, which cascades the Bank's risk appetite statement into actionable metrics, including various financial indicators, as well as the Bank's competitive position in the industry, which helps the Board to monitor the same.

Reputational Risk

Your Bank's reputation is rooted in the perception of its stakeholders, and the trust and loyalty they place in us is core to our purpose as a financial services organization. Your Bank is fully aware of the importance of reputational risk, and has put reputation as one of the anchors (along with earning, capital and liquidity) for finalising its risk appetite and has a Reputation Risk Dashboard as part of Enterprise Risk Dashboard, which is reviewed by the Board at quarterly intervals. Your Bank's Reputational Risk Management Framework consists of integrated parameters, which may influence various stakeholders. Your Bank has started measuring the idiosyncratic risks related to stock price movement, as also social as well as traditional media sentiments, complaints, regulatory action, etc.

Information Technology at the Bank

Information Technology has been a pivotal role player in the promising journey of your Bank. Few major initiatives taken during the FY 2021-22 are mentioned below:

• Application portfolio rationalization to enter banking enterprise landscape is underway.

• Started migrating data and functionalities from old Core Banking Solution ('CBS') to modern high scalable and reliable Core Banking Platform.

• Migration of Aadhaar number to a secured Aadhaar vault.

• Migration of Home Loan application from existing legacy system to modern resilient architecture.

• ISO 20022 based domain model standardization for all Banking APIs through a scalable and resilient API Gateway.

• In process of introducing assisted intelligence, while detecting early warning, using Artifical Intelligence ('AI').

• Replacing a series of applications, including Card Management Systems, Treasury System, Cash Management Solution, etc., to a modern, scalable, high available and resilient solution.

IT Infra related enhancements:

• Your Bank has set up its own Data Center ('DC') and Disaster Recovery ('DR') Center and Near DR ('NDR') site with state- of-the-art technology to ensure Zero Data loss of sensitive banking information.

• Built resilient back-up and replication technology to have data backup in Primary DC as well as in DR site.

• Setting-up high performance, advanced, state-of-the-art technology for Server/Storage/Network/Virtualization for smooth transformation to a new CBS.

• The security of the DC has been strengthened by deploying the controlling solutions, like, Database Access Monitoring ('DAM'), Mobile Device Management ('MDM').

• In order to facilitate undisrupted support and service, advanced Work from Home ('WFH') solution has been implemented.

• Privileged Access Management ('PIM') has been implemented to ensure that administrators have only the necessary levels of access to execute their jobs. This enabled secured access and better control on user management.

• ID Access Management ('IDAM') has been implemented to provide a common platform for access and identity management information to help employees to use common passwords for all applications which will be used under IDAM solution.

• Your Bank has set-up a Network Operating Centre ('NOC') in its premises to manage and monitor the Branch and DC links.

Material Changes and Commitment Affecting Financial Position of the Bank

There were no material changes and commitments, affecting the financial position of the Bank, which has occurred between the end of the FY of the Bank, i.e., March 31, 2022, to which the financial statements relate, and the date of this Board's Report.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, the Directors hereby confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the Bank's state of affairs as on March 31, 2022, and of its profit for the FY ended on that date;

iii. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

iv. We have prepared the annual accounts on a going concern basis;

v. We have laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and are operating effectively; and

vi. We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Acknowledgements and Appreciations

The Board of Directors of your Bank extends its gratitude for the invaluable support and guidance received from the Reserve Bank of India, other government and regulatory authorities, and financial institutions. The Board also thanks the correspondent banks for their cooperation and help. The Board acknowledges the support of its shareholders, and also places on record its sincere thanks to its valued clients and customers for their patronage.

The Board also expresses its deep sense of appreciation to all the employees for displaying their strong work ethics, excellence at work, professionalism, teamwork, commitment and initiative, which has led to the Bank making good progress in today's challenging environment. Further, the Board extends its special thanks for the unmatched efforts put in by the employees of the Bank, during these testing times caused due to the ongoing COVID-19 pandemic, to provide uninterrupted services to the customers and is deeply grateful and has immense respect for everyone who risked their life and safety to fight this pandemic, and deeply regrets the loss of life. Your Board will continue to strive for improvements as your Bank continues on its unique journey towards financial inclusion.

For and on behalf of the Board of Directors
Bandhan Bank Limited
Anup Kumar Sinha
Place: Kolkata Non-Executive (Independent) Chairman
Date: July 13, 2022 (DIN: 08249893)

   

Bandhan Bank Ltd Company Background

Anup Kumar SinhaChandra Shekhar Ghosh
Incorporation Year2014
Registered OfficeDN 32 Sector V,Salt Lake
Kolkata,West Bengal-700091
Telephone91-33-66090909,Managing Director
Fax91-33-66090502
Company SecretaryIndranil Banerjee
AuditorDeloitte Haskins & Sells/M M Nissim & Co LLP
Face Value10
Market Lot1
ListingBSE,NSE,
RegistrarKFin Techologies Ltd
Karvy Selenium Tow-B,31&32 Financial Dist,Nanakramguda ,Hyderabad-500032

Bandhan Bank Ltd Company Management

Director NameDirector DesignationYear
Ashok Kumar LahiriPart Time Chairman2017
Chandra Shekhar GhoshManaging Director & CEO2022
Holger Dirk MichaelisNominee2022
Thekedathumadam Subramani Raji GainNon-Exec. & Independent Dir.2022
Indranil BanerjeeCompany Secretary2022
ALLAMRAJU SUBRAMANYA RAMASASTRINon-Exec. & Independent Dir.2022
Santanu MukherjeeNon-Exec. & Independent Dir.2022
Anup Kumar SinhaChairman & Independent Directo2022
NVP TendulkarNon-Exec. & Independent Dir.2022
Vijay N BhattNon-Exec. & Independent Dir.2022
Suhail ChanderNon-Exec. & Independent Dir.2022
Subrata Dutta GuptaIndependent Director2022
Ms Divya KrishnanNon-Exec & Non-Independent Dir2022
Aparajita MitraNon-Exec. & Independent Dir.2022
Philip MathewNon-Exec. & Independent Dir.2022

Bandhan Bank Ltd Listing Information

Listing Information
BSE_500
BSE_100
BSE_200
BSEDOLLEX
CNX500
BSEBANKEX
BANKNIFTY
CNXMIDCAP
CNXMID50
CNX200
BSECARBONE
BSEALLCAP
BSELARGECA
BSEFINANCE
NFTMIDLQ15
NFTPVTBANK
SENSNEXT50
LMI250
BSEDFINRVG
BSE100LTMC
BSEPVTBNK
NFTYLM250
NFTYMC150
NFTYMSC400
NF500M5025

Bandhan Bank Ltd Finished Product

Product NameUnit Installed
Capacity
Production
Quantity
Sales
Quantity
Sales
Value
Interest/discount on adv billsRs.00012183.896
Income on InvestmentsRs.0001478.3033
Interest on balance with RBIRs.000140.5144
OthersNA00068.4065

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