Your Board of Directors present the Eighth Annual Report on thebusiness and operations of your Bank together with the Audited Financial Statements forthe 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: ||96330.62 ||77972.22 |
|- Savings Bank Deposits ||34616.86 ||29260.32 |
|- Current Account Deposits ||5462.32 ||4566.99 |
|- Term Deposits ||56251.44 ||44144.91 |
|Advances (Net): ||93974.92 ||81612.88 |
|- Cash Credits Overdrafts and Loans repayable on demand ||2330.21 ||2395.82 |
|- Term Loans ||91644.71 ||79217.06 |
|Total Assets/Liabilities ||138866.55 ||115016.17 |
|Net Interest Income ||8714.02 ||7563.35 |
|Non-Interest Income ||2822.82 ||2022.25 |
|Less: Operating Expenses (excluding Depreciation) ||3413.40 ||2713.81 |
|Profit before Depreciation Provisions and Tax ||8123.44 ||6871.79 |
|Less: Depreciation ||110.04 ||103.06 |
|Less: Provisions ||7884.78 ||3820.07 |
|Profit Before Tax (PBT) ||128.62 ||2948.66 |
|Less: Provision for Tax ||2.83 ||743.20 |
|Profit After Tax (PAT) ||125.79 ||2205.46 |
|Balance in Profit & Loss Account brought forward from previous year ||6171.00 ||4758.71 |
|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 ||6009.94 ||6171.00 |
|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 Bankhad crossed a landmark of Rs 1 lakh crore and continued to grow further during the yearunder review. The Total Liabilities (including capital and reserves) of your Bank stood atRs 138866.55 crore and the Total Advances (Net) at Rs 93974.92 crore whereas bankingoutlets increased to 5639 as on March 31 2022. During the FY under review the number ofbanking outlets that have been added to the network is 329. Out of the total 5639 bankingoutlets 35 per cent. are in rural 37 per cent. in semi-urban 18 per cent. in urban and10 per cent. in metro locations. The number of customers has increased from 2.30 crore ason March 31 2021 to 2.63 crore as on March 31 2022. With the expanding network ofbanking outlets and customers the total deposits grew further from Rs 77972.22 crore ason March 31 2021 to Rs 96330.62 crore as on March 31 2022 registering a climb of 23.55per cent. The Current Account and Savings Account ('CASA') deposits have seen anincrease of 18.48 per cent. from Rs 33827.31 crore as on March 31 2021 to Rs 40079.18crore as on March 31 2022.
During the FY under review the total income (net) of your Bank hasincreased by 20.36 per cent. to Rs 11536.84 crore as against the total income of Rs9585.61 crore for FY 2020-21. However during the FY your Bank has made additionalprovisions on NPA accounts resulting from elevated risk observed in certain geographiesand the potential impact of the COVID-19 pandemic on certain loan portfolios. Theseprovisions held by the Bank are based on the information available at the time of approvalof accounts and are in excess of the RBI prescribed norms. Due to this the profit aftertax ('PAT') for the financial year under review stood at Rs 125.79 crore a declineof 94.30 per cent. as compared to Rs 2205.46 crore for FY 2020- 21. Consequently Returnon Average Equity ('ROAE') was 0.76 per cent. for FY 2021-22 as against 13.24 percent. for FY 2020-21 and Return on Average Asset ('ROAA') was 0.11 per cent. for FY2021- 22 as against 2.13 per cent. for FY 2020-21. Correspondingly basic earnings pershare ('EPS') decreased from Rs 13.70 to Rs 0.78 whereas diluted EPS decreased fromRs 13.69 to Rs 0.78 as at the end of FY 2021-22 in comparison to FY 2020-21. However dueto various initiatives taken by the Government to support the economy and easing out ofthe impact of pandemic on the lives of customers your Bank has seen the best everquarterly performance during the quarter ended March 31 2022 backed by robust all roundoperating performance and lower credit costs. Given the strong recovery and stableoperating environment your Bank is confident of further improving its performances duringnext fiscal as well.
Your Bank continues to focus on financial inclusion by providingvarious financial services to the underserved. The Reserve Bank of India ('RBI')has mandated Priority Sector Lending ('PSL') of a minimum 40 per cent. of advancesfor all banks. During FY 202122 your Bank's PSL was Rs 56397.10 crore as on March 312022 as compared to Rs 74369.51 crore (net of IBPC of Rs 2124.13 crore) as on March 312021. At the end of FY 2021-22 PSL as a proportion of the gross advances of Rs 98790.70crore was 57 per cent.
FY 2021-22 started with the second wave of COVID-19 pandemic which wasmore severe and infectious affecting lives of people and resulted in restriction inmovements due to lockdowns in various parts of the country. This affected the economicactivities considerably especially the lower income population and businesses requiringphysical movement. With the aggressive vaccination drive by the Government and variousother measures to contain the spreading of infection the impact of the pandemic startedto recede in the second half of the FY. The Government of India ('GoI') and theReserve Bank of India ('RBI') continued with its measures to minimize the adverseeconomic impact on business caused by this pandemic.
Your Bank had diligently abided by the advisories issued by the GoIState Governments and various statutory and regulatory authorities from time to time.While enforcing the social distancing protocols and keeping the safety of employees inmind banking outlets and offices of the Bank operated in accordance with theguidelines/directions issued by various statutory regulatory and local authorities.
Your Bank continued to leverage its technology wherein the employeeswere benefitted through availing work from home facilities. Your Bank managed to run itsoperations smoothly across all its banking outlets. At all times during the COVID-19pandemic your Bank had managed to keep its services open to customers. Your Bank hasengaged with its customers through digital channels and contact centres with the objectiveof catering to their banking needs as well as enquiring about their well-being duringthese extraordinarily difficult times.
Your Bank continues to take multiple measures to ensure a safeenvironment for its employees and customers such as:
Regular sanitisation of the branches ATMs currency notestemperature checks at premises.
Maintaining social distancing norms through effective floormanagement.
Touch-base with all existing customers and enquiring about theirwell-being.
Adopting new digital initiatives from time to time.
Community outreach initiatives.
Vaccination drive for employees through tie-ups with hospitalsbased across regions and at Head Office.
Your Bank has implemented necessary packages rolled out by RBI for itsdifferent segments of customers to provide the financial assistance which are enumeratedhereinbelow under different heads.
Emerging Entrepreneur Business ('EEB')
The EEB vertical of your Bank has been serving borrowers at the bottomof the pyramid with affordable and convenient loans to help them develop intoentrepreneurs and transform their lives. Your Bank's EEB strategy is guided by itslong-held philosophy of financial inclusion and economic empowerment of the disadvantagedsections of the society.
Your Bank offers a wide array of loans through Banking Units ('BU') underEEB vertical to benefit small business owners in need of financial assistance. It alsohelps in the growth of additional income generation avenues and offers enhancedopportunities 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 TABs and also open loanaccounts after necessary credit checks. The highlight of the BUs' operations is the TABsthat are connected to the Core Banking System ('CBS') through cellular data. YourBank's Relationship Officers ('RO') carry these TABs to their group meetings andthe entire instalment reconciliation for the customer happens through these TABs on realtime basis. To ensure timely and effective support to the BUs in their day- to-dayfunctioning the Bank has a structure comprising Circles Territories Divisions Areasand Banking Unit Catchments. A central operation team maintains oversight of the qualityof the operations and adherence to prevalent guidelines at all times. Your Bank layssignificant emphasis on processes and controls to help maintain uniform and consistentstandards in transaction processing and service delivery as well as compliance withregulatory and statutory guidelines.
During FY 2021-22 your Bank opened 287 new BUs pan-India with a focuson financial inclusion and to enhance portfolio quality by limiting the number ofcustomers served by a BU. Your Bank's commitment towards financial inclusion is alsoreflected in the fact that it offered loans to 162581 new borrowers during FY 2021-22.The growth of 6.9 per cent. in the aggregated EEB asset portfolio from Rs 58346.34 croreto Rs 62399.08 crore during 202122 is another indicator of its commitment.
Your Bank now has EEB loans in 11 categories to cater better to thevaried demands of the customers:
EEB loan (Group loans)
1. Suchana Loan: Timely funds to start a new business or grow anexisting one. Loan size is from Rs 1000 to Rs 25000. However this product has sincebeen discontinued.
2. Srishti Loan: Loan to scale up home-based business. Loan sizeis from Rs 26000 to Rs 150000.
3. Subriddhi Loan: Loan amount is up to 50 per cent. of thedisbursement amount of running primary loan. Sanctioned to help customers fulfil theirextra business requirement during their ongoing loan.
4. Samadhaan Loan: Loan from Rs 5000 to Rs 15000 to supportexisting EEB borrowers by providing liquidity support to their businesses during pandemic.
5. Suraksha Loan: Loan size is up to Rs 15000 and is sanctionedto help existing customers meet their emergency expenses e.g.- medical drinking waterand sanitation.
6. Sushiksha Loan: Loan size is up to Rs 10000 and issanctioned 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 ofexisting EEB customers. Loan amount is from Rs 51000 to Rs 200000.
2. Samriddhi Loan: Loan to fund growing business needs ofexisting EEB customers. Loan size is from Rs 75000 to Rs 300000. However this producthas since been discontinued.
3. Micro Baazar Loan: With a loan size from Rs 26000 to Rs150000 this product is for small entrepreneurs who have an existing super-saveraccount with your Bank. This loan provides financial support to deposit customers fortheir working capital needs.
4. Micro Home Loan: Your Bank offers Micro Home Loan rangingfrom Rs 100000 to Rs 1000000 to existing EEB borrowers for construction as well asrenovation of their houses so that their dream of their own house does not remainunfulfilled.
5. Two-wheeler Loan: Your Bank offers two-wheeler loans rangingfrom Rs 30000 to Rs 120000 to existing EEB borrowers. It brings them a step closer totheir aspirations.
During the FY 2021-22 your Bank has taken various initiatives:
As per COVID protocols to maintain social distancing normsduring the COVID-19 pandemic and resulting restrictions your Bank has split the groups toreduce the number of group members.
Your Bank conducted awareness programmes to educate customersabout the COVID-19 pandemic and needs of COVID Vaccination.
Your Bank has also given them support to overcome theirregularity and distress caused by the pandemic and assured them that their Bank isalways with them in any situation.
Your Bank has initiated a vaccination drive for its employeesand ensured that all employees are vaccinated.
Awareness about using digital solutions like smartphone basedtransactions and use of credit/debit cards for online transactions is still a persistentissue to the customers of your Bank under the EEB vertical. To overcome these challengesyour Bank is giving training to make the customers aware about the benefits of digitalpayments and various other aspects such as seeding bank accounts with mobile number andAadhaar. Your Bank has also taken initiative by informing the customers to pay throughonline transactions.
