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DCB Bank Ltd.

BSE: 532772 Sector: Financials
NSE: DCBBANK ISIN Code: INE503A01015
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OPEN 160.80
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VOLUME 39380
52-Week high 244.60
52-Week low 159.35
P/E 13.74
Mkt Cap.(Rs cr) 5,022
Buy Price 161.85
Buy Qty 100.00
Sell Price 166.00
Sell Qty 1.00
OPEN 160.80
CLOSE 161.75
VOLUME 39380
52-Week high 244.60
52-Week low 159.35
P/E 13.74
Mkt Cap.(Rs cr) 5,022
Buy Price 161.85
Buy Qty 100.00
Sell Price 166.00
Sell Qty 1.00

DCB Bank Ltd. (DCBBANK) - Director Report

Company director report

Your Directors are pleased to present the Twenty Fourth Annual

Report of DCB Bank Ltd (hereinafter referred to as the Bank/Your

Bank/DCB Bank) together with the audited accounts for the year ended March 31 2019.

In FY 2019 the Bank has posted an Operating Profit of` 646.60 crore (FY 2018 Rs.524.97 crore) and a Net Profit Rs. 325.37 crore (FY 2018 Rs. 245.34 crore).

Total Assets have increased by Rs. 5569.74 crore and reached Rs. 35791.83 crore as onMarch 31 2019 (` 30222.09 crore as on March 31 2018). Customer Deposits have increasedby Rs. 5173.94 crore and Advances have increased by Rs. 3231.31 crore. Your Bank hasbeen contributing significantly to Priority Sector Lending (PSL) and has achieved theoverall PSL target as required by the Reserve Bank of India (RBI).

The Net Interest Margin (NIM) was 3.83% in FY 2019 as compared to 4.16% in FY 2018 andthe Current and Savings Accounts (CASA) ratio stood at 23.9% as on March 31 2019.

Cost to Income Ratio has decreased to 56.9% in FY 2019 from 59.8% in FY 2018. TotalBranch network stood at 333 as on March 31 2019 (318 as on March 31 2018) and ATMnetwork was 504 as on March 31 2019 (533 as on March 31 2018).

Provisions Other Than Tax have increased to Rs. 140.06 crore in FY 2019 from Rs. 138.80crore in FY 2018. The increase was mainly due to provision for existing and fresh NonPerforming Assets (NPA) slippages higher Floating provision and provision againstStandard Assets. Gross NPAs have increased to Rs. 439.48 crore as on March 31 2019 fromRs. 369.03 crore as on March 31 2018. Consequently Gross NPA Ratio as on March 31 2019was 1.84% as compared to 1.79% as on March 31 2018. Net NPAs have increased to Rs. 153.77crore as on March 31 2019 as against Rs. 146.72 crore as on March 31 2018. ConsequentlyNet NPA Ratio as on March 31 2019 was 0.65% as compared to 0.72% as on March 31 2018.The overall NPA Provision Coverage Ratio as on March 31 2019 was 78.77 % (75.72% as onMarch 31 2018).

Return on Assets (RoA) Ratio in FY 2019 was 0.99% as compared to 0.94% in FY 2018.Corresponding Return on Equity (RoE) Ratio in FY 2019 was 12.08% as compared to 10.31% inFY 2018.

Capital Adequacy Ratio (CAR) under Basel III as on March 31 2019 stood at 16.81%(16.47% under Basel III as on March 31 2018).

FINANCIAL SUMMARY

(Rs. in Crore)

Balance Sheet As at March 31 2019 As at March 31 2018 Increase / (Decrease)
Customer Deposits 24046.06 18872.12 5173.94
Inter Bank Deposits 4389.05 5134.74 (745.69)
Total Deposits of 28435.11 24006.86 4428.25
[Including Total CASA*]

[6809.90]

[5840.32]

[969.58]

Advances 23568.00 20336.69 3231.31
Gross – NPA 439.48 369.03 70.45
Net – NPA 153.77 146.72 7.05
Provision for Standard 97.11 89.65 7.46
Assets**
Total Assets 35791.83 30222.09 5569.74

 

Profit & Loss For the year ended March 31 2019 For the year ended March 31 2018 Increase / (Decrease)
Net Interest Income 1149.29 995.43 153.86
Non Interest Income 350.16 310.27 39.89
Total Operating Income 1499.45 1305.70 193.75
Operating Cost 852.85 780.73 72.12
Operating Profit 646.60 524.97 121.63
Provisions 140.06 138.80 1.26
Net Profit Before Tax 506.54 386.17 120.37
Tax 181.17 140.83 40.34
Net Profit After Tax 325.37 245.34 80.03

*Current and Savings Accounts (CASA)

**Including provision for unhedged foreign currency exposure and provision for specificStandard Assets

DIVIDEND

Your Board is pleased to recommend a dividend of Rs. 1.00 per equity share of Rs. 10.00each in respect of Financial Year ended March 31 2019.

MANAGEMENT DISCUSSION AND ANALYSIS

The present government has taken several unique structural and progressive steps inthe last few years. Assuming conducive domestic and global environment India is poisedfor solid economic growth. Interest rates are expected to decline or remain stabletherefore credit growth can be expected to be higher than the previous year. As usualmonsoons will be one of the key factors for determining demand and economic activity.Further the recent upgrade in India's Sovereign Rating by Moody's to Baa2 with stableoutlook the bank recapitalisation plan by the government and resolution of stressed loansunder Insolvency and Bankruptcy Code are likely to facilitate investment and momentum.

VISION

The Bank's vision is to be the most innovative and responsive neighbourhood bank inIndia serving entrepreneurs individuals and businesses. In line with our vision we beganimplementing a new strategy in FY 2010 which has now completed 9 years. The Bankcontinues to make steady progress and improvements are clearly visible in all areas of itsbusiness. In order to accelerate the business momentum further in October 2015 the Bankannounced its plan to increase its network by 150 more branches in 24 months. This planwas successfully completed by October 2017 and the total number of branches as on March31 2019 stood at 333. In the next 2 to 3 years the Bank is likely to open around 15 to 20branches per year.

TARGET MARKET

Keeping in view its inherent strengths branch network and expertise the Bank's targetmarket is mainly small business owners / self-employed / small business segment (tradersshopkeepers business owners MSMEs and SMEs). The Bank has chosen to have limitedpresence in the salaried segment. The MSME / SME sector is a vibrant and dynamic sector ofthe Indian economy and plays a very important role in the growth of the Indian economy.This segment is resilient and displays entrepreneurial spirit. Small enterprises createmillions of jobs and maintain social stability.

The MSME sector plays a pivotal role in the economic and social development of thecountry. In the long run Goods & Service Tax (GST) and other reforms are expected tobe beneficialto the economy. If MSME/SMEs reflect their business/sales completely in theirbank accounts then banks will find it easier to extend credit facilities for businessexpansion and working capital.

