Your Directors take great pleasure in presenting the sixth AnnualReport on the business and operations of your Bank together with the audited financialstatements for the financial year ('FY') ended March 31 2020.
Financial Performance of the Bank
The financial highlights for the financial year under review arepresented below:
| || ||(Figures Rs. In Crore) |
| ||For year ended |
|Particulars ||March 31 2020 ||March 31 2019 |
|Deposits: ||57081.50 ||43231.62 |
|- Savings Bank Deposits ||17726.99 ||14008.04 |
|- Current Account Deposits ||3301.47 ||3609.69 |
|- Term Deposits ||36053.04 ||25613.89 |
|Advances (Net): ||66629.95 ||39643.39 |
|- Cash credits overdrafts and loans repayable on demand ||1274.80 ||975.84 |
|- Term loans ||65355.15 ||38667.55 |
|Total Assets/Liabilities ||91717.80 ||56441.71 |
|Net Interest Income ||6323.91 ||4495.42 |
|Non-Interest Income ||1549.20 ||1063.05 |
|Operating Expenses (excluding depreciation) ||2346.28 ||1732.11 |
|Profit before Depreciation Provisions and Tax ||5526.83 ||3826.36 |
|Depreciation ||80.26 ||78.17 |
|Provisions ||1393.15 ||735.14 |
|Profit before Tax ||4053.42 ||3013.05 |
|Provision for Tax ||1029.68 ||1061.55 |
|Profit After Tax ||3023.74 ||1951.50 |
|Balance in Profit & Loss Account brought forward from previous year ||3283.64 ||2057.60 |
|Opening Profit & Loss Account balance adjustment on account of amalgamation ||(64.55) ||- |
|Appropriations: || || |
|Transfer to Statutory Reserves ||755.94 ||487.87 |
|Transfer to Statutory Reserve u/s 36(1)(viii) of Income Tax Act 1961 ||103.12 ||- |
|Transfer to Capital Reserve ||11.45 ||5.94 |
|Transfer to Investment Reserve ||5.16 ||- |
|Transfer to Investment Fluctuation Reserve ||- ||87.85 |
|Dividend Paid (Including Dividend Distribution Tax) pertaining to previous year paid during the year ||608.45 ||143.80 |
|Balance carried over to Balance Sheet ||4758.71 ||3283.64 |
|EPS (Basic) ||18.78 ||16.03 |
|EPS (Diluted) ||18.76 ||16.01 |
State of Affairs Of the Bank
Your Bank had commenced its business on August 23 2015 and withinfive years of its opertation it has grown to 4559 banking outlets as on March 31 2020.During the financial year the number of banking outlets that have been added in thenetwork is 559. Out of the total number of 4559 banking outlets 35 per cent were inrural 36 per cent in semi-urban 19 per cent in urban and 10 per cent were in metro. Thenumber of customers has increased from 1.66 crore as on March 31 2019 to 2.01 crore as onMarch 31 2020. With the expanding network of banking outlets and customers the totaldeposits increased from Rs. 43231.62 crore as on March 31 2019 to Rs. 57081.50 crore ason March 31 2020 registering an increase of 32.04 per cent. The Current Account andSavings Account ('CASA') deposits also increased from Rs. 17617.73 crore to Rs.21028.46 crore which is an increase of 19.36 per cent.
During the year under review the total income of the Bank increased by41.65 per cent. to Rs. 7873.11 crore as against the total income for FY 2018-19 of Rs.5558.47 crore. The profit after tax ('PAT') as at the end of the financial year underreview was Rs. 3023.74 crore an increase of 54.94 per cent. over the previous financialyear of Rs. 1951.50 crore. Further Return on Average Equity ('ROAE') was 21.07 per centin FY 2019-20 as against 19.00 per cent. in FY 2018-19. Return on Average Asset ('ROAA')was 3.64 per cent in FY 2019-20 as against 4.23 per cent in FY 2018-19. The Bank's basicearnings per share ('EPS') increased from Rs. 16.03 to Rs. 18.78 and diluted earnings pershare from Rs. 16.01 to Rs. 18.76 as at the end of FY 2018-19 and FY 2019-20respectively. The net interest margin ('NIM') was 8.12 per cent in FY 2019-20 as against10.43 per cent. in FY 2018-19.
One of the primary objectives of the Bank is to promote financialinclusion thereby inducting the disadvantaged sections of the society into the bankingspace. Towards this objective your Bank has been providing various banking services tothe underserved by way of Priority Sector Lending ('PSL'). The Reserve Bank of India('RBI') has mandated PSL of minimum 40 per cent of advances for all banks. During FY2019-20 your Bank's PSL went up from Rs. 37888.15 crore (net of IBPC of Rs. 4541.45crore) on March 31 2019 to Rs. 60640.98 crore (net of IBPC of Rs. 4612.70 crore) onMarch 31 2020 of which Rs. 56805.75 crore was sold to other banks falling short of PSLtargets by way of Priority Sector Lending Certificate ('PSLC') (as against the previousyear of Rs. 28895 crore). At the end of FY 2019-20 PSL as a proportion of the grossadvances of Rs. 67233.33 crore (after IBPC) was 90.19 per cent (including PSLC).
Your Bank has two types of banking outlets: bank branches catering togeneral banking customers and Banking Units ('BU') catering to micro banking customers.Your Bank offers a wide array of loans to benefit small business owners in need offinancial assistance. It also helps in the growth of additional income generation avenuesand offers enhanced opportunities to small entrepreneurs to achieve their business goals.
Each BU is linked to a bank branch for operational convenience. BUs areself-sufficient and empowered to open deposit accounts using tablets and also open loanaccounts after necessary credit bureau(s) checks. The highlight of BUs operations is theTABs that are connected to the Core Banking System (CBS) through cellular data. YourBank's Relationship Officers carry these TABs in their group meetings and the entireinstalment reconciliation for the customer happens through these TABs in real time. Toensure timely and effective support to the BUs in their day-to-day functioning the Bankhas a structure comprising a territory and a central operations team. These operationsteams maintain oversight of the quality of the operations and adherence to prevalentguidelines at all times. Your Bank lays significant emphasis on processes and controls tohelp maintain uniform and consistent standards in transaction processing and servicedelivery as well as compliance with regulatory and statutory guidelines.
Your Bank's microfinance strategy is guided by its philosophy offinancial inclusion and economic empowerment of the disadvantaged sections of society.During FY 2019-20 your Bank opened 332 new BUs Pan-India with sole focus of financialinclusion. Your Bank's commitment to financial inclusion is also reflected from the factthat it offered loans of 2260958 new borrowers during FY 2019-20. The growth of over19.61 per cent in the aggregate micro banking asset portfolio from Rs. 38614.60 crore toRs. 46189.00 crore during FY 2019-20 is another indicator of the Bank's commitment.
Your Bank now has micro banking loans in ten categories to cater betterto the demands of the customers:
a. Suchana Loan: Loan size is from Rs. 1000 to Rs. 25000 (noprocessing fee) and is sanctioned to micro banking customers for income generatingactivities.
b. Srishti Loan: Loan size is from Rs. 25001 to Rs. 150000 and issanctioned to micro banking customers for expanding their business.
c. Suraksha Loan: Loan size is up to Rs. 10000 and is sanctioned tomicro banking customers to meet emergency expenses due to health issues.
d. Susikhsha Loan: Loan size is up to Rs. 10000 and is sanctioned tomicro banking customers to meet expenses towards education of their children.
e. Su Briddhi: Sanctioned to micro banking customers to meet extrabusiness requirement during their ongoing loan and extra capacity to repay.
f. Samadhaan: Loan size up to Rs. 15000 sanctioned to existing microbanking customers to meet financial requirement to run and grow their business duringnationwide lockdown due to COVID-19.
g. Micro Enterprise loan: Loan size from Rs. 151000 to Rs. 300000for customer who have completed 4 cycle of our core micro banking product.
h. Micro Bazaar Loan: Loan size from Rs. 26000 to Rs. 150000 forsmall entrepreneurs who have fixed place to deliver their service to meet their workingcapital.
i. Samriddhi Business Loan: Loan size from Rs. 75000 to Rs. 300000matured microbanking borrowers who have shown considerable success in their endeavor.
j. Su Awas: Loan size is up to Rs. 1000000 and is sanctioned tomicro banking customers to meet renovation or new construction of their homes.
Under the Small Enterprises Loan ('SEL') scheme loans between Rs. 1lakh and Rs. 10 lakh are offered for income generating activities of small enterpriseswhich are described as enterprises with equipment investments below Rs. 25 lakh. SEL hashelped your Bank to enhance its objective of financial inclusion with significant increasein lending to small enterprises. As on March 31 2020 total SEL loan outstanding was Rs.2065.95 crore from 84140 customers as against Rs. 1497.36 crore from 84787 customersas on March 31 2019 a growth of 38 per cent. which has been acheived through its networkin 946 bank branches.
During the financial year under review your Bank acquired GRUH FinanceLimited ('GRUH') with an all-stock deal where 568 equity shares of Rs. 10 eachfully paid-up of the Bank was issued for every 1000 equity shares of Rs. 2 each fullypaid-up of GRUH held as on October 17 2019 being the record date for that purpose.Accordingly the Bank issued 416948659 equity shares to the shareholders of GRUH.Further on the effectiveness of the Scheme of Amalgamation on October 17 2019 GRUHamalgamated with the Bank and dissolved without winding up and consequently all assetsliabilities claims properties employees etc. of GRUH were transferred to the Bank ason January 01 2019 being the appointed date including 195 GRUH centres which becamebanking outlets of the Bank.