During the pandemic and post pandemic restrictions many of thecustomers of your Bank lost their livelihoods which made them financially vulnerable. Tostrengthen the customers your Bank came up with products specifically designed for thesesituations and ensured that the customers get the maximum financial assistance during thetoughest time in their lives. In addition to lending to customers your Bank isencouraging them to save in their savings bank accounts and to inculcate healthy financialhabits so that in any uncertain situation in the future they remain financially stable.
Your Bank has been driving the transformation of customers at theground level. Your Bank has already started migrating vintage and quality customers toindividual loans from their existing group loans by laying out a strategy to increase theshare of individual business loans in EEB overall portfolio and extending new productofferings such as Sahayata Loan Two-Wheeler Loan Micro Home Loan as per their changingrequirements.
Your Bank witnessed an overall retail deposit growth of 21 per cent.YoY to Rs 74441 crore during FY 2021-22 and the overall deposit growth of over 24 percent. YoY to Rs 96331 crore. Your Bank also witnessed an overall CASA growth of 18.48 percent. YoY to Rs 40079 crore.
The contribution from the Affluent Savings business segment whichconsists of the flagship products like the Elite and Premium Savings remainedunmatched. This segment contributed to an overall Saving Accounts ('SA') growth of 33per cent. YoY.
The liabilities proposition of your Bank achieved significant breadthand scale which enabled the Bank to have a competitive edge and deliver the best in classcustomer experience and the same is evident from the growth in its Liabilities franchise.
Moreover to strengthen the current account ('CA') customerbase your Bank has launched 3 variants under its Current Account product offering viz."Biz-Deluxe" which is designed to cater to the banking and financialneeds of customers like traders distributors and wholesalers; "Biz-Pro"designed to cater to the self-employed professionals and "Start-up" foraddressing the unique banking requirements of entrepreneurs.
Your Bank also introduced Cash@POS facility which permits cashwithdrawal at POS and SoftPOS services which enables the merchant to acceptdigital payments using a smartphone.
A total of 42 branches were added during the FY taking your Bank'sfootmark to 1189 branches. Despite challenging circumstances during FY 2021-22 yourBank's branches remained open throughout the lockdown period and your Bank has alsointroduced offsite ATMs as a pilot project at five of its major locations viz.Ahmedabad Salt lake Sector-V Urbana- Kasba Shillong and Bhubaneswar for providingprompt assistance to the customers.
During FY 2021-22 your Bank overcame all the challenging businessconditions and offered customers expedient ways to transact access their savings andcurrent accounts fixed deposits make digital payments and grow their wealth.
RBI announced the introduction of the 'COVID-19 Regulatory Package' onMarch 27 2020 in the wake of disruptions due to COVID-19 pandemic and consequent assetclassification and provisioning norms. As part of the COVID-19 Regulatory PackageNational Credit Guarantee Trust Company ('NCGTC') introduced operating guidelineson Emergency Credit Line Guarantee Scheme ('ECLGS 1.0') on June 02 2020. RBIissued subsequent additions/ modifications clarifications and extensions in respect ofthe Regulatory Packages during FY 2021-22. The COVID-19 Regulatory Package was included inthe Board approved policy of the Bank with a suitable enabling clause to accommodate anyfurther regulatory instructions on the COVID-19 Package.
NCGTC issued introduction of ECLGS 3.0 modification in ECLGS 2.0 alongwith extension of all three schemes (ECLGS 1.0 2.0 & 3.0) until June 30 2021 videupdated operating guidelines dated April 16 2021. Further introduction of ECLGS 4.0 andmodifications in ECLGS 3.0 were communicated vide updated operating guidelines dated June07 2021 along with extension of all four schemes (ECLGS 1.0 2.0 3.0 & 4.0) tillSeptember 30 2021. The last updated operating guidelines on ECLGS was issued by NCGTC onOctober 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 validtill March 31 2022. As per latest guidelines utilisation/disbursement under selectschemes/facilities stands extended until June 30 2022.
The following are the brief details of various schemes under ECLGSvalid 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 formof additional working capital term loan to its borrowers up to 20 per cent. of their totalfund based credit outstanding (max. Rs 50 crore) across all lending institutions as onFebruary 29 2020. All borrower accounts classified as NPA or SMA-2 as on February 292020 shall not be eligible. The tenor of loans shall be four years from the date of firstdisbursement. A Moratorium period of one year on the principal amount for the fund basedportion shall be provided to borrowers under the scheme during which interest shall bepayable. The principal shall be repaid in 36 instalments (three years) after themoratorium period is over.
> ECLGS 1.0 (Extension) refers to the scheme for providingadditional support to existing borrowers of ECLGS 1.0 or new borrowers eligible underECLGS 1.0 based on revised reference date of March 31 2021. All borrower accountsclassified as NPA or SMA-2 as on March 31 2021 shall not be eligible. The funding can bein the form of additional working capital term loan facility upto 30 per cent. of theirtotal credit outstanding (fund based only net of support received under ECLGS 1.0) up toRs 50 crore as on February 29 2020 or March 31 2021 whichever is higher. The tenor ofloans shall be five years from the date of first disbursement. Moratorium period of twoyears shall be provided to borrowers for the fund based portion. The principal shall berepaid 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 formof working capital term loan and/ or non-fund based facility or a mix of the two to itsborrowers in the 26 sectors identified by the Kamath Committee on Resolution Frameworkvide its report dated September 04 2020 and the Healthcare sector upto 20 per cent. oftheir total credit outstanding (fund based only) not exceeding Rs 500 crore across alllending institutions as on February 29 2020. All borrower accounts classified as NPA orSMA-2 as on February 29 2020 shall not be eligible. The tenor of facilities shall be fiveyears from the date of first disbursement of fund based facility or first date ofutilization of non-fund based facility whichever is earlier. Moratorium period of oneyear on the principal amount for the fund based portion shall be provided to borrowersunder the scheme during which interest shall be payable. The principal shall be repaid in48 instalments (four years) after the moratorium period is over. To be eligible forguarantee cover of the sanctioned nonfund based facility first utilization must happen onor before June 30 2022.
> ECLGS 2.0 (Extension) refers to the scheme for providingadditional support to existing borrowers of ECLGS 2.0 or new borrowers eligible underECLGS 2.0 based on revised reference date of March 31 2021. All borrower accountsclassified as NPA or SMA-2 as on March 31 2021 shall not be eligible. The funding can bein the form of additional working capital term loan facility and / or non-fund basedfacility or a mix of the two upto 30 per cent. of their total credit outstanding (fundbased only net of support received under ECLGS 2.0) not exceeding Rs 500 crore as onFebruary 29 2020 or March 31 2021 whichever is higher. The tenor of facilities shall besix years from the date of first disbursement of fund based facility or first date ofutilization of non-fund based facility whichever is earlier. A Moratorium period of twoyears shall be provided to borrowers for the fund based portion. The principal shall berepaid in 48 instalments (four years) after the moratorium period is over. To be eligiblefor guarantee cover of the sanctioned non-fund based facility first utilization musthappen 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 formof working capital term loan to its
borrowers in the Hospitality (hotels restaurants marriage hallscanteens etc.) Travel & Tourism Leisure & Sporting and Civil Aviation(scheduled and non-scheduled airlines chartered flight operators air ambulancesairports and ground handling units) sectors upto 40 per cent. of their total creditoutstanding (fund based only) across all lending institutions subject to a cap of Rs 200crore per borrower. All borrower accounts classified as NPA or SMA-2 as on February 292020 shall not be eligible. The tenor of facilities shall be six years from the date offirst disbursement. A Moratorium period of two years on the principal amount for the fundbased portion shall be provided to borrowers under the scheme during which interest shallbe payable. The principal shall be repaid in 48 instalments (four years) after themoratorium period is over.
> ECLGS 3.0 (Extension) refers to the scheme for providingadditional support to existing borrowers of ECLGS 3.0 or new borrowers eligible underECLGS 3.0 based on revised reference date of March 31 2021. All borrower accountsclassified as NPA or SMA-2 as on March 31 2021 shall not be eligible. The funding can bein the form of additional working capital term loan facility upto incremental crediteligibility based on outstanding of February 29 2020 or March 31 2021 whichever ishigher. 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 periodis over.
> ECLGS 4.0 refers to the scheme for providing 100 per cent.guarantee to member lending institutions extending eligible credit facility upto Rs 2Crore in the form of fund based (term loan) or non-fund based (LC for import of capitalgoods) facility to existing hospitals/nursing homes/clinics/ medical colleges/unitsengaged in manufacturing of liquid oxygen oxygen cylinders etc. for setting up on-siteoxygen producing plants. All borrower accounts classified NPA as on February 29 2020shall not be eligible. The tenor of facilities shall be for a maximum of six years fromthe date of first disbursement of fund based facility or first date of utilization ofnon-fund based facility whichever is earlier. Moratorium period of six months on theprincipal amount for the fund based portion shall be provided to borrowers under thescheme during which interest shall be payable. The principal shall be repaid in 54instalments (four and half years) after the moratorium period is over. Last date ofdisbursement under fund based facility and utilization of LC under nonfund facility shallbe June 30 2022.
RBI also issued Resolution Framework 2.0 dated May 05 2021 forresolution 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. Theframework is an extension of existing resolution framework introduced by RBI on August 062020 in view of continued need to support viable MSME entities on the fallout of COVID-19pandemic. As per the framework eligible borrowers with aggregate exposure includingnon-fund based facilities of all lending institutions shall not exceed Rs 50 Crore as onMarch 31 2021. The borrower should be classified as a MSME as on March 31 2021 in termsof the Gazette Notification S.O. 2119 (E) dated June 26 2020. The borrowing entity shallbe GST-registered (other than exempted MSMEs as on March 31 2021) on the date ofimplementation of restructuring. The borrower's account should be a 'standard asset' as onMarch 31 2021 and not restructured in terms of earlier applicable MSME restructuringcirculars issued by RBI.
In line with the Board-approved Credit and related Policies your Bankextended support (ECLGS Resolution Framework 2.0 etc.) to the deserving and eligibleborrowers based on requests.
In order to ensure inclusive book growth along with effective portfoliomonitoring the SME Segment under Commercial Banking was further categorised into twogroups i.e. one with borrower exposures upto Rs 5 Crore and the other with exposuresabove Rs 5 Crore each led by independent Heads.
Small Enterprise Loan (SEL)
Small businesses regularly need support in the form of short-to- mediumterm funding. Small Enterprise Loan ('SEL') vertical of your Bank empowers smallentrepreneurs by extending them business loans so as to enable them grow their businesses.
The pandemic has been an extremely difficult time for small businesseswhich impacted their cash flows owing to lockdowns reduced business hours and marketdemand.
Your Bank ensured its team worked relentlessly and flexibly to servethe customers by working in line with their requirements and guiding them to overcometheir challenges.