Some useful information on the MSME sector is given below:

Number of Working Enterprises: 63 million Employment: 111 million individuals

• Urban: 49% Rural: 51%

Manufacturing: 32% Trade 35% Other Service: 33%

• Sole Proprietor: 96%

(Source: Annual Report FY 2017-18 Government of India Ministry of Micro Small andMedium Enterprise)

DCB BANK CUSTOMERS

Your Bank provides banking services to a varied base of business owners self-employed/ small businesses for example – Commodity Trader Gold Trader Vegetable TraderCommission Agent Retailer

Restaurant Owner Caterer Baker Vending Machine Supplier

Consultant Doctor Contractor Interior Decorator Software

Designer Salon Beauty Parlour Printer Electrical Engineer Saw Mill

Flour Mill Rice Mill Grocery Store Brick Maker Builder Fabricator Artist WriterAuto Repair Ship Repair Pharmacy Computer Specialist Furniture Maker Uniform MakerGarment Shop Fashion Tailor Hardware Shop Agri Processor Pesticide Dealer AutoDealer Scrap Dealer Stationery Supplier FMCG or Consumer Goods Dealer Tool Maker AgriInput Dealer Tractor Dealer Plastic Manufacturer Mattress Manufacturer Water SupplierComputer Training Classes

Internet Cafe Coaching Classes Tour Operator Hotel Owner Transporter TicketingAgent C&F Agent amongst others. The list of Self Employed occupation is endless. Thetarget market is essentially

Micro Small and Medium Enterprises both in Manufacturing and Services. (Please referto MSMED Act 2006). Majority of lending to MSME sector qualifies for Priority SectorLending.

A major share of deposits and loans of the Bank are from the self employed segment.

CREDIT RATINGS

During the current year CRISIL Limited upgraded the Bank's rating for Tier IIBonds(underBaselIII)toCRISILAA-/Stableandreaffirmed its rating on the Bank's Certificatesof Deposit Programme and Short-term Fixed Deposit Programme at CRISIL A1+. The Bankcontinues to enjoy ICRA A+ (hyb)/ (stable) rating for Basel III Compliant Tier II BondsProgramme and ICRA A1+ rating for Short Term Fixed Deposits Programme and CARE A1+ forShort Term Bank Facilities.

AWARDS

Your Bank continued to be recognized for its progress and initiatives in variousfunctions.

Corporate Social Responsibility (CSR)

1) CSR Summit & Awards of UBS Forum BFSI Category - DCB

Bank was awarded for the project ‘Participatory Natural Resource

Management along Watershed Lines in the Tribal Belt of South

Rajasthan'.

2) Bombay Chamber Good Corporate Citizen Awards 2018 – Winner under Banking &Finance Companies category.

3) Asian Customer Engagement & Forum - ACEF Leadership Awards 2018 Excellence inCSR Social Impact Awards - DCB

Bank garnered Bronze for Best Environmental Behaviour Change

Award - Project : Participatory Natural Resource Management along watershed lines inthe Tribal Belt of South Rajasthan.

Human Resources

1) Asian Customer Engagement & Forum - ACEF HR & CSR Forum & Awards - Goldfor Best in-house publication in the "Engagement and Communications" category.

2) Asian Customer Engagement & Forum - ACEF HR & CSR Forum & Awards -Silver for Best Employee Engagement Scheme in the "Organisational Awards"category.

3) DCB Bank continues to be Great Place to Work-Certified. This year DCB Bank Ltd hasbeen recognized among India's 20 Best

Workplaces in BFSI - 2019.

Information Technology

Your Bank's efforts in modernising technology and being in the forefront of innovationwas recognised by many associations and forums.

1) Finnoviti 2018 Award for DCB Remit Initiative in Innovation category by BankingFrontiers.

2) Top 20 BSFI Leaders Award at BFSI Innovation and Technology Summit by Exito.

3) BFSI Leadership Award at BFSI Leadership Summit by eLets.

4) Winner at BIG 50 BFSI Leaders Award Summit by Trescon.

5) NextGen Digital Leader Award at Technology and Innovation Summit by DataQuest.

6) Winner at "BIG CIO 100 Awards Summit" by Trescon.

7) Winner of "CISO Platform 100" Award by CISO Platform.

BRANCH EXPANSION / ATMs

The number of branches as on March 31 2019 stands at 333 [Retail branches 189 and 144branches in Agri and Inclusive Banking (AIB)]. In line with the stated strategyapproximately 20 percent of the branches are in rural areas and 25 percent in semi-urbanareas. The branch expansion strategy which led to the opening of 150 new branches betweenOctober 2015 and October 2017 is now yielding results with a very high proportion of thebranches breaking even in less than 24 months from the start of their operations. The newbranches have a common look and feel and they are designed to provide a unique positiveand seamless banking experience for the customer. The Bankconstruction is a good hasjudiciously pruned ATMs which are financially less viable and it currently has 504 ATMs ason March 31 2019 as compared to 533 a year earlier.

RETAIL BANKING

Retail Banking has taken up the initiative to make the best of neighborhood bankingthrough (a) micro marketing initiatives focused on catchment areas and (b) continuouscustomer engagements. These engagements include discussions with tax experts methods ofadopting eco-friendly measures raising civic awareness blood donation forums teachingthe young good banking habits assisting older SMEs bridge the digital divideparticipating in neighborhood festivities children painting competition and driving goodhealth campaigns.

Our customers have varied financial needs at different points in time. They may havesurpluses which they may want to invest prudently deficits which they may want to tideover or cover risks and uncertainties of health life and business. In order to cater tothis wherever possible the Bank follows the principle of "all branches allproducts". It is a multi-product approach. This enables the branch to address nearlyall the banking needs of customers in the catchment area. It also helps to improveproductivity and service quality.

Mortgage and Micro Mortgage

Over the last few years Mortgage lending has been the lead product of the Bankprimarily addressing the requirements of the self-employed segment. As far as possibletailor-made solutions for home loans and business loans are offered to meet customerneeds. These customers may use the loan for various purposes such as home purchase homeimprovement home repairs business growth and personal expenses such as marriageeducation etc. Mortgages and Micro Mortgages together contribute approximately 40 percentof Total Advances. The Bank has engaged with various reputed builders for approval oftheir projects for home loans. Most of the retail and AIB branches offer Mortgage andMicro Mortgage loans. Micro or small ticket mortgage loans are most useful for customersin the Tier 2 to Tier 6 locations. The Bank has been able to increase its footprint in themicro mortgage segment. Many people in the rural and semi-urban areas generate informalincome derived from small activities or trade. At times this creates difficulty inestimating repayment capacity. Therefore the Bank needs to have the ability to assess thehousehold income in order to determine the loan eligibility. For almost every loanpersonal discussions are held with the borrowers and co-borrowers to improve creditassessment. Further most of the micro loans qualify under the PSL norms of the RBI. Aspart of The Government of India's

Pradhan Mantri Awas Yojana scheme during the year the Bank has processed the subsidyapplications for many home loan borrowers and subsidy has been credited to the customer'sloan account for 835 customers.