Your Bank has also forayed into the distribution of third- partyproducts/services which are made available through designated bank branches. The businesssegment began with the distribution of Mutual Funds in FY 2017-18 and at present the Bankdistributes mutual funds standalone health insurance policies general insurance andlife insurance products. As on March 31 2020 the Bank distributes mutual funds through534 branches across various metros and urban locations and through 60 semiurban branches.Currently your Bank is distributing standalone health insurance policies across allbranches and general insurance and life insurance products through 699 branches. Besidesyour Bank has also launched a co-branded credit card with Standard Chartered Bank. Theresponse for the products has been quite encouraging so far. It helps the customers of theBank to avail of insurance products if needed. It also helps your Bank to explore otherbusiness opportunities with a view to diversify its business risks. The use of technologyhas helped your Bank to offer the best possible services to its ever increasing number ofcustomers including those at the bottom of the pyramid. Customer grievances if any areaddressed in a structured and satisfactory manner.
COVID - 19
At the end of the financial year under review COVID-19 spread acrossthe world resulting in a global crisis. Almost all the countries in the world wereaffected infecting millions of people.
India also started to see the impact by March 2020 with a rising numberof people getting infected across the country. In order to enforce social distancing tocontain the spread of the disease the lockdown was imposed across the country whichaffected various business segments in manufacturing and service sectors. The Government ofIndia and the Reserve Bank of India (RBI) had announced several measures to contain theadverse economic impact on business caused by this pandemic.
Your Bank abided by the advisories issued by the Central GovernmentState Governments and various statutory and regulatory authorities from time to time. Inenforcing social distancing and keeping the safety of employees in mind the bankingoutlets across the country and the head office were operating in accordance with theguidelines/directions issued by various statutory regulatory and local authorities.
Your Bank has proactively leveraged technology enabling a majorportion of the workforce to work from home. Moreover to effectively manage operationsand cater uninterrupted services to the customers during this difficult times your Bankhas triggered its business continuity plan. Your Bank managed to run its operationssmoothly with limited staff across branches. Despite this constraint operations were asper the prescribed business hours during the day and cash was made available in the ATMsso as to provide uninterrupted financial services to the customers. At all times duringthe pandemic your Bank had managed to keep its services open to customers. Your Bank hasengaged with its customers through digital channels and contact centers with the objectiveof catering to their banking needs as well as enquiring about their well-being duringthese extraordinarily difficult times. Your Bank has also supported the customersmarginalised section of the society residing in its operational areas.
Your Bank has taken multiple measures to ensure a safe environment forits employees and customers such as:
Regular sanitisation of the branches ATMs currency notestemperature check at premises.
Distribution of Hand Sanitisers for banking outlets.
Maintaining social distancing norms through effective floormanagement.
Touching base with all existing customers and enquiring abouttheir well-being.
Adopting new digital initiatives.
Community outreach initiatives.
As far as economic policies are concerned the RBI announced on March27 2020 and April 17 2020 'COVID-19 Regulatory Package' on asset classification andprovisioning. In terms of the RBI guidelines the lending institutions have been permittedto grant a moratorium of three months on payment of all instalments/interest asapplicable falling due between March 01 2020 and May 31 2020 ('moratorium period').In this regard a Board approved policy has been implemented by your Bank. Information hasbeen hosted on the website of the Bank. Customers of the Bank can place their requestthrough banking outlets and call centres. Your Bank extended support to its deservingborrowers by granting moratorium in line with the regulatory package. As such in respectof all accounts classified as standard as on February 29 2020 even if overdue themoratorium period wherever granted shall be excluded by the lending institutions fromthe number of days past-due for the purpose of asset classification under RBI's IncomeRecognition and Asset Classification norms. Your Bank made provisions as on March 31 2020amounting to Rs. 690 crore against the potential impact of COVID-19 on standard assetsbased on all available information at that point of time. This includes Rs. 64 crore asthe minimum amount required as prescribed by the RBI in terms of circular dated April 172020; while RBI has permitted this amount to be spread over two quarters the Bank decidedto provide for the entire amount in quarter ended March 31 2020.
The extent to which the COVID-19 pandemic would impact the Bank'sprovision on assets and future results will depend on future developments which arehighly uncertain. This uncertainty relates to among other things any new informationconcerning the severity of the COVID-19 pandemic and any action to contain its spread ormitigate its impact. Some of these actions will be determined by policies at the nationallevel while others will be determined by measures adopted by the Bank. Given theuncertainty over the macro-economic condition the impact of the global health pandemicmay be different from that estimated as at the date of this report and the Bank willcontinue to closely monitor any material changes in economic conditions.
Your Bank has a dividend policy that inter alia balances theobjectives of appropriately rewarding shareholders and retaining capital to maintain ahealthy capital adequacy ratio. Pursuant to Regulation 43A of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 ('SEBILODR') the Board of Directors of the Bank have adopted a dividend policy which is inline with the parameters prescribed by the RBI and the SEBI for distribution of dividend.The policy is available on the Bank's website: https://www.bandhanbank.com/view-pdf.aspxRs. FileName=Dividend-Policy.pdf.
The RBI vide its Circular No. RBI/2019-20/218 DOR.BP.BC.No.64/21.02.067/2019-20 dated April 17 2020 has decided that all banks shall not make any furtherdividend payouts from profits pertaining to the financial year ended March 31 2020 untilfurther instructions which will be reassessed by the RBI based on the financial resultsof banks for the quarter ending September 30 2020. Accordingly in compliance with theabove Circular issued by RBI the Board of Directors of the Bank has not recommended anydividend for the financial year ended March 31 2020.
Transfer to Reserves
In line with the RBI regulations the Bank has transferred an amount ofRs. 755.94 crore to the statutory reserve during the financial year ended March 31 2020.
Issuance of Equity Shares & Capital Adequacy Ratio
During the financial year under review your Bank has issued 216329equity shares of Rs. 10 each pursuant to exercise of stock options by the eligibleEmployees of the Bank aggregating to Rs. 2163290. Moreover the Bank has also issued416948659 equity shares of Rs. 10 each to the eligible shareholders of GRUH on October21 2019 (date of allotment) pursuant to the amalgamation of GRUH into and with the Bank.
Post allotment of aforesaid equity shares the issued subscribed andpaid-up share capital of your Bank stood at Rs. 16102478430 comprising 1610247843equity shares of Rs. 10 each fully paid-up as on March 31 2020.
Your Bank has not issued any equity shares with differential votingrights during the financial year under review.
Your Bank's capital adequacy ratio ('CAR') calculated in linewith the RBI Circular on Capital Adequacy Framework stood at 27.43 per cent. on March 312020 well above the minimum regulatory requirements of 10.875 per cent. out of whichTier 1 Capital Ratio was 25.19 per cent. and Tier 2 Capital Ratio was 2.24 per cent.
Changes in Authorised Share Capital
During the financial year under review pursuant to approval of Schemeof Amalgamation of GRUH into and with the Bank by the Hon'ble National Company LawTribunal ('NCLT') benches at Ahmedabad and Kolkata the authorised share capitalof your Bank was increased from Rs. 5000 crore (divided into 5000000000 equity sharesof Rs. 10 each) to Rs. 5200 crore (divided into 5200000000 equity shares of Rs. 10each).
Further in terms of the provisions of Section 12(1)(i) of the BankingRegulation Act 1949 (the 'BR Act') the subscribed and paid-up share capital ofthe Bank shall not be less than one-half of the authorised share capital of the Bank.Accordingly in order to comply with the above provisions of BR Act the Shareholders ofthe Bank through Postal Ballot on December 04 2019 have approved the reduction in theauthorised share capital of the Bank from Rs. 5200 crore (divided into 5200000000equity shares of Rs. 10 each) to Rs. 3200 crore (divided into 3200000000 equity sharesof Rs. 10 each) by cancelling shares which have not been issued taken or agreed to betaken by any person and diminishing the amount of its authorised share capital by theamount of Rs. 2000 crore representing 2000000000 equity shares of Rs. 10 each.Consequent amendment to the Capital clause of Memorandum of Association of the Bank ('MoA')was also approved by the Sharehoders. The amendment to MoA with regard to reduction inauthorised share capital of the Bank was taken on record by the RBI.
As on March 31 2020 the authorised share capital of the Bank stood atRs. 3200 crore divided into 3200000000 equity shares of Rs. 10 each.
Scheme of Amalgamation
In terms of the Guidelines for Licensing of New Banks in the PrivateSector issued by RBI on February 22 2013 ('Licensing Guidelines') and Licensingconditions Bandhan Financial Holdings Limited ('BFHL' or the 'NOFHC') theholding company of the Bank is required to bring its excess shareholding to 40 per cent ofthe paid-up voting equity capital of the Bank within three years from the commencement ofoperation of the Bank i.e. by August 22 2018. The Bank and NOFHC have been exploringvarious options /opportunities to bring the shareholding to the prescribed level. In viewof this the Board of Directors of the Bank at its meeting held on January 07 2019 afterconsidering the report of the Audit Committee have considered and approved scheme ofamalgamation of GRUH Finance Limited ('Transferor Company') into and with the Bank('Transferee Company') and their respective Shareholders and Creditors underSections 230 to 232 and other applicable provisions of the Companies Act 2013 theCompanies (Compromises Arrangements and Amalgamations) Rules 2016 and other relevantprovisions under applicable law ('Scheme') subject to receipt of applicableregulatory and statutory approvals.