Together we learnt that hard times can be overcome if we collaboratehandhold and be empathetic towards our customers by understanding their needs. Your Bankunderstands SEL vertical is now more agile and raring to grow with positivity and hardwork with close customer connect and bringing on new products offering based on themarket 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 businessrequirements pertaining to working capital or asset creation for business or othershort-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 toworking 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 Rs25 lakh.
Your Bank considers Institutional Lending to Non-Banking FinancialCompanies ('NBFCs')/Housing Finance Companies ('HFCs') and NBFC-MFIsprimarily for on-lending activities. The NBFC-MFI business includes lending toMicrofinance Institutions ('MFIs') Societies and Trusts engaged in microfinanceactivities. While most of these loans are extended as Term Loans your Bank also hascredit exposure through Direct Assignments and investment exposures through Pass ThroughCertificates ('PTCs') and NonConvertible Debentures ('NCDs'). The NBFC(including Housing
Finance Company) business primarily includes Term Loan product foron-lending purpose and is also foraying into working capital loan Direct Assignments andco-lending activities. The book-size was at Rs 2690.74 crores as on March 31 2021 whichhas grown to Rs 4998.84 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 aswell as geographies during the FY under review.
Your Bank offers loans for the purchase construction repairs andrenovation of dwelling units. Loan against property ('LAP') as well as loansagainst rent receivables are also offered against selfoccupied residential/commercialproperty. In line with your Bank's objective of increasing financial inclusion Home Loansand LAP loans are offered to Salaried as well as Self-Employed customers including New toBank ('NTB') customers.
Post amalgamation of erstwhile GRUH Finance Limited with the Bank yourBank has expanded its scope of housing activities and has additionally started offeringhome loan products from more than 160 bank branches across the nation. Your Bank continuesto focus on the affordable housing segment and has tied-up with various Governmentprojects 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 hasreceived good response.
As on March 31 2022 your Bank had a total Housing and LAP exposure ofRs 23560.12 crore constituting 24 per cent. of the total assets.
With an objective to serve the financing needs of a larger populationand to maximize the profits by diversifying the risk your Bank has launched andstrengthened several retail asset products during FY 2021-22. Customers can now availvarious loans like gold loans personal loans two-wheeler loans and car loans from theBank.
Gold loan aims at fulfilling urgent monetary needs with easeof access simplified documentation process and quick turnaround time. Gold loans aregiven from a ticket size of Rs 10000 to Rs 2500000.
Personal Loan: Your Bank has revamped the product andchanged the model of sourcing by a dedicated sales team catering to existing customersand to start sourcing for New to Bank customers as well. The Personal Loan product hasstarted channel partner sourcing from the year 2021 to extend distribution network inmajor markets to diversify and expand the portfolio. Personal loans are given for ticketsize from Rs 50000 to Rs 1500000 for tenure up to 5 years at a competitive rate ofinterest. Your Bank has been quickly ramping up this book during FY 2021-22.
Two Wheeler Loans: Erstwhile Two Wheeler Loans were sourcedby Bank Branches for existing customers only. Your Bank redesigned the product as permarket standard with introduction of dealer/ channel based distribution model. Theobjective of the program is to provide financing to existing as well as New to Bankcustomers for purchase of new Two Wheelers. Your Bank leveraged on the digitalcapabilities and using digital means approves two wheeler loans in just 5 minutes formore than 90 per cent. of cases. The two wheeler loan caters to the customer's needs bygiving loans starting from Rs 5000 to Rs 500000.
Car Loan was launched by your Bank during the Q2 of FY2021-22 to meet the customers' aspirations of owning a car. Your Bank designed variousproduct schemes for loan amounts ranging from Rs 50000 to Rs 1 crore in order to caterto various customer profiles viz. salaried self-employed as well as non-individualentities. With the help of its extensive manufacturer and dealer network your Bank aimsto provide the best deals to existing as well as new customers.
Third Party Products
Your Bank currently distributes mutual funds life insurance generalinsurance including health insurance products and co- branded credit cards. The FY underreview has been a year of transformation and emergence. Your Bank continues to haveunabated focus on offering a robust and comprehensive retail health insurance solutionbased product proposition for the retail customers who bank with us. To strengthen theproduct suite being offered your Bank has tied up with a leading Health Insurance playerduring the course of the year. In the life insurance business your Bank has furtherenhanced the product proposition offering by adding a third partner for distributingretail insurance through its branches. In addition your Bank has added Unit LinkedInsurance Products ('ULIPs') in the product basket being offered for solicitation.In mutual funds distribution your Bank has started the distribution of funds in the NewFund Offer ('NFO') stage with a vision of providing its customers additionalflexibility while planning for investments. Your Bank continues to invest towards buildinga research and technology driven product distribution proposition across all Third PartyProducts and continues to seek out opportunities to add new product suites to servecustomers financial needs holistically.
The total mutual fund AUM managed under your Bank's code during FY2021-22 was Rs 527.07 crore earning an income of Rs 3.74 crore. A total of Rs 166.04crore and Rs 439.60 crore of general and retail life insurance business respectively wasgarnered through the retail network during FY 2021-22 earning a fee income of Rs 19.76crore and Rs 128.19 crore respectively. During FY 2021-22 the life insurance businessthrough the existing arrangement in all asset verticals amounted to Rs 1298.55 croreearning an income of Rs 61.50 crore. Your Bank has distributed the co-branded credit cardsand earned Rs 0.06 crore as commission during FY 2021- 22. Your Bank has also earned Rs0.32 crore as commission for distribution of Atal Pension Yojana NPS Lite Swavalambanschemes of PFRDA and others during the FY 2021-22.
Corporate Social Responsibility
Your Bank's core commitment to creating an inclusive growth isreflected in its Corporate Social Responsibility ('CSR') initiatives which focuseson the empowerment of the marginalised sections of the society. To address its societalcommitments your Bank
has adopted a comprehensive CSR Policy that outlines the CSRprogrammes 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 programmeyour Bank has constituted the CSR Committee of the Board of Directors ('CSRCB') inaccordance with the provisions of Section 135 of the Companies Act read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 ('CSR Rules') asamended. The composition of the CSR Committee is given in the Report on CorporateGovernance as well as Annual Report on CSR forming part of the Board's Report.
The marginalised communities residing in the vicinity of your Bank'soperational areas are confronted with multidimensional and inter alia vulnerabilities atthe core of which is the challenge to secure sustained livelihoods. Accordingly theinterventions of your Bank's CSR initiatives are appropriately designed to build theircapabilities for securing sustainable livelihoods.
Your Bank continued to engage itself with the marginalised sections ofthe society for inclusive growth. Your Bank has contributed Rs 78.43 crore towards 23 CSRprogrammes implemented through 10 Project Implementing Agencies ('PIAs'). The CSRprogrammes were spread across 671 project locations in 71 districts of 13 states in Indiareaching out to 276262 individuals during the FY under review thereby taking the totaloutreach to 2074603 individuals.
In terms with the provisions of Rule 8 of the CSR Rules your Bankappointed KPMG Assurance and Consulting Services LLP ('KPMG') to carry out anindependent Impact Assessment of the CSR Programmes of your Bank. In terms with provisionsof para no. 9.6 of the General Circular No. 14 /2021 dated August 25 2021 issued by theMinistry of Corporate Affairs the Impact Assessment Report by KPMG on the CSR programmesof your Bank is available at the Bank's website https://bandhanbank.com/beyond-bankingand the programme wise summary of the same is mentioned in the subsequent sections.
The details of CSR activities/projects undertaken during the financialyear 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 itwith the recent amendments to the provisions relating to CSR under the Companies Act andCSR Rules which was duly recommended by the CSR Committee and approved by the Board. Theupdated 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 WestBengal Registration Act XXVI of 1961 Implementing Agency. The programme is designed forthe ultra-poor women-headed households providing them with a range of gainfulmicro-enterprises (in the form of farm non-farm and mixed assets non-cash) along withhandholding support and training on confidence building enterprise skills consumerinteraction marketing and financial skills. They are also provided with sustenanceallowance to meet their daily needs till they start generating substantial income from theassets provided. In a period of 18 to 24 months these ultra-poor women start graduatinguplifting themselves from extreme poverty1 and get linked to mainstream society2.
During the FY under review 27600 ultra-poor women were providedfarm-based non-farm and mixed assets to sustain their livelihoods. These women belongedto 18 districts of Assam Jharkhand Madhya Pradesh Odisha and West Bengal.
An Impact Assessment Study carried out by KPMG indicated that more than29000 women were alleviated from below poverty line to above the national poverty line(Rs 1059.42 for rural and Rs 1286 for urban areas) with a significant increase in theirbusiness assets and household income having a monthly income of at least Rs 4000 andaverage of Rs 7456 per month. Additionally 29487 women had improved savings habits andaccess to safe and secure shelter.
Further a long term study done by the Nobel Laureate Dr. AbhijitBanerjee et.al.3 based on Randomised Control Trials ('RCT') method suggests thatin seven years after the assets were first distributed livestock revenue income fromnon-agricultural entrepreneurial activities and daily wage income was 286 per cent. 100per cent. and 25 per cent. respectively higher in the treatment group as compared to thecontrol group mean and it was not because of more working hours but because the incomeper hour went 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. as compared to the consumption of those assigned to control which increased by12 per cent. and the amount deposited in the savings account by the beneficiaries wasmore than double as compared to the control group. There was also an increase in formalborrowings.
The study highlights the positive effects across all categories ofoutcomes. Compared to non-beneficiaries the beneficiaries' households of the programmehave 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 theindividuals are healthier happier and less stressed. Furthermore the effects (exceptfor productive assets) almost always grows over time suggesting that the programme mayhave 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 35districts in nine states of India. The health programmes of the PIAs supported by yourBank covered 88019 beneficiaries during the year.
1 Poverty Line benchmarked according to the Suresh Tendulkar'sCommittee Poverty Lines per capita monthly expenditure 2011-12 Niti Aayog Government ofIndia
2 India SDG Index Score for Goal 1 - No Poverty; Goal 2 - Zero Hungerand SGD 5 - Gender Equality
3 Abhijit Banerjee Esther Duflo Raghabendra Chattopadhyay and JeremyShaprio (2016). The Long Term Impacts of a "Graduation" Program: Evidence fromWest Bengal. Working Paper September 2016. J-PAL MIT Cambridge Massachusetts. USA
Your Bank contributed towards creating health and hygiene- relatedawareness and behaviour change through a network of 4518 village-level female healthvolunteers known as "Swasthiya Sahayikas" who reached out to 216918 pregnantwomen and lactating mothers. The Swasthiya Sahayikas held 38266 health awareness forums.These sessions were attended by 771600 female participants belonging to the reproductiveage group. The Swasthiya Sahayikas and the Health organisers made 1481310 home visits tofollow-up on the health status of pregnant women lactating mothers and children belowfive years and have taken 2278 women for institutional deliveries during ante-natalcheck-ups ('ANC') and other health check-ups.