Construction Finance (CF)

Housing is a necessity and an integral part of the construction sector thus animportant contributor to the growth of our economy. The present government's variousprogramme/initiatives for providing affordable housing to both rural and urban areas andregulation of real estate industry will increase the demand for housing across country.This will create favourable conditions for construction of affordable housing in India.For banks financing opportunity. The Bank's approach is to focus on reputed builders witha strong track record who are primarily focussed on the affordable housing segment. Theimplementation of Real Estate (Regulation and

Development) Act 2016 in most states has improved the Bank's ability to monitor thecash flows of funded projects thereby improving the outlook for financing the developmentof real estate projects. Thus far the Bank has financed over 125 projects across 19locations in

India.

Commercial Vehicle (CV)

CV financing was restarted in FY 2013 to improve the Bank's ability to achieve PSLtargets set by RBI. The facility is currently offered across 195 locations. Almost 95%percent of the CV portfolio can be categorised as PSL. Although economic conditions wereweak during the year the portfolio quality has been maintained at an acceptable level.The CV industry is an essential part of the Indian economy and in the coming years theBank foresees an opportunity to build a strong CV portfolio.

Loan against Gold

Loan against Gold is offered in almost all Retail and AIB branches across the country.In FY 2019 in order to further improve the customer experience and reduce turnaround timefor customers the gold valuation process has been in-housed in select branches on a pilotbasis. The in-house valuation process will be rolled out across the country in the nearfuture. The Loan against Gold front end system "Gradatim" enables us to offer apaperless platform for Gold Loan processing thereby making the customer and employeeexperience delightful. Our "One Hour Gold Loan" process continues to delight ourcustomers. The Bank has many unique gold loan products. Our objective is to build a strongportfolio across the footprint.

Bharat Bill Payment System (BBPS)

BBPS offers integrated interoperable and anytime anywhere bill payment service for theconvenience of the bill payers across India. It facilitates seamless payment of billsthrough both digital and physical channels and empowers banks to operate the bill paymentecosystem.

DCB Debit Cards

The Bank offers cashback benefits for using its Debit Cards subject to maintainingprescribed average balance in CASA. At the end of FY 2019 the Bank had approximately500000 Debit Cards. The overall focus on "Digital India" is helping to increasedigital transactions rapidly. DCB Debit Cards also offer additional promotional benefitsfrom time to time.

DCB NiYo Cards

Your Bank has launched DCB NiYo Cards in partnership with Finnew

Solutions Pvt. Ltd. DCB NiYo Card has the capability to provide seamless compliantpayroll benefits to employees. The product has the potential to simplify the humanresource payroll processes of any organisation.

DCB Moneykit Cards

DCB Moneykit Cards was launched in January 2018 in partnership with Sienna SystemsResources Pvt Ltd. This is a distinctive proposition wherein loans get disbursed instantlyfor purchase of consumer durables or any other merchandise. The card has the uniquefeature of money on swipe wherein the customers pay only when the loan limit is utilised.

DCB Payless Cards

This is a unique product offered by the Bank and is a preferred card for thoseself-employed and small businessmen who are unable to provide sufficient income proof ordo not have an acceptable credit track record.

DCB Bank Prepaid Cards

DCB Bank has full suite of payment products on its prepaid platform. It has a platformfor product providers and businesses with small ticket transactions that are currentlyconducted in cash. It helps drive adoption of digital payments and the platform coverssolutions across Card Mobile and a combination of Card and Mobile.

Bharat QR (BQR)

BQR is a convenient and cost effective Mobile payment solution designed especially foryour Bank's small merchants and shopkeepers.

BQR is printed on an attractive DCB branded sticker and is placed at high visibilityareas in the store so the customers could scan and make mobile app based payments directlysettling into the account of the storekeeper held with DCB Bank.

DCB Unified Payment Interface (UPI):

UPI payment and acceptance channel empowers customers to link their multiple bankaccounts in a single UPI enabled mobile app this makes fund transfers instant andconvenient. Your Bank has more than 50000 account holders using UPI channel. Your Bank isin the forefront adopting all the new developments and updates made available on the UPIchannel for the security and ease of users.

DCB Remit

"DCB Remit" allows resident individual to send money abroad online from Indiato over 20 countries including USA Canada Australia

UK UAE and Germany. The transactions can be tracked on mobile phone or on internet.Also the Bank has signed an agreement with

"Instarem" for outbound money transfers to individuals from India.

Insurance and Mutual Funds

The Bank has corporate agency for life insurance health insurance and generalinsurance and has tie ups for referring/distribution of mutual funds. The main intentionof the Bank is to deepen relationship with both deposit and loan customers while enhancingfee income. In case of death or critical illness lack of adequate insurance coverage cancause major financial stress to the family. Keeping this in mind the

Bank strives to make customers aware of their insurance needs and take informeddecisions.

Traditional Community Banking

With a vision of strengthening neighbourhood banking the Bank set up a separatevertical in FY 2010 to focus on Traditional Community

Banking. The aim was to address the specific needs of the vintage neighbourhoodCommunity customers and provide personalized solutions wherever possible. This perhaps ispurest form of neighbourhood banking and is directed towards addressing small credit needsof education personal business and working capital.

Non-Resident Indian (NRI) business

In FY 2019 NRI deposits contributed to 8.6% of the Total Retail Deposits of the Bank.During the year 1602 NRI customers were sourced and 2616 NRI accounts were opened. TheBank now has close to 15000 customers across 134 countries of the world. The Bank has adedicated team of Relationship Managers (RMs) and Customer Care Associates in the callcentre to address the needs of NRI customers. The Bank intends to continue to build itsNRI business as it is an important source for deposits and remittance fee income.

COLLECTIONS AND RECOVERIES

Collections and Recoveries is a critical function for the Bank. Over time thisfunction has developed robust capabilities to collect overdue payments and ensureportfolio quality across products. The senior officers in Collections are experienced tounderstand the issues faced by customers and strive to find legal and compliant ways torehabilitate them during stressed times. The team operates out of 245 locations in India.Collections and Recoveries team uses data analytics to improve predictability targetingand collector productivity. The m-Collect

Mobile App for providing system-generated receipts on the field is working efficientlyand provides real time updates to the loan system.

STRATEGIC ALLIANCES

One of the key strategies of the Bank is to look for alliances with entities that mayhave similar business objectives. The idea is to enhance product benefits in order tofacilitate new customer acquisitions and customer retention. Over time we expect strongercustomer loyalty and increased fee income.

The list of various strategic alliances and business associations of your Bank is givenbelow;

Bancassurance:

Partner Name Type of arrangement
Aditya Birla Health Insurance Company Ltd. Corporate Agency
Aditya Birla Sun Life Insurance Company Ltd. Corporate Agency
HDFC Standard Life Insurance Company Ltd. Corporate Agency
ICICI Lombard GIC Ltd. Corporate Agency
Royal Sundaram General Insurance Company Ltd. Corporate Agency
Prepaid Solutions:
Partner Name Type of arrangement
Muthoot Finance Limited Prepaid Solution
Hero Fincorp Limited Prepaid Solution
EQX Analytics Private Limited Prepaid Solution
Remittance Solutions:
Partner Name Type of arrangement
Avenues Payments India Pvt. Ltd. (DCB Remit) Remittance Platform Solution
INSTAREM India Pvt. Ltd. Remittance Solution
Service Partners:
Partner Name Type of arrangement
Atos Worldline India Pvt. Ltd. Merchant Acquiring
CMS Info Systems Limited ATM deployment and cash management
Euronet Services India Pvt. Ltd. ATM and Switch management
M2P Solutions Pvt. Ltd. Program Partner (Prepaid programs)
Skilworth Technologies Pvt. Ltd. (Bijlipay) Merchant Acquiring
Business Alliances:
Partner Name Type of arrangement
Aditya Birla Finance Ltd. Lending Business
Fintech Alliances:
Partner Name Type of arrangement
Finnew Solutions Private Limited (NiYo) Digital Salary Account
Sienna Systems Resources Pvt. Ltd. (Slonkit & Moneykit) Money Management Solution

MSME and SME

The MSME and SME segment is large ubiquitous and growing.