During the financial year under review after obtaining the necessaryapprovals from various regulatory authorities and the Shareholders of the Bank on July 302019 on the Scheme the Hon'ble National Company Law Tribunal ('NCLT') bench atKolkata vide its Order dated September 27 2019 approved the Scheme. The Scheme was alsoapproved by the Hon'ble NCLT bench at Ahmedabad vide its Order dated September 18 2019.
Pursuant to approval of the Scheme as above GRUH and the Bank havefiled the certified copy of the respective Orders along with Scheme with Registrar ofCompanies Gujarat and West Bengal respectively on October 17 2019. Accordingly theScheme was effective from October 17 2019 with appointed date being January 01 2019. Theformalities with regard to amalgamation of GRUH have been completed during the financialyear under review.
Upon effectiveness of the Scheme:
GRUH amalgamated with the Bank and dissolved without winding up.
Pursuant to issuance of equity shares as consideration foramalgamation of GRUH with the Bank the shareholding of NOFHC in the Bank reduced from82.26 per cent to 60.96 per cent of the paid-up voting equity share capital of your Bank.
In terms of Regulation 38 of the SEBI LODR read with Rule 19(2)and Rule 19A of the Securities Contracts (Regulation) Rules 1957 ('SCRR') yourBank was required to bring the public shareholding to the level of at least 25 per centwithin three years of listing of equity shares on the stock exchanges i.e. by March 2021.On the request of the Bank SEBI approved the Scheme of Amalgamation as a method to complywith the norms of minimum public shareholding ('MPS') as required under Rule 19(2)(b) of the SCRR. Accordingly on the effectiveness of the Scheme on October 17 2019 andissuance of fresh equity shares the public shareholding in the Bank had increased from17.74 per cent to 39.04 per cent resulting into Bank's compliance with the SEBI mandatedMPS requirements.
Status of Dilution
As mentioned in the previous para in terms of Licensing Guidelinesissued by RBI and the Licensing conditions for the Bank NOFHC the holding company of theBank is required to bring its excess shareholding to 40 per cent of the paid-up votingequity capital of the Bank within three years from the commencement of operation of theBank i.e. by August 22 2018. The Bank and NOFHC have been exploring variousoptions/opportunities to bring the shareholding to the prescribed level. Keeping thisregulatory requirement in view and for further business growth the Bank has achieved asignificant milestone in its short life-span of 4 years by successfully completing theprocess of amalgamation of GRUH into the Bank effective from October 17 2019. Pursuant tocompletion of this Amalgamation and consequent issuance of fresh equity shares to theShareholders of GRUH on October 21 2019 the Bank has partially achieved the dilutionrequirement for NOFHC as it led to reduction in the shareholding of NOFHC in the Bank from82.26 per cent to 60.96 per cent of its paid-up voting equity share capital. Your Bank iscommitted to comply with the regulatory requirements.
Performance and Financial Position of the Subsidiaries Asociates orJoint Venture
Your Bank did not have any subsidiaries associates or joint venturecompanies during the financial year 2019-20. Accordingly no statement is required to bereported in Form AOC-1.
Awards and Recognitions
Though your Bank is a relatively new entrant in the banking space yetit has received many significant awards and laurels. During the financial year underreview your Bank was recognised for its excellence. Some of the key awards received bythe Bank are listed below:
'Emerging Company of the Year' at The EconomicTimes Awards 2019 for Corporate Excellence
'Best Bank' and the 'Fastest Growing Bank'in the small size bank category at Businessworld Magna Awards 2019
'Fastest Growing Company' and 'Excellence inBusiness Performance' at The Economic Times Bengal Corporate Awards 2020
'Best Indian Banking and Financial Institution' atTimes Business Awards 2020
'Tech Trendsetter' (use of emerging technologiesfor wider reach and impact) by Governance Now BFSI Awards 2019
Rating of Various Debt Instruments
Details of rating of various debt instruments of the Bank as on March31 2020 are as under:
|Instruments ||Rating ||Rating Agency ||Amount (D In Crs.) |
|Subordinated Tier II Non-Convertible ||CARE AA- Stable ||CARE Rating ||160 |
|Debentures ||[ICRA]AA(Stable) ||ICRA || |
|Term Loan from Banks ||[ICRA]AA(Stable) ||ICRA ||80 |
|Certificate of Deposit ||[ICRA]A1+ ||ICRA ||6000* |
| ||CRISIL A1+ ||CRISIL || |
|Non-Convertible ||[ICRA]AA(Stable) ||ICRA ||5075@ |
|Debentures" ||CRISIL AA/Stable ||CRISIL || |
|Fixed Deposits ||CRISIL FAAA/ ||CRISIL ||1600 |
|Programme" ||Stable || || |
|Subordinated Debt" ||CRISIL AA/Stable ||CRISIL ||35 |
*Rating of ICRA is for ^3000 crore only @Rating of ICRA is for^1576.40 crore only transferred from Gruh Finance Limited pursuant to effectiveness ofthe Scheme of Amalgamation.
During the financial year under review CRISIL has assigned CRISIL A1+for the Certificates of Deposit programme of your Bank. Pursuant to amalgamation of GRUHwith the Bank Non-Convertible Debentures amounting to Rs. 5075 crore Fixed DepositsProgramme amounting to Rs. 1600 crore and Subordinated Debt amounting to Rs. 35 crorehave been transferred to the Bank and accordingly the respective ratings have also beenaffirmed by rating agencies as mentioned above.
Board of Directors
As on March 31 2020 the Board of your Bank continued to have twelveDirectors out of which nine were Independent Directors two Non-Executive Non-IndependentDirectors incluidng one Nominee Director of Caladium Investment Pte. Ltd and one ManagingDirector and CEO.
Mr. NVP Tendulkar (DIN: 00869913)
Pursuant to the recommendation of the Nomination and RemunerationCommittee ('NRC') the Board of Directors of the Bank (the 'Board') approvedthe appointment of Mr. NVP Tendulkar (DIN: 00869913) as an Additional Director(Independent) of the Bank with effect from May 08 2020 after ascertaining his fit andproper status including independence from the management of the Bank and inclusion of hisname in the independent director's databank. Pursuant to the provisions of Section 161 ofthe Companies Act he continues to hold office as an Additional Director of the Bank upto the date of the ensuing AGM or the last date on which the AGM should have been heldwhichever is earlier. Your Bank has received a notice in writing from a member proposingthe candidature of Mr. NVP Tendulkar (DIN: 00869913) as a Director on the Board of theBank. Further the NRC and the Board have also recommended his appointment as anIndependent Director not liable to retire by rotation to the Shareholders at the ensuingAGM for a period of three years with effect from May 08 2020. Mr. Tendular is a qualifiedChartered Accoutant and Company Secretary with more than 37 years of experience infinance general management & operations in IT Telecom Manufacturing Industries withAmerican & European based multinational organisations with ability to resolvesuccessfully multi-dimensional dynamic & challanging issues of companies.
Mr. Vijay N Bhatt (DIN: 00751001)
Pursuant to the recommendation of the NRC the Board approved theappointment of Mr. Vijay N Bhatt (DIN: 00751001) as an Additional Director (Independent)of the Bank with effect from May 08 2020 after ascertaining his fit and proper statusincluding independence from the management of the Bank and inclusion of his name in theindependent director's databank. Pursuant to the provisions of Section 161 of theCompanies Act he continues to hold office as an Additional Director of the Bank up tothe date of the ensuing AGM or the last date on which the AGM should have been heldwhichever is earlier. Your Bank has received a notice in writing from a member proposingthe candidature of Mr. Vijay N Bhatt (DIN: 00751001) as a Director on the Board of theBank. Further the NRC and the Board have also recommended his appointment as anIndependent Director not liable to retire by rotation to the Shareholders at the ensuingAGM for a period of three years with effect from May 08 2020. Mr. Bhatt is a qualifiedChartered Accountant and Bachelors in Law (Gen.) with more than 35 years of experience inlarge medium and small Indian and Multinational businesses. Being in the auditprofession he has a good understanding of the business environment business riskscontrols accounting assurance and financial reporting issues relevant to businessesoperating in India.
Mr. Ranodeb Roy (DIN:00328764)
In terms of the provisions of Section 152 of the Companies Act out ofthe two Non-Executive Non-Independent Directors Mr. Ranodeb Roy (DIN:00328764)Non-Executive Non-Independent Director being longest in office shall retire at ensuingAGM and being eligible offers himself for re-appointment.
The resolution(s) in respect of appointment and re-appointment of theDirectors as aforesaid have been included in the Notice convening the 6th Annual GeneralMeeting of the Bank. Brief profiles of these Directors have been annexed to the saidNotice.
Shareholders Approved Appointments
During the financial year under review although no new directors wereappointed the appointment/re-appointment of following Directors was approved by theShareholders in the 5th Annual General Meeting held on June 28 2019:
1. Appointment of Dr. Allamraju Subramanya Ramasastri (DIN: 06916673)as an Independent Director of the Bank for a period of three years with effect from August08 2018.