The Swasthiya Sahayikas of the health programme inducted menstrualhygiene behaviour change communication amongst the women especially the adolescent girlsand infant care behaviours to the pregnant women and lactating mothers. They providedsanitary pads during door-to-door visits and have also started to supply infant diaperssoaps hand sanitizers moisturisers etc.
These efforts resulted in improving the institutional deliveries to90.25 per cent. (compared to the national average of 78.90 per cent.4) and complete ANCto 91 per cent. (compared to the national average of 51.20 per cent.4).
An Impact Assessment study conducted by KPMG indicated that theprogramme contributed in the improvement by 2 per cent. to 10 per cent. for Institutionaldeliveries ranging between 94 per cent. to 98 per cent. improved by 4 per cent. forcomplete ANC ranging between 94 per cent. to 97 per cent. and an improvement by 10 percent. 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 IndiaTrust from 2015 to 20 185 concluded that the programme has a visible positive impactamongst the participants of the health awareness programme on the level of awareness andhealth-related behavior between baseline from lower than 10 per cent. to end-line withmore than 90 per cent. of women know about Mother and Child Health ('MCH') and from20 per cent. to 80 per cent. of adolescent girls managing menstrual complications.
Apart from the public health programme during the FY under review76945 patients were provided treatment for various diseases like cataractshypertension diabetes cough and cold etc. in three districts of three states of Indiathrough the PIAs taking the total to 247602 patients being treated.
During the FY under review 275922 children under the age of fiveyears were enrolled in the nutrition initiatives of the Bandhan Health Programme. Out ofthese 2100 children were identified with severe acute malnutrition ('SAM') andwere supported for nutrition rehabilitation whereas 11607 children under the age offive were found with moderate acute malnutrition ('MAM') and were provided withnutritional supplements including support for a nutritional garden. 94 per cent. of thechildren over 24 months completed their primary immunization and 83.25 per cent. (NationalAverage 54.90 per cent.4) of children from 0-6 months were exclusively breastfed.
To provide round the year nutrition support 27444 households wereprovided planting materials of fruits and vegetables for setting-up their nutritiongardens. These nutrition gardens helped 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 whoare less 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.4). The awareness regarding a balanced and adequate diet during pregnancy coupledwith the availability of fruits and vegetables from the nutrition garden resulted inreducing the low birth weight incidences to a mere 2 per cent. of the live births ascompared 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 hasbeen reduction in malnutrition among children below five years of age from 14 per cent. to4 per cent.
During the FY under review 62 community-level reverse osmosis watertreatment plants were operational which provided 29577 kiloliters of purified safedrinking water to 33749 households.
Your Bank has contributed towards developing the community-ledsanitation and school sanitation programme of two PIAs covering three districts in threestates of India. The initiatives helped in improving the sanitation infrastructure of 502households 19 government schools which included separate toilets for Boys and Girlsusing child-friendly engineering RO drinking water stations mid-day meal platform withshades dishwashing stations roof rainwater harvesting system etc. The programme inducedbehaviour change amongst the school teachers and children through classroom sessions anddemonstrations regarding sanitation and personal hygiene including hand-washing usingsoaps after using toilets before and after a meal before holding infants afterarriving after playing outdoors after playing with animals after coughing sneezing orblowing nose cleaning toilets flushing toilets after use using sanitary pads formenstrual hygiene etc. The programme also supported monitoring of the operation andmaintenance of the facilities created.
Your Bank's education programme provides quality education to thechildren belonging to the marginalised sections of the society in your Bank's catchmentarea(s). The education programme enables the children to improve their learning outcomesespecially in Science Technology English and Mathematics ('STEM') subjects andincrease their retention and classroom engagement. The programme also provides training tothe teachers belonging to the communities government schools and schools run by thevarious charitable trust who are providing free education to transform their pedagogyand integrated various teaching and learning tools in their lesson plans and track thecomprehensive 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 67575 marginalised children in33 districts of six states of India.
An Impact Assessment study conducted by KPMG indicated that accordingto 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 statesapplauded the good quality of education provided at Bandhan Education Centre ('BEC').The respondents highlighted that there had been an improvement in the academic performancein English and Mathematics of their wards in formal schools due to the support provided atthe BECs. The parents and guardians shared that the staff at BEC provided them withhand-holding support during the enrolment of their children in formal schools. The reportfurther indicated that the prolonged closures due to the COVID-19 pandemic had affectedthe learning capabilities of the students.
Support to Person with Disabilities
In line with the commitment to inclusive growth your Bank hascontributed Rs 38.25 Lakh (Rs 38.85 Lakh in FY 2020-21) to the initiatives of three PIAswho are dedicated to providing equal opportunities and a conducive environment to personswith disabilities ('PwD'). During the FY under review the initiatives havesupported 270 PwDs in three districts of three states of India taking the total to 1332PwDs supported through these initiatives.
Your Bank's skill development initiatives provide market-linked andjob-ready employable skills to the youths from marginalised sections of the society invarious domains. This initiative not only provides on-job training and job placementfacilitation in the organised sector but also a follow-up on the placements so that theyouths are settled in their job post-training.
During the FY under review your Bank contributed Rs 4.79 core (Rs 4.89crore in FY 2020-21) towards the skill development initiatives of two PIAs in 16 districtsof six states of India. These PIAs operated 16 training centres in domains likeWarehousing and Logistics Retail and Customer Care Sales and Marketing ITeS and BPORefrigeration and Air Conditioning Computer Accounting Hardware and Networking BFSITailoring Mason Electrical GDA (Nursing) Manual Metal Arc Welding Fitter Fabricationetc.
During the FY under review 3738 youths were trained of which morethan 75 per cent. were placed with net salary ranging from Rs 8000 to Rs 15000 plusother 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 between2016 to 2021 11478 youth were trained with a placement rate of over 68 per cent. Theseyouth earned salaried income in organised sector with average salary of Rs 13591.
The water conservation initiative aims at water security anddrought-proofing to some of the high moisture stressed regions of India thereby providinga safety net to agriculture and livestock- based livelihoods. The initiatives facilitateparticipatory watershed management by empowering the communities to participate in theplanning and implementation of local water resource development. Measures such asbuilding reviving and maintaining waterharvesting 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 requiringless water etc. creates a multiplier effect in drought-proofing and climate changeadaptation measures and higher income generation. The programme has supported theconstruction of 23 water harvesting structures with a storage capacity of over 120000kiloliters of water in two states which not only provided drinking water to over 1500families but also supported participatory irrigation of various crops and helped ingenerating an income of more than Rs 123 Lakh.
Your Bank's afforestation initiatives have contributed towards theproject on establishing "Bio-shield" to save the mangroves in the Bharuchdistrict of Gujarat. Mangrove plantation of 67540 saplings carried out in 20 Hectares ina stretch of 1 kilometer of coastline was done along with plantation of other medicalplant species and fodder species sequestering over 4400 tonnes of CO2 annually. Thefodder bank was created to offset the biotic pressure from the mangrove area. The projectcreated 4629 person-days of employment and benefited 9123 beneficiaries with additionalincome generating avenues from fodder and medicinal plants harvesting.
Pursuant to Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ('SEBI LODR') the Board of Directors ofyour Bank has adopted a Dividend Distribution Policy that inter-alia balances theobjectives of appropriately rewarding shareholders and retaining capital to maintain ahealthy capital adequacy ratio. In addition to the Dividend Distribution Policy thedividend payout ratio of the Bank is guided by the Circulars on dividend issued by RBIfrom time to time. The Policy is available on the Bank's website athttps://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 proposedany 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 amountof 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 166666 equityshares of Rs 10 each fully paid-up pursuant to exercise of stock options by the eligibleEmployees of your Bank aggregating to Rs 1666660.
Post allotment of aforesaid equity shares the issued subscribed andpaid-up share capital of your Bank stood at Rs 16107658670 comprising 1610765867equity shares of Rs 10 each fully paid-up as on March 31 2022.
Your Bank has not issued any equity shares with differential votingrights during the FY under review.
The authorised share capital of the Bank was Rs 32000000000comprising 3200000000 equity shares of Rs 10 each as on March 31 2022.
Your Bank's capital adequacy ratio ('CAR') calculated in linewith the RBI Circular on Capital Adequacy Framework stood at 20.10 per cent. as on March31 2022 well above the minimum regulatory requirements of 10.875 per cent. out of whichTier 1 CAR was 18.89 per cent. and Tier 2 CAR was 1.21 per cent.
Performance and Financial Position of the Subsidiaries Associates orJoint Venture
Your Bank did not have any subsidiary associate or joint venturecompany during the FY 2021-22. Accordingly no statement is required to be reported inForm AOC-1.
Awards and Recognitions
Over the years your Bank has received multiple prestigious awards fromrespected institutions. During the FY under review your Bank has been bestowed with the 'BestGrowth 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 March31 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 ||6000(1) |
| ||CRISIL A1+ ||CRISIL || |
|Non-Convertible Debentures? ||[ICRA]AA(Negative) ||ICRA ||2052.50 ? |
| ||CRISIL AA/Negative ||CRISIL || |
|Fixed Deposits Programme? ||FAAA / Negative ||CRISIL ||1600 |
(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 theeffectiveness of the Scheme of Amalgamation.
During the FY 2021-22 your Bank has fully repaid the Subordinated TierII Non-Convertible Debentures amounting to Rs 160 crore listed on BSE Limited on itsmaturity to the Debenture holder. Accordingly ICRA Ltd and CARE Ratings Ltd havewithdrawn its rating of Subordinated Tier II Non-Convertible Debentures. CRISIL RatingsLtd has also withdrawn Subordinated Debt amounting to Rs 35 crore as there was nooutstanding 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 ofyour Bank. At the end of March 31 2022 the Board of your Bank had twelve Directors outof which nine were Independent Directors two were Non-Executive Non-IndependentDirectors including one Nominee Director of Caladium Investment Pte. Ltd and theManaging Director and CEO.
Ms. Divya Krishnan (DIN: 09276201)
The Board of Directors of the Bank at its meeting held on May 112022 on the basis of the recommendations of the Nomination and Remuneration Committee ofthe Bank ('NRC') has approved the appointment of Ms. Divya Krishnan (DIN:09276201) as an Additional Non-Executive Non-Independent Director [Nominee of BandhanFinancial Holdings Limited ('BFHL' or 'NOFHC') promoter of the Bank] on theBoard 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 shallhold 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 theNRC and the Board have recommended the appointment of Ms. Divya Krishnan as aNon-executive Non-Independent (Nominee) Director of the Bank liable to retire byrotation to the Shareholders for their approval at the ensuing AGM.