This segment is the core target market for your Bank. With GST implementation well andtruly underway this segment is seeing increasing participation from a wide spectrum oflenders right from fintechs to established banks. The Bank strives to be the businesspartner of MSMEs/SMEs by offering custom made solutions to meet the financial demands ofthis segment. The Bank offers a range of products and personalized services includingForeign Exchange

Cash Management Trade Finance Invoice Financing and Internet Banking which providethe customer both higher value and increased convenience. Given the inherent risksassociated with this segment the Bank continues its strategy of having a large portfolioof small ticket exposures.

CORPORATE BANKING

The Bank's intention is to have a limited exposure in Corporate

Banking. This business operates across India with regional offices in AhmedabadBengaluru Chennai Delhi Hyderabad Kolkata and Mumbai. The business objective is toprovide a complete range of commercial banking solutions including Foreign Exchange Trade

Finance and Cash Management. The Bank has a robust underwriting and credit system toaddress the inherent risks in Corporate Banking. The emphasis is on building a securedloan portfolio and creating long term relationships with high quality large andmid-corporates. Regular review exposures are conducted with the aim of initiating timelyaction in case of any emerging risks. In order to ensure the quality the focus ofattention is to improve continuously understanding of the borrower's business/prospectsensuring the right mix of products enhance analytics and tracking. The Corporate Bankingportfolio quality remained stable during the year. In FY 2019 the Bank added 24 newrelationships in Corporate

Banking. The unit improved on capital efficiency by optimising risk weighted assetsutilisation in the portfolio and adopted differentiated risk based pricing with focus onReturn on Equity. The unit also responded to the market conditions of liquidity andsegment stress by quickly reducing exposures and tenor. This also helped in reducingconcentration risks both at customer and segment level. Your Bank understands that theRelationship Managers (RMs) must have in-depth knowledge of various industries andcorporates. The Bank on an ongoing and continuous basis invests in knowledge improvementthrough training programs.

AGRI AND INCLUSIVE BANKING (AIB)

AIB is a separate unit with the main aim of achieving financial inclusion PSL andenhancing rural/semi urban footprints. At the end of March 2019 AIB had 144 branches in10 states of India. There are many opportunities to offer simple innovative productsbacked by superior technology in the rural/semi-urban areas. Some of the new branches arelocated in Tier 2 to Tier 6 locations. There is a constant endeavour to cater tounderbanked and unbanked population of the country through a wide range of products forexample zero balance savings account small recurring deposit account small loans tomatch the income and cash flow cycle. AIB also coordinates the entire PSL efforts for theBank and is primarily responsible for achieving the financial inclusion targets.

Pradhan Mantri Jan-Dhan Yojana (PMJDY)

In FY 2019 your Bank actively participated in PMJDY. The Bank had 31612 PMJDYaccounts as on March 31 2019. The Bank has enabled Rupay Debit Cards for PMJDY accountholders.

Pradhan Mantri Suraksha Bima Yojana (PMSBY) Pradhan Mantri Jeevan Jyoti Bima Yojana(PMJJBY) Atal Pension Yojana (APY) The Bank successfully reached out to unbanked andeconomically weaker population through PMSBY PMJJBY and APY programs that are designed tobring social security. Your Bank had 7214 customers under PMSBY; 3323 customers underPMJJBY and 1347 customers in APY as on March 31 2019.

BSBDA (Basic Savings Bank Deposit Account)

BSBDA has replaced "No frills account". This is a wonderful product forachieving financial inclusion especially for those who have limited transaction needs inthe low income group. The Bank had 53095 BSBDA accounts as on March 31 2019.

Kisan Mitra

"Kisan Mitra" as the name suggests is a liability product which fulfils therequirement and enhances the saving habit in rural areas. It is a product speciallydesigned for farmers. It is a modified Savings Account with zero account opening amountand no Average Quarterly

Balance maintenance charges.

Retail Agriculture Loan and Kisan Credit Card

In order to meet the credit needs of the farmers the Bank has several retail agriproducts namely Kisan Credit Card which provide for short term requirement like purchasingseeds fertilizers pesticides manure irrigation long term loan for animal husbandryand loans for investment purpose like land improvement irrigation and hi-techagriculture.

Tractor Loans

Tractor Loans is an integral part of the total agricultural equipment sector and is anindirect indicator of growth in the agricultural sector. The Bank has slowly built itsbusiness across Tier 2 to Tier 6 branches.

Providing tractor loans helps the Bank to partly meet PSL targets for agriculture andsmall and marginal farmers set by the RBI. This year your Bank has started used tractorfinance which would benefit small & marginal farmers who cannot afford new tractors.

For Tractor Loans the Bank has a Tab Banking where the sales team can provide doorstepprocessing to the customers and quickly inform them regarding the status of their loans.

Microfinance Institutions (MFIs) and Business Correspondents (BCs)

The Bank lends directly to MFIs who in turn lend to end borrowers.

Over time the Bank has created a strong network of MFI relationships across India. TheBank is also providing unsecured loans through

BCs in few states. Loans are given to members of Self Help Groups (SHGs) and JointLiability Groups (JLGs) for activities thereby enabling them to avail small loans from thebanking sector instead of high cost borrowing from money lenders. These loans areprimarily provided to small farmers and weaker sections mainly in rural areas. In order tosupport volume growth your Bank has an efficient software system for managing BC Loans.This software helps maintain adequate information about the borrowers under SHGs and JLGs.It provides a common platform for both Bank and BC for smooth processing of loans and hasadded immense value by reducing the loan disbursal cycle time In FY 2019 the MFI industryhas shown a positive growth along with better portfolio quality. The Bank has alwaysadopted a cautious approach towards this sector and it is taking several steps to maintainportfolio.

TREASURY MONEY MARKET AND FOREIGN EXCHANGE

Treasury

Treasury actively manages Liquidity Fixed Income Securities Trading Investments inEquity through Initial Public Offers (IPOs) and

Foreign Exchange. Treasury is responsible for ensuring compliance with regulatoryrequirements such as Cash Reserve Ratio (CRR) and

Statutory Liquidity Ratio (SLR). In FY 2019 the Bank made gains in a cautious mannerby utilizing the trading opportunities in G-Sec presented by declining interest rates inthe second half of the year.

The Bank selectively invested in a few Equity IPOs and booked moderate listing gains.The Bank also invested in medium term AAA

Corporate bonds and Units of Liquid Mutual Funds in order to earn interest income onliquidity mismatches.