2. Appointment of Dr. Anup Kumar Sinha (DIN: 08249893) as anIndependent Director and Non-Executive (Independent) Chairman of the Bank for a period ofthree years with effect from January 07 2019.
3. Appointment of Mr. Santanu Mukherjee (DIN: 07716452) as anIndependent Director of the Bank for a period of three years with effect from January 072019.
4. Re-appointment of Ms. Thekedathumadam Subramani Raji Gain (DIN:07256149) as an Independent Director of the Bank for a period of four years with effectfrom August 06 2018.
5. Dr. Holger Dirk Michaelis (DIN: 07205838) Nominee Director beinglongest in office who retired by rotation and being eligible offered himself forre-appointment was re-appointed on June 28 2019.
During the financial year under review none of the Directors hasresigned or otherwise ceased to hold office. However Mr. Chintaman Mahadeo Dixit (DIN:00524318) Independent Director completed his second term as Independent Director of theBank on July 08 2020. Accorodingly he ceased to be the Director of the Bank from theclose of business hours on July 08 2020. Necessary disclosure in this regard has beenmade to the Stock Exchanges the RBI and the Ministry of Corporate Affairs. The Boardplaces on record its sincere appreciation for the contributions made by Mr. Dixit duringhis tenure as an Independent Director of the Bank.
Key Managerial Personnel
Mr. Chandra Shekhar Ghosh Managing Director & CEO Mr. SunilSamdani Chief Financial Officer and Mr. Indranil Banerjee Company Secretary of the Bankare the Key Managerial Personnel of the Bank as per the provisions of the Companies Actand rules made thereunder.
Meetings of the Board and Board Committees
The Board met twelve times during the Financial Year 2019-20 viz. onMay 02 2019 June 14 2019 July 19 2019 August 29 2019 October 03 2019 October 242019 December 11 2019 January 10 2020 January 14 2020 January 27 2020 February27 2020 and February 28 2020. The details of Board meetings held during the financialyear attendance of Directors at the meetings and other details have been providedseparately in the Report on Corporate Governance forming part of this Directors' Report.
The Bank currently has following nine Board Committees:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Risk Management Committee
4. IT Strategy Committee
5. Customer Service Committee
6. Corporate Social Responsibility Committee
7. Stakeholders Relationship Committee
8. Committee of Directors
9. Special Committee for Monitoring High Value Frauds
Additionally meetings of Independent Directors were also held duringthe financial year under review.
The details with respect to the composition terms of referencenumbers of meetings held etc. of these Board Committees are provided in the Report onCorporate Governance forming part of this Report.
Corporate Social Responsibility
Your Bank's core commitment to create inclusive growth is reflected inits Corporate Social Responsibility ("CSR") initiatives that focus on theempowerment of the marginalised sections of the societies. To address its societalcommitments your Bank adopted a comprehensive CSR Policy as amended in FY 2019-20 thatoutlines the CSR programme that your Bank intends to implement for the relevantstakeholders in the vicinity of its operational areas. All these programmes fall withinthe purview of the Schedule VII read with Section 135 of the Companies Act.
For the seamless implementation and monitoring of the CSR programmeyour Bank has constituted the Corporate Social Responsibility Committee of the Board ofDirectors ('CSR Committee') in accordance with the provisions of Section 135 ofthe Companies Act read with the Companies (Corporate Social Responsibility Policy) Rules2014 as amended. The composition of CSR Committee is given in Corporate Governance Reportwhich forms the part of Directors Report.
The beneficiaries of your Bank's CSR initiatives are those who areresiding in the operational areas and who are confronted with multidimensionaldeprivations and vulnerabilities. Accordingly the interventions of your Bank's CSRinitiatives are appropriately designed to build their capabilities for securingsustainable livelihoods.
During the year under review your Bank has contributed Rs. 67.09 croretowards various CSR programmes of 21 Project Implementing Agencies ('PIAs')encompassing 12 states 87 districts and 6.53 lakh targeted stakeholders. The Bankcontinues to engage itself with the stakeholders for the overall growth of society. Thedetails of CSR activities/projects undertaken during the year are given as Annexure - 1and forms part of this Directors' Report. The CSR Policy as recommended by the CSRCommittee and approved by the Board is available on the Bank's website: https://www.bandhanbank.com/view-pdf.aspxRs. FileName=CSR-Policy-New- Format.pdf. During the financialyear under review changes in the Policy have been approved by the Board to align it withthe recent amendments to the statutory provisions.
Some of the key programmes of your Bank's CSR initiatives are:
Targeting the Hard-Core Poor Programme
Your Bank has contributed Rs. 27.60 crore towards Targeting theHard-Core Poor (THP) programme - the flagship programme of Bandhan Konnagar anOrganisation registered under the Socities of West Bengal Registration Act XXVI of 1961Implementing Agency. The programme is designed for the ultra-poor-women headed householdsproviding them with a range of gainful micro-enterprises (in form of farm non-farm andmixed assets not cash) along with handholding support and training on confidencebuilding enterprise skills consumer interaction marketing and financial skills. Theyare also provided with sustenance allowance to meet their daily needs till they startgenerating substantial income from the assets provided.
In 18-24 months these ultra-poor women start graduating upliftingthemselves from extreme poverty and getting linked to mainstream society.
During the financial year under review 21600 ultra-poor women fromyour Bank's catchment area covering 20 districts of Assam Jharkhand Madhya PradeshOdisha Tripura and West Bengal had access to sustainable livelihood sources.Cumulatively as on March 31 2020 45133 ultra-poor women had access to sustainablelivelihood sources of which 28366 have already graduated and moved out of poverty . Theremaining 16500 women are in various stages of moving out of poverty.
A study conducted by Nobel laureate Dr. Abhijit Banerjee et.al.2on the long term impacts of the programme suggests that in seven years after theassets were first distributed livestock revenue income from non-agriculturalentrepreneurial activities and daily wage income was 286 per cent. 100 per cent. and 25per cent. higher in the treatment group as compared to the control group average and itwas not because of more working hours but because of the fact that the income per hourwent up and they diversified their businesses and invested part of the gains fromlivestock into other activities.
The monthly consumption of those assigned to treatment increased by 25per cent. (USD 16) as compared to the consumption of those assigned to control whichincreased by 12 per cent. (USD 6.6) and the amount deposited in the savings account by thebeneficiaries was more than double as compared to the control group. There was also anincrease in the formal borrowings.
The study also found positive effects across all categories ofoutcomes. Compared to non-beneficiaries the beneficiaries' households of the programmehave more assets food security is higher earn more and are financially better off. Theresults for the adult-level indexed variables of the study indicated that the individualsare healthier happier and less stressed. Furthermore the effects (except for productiveassets) almost always grow over time suggesting that the programme may have putbeneficiaries' households on a different trajectory.
This suggests that the promise of the programme to unlocking the"poverty trap" seems to have been achieved.
Health Nutrition Drinking Water and Sanitation
During the financial year under review your Bank has contributed Rs.17.96 crore towards health programmes of five PIAs in the catchments of your Bank'soperational area covering 33 districts in 9 states of India.
Your Bank has helped in creating health and hygiene related awarenessand behavioural changes through a network of 3193 village level female health volunteersknown as "Swasthiya Sahayikas" who reached out to 572450 womenincluding 15488 adolescent girls and 45603 pregnant women and 117619 lactatingmothers. The Swathiya Sahayikas held 38212 health awareness forums health and nutritioncamps and health sessions focused on pregnant and lactating women. These awareness campsand sessions were attended by 682647 female participants in the reproductive age group.The Swasthiya Sahayikas made 630173 home visits to follow up on the health status ofpregnant women lactating mothers and children below 5 years and have taken 1744 pregnantwomen for institutional deliveries during emergency situations or in case of absence ofany family members. They have referred 7053 women for ante-natal check-ups ('ANC') andinstitutional deliveries in 457 healthcare centres. These efforts resulted in improvingthe institutional deliveries to 90.25 per cent. (national average of 78.90 per cent.) andcomplete ANC to 91 per cent. (National average 51.20 per cent.).
Apart from public health programme 162104 patients were providedtreatment for various diseases like cataract hypertension diabetes cough & cold by4 PIAs in 4 districts of 4 states of India.
During the financial year under review 278926 children were enrolledin the nutrition initiatives of which it identified 28751 severe acute malnutrition('SAM') children under the age of five years and supported them for nutritionrehabilitation. 94 per cent. of the children over 24 months completed their primaryimmunisation and 83.25 per cent. (National Average 54.90 per cent.) of children from 0- 6months were exclusively breast-fed.
To provide round the year nutrition support 594050 households wereprovided planting materials of fruits and vegetables for setting up their nutritiongardens. These nutrition gardens helped the families especially women and children toconsume pesticide free fresh fruits and vegetables round the year. This initiative hashelped in reducing the protein energy malnutrition ('PEM') amongst the children who areless than five years of age and is evident from the fact that the wasting of childrenunder-five has gone down to 9 per cent. (as against the national average of 35.7 percent.). The awareness regarding balanced and adequate diet during pregnancy coupled withavailability of fruits and vegetables from the nutrition gardens resulted in reducing thelow birth weight incidences to a mere 2 per cent. of the live births as compared to thenational average of 18.2 per cent. live births being under 2.5 kg.
During the financial year under review 23 community-level reverseosmosis water treatment plants were set up which provided 10302.36 kilo litres ofpurified drinking water to 23532 households.