Ms. Divya Krishnan is a finance and investment banking professional andcurrently a visiting faculty at Ashoka University. Ms. Krishnan was formerly a ChiefInvestment Officer ('CIO') and Head of Investment at SBI Mutual Fund. Prior tobecoming CIO Ms. Krishnan worked as a fund manager at SBI Funds. Post her voluntary exitfrom SBI in 2001 Ms. Krishnan has served as a consultant to a number of leadingnon-profits and NGOs. She worked closely with non-profit institutions catalysing growththrough impactful programs.
Mr. Philip Mathew (DIN: 09638394)
Pursuant to the recommendations of the NRC the Board approved theappointment 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 andindependence from the management of your Bank. Pursuant to the provisions of Section 161of the Companies Act read with Regulation 17(1C) of the SEBI LODR he will continue tohold office as an Additional Director of the Bank up to the date of the ensuing AGM orupto three months from the date of his appointment whichever is earlier. Your Bank hasreceived a notice in writing from a member proposing his candidature as Director on theBoard of the Bank. Further the NRC and the Board have also recommended his appointment asan Independent Director not liable to retire by rotation to the Shareholders at theensuing 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 16years. During his tenure at HDFC Bank he was involved in various HR related initiativessuch as successful transition to a cloud-based enterprise-wide HR application amongst thefirst to adopt the new governance and risk management standards set by CompensationGuidelines by RBI recognition as 'Best Employer' in the BT Survey in 2016 etc. Hisexperience as a HR practitioner spans across organisations involved in manufacturing andfinancial services. His career journey has been through the entire landscape of HR withsignificant depth. He was Plant HR In charge at Rallis India Ltd and Marico IndustriesLtd Project Lead for roll-out of new PMS at ANZ Grindlays Bank a brief corporate stintat Colgate-Palmolive before becoming Head HR at Sharekhan.com and thereafter moved toHDFC Bank in 2002.
Dr. Aparajita Mitra (DIN: 09484337)
Pursuant to the recommendations of the NRC the Board approved theappointment 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 andindependence from the management of your Bank. Pursuant to the provisions of Section 161of the Companies Act read with Regulation 17(1C) of the SEBI LODR she will continue tohold office as an Additional Director of the Bank up to the date of the ensuing AGM orupto three months from the date of her appointment whichever is earlier. Your Bank hasreceived a notice in writing from a member proposing her candidature as Director on theBoard of the Bank. Further the NRC and the Board have also recommended her appointment asan Independent Director not liable to retire by rotation to the Shareholders at theensuing AGM for a period of three years effective July 13 2022.
Dr. Aparajita Mitra a Doctorate in Agriculture (Dept. of PlantMolecular and cellular Biology Bose Institute) has extensive experience and expertise ofmore than three decades in the field of agricultural sciences. She has done extensiveresearch and published articles in the field of commercial micropropagation ofHorticulture/tree and medicinal species DNA extraction and sequencing DNA fingerprinting(plants) gel electrophoresis protein and isozyme analysis etc. Dr. Mitra is a recipientof the CSIR Fellowship and the 'Women Scientist Award' from the Department of Science andTechnology Government of India 2005 for the project "Identification of DiseaseResistant Genetic Markers in Bamboo Spp." She has also guided various postgraduatestudents from well-known universities on their projects in the domain of Plant Tissueculture part. She has been associated with various organizations.
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 ofthe Bank being longest in office shall retire at ensuing AGM and being eligible hasoffered himself for re-appointment.
Mr. Narayan Vasudeo Prabhutendulkar (DIN: 00869913) and Mr. VijayNautamlal Bhatt (DIN: 00751001)
Mr. Narayan Vasudeo Prabhutendulkar and Mr. Vijay Nautamlal Bhatt wereappointed as Independent Directors of the Bank effective May 08 2020 for a period ofthree years each and their respective current terms are expiring on May 07 2023.Accordingly considering the outcome of their performance evaluation notices receivedunder Section 160 of the Companies Act from member(s) proposing their candidature for theoffice of Directors and the recommendations of the NRC the Board at its meeting held onJune 15 2022 has approved their re-appointment as Independent Directors of the Bank notliable to retire by rotation for the second term of five years each effective May 082023 subject to the approval of Shareholders of the Bank by way of special resolutionsat the ensuing AGM.
The resolution(s) in respect of appointments and re-appointments of theDirectors as aforesaid have been included in the Notice convening the 8th AGM of theBank. Brief profiles of these Directors together with other requisitedisclosures/details have been annexed to the said Notice. None of the Directors asproposed for appointment / re-appointment will cross the age of 75 years during thecontinuation of their tenure on the Board of the Bank.
Shareholders approved appointments/ re-appointments
During the FY under review the following appointments/re- appointmentswere approved by the Shareholders at the 7th AGM of the Bank held on August 06 2021:
Appointment of Mr. Suhail Chander (DIN: 06941577) as anIndependent Director of the Bank not liable to retire by rotation for a period of threeyears effective March 19 2021.
Appointment of Mr. Subrata Dutta Gupta (DIN: 08767943) as anIndependent Director of the Bank not liable to retire by rotation for a period of threeyears effective March 19 2021.
Dr. Holger Dirk Michaelis (DIN: 07205838) Nominee Director ofCaladium Investment Pte. Ltd. being longest in office and liable to retire by rotationretired at the 7th AGM of the Bank and who being eligible had offered himself forreappointment was duly re-appointed.
Re-appointment of Dr. A. S. Ramasastri (DIN: 06916673) as anIndependent Director of the Bank not liable to retire by rotation for the second term offive years effective August 08 2021.
Re-appointment of Dr. Anup Kumar Sinha (DIN: 08249893) as anIndependent Director and Non-Executive Chairman of the Bank not liable to retire byrotation for the second term from January 07 2022 up to July 04 2026 i.e. up to thedate of his attaining the age of 75 years. RBI approved tenure as Non-Executive Chairmanis upto January 06 2025.
Re-appointment of Mr. Santanu Mukherjee (DIN: 07716452) as anIndependent Director of the Bank not liable to retire by rotation for the second term offive 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 toretire by rotation.
During the FY under review none of the Directors on the Board of theBank ceased to hold office.
The Board of Directors of the Bank at its meeting held on May 112022 has taken on record the cessation of Mr. Ranodeb Roy (DIN: 00328764) asNon-executive Non-Independent Director of the Bank pursuant to withdrawal of hisnomination by NOFHC from the Board of the Bank. Accordingly Mr. Ranodeb Roy ceases to bea Non-Executive Non-Independent Director of the Bank with effect from May 11 2022.
Further Mr. Snehomoy Bhattacharya Independent Director of the Bankcompleted his second term of four years as an Independent Director on the Board of theBank on July 08 2022. Accordingly Mr. Bhattacharya ceased to be the Director of the Bankeffective July 09 2022.
Necessary disclosures in this regard have been made to the StockExchanges RBI and the Ministry of Corporate Affairs. The Board places on record itssincere appreciation for the contributions made by Mr. Roy and Mr. Bhattacharya duringtheir tenure as Directors of the Bank.
Key Managerial Personnel
Mr. Chandra Shekhar Ghosh MD & CEO; Mr. Sunil Samdani ChiefFinancial Officer; and Mr. Indranil Banerjee Company Secretary of the Bank are the KeyManagerial Personnel of the Bank as per the provisions of the Companies Act and rulesmade thereunder. Further during the FY under review the Board at its meeting held onJune 25 2021 while approving the re-appointment of Mr. Ghosh as the MD & CEO of theBank had also approved his re-appointment as Key Managerial Personnel of the Bank for aperiod of three years effective July 10 2021 pursuant to the provisions of Section 203of 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 262021; October 29 2021; January 13 2022; January 21 2022; February 11 2022; February19 2022; February 24 2022; and February 25 2022. The details of the Board meetings heldduring the FY attendance of Directors at the meetings and other details have beenprovided separately in the Report on Corporate Governance forming part of the Board'sReport 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 theattendance of non-independent directors and members of management were also held duringthe FY under review.
The details with respect to the composition terms of referencenumbers of meetings held attendance of members etc. of these Board Committees areprovided 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 IndependentDirectors under Section 149(7) of the Companies Act and Regulation 25(8) of the SEBI LODRthat they meet the criteria of independence laid down under Section 149(6) of theCompanies Act read with allied rules and Regulation 16(1)(b) of the SEBI LODRrespectively. The Board 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. In the opinion of the Board all the Independent Directors possessrequisite expertise experience integrity and proficiency as required under theapplicable laws and policies of the Bank.
Familiarisation Programmes for Independent Directors
The details of the familiarisation programme(s) for the IndependentDirectors of the Bank are disclosed in the Report on Corporate Governance forming part ofthe Board's Report.
Pursuant to recommendation of the NRC the Board has framed the'Performance Evaluation Policy for the Board Committees NonIndependent / Whole TimeDirectors and Independent Directors' (the 'Board PE Policy') in accordance withthe relevant provisions of the Companies Act the SEBI LODR and SEBI Guidance Note onBoard Evaluation. In terms of the Board PE Policy performance evaluation of the Board andits Committees Chairman and individual Directors are done on various parameters.Parameters for the Board include various aspects such as structure meetingsappointments agenda discussions roles and responsibilities evaluation of risksstrategy governance and compliance conflict of interest etc.
Parameters for Board Committees include various aspects such asmandate and composition effectiveness meetings agenda minutes discussion and dissentindependence etc.
Parameters for the Directors include various aspects such asknowledge and competency integrity functioning commitment contribution attendanceinitiative teamwork communication corporate governance updates etc. and in case ofIndependent Directors additional parameters include fulfilment of the independencecriteria and their independence from the management.
The evaluation process has been carried out electronically. The Boardof Directors has done the evaluation of Independent Directors excluding the IndependentDirector being evaluated. Similarly Independent Directors have done the evaluation of theBoard as a whole Non-Executive Chairman and NonIndependent Directors including the MD& CEO. The respective Chairmen of Board Committees have done performance evaluation oftheir respective Committees. Thereafter the report on performance evaluation ofDirectors excluding NRC members and Chairman was submitted to the NRC whereas thereport on performance evaluation of the Board as a whole Board Committees and Directorswho were NRC members was submitted to the Board for necessary action. The
NRC after considering the performance evaluation report of Directorsexcluding NRC members made its recommendations to the Board for continuation /re-appointment of Directors. Thereafter the Board considered the recommendations of theNRC and report on the performance evaluation of the NRC members the Board as a whole andthe Board Committees. The Board evaluation has provided some valuable inputs foroptimising the roles and responsibilities quality quantity and timeliness of flow ofinformation between the Bank's management and the Board.
The Board of Directors of the Bank is satisfied with the outcome of theperformance evaluation process. They were of the view that the Directors have beendischarging their roles and responsibilities as expected by the Board and as requiredunder the applicable regulatory provisions. The Board continues to be duly constitutedrepresenting various expertise skill sets knowledge and qualification required for thebanking business. There was no observation during the performance evaluation of theprevious years; and so is the case with the current year.