Money Market

India reported average Gross Domestic Product (GDP) growth of 7.20% p.a. for the periodApril to December 2018. The GST collections have been robust. The Index of IndustrialProduction (IIP) growth recovered on the back of growth in the manufacturing electricityand mining sectors. The Consumer Price Index (CPI) inflation came down from a high of 5.0%in July 2018 to 2.57% in March 2019. The RBI conducted variable rate Reverse Repo/CashManagement Bills to soak up excess liquidity and Open Market Operations (OMOs) to infuseliquidity whenever required. Indian stock market indices went up by more than 12% on theback of improving macroeconomic conditions in the second half of the FY2019 after seeing asteep fall initially which could be attributed to rising crude oil prices falling Rupeeand rising US Yields

Foreign Exchange

As usual a few geo-political events in FY 2019 affected the global and Indian markets.This included a strong stance taken by US Fed on hiking interest rates and a range ofmeasures announced by both US policy makers and European policy makers. US imposedsanction on

Iran which resulted in higher crude oil prices which moved up from $64/ barrel to $86/barrel before cooling off to $66/ barrel after US intervention and Saudi Arabiaincreasing supplies. The Rupee moved in tandem with fluctuating Oil prices. Uncertaintiesremained around the Brexit deal. FII's have been net sellers of Indian Equity and Debt inFY 2019.

TRANSACTION BANKING

Cash Management Services (CMS)

The Bank provides Corporates MSME/SME and Retail customers sophisticated and costeffective CMS. This helps customers manage their collection and payment logistics withease. In the last few years the Bank has steadily increased CMS customers. The Bank addedone new vendor for CMS cheque collections taking the total to 18 vendors pan India. TheBank has upgraded the CMS system for both payments and collections making it rich infeatures. At the end of FY 2019 the Bank had 7094 active customers using the CMSfacility.

Business Internet Banking (BIB)

The Bank offers state-of-the-art BIB product especially designed for

MSME/SME customers. The adaptive and responsive feature of the application makes ituser friendly for customers across devices. At the end of FY 2019 BIB facility is availedby 32131 users.

RISK MANAGEMENT

Risk is an integral part of the banking business and the Bank's aim is to maintainportfolio quality by making appropriate risk/reward tradeoffs. The Bank is exposed tocredit concentration market country exposure liquidity operational fraud andreputation risk. The Board of Directors of the Bank has oversight of all the risks assumedby the Bank and has delegated its power to manage risks to Risk Management Committee (RMC)of the Board.

Credit Risk

The Credit Risk unit ensures alignment with the objectives of achieving growth whilemaintaining portfolio quality by making appropriate risk / reward trade-offs. The idea isto ensure long-term sustainable performance across business cycles. On-going efforts aremade to improve risk assessment and controls. Credit Risk unit over time has developedcapabilities to assess the risks associated with various products and business segments.As far as possible efforts are made to standardize the entire process pan India whiletaking into account geographic nuances. The Bank has implemented a rating model that takesinto account both quantitative and qualitative factors and produces a rating that becomesone of the key inputs to credit decisions. One of the focus areas for the Credit functionwas improving productivity and customer experience. In order to continuously improve thequality of the portfolio the Credit Risk unit uses SAS analytics and has created severalinsightful models that helped in refining the product offering choosing the targetsegment of customers collections and recoveries. Key processes in credit underwritingwere examined and duplication was reduced to improve speed of processing. Periodicportfolio reviews were conducted with the business units that helped improve portfolioquality.

Concentration Risk

Concentration risk is monitored and managed both at the customer level and at theaggregate level. The Bank inter alia continuously monitors portfolio concentrations bysegment ratings borrower group sensitive sectors unsecured exposures industry andgeography. The Bank adopts a conservative approach within the regulatory prudentialexposure norms.

Market Risk

Besides the usual monitoring of Structural Liquidity Interest Rate

Sensitive Gap limits and Absolute Holding limits the Bank also monitors interest raterisks using Value at Risk limits. Exposures to Foreign Exchange and Capital Markets aremonitored within pre-set exposure limits margin requirements and stop-loss limits.

Country Exposure Risk

The Bank has established specific country exposure limits which is capped at 1.5% ofTotal Assets. The limit also depends upon rating of individual countries. The Bankmitigates risks using insurance cover available through the Export Credit and GuaranteeCorporation (ECGC) where appropriate.

Liquidity Risk

As part of the liquidity management and contingency planning the Bank assessespotential trends demands events and uncertainties that could result in adverse liquidityconditions. The Bank's Asset Liability Management (ALM) policy defines the gap limits forthe structural liquidity and the liquidity profile is analysed on both static and dynamicbasis by tracking cash inflow and outflow in the maturity ladder based on the expectedoccurrence of cash flow. The Bank undertakes behavioural analysis of the non-maturityproducts namely CASA

Cash Credit and Overdraft accounts on a periodic basis to ascertain the volatility ofbalances in these accounts. The renewal pattern and premature withdrawals of Term Depositsand drawdowns of unavailed credit limits are also captured through behavioural studies.

The liquidity profile is estimated on an active basis by considering the growth inDeposits Advances and investment obligations. The concentration of large deposits ismonitored on a periodic basis.

Emphasis has been placed on growing Retail deposits and avoid as far as possible bulkdeposits. The Bank periodically conducts liquidity stress testing.

Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internalprocesses people or systems or external events. The Bank's operational risk managementframeworkisdefinedin the Operational

Risk Management Policy approved by the Board of Directors. While the policy provides abroad framework Operational Risk Management Committee (ORCO) oversees the operationalrisk management in the Bank. The policy specifies the composition roles andresponsibilities of the ORCO. The framework comprises identification assessmentmanagement and mitigation of risks through advanced tools and analysis.

Process Review

Your Bank strives to continuously improve process controls and customer satisfaction.The Bank has a separate cross functional committee – Management Committee forApproval of Processes (MCAP). New products and processes are subjected to review by MCAP.The Committee is tasked with identifying operational and compliance risks in newproducts/processes and ensuring that steps are taken to mitigate the risks. Also MCAP onan on-going basis reviews existing processes for further improvement. In the FY 2019 122products/processes were reviewed by MCAP.

Reputational Risk

The Bank pays attention to issues that may create Reputational risks.

Events that can negatively affect the Bank's reputation are handled cautiously ensuringutmost compliance and in line with the values of the Bank.

IMPLEMENTATION OF BASEL III GUIDELINES

In accordance with the RBI guidelines the Bank has migrated to

Basel III capital adequacy disclosures with effect from Q1 FY 2014.

The Bank continues to review and improve on its risk management systems and practicesto align them with international best practices. The Bank has implemented StandardizedApproach for Credit Risk Standardized Duration Approach for Market Risk and BasicIndicator

Approach for Operational Risk.

INFORMATION TECHNOLOGY (IT)

The banking landscape is changing rapidly. Existing models and approaches are beingchallenged every day. Customers are demanding high level of digitisation. Your Bank hastaken many initiatives to keep pace with the changes. It has created a detailed anddynamic

"digitisation" plan that is being executed in a systematic manner.