Your bank has contributed Rs. 1.02 crore towards the school sanitationprogramme of two PIAs covering 19 schools in 3 districts in 3 states of India. Theinitiatives helped in improving the sanitation infrastructure of government schools whichincluded separate toilets for boys and girls using child-friendly engineering RO drinkingwater stations mid-day meal platforms with shades dish washing stations roof-rainwaterharvesting system etc. The programme induced behavioural changes amongst the schoolteachers and children through classroom sessions and demonstrations regarding sanitationand personal hygiene including hand-washing using soaps after using toilets before andafter a meal before holding infants after returning home from outside after playingoutdoors after playing with
1Poverty Line benchmarked accordingly to the Suresh Tendulkar'sCommittee Poverty Lines per capita monthly expenditure 2011-12 Niti Aayog Government ofIndia and India SDG Index Score for Goal 1 - No Poverty; Goal 2 - Zero Hunger and SGD 5 -Gender Equality
2Abhijit Banerjee Esther Duflo Raghabendra Chattopadhyay andJeremy Shaprio (2016) The Long Term Impacts of a "Graduation" Program: Evidencefrom West Bengal. Working Paper September 2016. J-PAL MIT Cambridge Massachusetts.USA.
animals after coughing sneesing or blowing your nose cleaningtoilets flushing toilets after use using sanitary pads for menstrual hygiene and so on.The programme also supported monitoring of the operation and maintenance of the facilitiescreated.
The Swasthiya Sahayikas of the health programme inducedmenstrual-hygiene behaviourial change among women especially adolescent girls and in theawareness about infant care in pregnant women and lactating mothers. They provided308179 sanitary pads during door to door visits and have also started to supply infantdiapers soaps hand sanitisers moisturisers etc.
Your Bank's education programme provides quality education to thechildren belonging to the marginalised section of the society in your Bank's catchmentarea. The education programme enables the children to improve their learning outcomesespecially in science technology engineering and mathematics (STEM) subjects andincrease their retention and classroom engagement. The programme also provides training tothe teachers belonging to government schools and schools run by various charitable truststhat provide free education. The training aims to transform their pedagogy and integratevarious teaching and learning tools in their lesson plans. It also aims to track acomprehensive and continuous assessment for each child. For inclusive learning your Bankhas also contributed to "Sammilit Pathshala" for providing education tochildren with special needs with other children. For creating better learning environmentthe programme also contributed for creation of school education facilities includingsetting up computer labs smart classrooms furniture and fixtures building as learningaid paintings etc.
Your Bank contributed Rs. 12.25 crore towards the education programmeof 8 PIAs benefiting 55437 marginalised children in 35 districts of 7 states of India.
Support to Person with Disabilities
In line with the commitment to inclusive growth your Bank hascontributed Rs. 78.43 Lakh to the initiatives of 4 PIAs who are dedicated to provide equalopportunities and create conducive environments for persons with disabilities ('PwD').During the financial year under review the initiative has supported 2058 PwDs in 8districts of 4 states of India.
Your Bank's skill development initiative provides market linked andjob-ready employable skills to the youths from marginalised section of the society invarious domains. This initiative not only provides on-job training and job placementfacilitation in the organised sector but also follow-up of the placements so that youthsare settled in their job after receiving training.
During the financial year under review your bank contributed Rs. 4.25crore towards the skill development initiatives of three PIAs in 16 districts of 8 statesof India. These PIAs operated 17 training centre which were operational in likeHospitality Retail and Customer Care Sales and Marketing ITeS and BPO Refrigerationand Air Conditioning Computer Accounting Hardware and
Networking BFSI Tailoring Mason Electrical GDA (Nursing) ManualMetal Arc Welding Fitter Fabrication Security Guard and Driving domains.
As on March 31 2020 4638 youths were trained of which nearly 80 percent were placed with net salary ranging from Rs. 6500 to Rs. 12000 and otherperformance based allowances and social security benefits like Provident Fund (PF) andEmployees' State Insurance (ESI) were provided.
The water conservation initiative aims at water security and droughtproofing to some of the high moisture stressed regions of India thereby providing asafety net to agriculture and livestock based livelihoods. The initiatives facilitateparticipatory watershed management by empowering the communities to participate inplanning and implementation of local water resource development. Measures such asbuilding reviving and maintaining water-harvesting structures prioritisation andjudicious use of water for every community member crop planning and water-efficientfarming use of drought resistant varieties cultivation of high value crop requiring lesswater create a multiplier effect in drought-proofing and climate change adaptationmeasures along with higher income generation. Currently the programme is beingimplemented in 2 states. These projects not only provide drinking water to over 1500families but also supporte participatory irrigation of cumin crop for 35 farmers andhelped in generating an income of more than Rs. 20 Lakh.
Your Bank's afforestation initiatives have contributed towards theproject on establishing "Bio-shield" to save the mangroves in Bharuch districtof Gujarat. Mangrove plantation in a stretch of 1 km of coastline was done along withplantation of other medicinal plant species and fodder species. A fodder bank was createdto offset the biotic pressure from the mangrove area.
The project created 4629 person-days of employment and providedadditional income generating avenues from fodder and medicinal plants.
Declaration from Independent Directors
The Bank has received necessary declarations from all the IndependentDirectors under section 149(6) of the Companies Act and Regulation 16(1)(b) of the SEBILODR that they meet the criteria of independence laid down thereunder. The Board ofDirectors of the Bank has reviewed the disclosures of independence submitted by theIndependent Directors and is of the opinion that the Independent Directors of the Bankfulfil the conditions specified in the Companies Act and SEBI LODR and are independent ofthe management. All the Independent Directors of the Bank have also registered themselveswith the databank maintained by the Indian Institute of Corporate Affairs ('IICA')as prescribed by the Ministry of Corporate Affairs. The Board is also of the opinion thatthe Independent Directors appointed on May 08 2020 are having requisite expertiseexperience and qualification to act as Independent Directors of the Bank and they havealso registered themselves with the databank maintained by IICA.
Familiarisation Programmes for Independent Directors
The familiarisation programme for the Independent Directors aredisclosed in the Report on Corporate Governance that forms part of this Directors' Report.
Pursuant to recommendation of the NRC the Board has framed'Performance Evaluation Policy for the Board Committees Nonindependent / Whole TimeDirectors and Independent Directors' (the 'Board PE Policy') in accordance with therelevant provisions of the Companies Act the SEBI LODR and SEBI Guidance Note on BoardEvaluation. In terms of the Board PE Policy questionnaire for the performance evaluationof the Board and its Committees and of individual Directors covering various aspects oftheir respective performance including quality roles responsibilities processfunctioning participation commitment contribution attendance initiative teamworkcommunication adherence to the code of conduct compliance corporate governance bestpractices updates and in case of Independent Directors fulfilment of the independencecriteria and their independence from the management has been provided to each Director.The Board of Directors have done the evaluation of the performance of the IndependentDirectors excluding the director being evaluated. Similarly Independent Directors havedone the evaluation of the performance of the Non-Independent Directors including MD &CEO and the Chairman of the Board and the Board as a Whole. The Chairman of BoardCommittees have done performance evaluation of respective Committees. Thereafter thereport by the Board and the Independent Directors on the performance evaluation ofDirectors was submitted to the NRC. The NRC after considering the perfomance evaluationreport for Directors made its recommendations to the Board for continuation /re-appointment of Directors. Thereafter the Board considered the recommendations of theNRC report on the performance evaluation of the Board as a Whole and of the BoardCommittee. The Board evaluation has provided some valuable inputs for optimising the rolesand responsibilities quality quantity and timeliness of flow of information between theBank's Management and the Board.
The Board of Directors of the Bank were satisfied with the outcome ofthe performance evaluation process of the Directors Board and its Committees. They wereof the view that the Directors have been discharging their roles and responsibilities asexpected by the Board and the regulatory provisions and the Board is duly constitutedrepresenting various expertise skill sets and qualification required for the bankingbusiness. There was no observation during the performance evaluation of the previousyears; so is the case with the current year.
Appointment of Directors
Appointment of Directors on the Board of the Bank is guided by theprovisions of the BR Act and the guidelines/ circulars issued by the RBI from time totime the Companies Act and the SEBI LODR. In view of these provisions your Bank hasadopted 'Policy on Appointment and fit and proper criteria for Directors'. In terms ofthis Policy the NRC / Board considers fit and proper criteria various skill setsprofessional knowledge practical experience gender diversity status of independence incase of Independent Directors while appointing directors on the Board of the Bank.
The details of the same have been included in the Report on CorporateGovernance forming part of this Directors' Report.
The policy on Appointment and Fit & Proper Criteria for Directorsof the Bank is available on the Bank's website: https://www.bandhanbank.com/view-pdf.aspxRs. FileName=Policy-Fit-Proper- Criteria-Director.pdf
Your Bank has formulated and adopted a comprehensive CompensationPolicy for its Directors Key Managerial Personnel and Employees of the Bank in terms ofSection 178 of the Companies Act read with the relevant Rules made thereunder Regulation19 of the SEBI LODR and the Guidelines /Circulars issued by the RBI in this regard fromtime to time. The details of the same have been included in the Report on CorporateGovernance forming part of this Report. The compensation policy of the Bank is availableon the Bank's website: https://www.bandhanbank.com/view-pdf. aspxRs.FileName=CompensationPolicy.pdf.