Appointment of Directors
Appointment of Directors on the Board is guided by the provisions ofthe BR Act and the guidelines/ circulars issued by the RBI from time to time theCompanies 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 thisPolicy while appointing directors the NRC / Board considers fit and proper criteriavarious skill sets professional knowledge practical experience integrity genderdiversity and additionally status of independence in case of Independent Directors. Thedetails of the same have been included in the Report on Corporate Governance forming partof the Board's Report. The Policy on Appointment and Fit & Proper Criteria forDirectors was reviewed and suitably amended by the Board on the recommendations of theNRC to align it with the regulatory/ statutory changes. The updated Policy is availableon the Bank's website at: https://bandhanbank.com/pdfViewerJS/index.
Your Bank has formulated and adopted a comprehensive 'CompensationPolicy' for its Directors Key Managerial Personnel and Employees in terms of Section 178of the Companies Act read with the relevant Rules made thereunder Regulation 19 of theSEBI LODR and the Guidelines /Circulars issued by the RBI in this regard from time totime. The details of the same have been included in the Report on Corporate Governanceforming part of the Board's Report. The Compensation Policy was suitably amended by theBoard on the recommendations of the NRC to include the provision of payment of fixedremuneration to the Non-Executive Directors excluding the Chairman of your Bank in termsof the RBI Circular dated April 26 2021. The updated Compensation Policy of your Bank isavailable on the Bank's website at:https://bandhanbank.com/pdfViewerJS/index.html#../sites/default/files/2022-02/Compensation_Policy_2022.pdf.
As on March 31 2022 your Bank had 60211 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 Annex - 2(a) and forms part ofthe Board's report. The ratio of the remuneration of each Director to the medianremuneration 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 ofManagerial 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 enableits employees to participate in your Bank's future growth and financial success. Your Bankprovides its employees with a platform for participating in important decision making andinstilling long-term commitment towards the future growth of the Bank by way of rewardingthem through stock options. ESOP Scheme of your Bank is in compliance with the provisionsof SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 ('SEBISBEBSE') 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 Optionswould vest not earlier than one year and not later than four years from the date of grantas 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 respectivevesting of Options. Since your Bank has been allotting fresh equity shares upon exerciseof 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 reviewto the eligible employees. Except the MD & CEO none of the Directors was issued thestock options during the financial year under review.
The information pertaining to the ESOP Scheme as prescribed under SEBISBEBSE is available on the website of the Bank at https://bandhanbank.com/annual-reports.
Further as required under SEBI SBEBSE a certificate from theSecretarial Auditor of the Bank certifying that your Bank has implemented the ESOP Schemein accordance with the applicable provisions of the SEBI SBEBSE and resolution(s) passedby Shareholders will be made available electronically 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 Statementsfor 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 aCompliance Department ('CD') which independently carry out evaluation of theadequacy of all internal controls. These departments ensure that operating and businessunits adhere to the laid down internal processes and procedures as well as to theregulatory/statutory and legal requirements.
The Compliance Function is one of the key elements in your Bank'scorporate governance structure. The compliance starts from the top and the Board andSenior Management play an important role in driving the compliance culture. Your Bankremains committed to adhere to the highest standards of compliance vis-a-vis regulatoryprescriptions and internal guidelines. Your Bank has a robust Compliance Policy outliningthe compliance philosophy and roles and responsibilities of the CD.
The CD assists the Board and Senior Management in managing thecompliance risk of your Bank. The CD ensures that overall business of your Bank isconducted in strict adherence to the guidelines issued by RBI and other regulatorsvarious statutory provisions standards and codes prescribed by FEDAI FIMMDA etc. byevaluating the products / processes guiding business departments on the variousregulatory guidelines with a special emphasis on better understanding of the perspective.It closely works with operational risk and internal audit functions and monitors variousactivities of your Bank with more emphasis on active risk management.
As the focal point of contact with RBI and other regulatory entitiesthe CD evaluates the adequacy of internal controls and examines any systemic correctionthat is required based on its analysis and interpretation of regulatory guidelines anddeviations observed during monitoring and testing. Your Bank has a robust Anti MoneyLaundering ('AML') framework and tools to manage the AML risk. It periodicallyapprises the Audit Committee of the Board ('ACB') the Board and the SeniorManagement on compliance levels based on the changes in the external regulatoryenvironment. The CD submits the compliance report to the ACB at regular intervalsproviding the compliance status with the laws/rules and regulations applicable to theBank.
The IAD independently carries out audit of various functions in theBank primarily to assess the effectiveness of internal control processes and compliancewith regulatory guidelines. The Bank has put in place extensive preventive and detectivecontrols including segregation of duty dual controls monitoring processes checking ofaudit trails supervisory reviews etc. to mitigate the various risks emanating frombanking business. IAD further ensures independent checks and balances and adherence tolaid down policies and procedures of your Bank and also recommends improvements inoperational processes and systems proactively.
To maintain the independence of these departments the performanceevaluation 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 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 ACB the Board of Directorsis of the opinion that the internal financial controls established and maintained by theBank are adequate.
Related Party Transactions
There were no materially significant transactions with related partiesduring the FY 2021-22 which could lead to a potential conflict of interest between yourBank and these parties. Prior omnibus approval is obtained from the ACB for the relatedparty transactions which are of repetitive nature as well as for the normal bankingtransactions which cannot be foreseen. The quarterly update on the details of transactionswith the related parties pursuant to the omnibus approval are placed before the ACB. TheRelated Party Transactions that were entered during the FY under review were on an arm'slength basis and were in the ordinary course of business pursuant to the approval of theACB. Further there are no Related Party Transactions required to be reported in FormAOC-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 hasbeen 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 suitablyamended by the Board on the recommendations of the ACB to align it with the changes madein 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 theprovisions of Section 186 of the Companies Act except sub-section (1) thereof do notapply to any loan made any guarantee given security provided or any investment made bya banking company in the ordinary course of its business. However the particulars ofinvestments made by the Bank are disclosed in the Financial Statements for the FY 2021-22forming 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 andWhistle Blower Mechanism' as required under Section 177 of the Companies Act Regulation22 of the SEBI LODR and applicable circulars issued by the RBI. This Policy aims toprovide an avenue to raise concerns on Ethical Legal or Regulatory violations andpromptly addressing them while assuring the confidentiality and protection of the WhistleBlower against any form of retaliation. Your Bank is committed to conduct all its businessoperations and transactions by maintaining highest ethical moral and legal standards.Your Bank encourages its employees all stakeholders and members of general public whohave concerns about suspected misconduct to come forward and express these concernswithout fear of retaliation or unfair treatment.
This Policy aims at putting in place a detailed Protected DisclosureMechanism based on RBI directions ('Protected Disclosures Scheme for Private Sector andForeign Banks') and in compliance with the provisions of Whistle Blowing / Vigil Mechanismunder the Companies Act read with the Companies (Meetings of Board and its Powers) Rules2014 and the SEBI LODR.
Significant and Material Orders passed by Regulators or Courts orTribunals
During FY 2021-22 no significant or material orders were passed by anyRegulators or Courts or Tribunals against your Bank impacting its going concern status andoperations in future. However during the FY 2021-22 the Reserve Bank of India vide itsorder 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 ofRs 1 Crore on the Bank on account of contravention of directions contained in Circularson "Lending to Non-Banking Financial Companies (NBFCs)" and "Bank Financeto Non-Banking Financial Companies (NBFCs)". Your Bank has enhanced its review andmonitoring mechanism to avoid such incidents in future.
Statutory Auditors and their Report
In terms of the 'Guidelines for Appointment of Statutory CentralAuditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs) UCBs andNBFCs (including HFCs)' dated April 27 2021 ('RBI Guidelines') issued by RBIbanks shall appoint the Statutory Auditors for a continuous period of three years subjectto the firms satisfying the eligibility norms each year and the approval of RBI on anannual basis. Further in terms of the RBI Guidelines and the Bank's Policy forAppointment of Statutory Auditors your Bank is required to appoint two statutoryAuditors. Accordingly the Members of the Bank at the 7th AGM held on August 06 2021 hadapproved the appointment of M. M. Nissim & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 107122W/W100672) as the Joint Statutory Auditors of the Bank for aperiod of three years to hold office from the conclusion of the 7th AGM until theconclusion of the 10th AGM of the Bank to be held in 2024. M. M. Nissim & Co. LLP isholding the office of Statutory Auditors along with Deloitte Haskins & SellsChartered Accountants (ICAI Firm Registration Number 117365W) who will hold office tillthe conclusion of 8th AGM.
Therefore the Bank is required to appoint one more audit firm to actas 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 ofDirectors has recommended the appointment of M/s. Singhi & Co. Chartered Accountants(ICAI Firm Registration No. 302049E) as Joint Statutory Auditors of the Bank for aperiod of three years to hold office from the conclusion of the 8th AGM until theconclusion of the 11th AGM of the Bank for the approval of the shareholders at theensuing AGM subject to approval of RBI on an annual basis. Approval of RBI has alreadybeen received for appointment of M M Nissim & Co. LLP Chartered Accountants (FRN107122W/ W100672) and M/s. Singhi & Co Chartered Accountants (FRN 302049E) as theJoint Statutory Auditors of the Bank for the year 2022-23 for their second year and firstyear respectively.
The Report given by the Joint Statutory Auditors on the financialstatements of the Bank for the financial year ended March 31 2022 forms part of thisAnnual Report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report. Also no offence of fraud was reported by the JointStatutory 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 andRegulation 24A(1) of the SEBI LODR the Board has appointed CS Anjan Kumar Roy PractisingCompany Secretary (FCS No.: F5684 C.P. No.: 4557) as the Secretarial Auditor to conductSecretarial Audit of the Bank for FY 2021-22. Accordingly the Secretarial Audit Reportfor FY 2021-22 is enclosed to the Board's Report as Annex - 3. There are noqualifications reservations adverse remarks or disclaimers in the Secretarial AuditReport. 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 penaltyof 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 ofcontravention of the directions contained in circulars on 'Lending to Non-BankingFinancial Companies (NBFCs)' and 'Bank Finance to NBFCs'." This has also beenmentioned under the para 'Significant and Material Orders passed by Regulators or Courtsor Tribunals'. Further no offence or fraud was reported by the Secretarial Auditor of theBank under Section 143(12) 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.
Corporate Governance is based on the principles of conducting businesswith integrity fairness and being transparent in all transactions making necessarydisclosures. Decisions are made in compliance with the laws of the land with fullaccountability and responsibility towards the stakeholders and a commitment to conductingall business in an ethical manner. Your Bank is committed to achieving the higheststandards of Corporate Governance and adhering to the Corporate Governance requirementsset by the regulators. A separate section on Corporate Governance standards followed byyour Bank and the relevant disclosures as stipulated under the SEBI LODR the CompaniesAct 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 CorporateGovernance as stipulated under SEBI LODR is annexed to the Report on CorporateGovernance which forms part of the Board's Report.