The intention is to meet / exceed customer expectations by taking advantage of thedigital revolution. During FY 2019 the Bank implemented many new applications andupgrades.

1) API Banking – this is the future of banking. The Bank tied up with partners tooffer "frictionless" banking experience.

2) Fraud Risk Management – a new advanced system to monitor and identifyfraudulent activities in various channels

3) Zippi Plus – end to end digital online Term Deposit solution for customers

4) SME Platform end to end SME lending platform developed in-house. This system helpsto improve customer experience and staff productivity

5) Branch Locker Module automated and efficient solution replacing existing manualprocesses.

6) Mobile Solution for Commercial Vehicle – a smartphone solution for efficientcapture of leads and KYC / CIBIL checks.

7) Bank Statement Analyser – automates cumbersome paper based analysis saves timeand improves accuracy.

8) e-NACH –automation of mandate management that facilitates ease of informationexchange and reduces overall processing time.

9) DBSA DCB Delight – an insta-kit for immediate on-boarding of small CurrentAccounts 10) PPA (PFMS Print pay Advice) (Public Financial Management System) - a platformfor e-payment of subsidy under Direct

Benefit Transfer (DBT) to both Aadhaar based and non- Aadhaar based bank accountsthrough NPCI. The Bank has implemented

PPA payments module through PFMS for the beneficiaries covered under these schemes. 11)Near DR setup of critical applications – to protect data of critical applications inreal-time a near DR setup as third data center has been created. A powerful "2GBPS" dark fiber direct connectivity has been configured between Primary DC and NearDR for real time replication of data.

12) SWIFT Upgrade and STP Implementation – implemented STP between core bankingand SWIFT. The Bank has also upgraded SWIFT version and implemented dual factorauthentication for user login.

13) Big Data – implemented a scalable contemporary and robust framework to handlethe four V's of data namely Volume Variety Velocity and Veracity. In FY 2019 the Bankhas replaced 47 existing MIS reports with Big Data capabilities giving instant accurateand rich information.

OPERATIONS

The Bank's focus is on creating a "Centre of Excellence" at Operations bydelivering delightful experience to customers. This was achieved by in-sourcing majoractivities resulting in improved cycle time and reduction in errors. The Robotic ProcessAutomation (RPA) was also used for automating various manual processes. During FY 2019the enhanced version of NACH platform was implemented which has various features offeredby NPCI.

INTERNAL AUDIT (IA) AND VIGILANCE

IA continued to be the effective tool of control and compliance in your Bank. The teamcomprises of professionals experienced bankers and domain experts. Every year IA inductsand grooms newcomers with audit and finance background to strengthen the IA capacity. The

IA team functions under the able guidance of Audit Committee of the Board (ACB) whichreviews the Audit Charter/Manual on an annual basis and ensures that IA has put in place adetailed risk assessment and audit planning process. On a pilot basis a centralisedContinuous

Monitoring System has been implemented to help identify control issues as early aspossible.

In FY 2019 IA conducted 171 branch audits 28 periodic audits 7 compliance audits 4snap audits and 6 IT audits. In order to further improve effectiveness the Bank hasstarted in-housing Concurrent Audits in a phased manner. The Vigilance unit is a smallhigh quality team. Vigilance reviews "alerts" received from various sources toidentify issues and control potential frauds. In order to further enhance fraud controlmechanisms a new software "Fraud Risk Monitoring" has been introduced. TheVigilance team has been streamlining the process of identification and updating list ofundesirable individuals and entities on a continuous basis to prevent them from enteringinto the banking system.

COMPLIANCE AND RISK BASED SUPERVISION BY THE RBI

The Bank's Compliance unit is independent of its business and operation functions. Ithas created detailed procedures to ensure compliance with all applicable regulations. Inaddition to ensuring timely submission of various returns to regulatory and statutoryauthorities the Compliance unit also ensures that the Bank's internal procedures andprocesses are in adherence with the applicable regulatory and statutory guidelines. TheCompliance unit is also responsible for AML / KYC monitoring and for executing the samethe Bank relies on advanced software and analytics. The Bank is a member of Banking Codesand Standards Board of India (BCSBI).

The Bank is covered under the Banking Ombudsman Scheme of the RBI wherein escalatedcustomer complaints received through the Office of the Banking Ombudsman are addressedunder a well-defined Customer Grievance Redressal mechanism. To strengthen the internalgrievance redressal system and to ensure that the complaints of customers are redressed atthe level of Bank itself to the extent possible an internal Ombudsman has also beenappointed in line with

RBI guidelines. The Compliance function also has a separate unit for Compliance testingon an ongoing basis.

HUMAN RESOURCES (HR)

Your Bank strives to provide an environment where people can learn grow and progresswhile delivering sustainable results for the Bank. The main focus is to create a uniquecaring culture and nurture talent for future business expansion and growth. Throughsophisticated tools training and intervention continuous efforts are made to improveskill sets team work productivity empathy and adherence to compliance and controls.

In FY 2019 the Bank's headcount went up to 6134 (5790 in FY 2018). There was anincrease in hiring through our unique employee referral scheme "LINK" (i.e. 42%in FY 2019 v/s. 32% in FY 2018) and hiring through our internal job posting which wentupto 50%. The candidate portal which was launched in the previous year has now a databaseof more than 29000 resumes. The Bank has an increasing following on LinkedIn. The Bankhas made a lot of effort in building its brand with the young population through itscampus interaction.

"The Top Recruit" program continues to help us enhance our brand at Tier 3and Tier 4 business schools in cities like Bengaluru Delhi Kolkata and smaller towns inMaharashtra. The Bank continues to create a strong culture of learning through the

Individual Learning & Development Scorecard (ILDS) spanning the entire employeelife cycle. All new joinees undergo critical mandatory classroom training programsincluding an elaborate Induction module. More than 97% employees continued to get coveredunder at least one workshop or e-learning module. The Bank has revamped its onlinelearning academy "LUMOS" with enhanced features classroom management andmobility options which facilitates ease of learning. More than 80% of the employees usedat least one learning module in LUMOS in FY 2019 as compared to 76% in FY 2018.

In FY 2019 over 4000 employees across India were imparted direct training on ourculture of Teamwork; coined as "CREW"(Collaborate Respect Encourage and Win).In addition to this the Bank continued to focus on signature training programmes namelyGlobal Leadership Development Programme Budding Branch Manager SPRINT ASPIRE and RISEwhich helped build the next cadre of leaders in our Bank. In FY 2019 eight high potentialSenior Management team members participated in world class leadership programmes. As partof the RBI's capacity development policy the Bank has tied up with Moody's Analytics aglobally recognized certification agency to certify its employees on critical roles. TheBank has also tied up with Indian Institute of Banking Finance (IIBF) to certify employeesfor Audit & Compliance Treasury Operations and Credit Appraisal ratings. A total of490 Bank employees were certified FY 2019 in partnership with the aforesaid agencies. TheBank "Project Prayas" which was launched for improving knowledge andunderstanding of various regulatory and compliance circulars.