As on March 31 2020 your Bank had 39750 employees. The statementcontaining particulars of employees as required under Section 197(12) of the Companies Actread with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are appended separately as Annexure - 2(a) and forms partof this report. The ratio of the remuneration of each Director to the median remunerationof the employees of the Bank and other details in terms of Section 197(12) of theCompanies Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are forming part of this report as Annexure - 2(b).
Employee Stock Options
Your Bank has instituted Employees Stock Option Plans to enable itsemployees to participate in your Bank's future growth and financial success. Your Bankprovides its employees a platform for participating in important decision making andinstilling longterm commitment towards future growth of the Bank by way of rewarding themthrough stock options. Accordingly with the approval of the Shareholders of the Bank theBank had instituted an Employees Stock Option Scheme ('ESOP') i.e. Bandhan BankEmployee Stock Option Plan Series I ('ESOP Scheme'). In terms of the Shareholders'approved ESOP Scheme and the Compensation Policy of the Bank the NRC has approved thegrant of 2220725 Stock Options to the eligible Employees of the Bank at a grant price ofRs. 180 per Stock Option in the month of December 2017 under Tranche 1.
The ESOP Scheme was approved by the shareholders of the Bank in thegeneral meeting before the maiden Initial Public Offering ('IPO') of the Bank inMarch 27 2018. However in terms of compliance of Regulation 12 of the SEBI (Share BasedEmployee Benefits) Regulations 2014 ('SEBI SBEB') the ESOP Scheme was required tobe approved by the shareholders after the IPO of the Bank. Accordingly the ESOP Schemewas approved by the shareholders in the 5th AGM of the Bank on June 28 2019along with granting of additional 52536327 stock options under the ESOP Scheme inmultiple tranches from time to time in terms of the provisions of the SEBI SBEB. Duringthe financial year under review fresh grants have been made under Tranche-2 of the ESOPScheme details of which are provided in the disclosure in this regard made separately.
Further in terms of the Scheme of Amalgamation approved by theShareholders regulatory bodies and NCLT upon effectiveness of the Scheme ofAmalgamation the options granted by GRUH to its employees shall automatically standcancelled and fresh options have to be granted by the Bank to the eligible employees onthe basis of Share Exchange ratio such that the employees shall as option holders of theBank enjoy the same economic benefits as they would have received under GRUH's ESOPScheme. Therefore upon effectiveness of the Scheme of Amalgamation of GRUH with the Bankthe stock options already granted by GRUH to its employees have accordingly been cancelledas on the effective date of the Scheme i.e. October 17 2019. Accordingly ESOP Scheme ofthe Bank was suitably modified by NRC to give effect to the above and issued the freshstock options to the eligible employees of erstwhile GRUH under the Tranche - 2 of theESOP Scheme of the Bank in terms of the ratio specified in the Scheme of Amalgamation.Other than above no other material change has been made in the ESOP Scheme and is incompliance with the provisions of SEBI SBEB.
The ESOP Scheme is administrated by the NRC. In terms of the ESOPScheme the Options would vest not earlier than one year and not later than four yearsfrom the date of grant as decided by the Board / NRC. The Options granted shall be equallyvested over four years. The exercise period shall be a maximum of five years from the dateof respective vesting of Options. Further the source of shares is primary in naturesince your Bank has been issuing new equity shares upon exercise of Options. None of theDirectors were issued the stock options during the financial year under review.
The information pertaining to the ESOP Scheme as prescribed under SEBISBEB read with SEBI Circular dated June 16 2015 on requirements specified under the SEBISBEB is available on the website of the Bank at www.bandhanbank.com.
Further as required under SEBI SBEB the auditor's certificate on theimplementation of ESOP Scheme in accordance with these regulations will be made availableelectronically at the AGM.
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 theCompanies Act are not applicable to your Bank. The details of the deposits received andaccepted by your Bank as a banking company are enumerated in the financial statements forthe financial year ended March 31 2020.
Internal Financial Controls Audit and Compliance
Your Bank has an Internal Audit department and a Compliance departmentwhich independently carries out evaluation of the adequacy of all internal controls. Thesedepartments ensure that operating and business units adhere to laid down internalprocesses and procedures as well as to regulatory and legal requirements. The auditdepartment also proactively recommends improvements in operational processes and servicequality. The Bank has put in place extensive internal controls including audit trailsappropriate segregation of front- and back-office operations post-transaction monitoringprocesses at the backend to mitigate operational risks. The Compliance Department submitsthe compliance report to the Audit Committee on regular interval providing the compliancestatus with the laws applicable to the Bank. It further ensures independent checks andbalances and adherence to the laid down policies and procedures of the Bank are inaccordance with the regulatory guidelines. Your Bank has adhered to the highest standardsof compliance and governance and has placed controls and appropriate structure to ensurethis.
To safeguard independence the internal audit department reportsdirectly to the Chairman of the Audit Committee of the Board. The Audit Committee of theBoard also reviews the performance of the Audit department and Compliance department. Itfurther appraises the effectiveness of controls and compliance with regulatory guidelines.
Considering the internal financial controls audit and compliancesystems of the Bank and the work performed by the auditors including the audit ofinternal financial controls over financial reporting by the statutory auditors and thereviews performed by management under the supervision of the Audit Committee the Board ofDirectors is of the opinion that the internal financial controls established andmaintained by the Bank were adequate and operating effectively.
Related Party Transactions
There were no materially significant transactions with related partiesduring the financial year 2019-20 which could lead to a potential conflict of interestbetween the Bank and these parties. Prior omnibus approval for normal banking transactionsis also obtained from the Audit Committee for the related party transactions which are ofrepetitive nature as well as for the normal banking transactions which cannot be foreseenand accordingly the required disclosures are made to the Audit Committee for theirapproval. The details of the transactions with related parties if any were placed beforethe Audit Committee from time to time. The Related Party Transactions that were enteredduring the financial year were on arm's length basis and were in ordinary course ofbusiness. Accordingly there are no Related Party Transactions required to be reported inForm AOC-2. However necessary disclosure as required under the Accounting Standards (AS18) read with RBI's Master Circular- Disclosure in Financial Statements- Notes to Accountsdated July 01 2015 has been made in the note no. 18.13 to the annual financialstatements for the financial year 2019-20.
Your Bank's Policy on dealing with Related Party Transactions isavailable on the Bank's website: https://www.bandhanbank.com/ view-pdf.aspxRs.FileName=RelatedParty-Transactions-Policy.pdf.
Particulars of Loans Guarantees or Investments
In terms of the provisions of Section 186 (11) of the Companies Actthe provisions of Section 186 of the Companeis Act except sub-section (1) do not apply toany loan made any guarantee given or security provided or any investment made by abanking company in the ordinary course of its business. However the particulars ofinvestments made by the Bank are disclosed in the Financial Statements for the financialyear 2019-20 as per the applicable provisions of the BR Act.
Whistle Blower Policy/Vigil Mechanism
Your Bank has adopted a Whistle Blower Policy as required under Section177 of the Companies Act and Regulation 22 of SEBI LODR pursuant to which the Bank'semployees can raise their concerns relating to fraud malpractice or any other activity orevent which is against the interests of the Bank or society as a whole. According to thispolicy the Audit Committee has been entrusted with the responsibility of reviewing thecomplaints received and the action taken thereof. Detailed information on the VigilMechanism of the Bank is provided in the Report on the Corporate Governance which formspart of this Annual Report.
Significant and Material Orders passed by Regulators or Courts orTribunals
During FY 2019-20 no significant or material orders were passed by anyRegulators or Courts or Tribunals against the Bank impacting its going concern status andoperations in future. However the RBI in exercise of the powers conferred under Section47A(1)(c) read with Section 46(4)(i) of the BR Act had imposed a penalty of Rs. 1 croreon the Bank on account of failure of the Bank to bring down the shareholding of its NOFHCBandhan Financial Holdings Limited in the Bank to 40 per cent of the total paid-up votingequity capital within three years from the date of commencement of business of the Bank.Your Bank has taken initiatives to comply with the only remaining licensing condition. Itmay be noted that upon amalgamation of GRUH into and with the Bank during the financialyear under review existing shareholding of NOFHC in the Bank has been brought down toapproximately 61 per cent. Your Bank is taking necessary steps to complete the compliancein this regard at the earliest. Further in view of the efforts made by the Bank tocomply with the licensing condition with regard to dilution the RBI has lifted therestriction of obtaining prior-approval for opening new banking outlets. However as perthe regulatory requirements the Bank shall have at least 25 per cent of the total numberof banking outlets opened during a financial year in unbanked rural centres.
Statutory Auditors and Their Report
The Members of the Bank at the 5th Annual General Meetingheld on June 28 2019 have approved the appointment of Deloitte Haskins & SellsChartered Accountants (ICAI Firm Registration Number 117365W) as the Statutory Auditors ofthe Bank for a period of four years from the conclusion of 5th AGM till theconclusion of 9th AGM subject to approval of RBI on an annual
basis. The approval of the RBI for appointment of Deloitte Haskins& Sells Chartered Accountants as the Statutory Auditors of the Bank for thefianncial year 2020-21 has been received.
The Report given by the Auditors on the financial statements of theBank for the financial year ended on March 31 2020 forms part of this Directors' Report.There has been no qualification reservation adverse remark or disclaimer given by theAuditors in their Report. Also no offence of fraud was reported by the Auditors of theBank under section 143(12) of the Companies Act.
Secretarial Auditors and their Report
Pursuant to the provisions of Section 204 of the Companies Act theBoard has appointed Mr. Anjan Kumar Roy Practicing Company Secretary (C.P. 4557) asSecretarial Auditor to conduct Secretarial Audit of the Bank for the FY 2019-20.Accordingly the Secretarial Audit Report for FY 2019-20 is annexed to this report as Annexure- 3. There are no qualification reservation adverse remark or disclaimer in theSecretarial Audit Report. However the explanation to the only observation made withregard to the penalty of Rs. 1 crore levied by the RBI on account of failure of the Bankto bring down the shareholding of its NOFHC to 40 per cent. of the total paid-up votingequity capital within three years from the date of commencement of business of the Bankhas been given in the previous para on 'Significant and Material Orders passed byRegulators or Courts or Tribunals'. No offence of fraud was reported by the SecretarialAuditor of the Bank under section 143(14) of the Companies Act.
In terms of the provisions of Section 148(1) of the Companies Act readwith Rule 3 of the Companies (Cost Records and Audit) Rules 2014 your Bank is notrequired to maintain cost records and accordingly is not required to undergo cost audit.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Energy and natural resource conservation have been one of the focusarea for the Bank and conscious efforts are being made towards improving energyperformance year on year. The conservation of energy has been integrated with the visionof the organisation and its operations. Some of the steps undertaken by the Bank towardsconservation of energy are as under:
Inclusive approach led by the top management down to the endconsumer:
Standardisation of temperature across the offices at 24 degreecelsius.
Balancing of inlet air flow and air exchange as per loadcapacity.
Heatload reduction through canopy improvisation and shading.
Cleaning of air filters & actuators at AHU and indoor unitlevel
Chiller tube cleaning and maintaining water quality.
Tracking of energy consumptions at all levels andcomparing with the best international benchmarks. Engagement with key stakeholders atregular intervals to drive energy conservation in the organisation culture.
Incorporation of latest technologies in air-conditioningand inductive equipment in terms of variable drives and improved IKW (Consumption per Ton)in HVAC.
Lighting: Incorporation of LED for lighting day lightutilisation timed illumination of signage.
Daily operations and usage- Conservation through basichygiene practices on energy usage through Occupancy sensors Zoning of electrical circuitsand master switches for premises.
The details on the Information technology used by your Bank in itsoperations have been provided under section on 'Information Technology at the Bank' inthis Report.
The Foreign exchange earnings of the Bank was Rs. 69.07 lakh whereasforeign exchange outgo was of Rs. 74.69 lakh during the financial year 2019-20.
Corporate governance is based on the principles of conducting businesswith integrity fairness and being transparent in all transactions making necessarydisclosures. Decisions being made in compliance with the laws of the land with fullaccountability and responsibility towards the stakeholders and a commitment of conductingall business in an ethical manner. Your Bank is committed to achieving the higheststandards of Corporate Governance and also adheres to the Corporate Governancerequirements set by regulators. A separate section on Corporate Governance standardsfollowed by your Bank and the relevant disclosures as stipulated under the SEBI LODR theCompanies Act and rules made thereunder is annexed to this Report as Annexure -4.
A Certificate from CS Deepak Kumar Khaitan Practicing CompanySecretary (C.P. No. 5207) conforming compliance by the Bank to the conditions ofCorporate Governance as stipulated under SEBI LODR is annexed to the Report on CorporateGovernance which forms part of this Directors' Report.
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) ofthe Companies Act read with Rule 12(1) of the Companies (Management and Administration)Rules 2014 the extract of Annual Return as at March 31 2020 forms part of this Reportas Annexure - 5 and the Annual Return of the Bank as at March 31 2020 is placed onits website and can be accessed at www.bandhanbank.com.
Management Discussion and Analysis
The Management Discussion and Analysis report for the financial year2019-20 as prescribed under SEBI LODR is enclosed as Annexure - 6 which forms partof this report.
Business Responsibility Report
In terms of the provisions of SEBI LODR a Business ResponsibilityReport describing the initiatives taken by your Bank from environmental social andgovernance perspective is forming part of this report as Annexure - 7.
The Bank has prepared an Integrated Report based on the principlesenunciated by the International Integrated Reporting Council which has been hosted on thewebsite of the Bank. The report provides information including financial and non-financialwhich would enable the Members to take well informed decisions and have a betterunderstanding of the Bank's perspective. It also deals with various aspects such asorganisational strategy governance framework performance and prospects of valuecreation based on the six forms of capital viz. financial capital manufactured capitalintellectual capital human capital social and relationship capital and natural capital.
Compliance with Secretarial Standards
The Board of Directors affirm that the Bank has complied with theapplicable Secretarial Standards issued by the Institute of Companies Secretaries of India(SS-1 and SS-2) relating to Meetings of the Board its Committees and the GeneralMeetings.
Information Under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Your Bank has zero tolerance towards any action on the part of any ofits employees which may fall under the ambit of 'sexual harassment' at workplace and isfully committed to uphold and maintain the dignity of every woman constituent associatedwith the Bank. It takes all necessary measures to ensure a harassment free workplace andhas instituted an Internal Committee for redressal of complaints and to prevent/prohibitsexual harassment in compliance with the guidelines enumerated in the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. At the begnningof the financial year under review there were no pending complaints however during thefinancial year eight complaints were received out of which six complaints have beenclosed during the financial year and the balance two complaints that were pending at theend of the financial year have since been closed.
Human Resource Management
Your Bank recognises that the human resource is an important ingredientof organisational success. Thus the goal of the Human Resources ('HR') departmentis to ensure that employees are recruited engaged retained and motivated to contributeto the Bank's growth and strategic mission. The HR Department proactively engages withemployees at all levels for this purpose. Its vision is to create an environment oflearning and superior performance in line with the Bank's corporate values and aligningthe personal aspirations of employees to business imperatives.
The employee engagement initiatives place greater emphasis on learningand development providing opportunities for staff to seek aspirational rolesstreamlining the Performance
Management System and introducing performance-linked rewards. A host ofprogrammes are being run to meet the ongoing learning and development needs in the Bankand promote a climate of learning self-growth and excellence. The learning architecturein your Bank focusses on:
1. Developing tailor-made competency-mapped programmes for differentsets of employees based on their roles in the Bank;
2. Induction/orientation of new hires for acquaintance with the cultureof the Bank;
3. Training on operational risk audit compliance and regulatoryaspects for frontline staff; and
4. People management customer-centric and compliance- based programmesfor employees in leadership roles.
Through its 11 residential training facilities across the country andthrough a wide range of training programmes your Bank has provided 130384 person-days oftraining to its employees. The trainings were provided to people across departments andfunctions to build their professional competence and improve their skill sets and thusenable them to contribute to your Bank's mission.
Additionally the Bank continues to engage with leading managementinstitutes for leadership and management development programmes and specialised programmesfor employees across senior and mid-management levels of staff.
Your Bank believes that the Performance Management ('PM') process is apowerful driver of individual and corporate performance. An online PM System ('PMS') withfocus on building transparency in performance assessments employee ownership of the goalsand encouraging dialogue on performance and developmental feedback between the appraiseeand appraiser was introduced in your Bank. Softer behavioural attributes like theemployee's adherence to values of the organisation customer focus accountabilityability to work in a team and others build a culture conducive to sustainable businessperformance and promote desired behaviour. Recognising their importance attention wasalso paid to such softer behavioural attributes.
Your Bank shall continue to leverage and align HR practices to buildcritical organisational capabilities create a conducive work environment to enhance andshape employee satisfaction and enable achievement of the organisation's strategic goals.
Risk Management Framework Risk Appetite & Culture:
Your Bank manages a variety of risks both financial and nonfinancialthat can significantly affect our financial performance and ability to meet theexpectations of customers shareholders regulators and other stakeholders.
Risk is an integral part of the Bank's Business Model and the Bankmeasures and manages risk as part of its business including in connection with theproducts and services offered to its customers.
Risk Appetite Framework approved by the Board defines the Bank's riskappetite which is the amount of risk the Bank is comfortable taking (acceptable risk)given its current level of resources. Risk profile coming out of the Risk AppetiteStatements is a holistic view of all risks the Bank holds at a point in time. The Bankmonitors its risk profile and the Board periodically reviews reports and analysisconcerning its risk profile.
The Bank's Strategy Planning process considers its risk appetite andrisk management effectiveness (e.g. the holistic measure of the quality and effectivenessof the Bank's risk management activities including the functional or programmatic use ofcontrols and capabilities to manage risks) and is closely linked with the Bank's capitalplanning process; this gets encapsulated in the Board approved ICAAP document.
The Board holds management accountable for establishing and maintainingthe right risk culture and effectively managing risk. Every team member creates risk inthe course of performing business activities and is required to manage that risk.Risk iseveryone's responsibility. Every team member is required to comply with applicable lawsregulations and policies and are strongly encouraged and expected to speak up when theysee something that could cause harm to the Bank's customers communities team membersshareholders or reputation. For ensuring this the Bank has a robust Whistle Blowerframework. Each team member's performance evaluations are tied to and take into accounteffective risk management. The Bank's performance management and incentive compensationprograms are also designed to establish a balanced framework for risk and reward undercore principles that team members are expected to know and practice.
Risk Management Framework:
The risk management framework sets forth the core principles on how theBank seeks to manage and govern its risk. Risk policies and frameworks anchor to the riskmanagement framework's core principles.
The Board assesses management's performance provides crediblechallenge and holds management accountable for maintaining an effective risk managementprogram and for adhering to risk management expectations. The Board carries out its riskoversight responsibilities directly and through its committees.
Risk Management Committee of the Board ('RMCB') approves the Bank'srisk management framework and oversees its implementation including the processesestablished by management to identify assess measure monitor and manage risks. It alsomonitors the adherence to the risk appetite. In addition the RMCB oversees theperformance of the Chief Risk Officer ('CRO') who reports functionally to the RMCB andadministratively to the MD &CEO and the aspect of CRO's independence is reviewed on anannual basis by the Board.
The Bank has established various management level risk committees thatsupport the MD & CEO and other senior management in carrying out its governance andrisk management responsibilities. Each management committee is expected to discussdocument and make decisions regarding significant risk issues emerging risks and riskacceptances; review and monitor progress related to critical and high-risk issues andremediation efforts within its scope including lessons learned; and report keychallenges decisions escalations other actions and open issues as appropriate. Therisk management committees have a direct escalation path to the RMCB.
Your Bank's risk operating model creates necessary interactioninterdependencies and ongoing engagement among the lines of defence: Front Line (composedof business groups and certain activities of enterprise functions) Risk Management is thesecond line of defence and it establishes and maintains the Bank's risk management programand provides oversight including challenge to and independent assessment of the frontline's execution of its risk management responsibilities; and the Internal Audit is thethird line of defence- responsible for acting as an independent assurance function andvalidates that the risk management program is adequately designed and functioningeffectively.
Risk Type Classifications
While your Bank follows an Integrated Risk Approach it uses commonclassifications to enable consistency across risk management programs and aggregation ofinformation. Risk type classifications permit the Bank to identify and prioritise its riskexposures including emerging risk exposures. The Risk department is structuredaccordingly with separate teams (Operational Risk Information Security Credit Risk andMarket Risk) focussing on their respective areas reporting to CRO who presents anintegrated view to the Board the RMCB and the MD&CEO.
Operational risk is the risk resulting from inadequate or failedinternal processes people and systems or from external events. At the management levelthe Operational Risk Team has primary oversight responsibility for operational risk andprovides periodic reports related to operational risk including Business Continuity andThird-party risk to the RMCB and the Operational Risk Management Committee ('ORMC').
Information security is a significant operational risk and includesthe risk arising from unauthorised access use disclosure disruption modification ordestruction of information or information systems. The Board is actively engaged in theoversight of the Bank's information security risk management and cyber defence programs.Information Security Team (headed by CISO) having oversight over information riskmanagement Enterprise Data Governance cybersecurity etc. provides periodic reports inthese sphere to the RMCB and Information Technology Strategy Committee of the Board ('ITSCB')as also to the Information Security Committee a management level committee.
Your Bank like other financial institutions continue to be the targetof various evolving and adaptive cyber-attacks including malware and denial-of-serviceas part of an effort to disrupt the operations of financial institutions potentially testtheir cybersecurity capabilities commit fraud or obtain confidential proprietary orother sensitive information. Cyber-attacks have also focused on targeting onlineapplications and services such as online banking as well as cloud-based servicesprovided by third parties and have targeted the infrastructure of the internet causingthe widespread unavailability of websites and degrading website performance. Your Bank hasnot experienced any material losses relating to these or other types of cyber-attacks.
For the Bank Cybersecurity risk is a priority and the Bank continuesto develop and enhance its controls processes and systems in order to protect itsnetworks computers software and data from attack damage or unauthorised access. TheBank's internal Cyber Security Operations Centre (C-SOC) has been operationalised duringthe financial year under review.
Credit risk is defined as the risk of loss associated with aborrower or counterparty default. At the management level Credit Risk Team has theprimary oversight responsibility and provides periodic reports related to credit risk tothe RMCB and Credit Risk Management Committee ('CRMC'). Your Bank manages itscredit risk by establishing what it believes are sound credit policies for underwritingnew business while monitoring and reviewing the performance of its existing loanportfolios.
The Bank's overall credit process includes comprehensive creditpolicies disciplined credit underwriting frequent and detailed risk measurement and acontinual loan review and audit process. For large size credit underwriting the Bankfollows the Committee approach for sanctioning.
Asset/Liability Management involves evaluating monitoring andmanaging interest rate risk market risk liquidity and funding. The Market Risk team hasprimary oversight responsibility for market risk as well as the Liquidity and InterestRate Risk and provides periodic reports related to these risks to the RMCB and ALCO whichconsists of senior management personnel from finance risk and business groups.
Interest rate risk which potentially can have a significantearnings impact arises because assets and liabilities may mature or reprice at differenttimes assets and liabilities may reprice at the same time but by different amountsshort-term and longterm market interest rates may change by different amounts theremaining maturity of various assets or liabilities may shorten or lengthen as interestrates or interest rates may also have a direct or indirect effect on loan demandcollateral values credit losses mortgage origination volume etc. The Bank assessesinterest rate risk by comparing outcomes under various net interest income simulationsusing many interest rate scenarios that differ in the direction of interest rate changesthe degree of change over time the speed of change and the projected shape of the yieldcurve.
Market risk is the risk of possible economic loss from adversechanges in market risk factors such as interest rates credit spreads foreign exchangerates equity and commodity prices and the risk of possible loss due to counterpartyexposure.
This applies to implied volatility risk basis risk and marketliquidity risk. Value-at-risk ('VaR') is a statistical risk measure used toestimate the potential loss from adverse moves in the financial markets. The Bank uses VaRmetrics complemented with sensitivity analysis and stress testing in measuring andmonitoring market risk. Treasury Mid-office under the market risk management functionaggregates and monitors all exposures to ensure risk measures are within our establishedrisk appetite.
The objective of effective liquidity management is to ensure that theBank can meet customer loan requests customer deposit maturities/withdrawals and othercash commitments efficiently under both normal operating conditions and under periods ofBank-specific and/or market stress. To achieve this objective the Board establishesliquidity guidelines that require sufficient asset- based liquidity to cover potentialfunding requirements and to avoid over-dependence on volatile less reliable fundingmarkets. These guidelines are monitored on a monthly basis by the ALCO and on a quarterlybasis by the RMCB. The Bank has always maintained Liquidity Coverage Ratio ('LCR')much above the minimum LCR requirement of 100 per cent which is calculated as HQLA (HighQuality Liquid Assets) divided by projected net cash outflows as each is defined underthe LCR rule.
Information Technology at the Bank
Your Bank has taken giant strides in its IT & Digital Initiatives.Information Technology has played a key driver in this journey with solutions around thekey levers of the Bank. Few major initiatives across Payments Customer ExperienceOperational Efficiency and Channel Upgrades are mentioned below:
Bank New Transformation Program:
The Bank has launched an IT Transformation Program with an objective ofmodernising its technology stack and upgrading application platforms with best of thebreed products.
The Program will be carried out over a period of time and will be inline with modern evolutionary architecture principles designed to deliver best in classCustomer experience rapid time to market and optimal use of data and analytics.
Capability Maturity Model Integration (CMMI) Initiative:
The Bank has taken an initiative to standardise its IT processes &deliver the IT Projects with an international standardised process like CMMI. The Bank'sIT Department is working for the CMMI V2.0 Level 3 Certification
1. In order to improve the Customer experience the Bank has introducedthe following functionalities in the Corporate Internet Banking:
(i) Option is available to add transaction amount limit at the time ofadding new beneficiary.
(ii) Option is available at the bank level to set the number ofbeneficiaries that may be added in a day per account.
(iii) Terms & Conditions document for the Bank's net bankingfacility is visible to the user in Corporate Internet Banking log-in page.
2. The Bank has initiated a new project on Micro Banking in July 2019where the hand held devices (HHD) used in fields for micro-banking shall be replaced withTablets (Tab-based Banking). This project has been launched in April 2020.
3. In order to enhance security the Bank is now storing all its datain an encrypted manner.
4. The Bank has further developed various other inhouse applications tosupport the internal operations and automate various processes which has significantlyreduced manual intervention.
Material Changes and Commitment Affecting Financial Position of theBank
There was no material changes and commitments affecting the financialposition of the Bank which has occurred between the end of the financial year of the Banki.e. March 31 2020 and the date of this Directors' Report.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) read with Section134(5) of the Companies Act the Directors hereby confirm that:
i. in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;
ii. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the Bank's state of affairs as on March 31 2020 and of itsprofit for the year ended on that date;
iii. they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Bank and for preventing and detecting fraud and otherirregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed bythe Bank and that such internal financial controls are adequate and were operatingeffectively; and
vi. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and were operatingeffectively.
The Board of Directors places on records its gratitude for the supportand guidance received from the Reserve Bank of India other government and regulatoryauthorities and financial institutions. The Board thanks correspondent banks forcooperation and help. The Board acknowledges the support of the shareholders and alsoplaces on record its sincere thanks to its valued clients and customers for theirpatronage. The Board also expresses its deep sense of appreciation to all employees of theBank for their strong work ethic excellent performance professionalism teamworkcommitment and initiative which has led to the Bank making commendable progress intoday's challenging environment. Your Board will continue to strive for improvements asyour 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 2020 ||(DIN: 08249893) |