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 March31 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 onyour Bank's website at the said link upon filing of the same with the Registrar ofCompanies under Section 92(4) of the Companies Act.
Management Discussion and Analysis
The Management Discussion and Analysis Report for the FY 202122 asprescribed 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 ResponsibilityReport describing the initiatives taken by your Bank from an environmental social andgovernance perspective forms part of the Board's Report and is enclosed as Annex - 6.
Your Bank has prepared an Integrated Report based on the principlesenunciated by the International Integrated Reporting Council which has been hosted on thewebsite of your Bank and can be accessed at https://www.bandhanbank.com/annual- reports.The report provides information including financial and non-financial parameters whichwould enable the members to make well informed decisions and have a better understandingof your Bank's performance. It also deals with various aspects such as organisationalstrategy governance framework performance and prospects of value creation based on thesix forms of capital viz. financial capital manufactured capital intellectual capitalhuman capital social and relationship capital and natural capital.
Compliance with Secretarial Standards
The Board of Directors affirms that your Bank has complied with theapplicable provisions of the Secretarial Standards issued by the Institute of CompanySecretaries of India viz. SS-1 relating to Meetings of the Board and itsCommittees; 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 ofany of its employees which may fall under the ambit of 'sexual harassment' at workplaceand is fully committed to uphold and maintain the dignity of every woman constituentassociated with your Bank. It takes all necessary measures to ensure a harassment freeworkplace and has instituted an Internal Committee for redressal of complaints and toprevent/ prohibit sexual harassment in compliance with the guidelines enumerated in theSexual 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 FY13 complaints were received out of which 14 complaints had been closed during the FY. Twocomplaints were pending at the end of the FY which have since been closed.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
In our endeavour to achieve aggressive goals to reduce carbonfootprints the conservation of energy has been integrated with the vision of theorganisation and its operations. Your Bank has made it mandatory to use BEE StandardEnergy Efficient equipment and promote Energy Efficient Building Design ('ECBC') inthe upcoming projects. Some of the steps undertaken by your Bank towards conservation ofenergy are as under:
Smart building systems to achieve the highest level ofefficiency;
At banking outlets the focus is on insulation on walls androof optimum window wall ratio premises shape and orientation and re-engineering andretrofit of equipment;
Tracking of energy consumptions at all levels and comparing withthe best international benchmarks;
Incorporation of smart meters for energy use monitoring andengagement with key stakeholders at regular intervals to drive energy conservation inthe organisation culture;
Inclusion of the latest technologies in air-conditioning andinductive equipment in terms of variable drives and improved IKW (Consumption per Ton) inHVAC;
Lighting: Incorporation of 100 per cent. LED for lightingdaylight harvesting timed illumination of signage through central monitoring system.Natural daylight utilization is encouraged in your Bank buildings;
Daily operations and usage - Conservation through basichygiene practices on energy usage through occupancy sensors zoning of electrical circuitsand master switches for premises;
Water Conservation: Ground water recharge facilities throughrain water harvesting in upcoming projects volume flow controls at each sink point waterrecycling through STPs.
The details on the Information Technology used by your Bank in itsoperations have been provided under the section on 'Information Technology at the Bank' inthis Report.
The foreign exchange earnings of the Bank was Rs 62.38 lakh (includingthe net gains arising in all exchanges/derivatives transactions) whereas the foreignexchange 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 rapidlyadapting the new normal to ensure business continuity in these uncertain times. It hasbeen consistently focused towards adapting Digitization new e-learning modules acrossgenre and specifically emphasized on its expansion of Branches and Verticals for betterpenetration across the Country reaching out to every prospective customer. It has set anexemplary example of "Human Empathy" providing COVID-CARE support and work fromhome facilities for its fellow employees.
During FY 2021-22 your Bank has increased the manpower strength by 22per cent. from 49445 in FY2020-21 to 60211. Your Bank has Pan India network of 1189Retail Bank Branches 4252 Banking Units and 198 Home Loan Centers. Since inception ofyour Bank the manpower has increased by 224 per cent. and your Bank has added 124 percent. new branches since 2015.
Your Bank understands human motivation and dedicated efforts to achievethe desired goal. Your Bank is intended towards creating a workplace of Resilience whereemployees can Re-learn and Reimagine to excel and overcome this phase of turmoil. Toprovide a platform towards learning and self -growth your Bank has promoted an alignedarchitecture as:
Your Bank has adapted to digital connectivity to connect withtalents across the globe with the online mode of interview via MS Team to restrainphysical interaction in this pandemic era.
Competency based grade promotion process to nurture talent andto elevate employee motivation. 14003 employees promoted during FY 2021-22.
Succession planning for roles across the Bank. 5115 employeesidentified for role elevation during FY 2021-22 in the Bank based on Competency analysis.
Adaptation towards Digitization for an enhanced employeeexperience. Introduction of LOS process in Retail Assets portals like Bandhan Express hasalso been improvised.
Revamping the Retail Asset Model on-boarding more than 1100manpower during FY 2021-22 across regions compared to 60 manpower during FY 2020-21. YourBank proposed 48 Retail Asset centers across the Country to be made Operational.
Conducting both offline and online mode of Campus Hire creatingan energetic talent base. During FY 2021-22 your Bank has covered almost 56 Campus acrosscountry hiring 389 Fresh talent recruits across Tiers.
To nurture and empower the next generation of bankers your Bankhas partnered with Bandhan School of Development Management ('BSDM') who hasobtained affiliation of Maulana Abdul Kalam Azad University of Technology ('MAKAUT') -West Bengal to offer a Post Graduate Diploma in Banking and Finance. Over 9 BatchesConducted and 603 participants placed across 19 states. Batch X XI comprising 106students to be on-boarded by July' 2022. Batch XII comprising 69 students have beeninitiated in February 2022.
Your Bank continued extending empathetic support towards staffproviding HOMECARE facilities towards COVID-19 affected employees. Your Bank has extendedsupport towards 2146 staffs during FY 2021-22. Besides it also provided in house COVIDvaccination for employees based across regions and at Head Office.
Empaneled with Organizations like Gallup for a focused emphasison Employee Survey to further improvise employee experience with your Bank.
Over the journey of more than 6 years your Bank has strengthened itsworkforce by 3.2X resulting in an exciting blend of the old and new in a culture ofvalues-driven growth professionalism and ethical governance. A committed and dedicatedworkforce is the fundamental base towards strengthening the Bandhan Bank approach towardsresilience. Our Human Resources Management strategy is focused in emphasizing asupportive engaging & collaborative work environment remaining customer-centricperformance driven and absolutely future ready.
Your Bank is in the business of managing the risks inherent to thefinancial services industry as it aims to create maximum value for shareholders clientsemployees and communities. The ability to manage risk is a core competency of a bank andis supported by strong risk conduct and risk-aware culture. Your Bank's view of risks isdynamic reflecting the pace of change in the financial services industry.
Integrated Risk Management Framework
Your Bank operates an Integrated Risk Management Framework which iscentered on the embedding of a strong risk culture. The framework ensures that the toolsand capability are in place to facilitate risk management and decision-making across theorganisation. Risk appetite supported by a robust set of principles policies andpractices defines the levels of tolerance for a variety of risks and provides astructured approach to risk-taking within agreed boundaries.
All Bank colleagues share ownership of the way the risk is managedworking together to make sure business activities and policies are consistent with riskappetite. The methodology for setting governing and embedding risk appetite has beenfurther enhanced with the introduction of Long Term Risk Appetite with the aim ofincreasing alignment with strategic planning and external threat assessments.
Risk appetite defines the levels and types of risk that are acceptablewithin risk capacity in order to achieve strategic objectives and business plans. Itlinks the goals and priorities to risk management in a way that guides and empowers staffto serve customers well and achieve financial targets.
The risk appetite framework which is approved annually by the Boardbolsters effective risk management by promoting sound risk-taking through a structuredapproach within agreed boundaries. It also ensures that emerging risks and risk-takingactivities which would be out of appetite are identified assessed escalated andaddressed in a timely manner.
Your Bank's risk profile is a holistic representation of all risks thatit holds at a point in time in the form of a dashboard. Your Bank monitors its riskprofile and the Board quarterly reviews reports and analysis concerning its risk profile.
In your Bank risk culture is at the centre of both the risk managementframework and risk management practice. The target culture across is one in which risk ispart of the way employees work and think. The desired risk culture behaviours are alignedto your Bank's core values therefore forming an effective basis for risk culture sincethese are used for performance management recruitment and development.
The Board and Senior Management sets the "tone at the top" bysupporting a strong culture defined by the Bank's expectations that guides how employeesconduct themselves work with colleagues and make decisions. Employees are stronglyencouraged and expected to speak up as and when they see something that could cause harmto any stakeholder of the Bank risking its reputation. This is because risk management iseveryone's responsibility all employees are expected to challenge risk decisions whenappropriate and to escalate their concerns when they have not been addressedappropriately. Your Bank has a well-defined Whistle Blower Policy in place.
Conduct risk is the risk of inappropriate unethical or unlawfulbehaviour on the part of employees or individuals acting on behalf of the Bank or fromdeliberate or unintentional business actions or business practices that may be detrimentalin the interest of the Bank its customer or market. Your Bank has since its inceptionconsidered conduct risk as a very important parameter and critical for robust InternalControl Environment. The Risk Management Committee of the Board ('RMCB') reviewsthe 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 riskmanagement process comprise:
Regular assessment of the overall risk profile incorporatingmarket developments and trends as well as external and internal factors.
Monitoring of the risks associated with lending and creditexposures.
Assessment of trading and non-trading portfolios.
Review of potential risks in new business activities andprocesses.
Analysis of potential risks in any complex and unusual businesstransactions.
Risk Treatment and Mitigation
Risk treatment and mitigation is an important aspect of ensuring thatrisk profile remains within risk appetite. Your Bank's risk mitigation strategies arediscussed 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 mitigationactions) are considered.
Stress testing is a key risk management tool and a fundamentalcomponent of your Bank's approach to capital management. It is used to quantify andevaluate the potential impact of specified changes to risk factors on the financialstrength of the Bank including its capital.
Your Bank's Stress testing includes Scenario testing which examinesthe impact of a hypothetical future state to define changes in risk factors as alsoSensitivity testing which examines the impact of an incremental change to one or morerisk factors. These are reviewed and agreed by senior management through seniorcommittees 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 inorder to identify circumstances that may lead to specific defined outcomes.
Internal Capital Adequacy Assessment Process ('ICAAP')
The examination of capital requirements under normal economic andadverse market conditions enables your Bank to determine whether its projected businessperformance meets internal and regulatory capital requirements. The examination of capitalrequirements under adverse economic and market conditions is assessed through stresstesting. Your Bank carries out an internal assessment of material risks annually to enablean evaluation of the amount type and distribution of capital required to cover theserisks. This is referred to as the ICAAP. The ICAAP consists of a point-in-time assessmentof exposures and risks at the end of the FY together with a forward-looking stresscapital 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 onhow the Bank seeks to manage and govern its risk. Many Bank policies and documents anchorto the risk management framework's core principles.
The Board of Directors has the overall responsibility for your Bank'sRisk Management including culture and governance framework. The RMCB assists the Board indischarging these responsibilities effectively. The RMCB annually reviews and approvesthe risk management framework.
Your Bank's utmost priority is to strengthen by building the right riskand control infrastructure. Your Bank continues to enhance its risk management programmesincluding the non-financial risk management in accordance with Industry's best practicesand regulatory guidelines. The Board assesses management's performance provides crediblechallenges and holds management accountable for maintaining an effective risk managementprogramme 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 tothe RMCB and administratively to the MD & CEO.
In addition the CRO has the authority to escalate risks and issuesdirectly to the RMCB.
Major Risks and Emerging Risks
An important component of your Bank's risk management approach is toensure that Major risks and emerging risks as they evolve are identified managed andincorporated into its existing risk management assessment measurement monitoring andescalation processes. These practices ensure that a forwardlooking risk assessment ismaintained by management in the course of business development and as part of theexecution of ongoing risk oversight responsibilities. Senior management and the Boarddiscuss top and emerging risks on a regular basis.
Operational risk is the risk resulting from inadequate or failedinternal processes people and systems or external events.
Your Bank is committed to providing uninterrupted service to itscustomers and therefore to ensure business resilience and continuity of the variousoperational units a Business Continuity Management Framework has been put in place withthe objective to recover critical activities and systems within defined timelines; thesafety of people and its assets; communicate with stakeholders during an emergency; managereputation risk etc.
Your Bank has also initiated model-based approach for measurement ofOperational Risk VaR.
Your Bank has also in place robust Fraud Risk Outsourcing Risk andLegal Risk Frameworks within its Operational Risk Management.
Your Bank recognizes the increased importance of regulatory risk. Itkeeps a close watch on the developments in the regulatory environment and analyses theexpected impact of new regulatory guidelines on your Bank's businesses and strategy. YourBank also reviews the trend of regulatory observations for identifying the pattern ofobservations major risk areas and emerging risk to keep the risk under control. Your Bankhas done a comprehensive analysis of the Regulator's supervisory observations over theyears to increase the robustness of its regulatory compliance.
Information Security and Cyber Risks
Information security and cyber risks remain as major risks not onlyfor the financial services sector but for other industries worldwide. Your Bank is alsosubject to heightened risks in the form of cyber-attacks data breaches cyber extortionand similar compromises due to the increase in size and scale in nature of operations asalso clients' use of personal devices as the Bank has little or no control over the safetyof these devices. As the volume and sophistication of cyber-attacks continue to increasethe resulting implications could include business interruptions service disruptionsfinancial loss theft of intellectual property and confidential information litigationenhanced regulatory attention and penalties and reputational damage.
Your Bank has not experienced any material loss relating to these orother types of cyber-attacks. Cybersecurity risk is a priority for your Bank and wecontinue to develop and enhance our controls processes and systems in order to protectour networks computers software and data from attack damage or unauthorised access.Your Bank is also proactively involved in industry cybersecurity efforts and working withother parties including our third-party service providers and governmental agencies tocontinue to enhance defences and improve resiliency to cybersecurity threats.
Your Bank has set-up its own independent 24x7 C-SOC (Cyber SecurityOperations Centre) for a state-of-art centralized and consolidated cybersecurity incidentprevention security event monitoring detection and response capabilities to take intoaccount proactive monitoring and management capabilities with sophisticated tools fordetection quick response and backed by data and tools for sound analytics.
Your Bank defines credit risk as the risk of loss associated with aborrower or counterparty default (failure to meet obligations in accordance with agreedupon terms). Credit risk exists with many of our assets and exposures such as debtsecurity holdings and loans.
Your Bank balances the risk and return by setting certain objectivese.g. ensuring credit quality is not compromised for growth; mitigating credit risk intransactions relationships and portfolios; using our credit risk rating and scoringsystems or other approved credit risk assessment or rating methodologies policies andtools; pricing appropriately for the credit risk taken; detecting and preventinginappropriate credit risk through effective systems and controls; applying consistentcredit risk exposure measurements; ongoing credit risk monitoring and administration; andavoiding 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 mayarise from climate change or from efforts to mitigate climate change their relatedimpacts and their economic and financial consequences. These risks are typicallyclassified as physical and transition risks. Physical impacts include the potentialeconomic costs and financial losses resulting from the increasing severity and frequencyof extreme climate-change related events and longer- term progressive shifts in theclimate whereas transition impacts relate to the process of adjusting to a low-carboneconomy. Your Bank has identified the Physical Risk in the Bank's certain portion of itsadvance book which is prone to natural calamities such as flood and cyclone. Your Bankis presently having provision in its Credit Policy to support green financing andconsidering proposals from such segments to encourage green financing. Your Bank'sLiability Risks arising from people businesses seeking compensation for losses sufferedfrom physical or transition risks e.g. floods pollution etc. is minimal as yourBank's major loan exposure is into retail and micro finance segment and limited portfoliois under large segment.
Market risk is the risk of possible economic loss from adverse changesin market risk factors such as interest rates credit spreads foreign exchange ratesequity 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 lossfrom adverse moves in the financial markets. Your Bank uses VaR metrics complemented withsensitivity analysis and stress testing in measuring and monitoring market risk. TreasuryMid-office under the Risk Management function aggregates and monitors all exposures toensure risk measures are within its established risk appetite.
Asset/Liability Management involves evaluating monitoring and managinginterest rate risk market risk liquidity and funding. Interest rate risk whichpotentially can have a significant earnings impact arises because assets and liabilitiesmay mature or reprice at different times assets and liabilities may reprice at the sametime but by different amounts short-term and long-term market interest rates may changeby different amounts the remaining maturity of various assets or liabilities may shortenor lengthen as interest rates or interest rates may also have a direct or indirect effecton loan demand collateral values credit losses mortgage origination volume etc. YourBank assesses interest rate risk by comparing outcomes under various net interest incomesimulations using many interest rate scenarios that differ in the direction of interestrate changes the degree of change over time the speed of change and the projected shapeof the yield curve. 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. Your Bank has always maintained healthy Liquidity ratios; Liquidity CoverageRatio ('LCR') much above the regulatory minimum LCR requirement by havingsignificant HQLA ('High Quality Liquid Assets') as also the Net StableFunding Ratio ('NSFR') which is measured as the proportion of long-term assetsthat are funded by stable sources.
Strategic risk is the risk that the enterprise or particular businessareas will make inappropriate strategic choices or will be unable to successfullyimplement selected strategies or achieve the expected. Your Bank is monitoring thestrategic risk by tracking the continuous validity of the assumptions made in forming thestrategic plan and their alignment with the macro-economic environment as also the statusof your Bank's strategy plans vis-avis achievements. Your Bank has conducted a mid-termrisk review of its five-year strategic plan during the year under review and the Board hasdirected for the required directional changes.
Business risk is the possibility a company will have lower thananticipated profits or experience a loss rather than taking a profit. Your Bank has arobust Business Risk Management Framework in place which cascades the Bank's riskappetite statement into actionable metrics including various financial indicators aswell as the Bank's competitive position in the industry which helps the Board to monitorthe same.
Your Bank's reputation is rooted in the perception of its stakeholdersand the trust and loyalty they place in us is core to our purpose as a financial servicesorganization. Your Bank is fully aware of the importance of reputational risk and has putreputation as one of the anchors (along with earning capital and liquidity) forfinalising its risk appetite and has a Reputation Risk Dashboard as part of EnterpriseRisk Dashboard which is reviewed by the Board at quarterly intervals. Your Bank'sReputational Risk Management Framework consists of integrated parameters which mayinfluence various stakeholders. Your Bank has started measuring the idiosyncratic risksrelated to stock price movement as also social as well as traditional media sentimentscomplaints regulatory action etc.
Information Technology at the Bank
Information Technology has been a pivotal role player in the promisingjourney of your Bank. Few major initiatives taken during the FY 2021-22 are mentionedbelow:
Application portfolio rationalization to enter bankingenterprise landscape is underway.
Started migrating data and functionalities from old Core BankingSolution ('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 systemto modern resilient architecture.
ISO 20022 based domain model standardization for all BankingAPIs through a scalable and resilient API Gateway.
In process of introducing assisted intelligence while detectingearly warning using Artifical Intelligence ('AI').
Replacing a series of applications including Card ManagementSystems Treasury System Cash Management Solution etc. to a modern scalable highavailable and resilient solution.
IT Infra related enhancements:
Your Bank has set up its own Data Center ('DC') andDisaster 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 databackup in Primary DC as well as in DR site.
Setting-up high performance advanced state-of-the-arttechnology for Server/Storage/Network/Virtualization for smooth transformation to a newCBS.
The security of the DC has been strengthened by deploying thecontrolling solutions like Database Access Monitoring ('DAM') Mobile DeviceManagement ('MDM').
In order to facilitate undisrupted support and service advancedWork from Home ('WFH') solution has been implemented.
Privileged Access Management ('PIM') has been implementedto ensure that administrators have only the necessary levels of access to execute theirjobs. This enabled secured access and better control on user management.
ID Access Management ('IDAM') has been implemented toprovide a common platform for access and identity management information to help employeesto 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 theBank
There were no material changes and commitments affecting the financialposition 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'sReport.
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 if any;
ii. We 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 2022 and of itsprofit for the FY ended on that date;
iii. We 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. We have prepared the annual accounts on a going concern basis;
v. We have laid down internal financial controls to be followed by theBank and that such internal financial controls are adequate and are operating effectively;and
vi. We have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Acknowledgements and Appreciations
The Board of Directors of your Bank extends its gratitude for theinvaluable support and guidance received from the Reserve Bank of India other governmentand regulatory authorities and financial institutions. The Board also thanks thecorrespondent banks for their cooperation and help. The Board acknowledges the support ofits shareholders and also places on record its sincere thanks to its valued clients andcustomers for their patronage.
The Board also expresses its deep sense of appreciation to all theemployees for displaying their strong work ethics excellence at work professionalismteamwork commitment and initiative which has led to the Bank making good progress intoday's challenging environment. Further the Board extends its special thanks for theunmatched efforts put in by the employees of the Bank during these testing times causeddue to the ongoing COVID-19 pandemic to provide uninterrupted services to the customersand is deeply grateful and has immense respect for everyone who risked their life andsafety to fight this pandemic and deeply regrets the loss of life. Your Board willcontinue to strive for improvements as your Bank continues on its unique journey towardsfinancial 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) |