"Lead Generation" a sales centric training program now in its second yearhas helped the Bank generate large amount of actual business and pipeline for the future.As part of growth and career management 10% of the employees have been promoted throughthe Bank's unique annual promotion process In order to enhance the overall quality of thestaff a job evaluation process has been introduced for certain job categories.

S-PEAK survey continued into its third year with 99% employees participating in thisunique initiative to provide feedback on their supervisors. The main idea of S-PEAK is tohelp supervisors to become better managers and deliver superior performance by using thepointers in the survey.

The Bank has been conducting an internal service poll (ESQ Empathy Speed and Qualityour pillars of service) for the past seven years which provides feedback on the level ofservice and support that all departments/units provide to each other. The poll results arecollated analysed and shared across all the units. The HR team organises stakeholdermeetings to interpret the poll results and create action items for improvement.Ultimately better Internal Employee ESQ will lead to improvement in customersatisfaction. Every year the Bank has been able to improve Internal ESQ scores.

"DCB Chaupal" and "Hour HR" (our signature live radio show)continue to help employees interact with the HR team and seniors directly. This year theBank launched "Empowering CREW" (part of the teamwork culture initiative) toaddress any issues that can be resolved within units through mutual co-operation. . Theemployees are also engaged through various activities in the Bank via our quarterlynewsletter "High Decibel". On an annual basis the HR team conducts DCBAllympics a mega sports event across the country. The Bank has a powerful and popularyearly program for employee recognition - "Movers & Shakers" where topperformers and teams pan India are recognized for their contribution. This event alsoprovides a unique opportunity to employees to showcase their talent in terms of singingdancing acting and playing any instruments as well.

STAFF PARTICIPATION IN CORPORATE SOCIAL

RESPONSIBILITY (CSR)

Your Bank employees enthusiastically participated in Clean Up and Green Up (treeplanting) activities around the branch neighbourhood. In FY 2019 over 700 employees panIndia participated in CSR activities of the Bank availing the unique two days paid CSRleave per year. The Bank has identified CSR volunteers at various locations across theBank. The activities executed range from lake clean up waste management habitatrestoration park clean up tree planting creating awareness amongst people on waterconservation and waste management. Trees are critical for human existence on earth. Theworld and our country urgently need a sustainable model that allows development withoutdamage to the environment. As part of this thinking the Bank facilitated planting of118137 trees during FY 2019. Extensive tree plantation was undertaken in the buffer zonesof in wildlife sanctuaries for mitigating climate change and improving the microclimate.Tree plantation activities create gainful employment especially tribal communities livingin the periphery of the wildlife sanctuaries. As part of reducing water usage and reducingpollution the Bank has a program to install "waterless" urinals. In waterstarved regions the Bank has CSR initiative to fixnon-electric bio-sand water filters invillage schools. In order to promote renewable energy solar panel lighting was installedin remote tribal villages that cannot be connected with electricity grids. In FY 2019 theBank was recognized for its CSR efforts:

1) CSR Summit & Awards of UBS Forum BFSI Category - DCB Bank was awarded forProject Participatory Natural Resource Management along watershed lines in the Tribal Beltof South Rajasthan.

2) Bombay Chamber Civic Awards & Good Corporate Citizen Awards - 2018 for"Good Corporate Citizen Awards - Banking & Finance Companies".

3) Asian Customer Engagement & Forum - ACEF HR & CSR Forum & Awards- DCBBank garnered Bronze for Best Environmental Behaviour Change Award - Project ParticipatoryNatural Resource Management along watershed lines in the Tribal Belt of South Rajasthan.

CUSTOMER SERVICE

Customer delight and satisfaction with every banking interaction is central to theBank's effort in building a strong business franchise across India. An established processfollowed rigorously customer complaints and satisfaction levels are monitored by theManaging Director and Chief Executive Officer along with the Senior Management team. TheBank has constituted the Service Excellence team to analyse customer complaints identifyroot causes make suggestions for process improvements and works with the various businessand service teams to adapt adopt and implement processes and standards. The Bank has a"Centralised Complaint Management" system and rigorous standards to ensure thatcustomer queries and complaints are not missed out and are resolved in a timely manner.The Bank continues to make steady progress on the concept of Power of Three - EmpathySpeed and Quality (ESQ) initiative launched eight years ago. The Bank continuously workson the six pillars of Service Excellence Voice of Customer Service Recovery AttritionCalling Process Simplification Service Culture and Measures and Metrics. The ServiceExcellence team regularly conducts review of progress on six pillars with keystakeholders weekly calls with frontline staff to obtain feedback surprise visits tovarious units customer meetings focus groups and "mystery shopping" tounderstand frontline service culture and competence. The progress on Service Excellence isregularly monitored by the Customer Service Committee (CSC) of the Board.

NON-BRANCH CHANNELS

Your Bank provides multiple channels for customers to access the Bank. DCB 24-hourCustomer Care Phone Banking ATMs Internet and Mobile Banking provide customers the meansto view transact and make service requests from anywhere and at any time. The Bankstrives to provide best-in-class technology and service platform. In FY 2019 the Bank'sCustomer Care Associates attended to almost 17 lakh calls with one of the best "speedto answer" response time across the industry. At DCB Bank's 24 Hour Toll FreeCustomer Care customers directly get connected with the customer care associates withouthaving to go through seemingly endless Interactive Voice Response (IVR) menu. Consideringthe fact that it has an all India presence the Bank has ensured that its customer careassociate can interact with the customers in 8 languages (English Hindi GujaratiKannada Marathi Odiya Tamil and Telugu). This helps in providing uninterrupted serviceto the customer in the language of their choice at all times. The Bank providesstate-of-the-art internet and mobile banking platforms to customers. More than one lakhcustomers have used the personal internet banking facility fifty five thousand morethan customers have used the mobile banking of the Bank.

MARKETING/BRAND AWARENESS

The Bank continuously undertakes numerous measures to create brand awareness andimprove its brand presence and image. The Bank has a unique concept called "micromarketing". Low cost small scale promotions are held in the neighbourhood areas on aregular basis. In FY 2019 the Bank executed almost 8000 micro marketing activities. InFY 2019 your Bank created and re-launched its various product communication in Englishand other Indian languages with the theme "Isse Mujhe Kya Milega" to promote itsunique propositions in a very engaging fashion.

Like every year as part of its culture to engage directly with customers and taketheir feedback in informal forums the Bank conducted several customer events and megamusical programs. Customers were delighted to be part of the musical evenings and someeven sang alongside the professional singers. The Bank also successfully conducted its 4thgolf event with top Indian Navy personnel in Gurugram.

IND AS IMPLEMENTATION

The Ministry of Corporate Affairs (MCA) Government of India has notified the Companies(Indian Accounting Standards) Rules 2015 on

February 16 2015. Further a Press Release was issued by the MCA on January 18 2016outlining the roadmap for implementation of Indian Accounting Standards (IND AS) convergedwith International Financial Reporting Standards (IFRS) for banks. As per earlierinstructions banks in India were required to comply with the IND

AS for financial statements for accounting periods beginning from April 1 2018onwards with comparatives for the periods ending March 31 2018 or thereafter.Progressing towards IND AS the Bank had prepared proforma financials as on June 30 2017as per extant regulatory guidelines and submitted the same to the RBI. On April 05 2018the RBI had announced deferment of implementation date by one year with IND AS beingapplicable to banks for accounting periods beginning April 01 2019 onwards. Inpreparation for the same the Bank has been submitting quarterly pro-forma financials tothe RBI from quarter ended June 30 2018.

On March 22 2019 the RBI has announced deferment of the implementation of IND AS bybanks till further notice.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE BANK.

Not applicable being a banking company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS

WITH RELATED PARTIES

All the transactions with related parties are in the ordinary course of business and onarm's length basis and there are no ‘material' contracts or arrangement ortransactions with related parties and thus disclosure in Form no. AOC-2 is not required.

POLICY ON RELATED PARTY TRANSACTIONS OF THE BANK

The Bank has a policy on Related Party Transactions and the same has been displayed onthe Bank's website: http://www.dcbbank.com/pdfs/Policy_on_Related_Party_Transactions%20_2018_19.pdf

BUSINESS RESPONSIBILITY REPORT:

In terms of Regulation 34(2)(f) of the SEBI Listing Obligations and DisclosureRequirements (LODR) Regulations 2015 the Bank's

Business Responsibility Report describing the initiatives taken by the Bank from anenvironmental social and governance perspective forms part of this Report and has beenhosted on the website of the

Bank at the following Link: http://www.dcbbank.com/cms/showpage/page/for-shareholder

CORPORATE SOCIAL RESPONSIBILITY (CSR)

DCB Bank's CSR projects and activities are focused on water crisis climate change andsustainability. The CSR thrust areas are - water and protection of water sources;recycling; waste management; renewable energy & waste-to-energy protecting andpreservation of archaeological and heritage sites in India.

The Bank achieved a milestone of 118187 saplings planted in FY

2018-19 and surpassed the target of One Lakh saplings. The milestone was achieved withthe help of DCB Bank staff volunteers and CSR implementation partners. The Bank willcontinue the initiative on tree plantation along rivers streams ponds lakes and greenzones. Increasing the green cover improves bio diversity aids the absorption of waterinto the ground prevents soil loss and absorbs carbon. For communities abutting forestareas trees also provide economic sustenance. Communities in tribal hamlets villagesschools and institutions of learning in rural areas are the locales where the Bank'sprojects reach. Tackling the water crisis is as much an urban issue and the Bank'soutreach touch institutions in urban areas such as Bengaluru Chennai Delhi HyderabadJaipur Mumbai Pune amongst other locations. It is heartening to note that the Bank'sprojects in the CSR field have been recognized by print and online media peers in the CSRcommunity by the Bank's customers and well-wishers at large. The CSR projects'underlying theme also are in consonance with the United Nations Sustainable DevelopmentGoals (SDG).

Awards & recognition conferred to DCB Bank CSR Projects in FY 2018-19:

1) Awarded by Bombay Chamber of Commerce and Industry Mumbai

Recognized for ‘Sustainable Environmental Initiatives' for CSR projects.

2) Asian Customer Engagement & Forum - ACEF HR & CSR

Forum & Awards Mumbai

DCB Bank awarded for Best CSR Project

3) CSR Summit UBS Forums Bengaluru

DCB Bank awarded for Best CSR Sustainability Project

India extracts a lot of ground water for farming and non-farming needs the depletionof ground water is severe and the country is water stressed than ever before. The Bank'sCSR thrust areas are aimed to work with communities that are hit by - the loss offorestland unabated use of groundwater and rivers unmanageable waste polluting oursources of water. The Bank's CSR activities focus on this crisis. The major CSR projectsduring the year were - installation of waterless urinals to stop wastage of water andreduce pollution of water roof top rainwater harvesting and installation of non-electricbio-sand water filters in village schools in water-starved regions. Watershed developmentincluding water audit tree plantation desilting of village tanks and wells creatingpercolation tanks trenches and ponds in drought prone water starved villages are someother projects. Extensive tree plantation in the buffer zones of wildlife sanctuaries forclimate change mitigation and improving the microclimate was undertaken; this alsoprovided and will continue to provide gainful employment for tribal communities living inthe periphery of the wildlife Sanctuaries. The Bank also propagated use of renewableenergy by installing solar panels in remote tribal hamlets and village communities. TheBank also undertook development of butterfly parks as a means to increase the green coverand provide a haven for bio diversity. The recycling effort took an innovative approachwith the Bank adopting t-shirts made from recycled PET soft drink bottles. The drive toreduce usage of plastic in our daily lives saw the Bank link up with a self-help groupfrom Chembur Mumbai to fabricate 100% cotton recyclable carry bags. These bags are usedby local delivery services of pharmacists restaurants and provision stores. It is toencourage people to shun plastic carry bags.

Communication and messaging is an important supplement to drive the message ofsustainable living. The Bank in a major outreach activity is using videos of the projectson social media. Moreover in a unique initiative the Bank launched ‘Ride for Good'with Ms. Shilpa Balakrishnan a renowned long distance motorcyclist. This initiative spreadthe message of Swachh Bharat Clean India & Green India during her India recordsetting solo ride to the four corners of India. She covered 15219 km in twenty-nine dayscovering Mumbai to

Kanyakumari to Leh to Kibithu (Arunachal Pradesh) to Koteshwar (Gujarat) to Mumbai.Enroute she visited schools met customers at branches addressed the DCB Bank employeesand travellers. DCB Bank planted a sapling for every kilometre covered in the ‘Ridefor Good'. The journey was covered extensively in print media both local and Englishlanguage newspapers FM radio and online social media to encourage people to step up anddo their bit to protect trees save water segregate trash and give up plastic bags tosave the environment.

Clean Up & Green Up! - STAFF PARTICIPATION IN CORPORATE SOCIAL RESPONSIBILITY (CSR)

DCB Social is the CSR employee volunteer formation that participate in Clean Up andGreen Up projects and campaigns across India at locations having DCB Bank branch presence.DCB Social volunteers undertook tree plantation and habitat restoration projects atvarious locations such as lake restoration in Bengaluru tree plantation at

Anantapur A.P. butterfly parks at Karnala and Jahwar in Maharashtra.

Seven hundred and twenty nine (729) employee volunteers opted for the Bank's unique2-day CSR leave policy. Employees volunteered for tree plantation in Andhra PradeshGujarat Punjab Maharashtra Rajasthan and Tamil Nadu and participated in clean-upactivities as well as habitat restoration in various parts of India.

DCB Bank CSR volunteers have worked on CSR projects that range from local lake cleanup; locality based waste management natural habitat restoration and creation of natureparks. Tree plantation tree count propagation of fruit bearing trees in tribal villagesto enhance long-term income earning capability are other employee initiatives. The Bankhas spent an amount of Rs. 3.87 crores (Previous year: Rs. 1.77 crores) in respect of CSRactivities across the Country.

REPORT ON CORPORATE SOCIAL RESPONSIBILITY

(CSR):

A Board level committee for CSR has already been in place as stated in the section onCorporate Governance. The report on CSR is given below: