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RBL Bank Ltd.

BSE: 540065 Sector: Financials
NSE: RBLBANK ISIN Code: INE976G01028
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OPEN 350.00
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VOLUME 633499
52-Week high 716.55
52-Week low 291.90
P/E 15.15
Mkt Cap.(Rs cr) 14,302
Buy Price 332.25
Buy Qty 148.00
Sell Price 332.25
Sell Qty 230.00

RBL Bank Ltd. (RBLBANK) - Director Report

Company director report

DEAR MEMBERS

The Directors have pleasure in presenting the 76th Annual Report of RBL BankLimited ("the Bank") along with the audited statement of accounts for thefinancial year ended March 312019.

A. FiNANCiAL PERFORMANCE

The comparative standalone financial performance for the financial year ended March312019 (FY19) with that of March 312018 (FY18) is summarized in the following table:

(R in crore)

Particulars FY19 FY18 Change(%)
Advances (Net) 54308.24 40267.84 34.87%
Deposits 58394.42 43902.26 33.01%
Net interest income 2539.48 1766.28 43.78%
Other income 1442.37 1068.19 35.03%
Net total income 3981.85 2834.47 40.48%
Operating expenses 2042.02 1503.41 35.83%
Provisions and contingencies 1072.88 695.98 54.15%
Net profit 866.95 635.09 36.51%
Gross NPA ratio 1.38% 1.40% -
Net NPA ratio 0.69% 0.78% -
Capital Adequacy Ratio 13.46% 15.33% -
Business per employee 19.29 15.88 21.45%
Business per branch 347.85 317.62 9.52%
Appropriations
Transfer to Statutory Reserve 217.00 158.80 -
Transfer to Capital Reserve 9.00 9.39 -
Transfer to Revenue and Other Reserves 400.00 360.00 -
Transfer to Investment Fluctuation Reserve 78.36 - -
Transfer from Investment Reserve - (2.20) -
Dividend for the year including tax thereon 107.00 82.17 -

The Bank posted a net total income of R 3981.85 crore and net profit of R 866.95 crorefor FY19 as against a net total income of R 2834.47 crore and net profit of R 635.09crore for FY18 which is an increase of 40.48% and 36.51% respectively over FY18

Appropriations from net profit have been done as detailed herein above.

B. BUSiNESS UPDATE AND STATE OF BANK'S AFFAiRS

The details on state of affairs of the Bank and the business update are separatelyprovided in Management Discussion and Analysis Report which forms an integral part of thisReport.

C. FINANCIAL DISCLOSURES Dividend

Considering the overall performance during FY19 and the need to maintain a healthycapital adequacy ratio as well as to

support the Bank's future growth the Board of Directors have recommended subject toapproval of the members at the Annual General Meeting ("AgM") a dividend of R2.70 (27%) per equity share for FY19 as against R 2.10 (21%) per equity share for FY18.This dividend shall be subject to tax on dividend to be paid by the Bank.

Capital Raising

During the fiscal FY19 the Bank had raised capital to the tune of R 100.54 crorethrough issuance/allotment of equity shares pursuant to exercise of stock options by theemployees of the Bank under various Employees Stock Option Plans/ Schemes.

The paid up Equity Share Capital of the Bank as on financial year ended March 31 2019stood at R 4267097280 divided into 426709728 equity shares of R 10/- each.

Capital Adequacy Ratio

The Bank is well capitalized with a Capital Adequacy Ratio ("CAR") of 13.46%as on March 31 2019. The Bank complies with the Capital Adequacy guidelines of ReserveBank of India ("RBI") which came into effect from April 1 2013 known as 'BaselIII Guidelines'.

Net worth

The Bank's net worth as on March 312019 is R 7336.30 crore. It comprises of paid-upequity capital of R 426.71 crore and reserves of R 6909.59 crore (excluding RevaluationReserve Investment Reserve Foreign Currency Translation Reserves and as reduced byintangible and deferred tax assets).

d. corporate governance

A detailed report on Corporate Governance as envisaged under Regulation 34(3) of theSecurities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulation 2015 ("Listing Regulations") is annexed as Annexure I to thisReport.

A copy of Certificate issued by M/s. Alwyn Jay & Co. Practicing Company Secretaryis enclosed to Annexure I and forms an integral part of this Report.

E. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the Listing Regulations a Business ResponsibilityReport ("BRR") has to be furnished by top five hundred listed companies based onmarket capitalization in the format prescribed by the SEBI. Accordingly the reportdescribing the initiatives taken by the Bank from an environmental social and governanceperspective is presented in a separate section forming part of this Annual Report.

F. STATUTORY DISCLOSURES Extract of Annual Return

An extract of the Annual Return as of March 31 2019 pursuant to the sub-section (3) ofSection 92 of the Companies Act 2013 read with Rule 12 (1) of the Companies (Managementand Administration) Rules 2014 and forming part of the report is placed on the website ofthe Bank as per provisions of Section 134(3)(a) and is available at the following link: https://ir.rblbank.com/

Conservation of Energy and Technology Absorption

Summary of measures taken by the Bank with respect to conservation of energy andtechnology are covered in Management Discussion and Analysis Report and BusinessResponsibility Report forming part of this Annual Report. The Bank is constantly pursuingits goal of upgrading technology

to deliver quality services to its customers in a cost-effective manner.

Foreign Exchange Earnings and outgo

During the year ended March 312019 the Bank earned R 296.62 crore and spent R 179.05crore in foreign currency. This does not include foreign currency cash flows inderivatives and foreign currency exchange transactions.

Board of Directors

The Board of Directors ("Board") is constituted in accordance with theprovisions of the Companies Act 2013 ("CA 2013") the Banking Regulation Act1949 ("the BR Act 1949") SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") and the Articles ofAssociation of the Bank. The Board consists of eminent persons with considerableprofessional expertise in banking finance marketing taxation financial inclusionagriculture and other related fields. Their experience and professional credentials havehelped the Bank to gain insights for strategy formulation and direction setting for theBank thus adding value to its growth objectives.

The Board comprises of eight (8) Directors out of whom two Directors are Executive/Whole-time Directors (one of whom is a Managing Director and Chief Executive Officer)five Directors are Independent Directors (one of whom is also the part-time Chairman ofthe Board) and one Director is Non-Executive Director.

During the year under review Mr. Narayan Ramachandran (DIN: 01873080) Non-ExecutivePart-Time Chairman of the Bank and Mr. Vimal Bhandari (DIN: 00001318) Independent Directorceased to be a Director of the Bank due to completion of their tenure of eight years asprescribed under section 10A of the Banking Regulation Act 1949 w.e.f. close of workinghours of May 19 2018 and September 13 2018 respectively. Pursuant to cessation of Mr.Narayan Ramachandran as Director/Chairman of the Bank Mr. Prakash Chandra (DIN:02839303) Independent Director of the Bank since January 25 2016 was appointed asPart-time Chairman of the Bank w.e.f. May 20 2018 for a period of two years. The saidappointment of Part-Time Chairman was approved by the Reserve Bank of India on July 242018 and shareholders at their 75th Annual General Meeting of the Bank held onAugust 3 2018.

Mr. Vijay Mahajan (DIN: 00038794) was appointed as an Additional Director of the Bankby the Board of Directors at their meeting held on April 27 2018. The Shareholder of theBank at 75th Annual General Meeting of the Bank held on August 3 2018appointed Mr. Mahajan as Non-Executive Director liable to retire by rotation.

During the year under review Ms. Rama Bijapurkar (DIN: 00001835) resigned as anIndependent Director of the Bank w.e.f. close of working hours of January 10 2019. Ms.Bijapurkar had resigned in order to explore taking on a responsibility which forregulatory reasons reguire her to resign from the Board of the Bankfirst. The Boardplaces on record its sincere appreciation for the valuable services rendered by Mr.Narayan Ramachandran Mr. Vimal Bhandari and Ms. Rama Bijapurkar during their tenure asChairman/Directors of the Bank.

In terms of Section 152 of the CA 2013 Mr. Vijay Mahajan shall retire at the ensuingAnnual General Meeting and being eligible offer himself for re-appointment.

The details with regards to the Board and its Committees Composition PerformanceEvaluation etc. are provided in the Corporate Governance Report as Annexure I to thisReport.

Key Managerial Personnel

Mr. Vishwavir Ahuja Managing Director & CEO Mr. RajeevAhuja Executive Director(ED) Mr. Deepak Ruiya Chief Financial Officer (interim) and Mr. Vinay Tripathi CompanySecretary of the Bank are the Key Managerial Personnel (KMP) as per the provisions of CA2013.

Particulars of Employees

The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of subsection 12 of Section 197 of CA 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 aregiven below:

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the Bank for the financial year.

Sr. No. Name of the Director Designation Ratio
1 Mr. Prakash Chandra* Non-Executive & Part-time Chairman 4.53x
2 Mr. Vishwavir Ahuja Managing Director & CEO 37.14x
3 Mr. Rajeev Ahuja Executive Director 34.97x

* For calculation of ratio remuneration off 1298387/- for the FY 2018-19 whichwill be paid in the FY 2019-20 is also included.

2. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer and Company Secretary of the Bank for the financial year.

Sr.

No.

Name of the Director / KMP Designation % Increase
1 Mr. Prakash Chandra Non-Executive & Part-time Chairman N.A.
2 Mr. Vishwavir Ahuja Managing Director & CEO 15%
3 Mr. Rajeev Ahuja* Executive Director 12%
4 Mr. Deepak Ruiya Chief Financial Officer (interim) 20%
5 Mr. Vinay Tripathi Company Secretary 15%

* The increase in remuneration of Mr Rajeev Ahuja is effective from February 212019 subject to the approval of Reserve Bank of India.

3. The percentage increase in the median remuneration of employees in the financialyear.

The percentage increase in the median remuneration of employees in the financial yearwas 4.36%.

4. The number of permanent employees on the rolls of Bank.

The number of permanent employees on the rolls of Bank as on March 312019 was 5843.

5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration.

Average increase in remuneration is 8.2% for employees other than managerial personneland 15.50% for managerial personnel (Executive Directors including Managing Director &CEO Chief Financial Officer (interim) and Company Secretary).

It is hereby affirmed that the remuneration paid to Directors and KMPs is as perthe remuneration policy of the Bank.

Notes:

/. ‘x' denotes the median remuneration of the employees.

//. The remuneration of Directors is exclusive of sitting fees and remuneration(profit-linked commission) paid to Non- Executive Directors wherever applicable.Therefore the median remuneration is provided of Directors exclusive of IndependentDirectors.

The statement containing particulars of employees as required under Section 197(12) ofCA 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms part of this report. In terms of Section 136 of CA 2013 theAnnual Reports are being sent to the members excluding the information as required underRule 5(2) as mentioned aforesaid and the same is open for inspection at the RegisteredOffice of the Bank on all working days between 11:00 A.M. to 1:00 P.M. upto the date ofAGM. A copy of this statement may be obtained by the members by writing to the CompanySecretary of the Bank.

Remuneration Policy

Remuneration policy for employees

The Bank's compensation policy keeps in mind the strategy ethos and financialperformance of the Bank and market compensation trends at any given time. The Bankrecognizes that talent is critical to the long-term growth and success of the Bank and itis a pre-requisite to have a compensation structure comparable with the industry.

The Bank has set out its Compensation Policy based on the concept of CTC (Cost toCompany) and TEC (Total Employee Compensation) to make compensation packages for officersacross all Grades competitive enough to attract nurture and retain high calibreprofessionals in the Bank and have an organization structure that reflects specializationfocus & scale.

The Bank's Compensation Policy is designed and aimed at attracting & retaining bestpossible / available talent that it requires to effectively grow the business and beconsidered a highly respected institution. It comprises of a balanced mix of Fixed &Variable cash and non-cash compensation and benefits / perquisites to deliver maximumvalue to the employee and other stakeholders.

The Bank strongly believes that an equity component in the compensation goes a long wayin aligning the objectives of employees with those of the Bank. The underlying philosophyof stock options is to enable the employees present and future to get a share in thevalue that they help to create for the Bank over a certain period of time.

Remuneration Policy for Directors

In terms of the provisions of CA 2013 and Listing Regulations the Board has onrecommendation of the Human Resource & Remuneration Committee ("HRRC")framed a compensation policy which inter alia deals with remuneration structure andcriteria for selection and appointment of directors.

Remuneration of Executive Directors

The Board considers the recommendations of HRRC and approves the remuneration ofExecutive Directors (including of Managing Director & CEO) with or withoutmodifications subject to members and regulatory approvals.

The remuneration payable to Executive Directors is subject to prior approval of theRBI. Therefore the remuneration or any revision in remuneration to Executive Directors ispayable only after receipt of the approval from RBI.

Remuneration of Chairman

The HRRC recommends the remuneration of the Chairman to the Board which is consideredand approved by the Board in the same manner subject to members and regulatory approvals.

The remuneration payable to the Chairman is subject to prior approval of the RBI.Therefore the remuneration or any revision in remuneration of the Chairperson is payableonly after receipt of the approval from RBI.

Remuneration of Non-Executive Directors (NEDs)

The NEDs are paid sitting fees for attending each meeting of the Board of Directors orany Committee thereof. The NEDs are also entitled to reimbursement of expenses forparticipation in the meeting of the Board and Committee thereof.

RBI vide Circular No. DBR. No.BC.97/29.67.001/2014-15 dated June 1 2015 issuedGuidelines on Compensation of Nonexecutive Directors of Private Sector Banks emphasizingthat in order to enable banks to attract and retain professional directors it isessential that such directors are appropriately compensated. Pursuant to the aforesaid RBICircular the maximum amount that can be paid as Commission was capped at T 10.00 Lakh perdirector per annum. Also section 197 of CA 2013 permits payment of profit basedcommission to the Directors who are neither Managing Directors nor Whole-time Directorsnot exceeding One per cent (1%) of the net profits of the company if there is a Managingor Whole-time Director or Manager or three per cent (3%) of the net profits in any othercase.

The members of the Bank at their 74th Annual General Meeting had approvedthe payment of remuneration to NEDs (excluding the Chairman of the Bank) in the form ofcommission based on profit earned by the Bank w.e.f. FY 2017-18. The Board at its meetingheld on April 27 2018 had approved criteria for payment of Commission to NEDs and thecommission paid during FY 2018-19 is appropriately disclosed in the 76th AnnualReport of the Bank.

The Bank does not grant any Stock Options to NEDs.

Whistle Blower Policy (Vigil Mechanism)

Details required to be disclosed in this regard has been provided under CorporateGovernance Report annexed as Annexure I to this Report.

Dividend Distribution Policy

The Bank has formulated a Board approved Dividend Distribution Policy. This Policy ishosted on the website of the Bank at: https://rblbank.com/api/vl/doc/document/Bank%20Policies/ Dividend-Distribution-Policy.pdf

Auditors

The members at the 75th Annual General Meeting (AGM) of the Bank hadsubject to the approval of RBI appointed M/s. B S R & Co. LLP Chartered Accountants(Firm Registration No. 101248W/ W-l 00022) as Statutory Auditors for a period of two (2)year to hold office till the conclusion of 77th AGM in connection with theaudit of the accounts of the Bank for the year ending March 31 2020. The Bank will obtainthe reguisite approval of the Reserve Bank of India for the appointment of M/s. B S R& Co. LLR Chartered Accountants as the Statutory Auditors of the Bank for thefinancial year 2019-20.

The Statutory Auditors have confirmed their eligibility under Section 141 of CA 2013 tocontinue to act as Statutory Auditors of the Bank. Further as reguired under the relevantprovision of the Listing Regulations the Statutory Auditors have also confirmed that theyhad subjected themselves to the peer review process of the Institute of CharteredAccountants of India (ICAI) and they hold a valid certificate issued by the Peer ReviewBoard of ICAI.

Pursuant to Section 204 of CA 2013 the Board had appointed M/s. Alwyn Jay & Co.Practicing Company Secretaries Mumbai as its Secretarial Auditors for FY 2018-19. TheBank provided all assistance and facilities to the Secretarial Auditor for conductingtheir audit as prescribed under Companies Act 2013. The Secretarial Audit Report for theFY 2018-19 is annexed to this report as Annexure II.

During the financial year under review the Bank has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India.

Employees Stock Option Plan (ESOP)

The underlying philosophy of the Bank Employee Stock Option Plan (ESOP) is to enablethe present and future employees to share the value that they help to create for the Bankover a period of time. ESOP is also expected to strengthen the sense of ownership andbelonging among the recipients. The ESOP has been designed and implemented in such amanner that the compensation structure goes a long way in aligning the objectives of anindividual with those of the Bank. In addition during the year the Bank continued withits plan of rewarding long-serving employees with ESOPs thus making them true partners inthe Bank's growth.

More details of the ESOP are given in the notes to accounts in the attached financialstatements and Annexure III to this report.

Disclosure under Section 22 of the Sexual Harassment of Woman at Workplace (PreventionProhibition and Redressal) Act 2013

The Bank has Zero tolerance towards any action on the part of any executive which mayfall under the ambit of 'Sexual harassment' at workplace and is fully committed to upholdand maintain the dignity of every woman executive working in the Bank. The Policy providesfor protection against sexual harassment of women at

workplace and for prevention and redressal of such complaints. As a part of Anti SexualPlarassment initiatives the Bank created a mandatory e-learning module for all theemployees called "i-COMPLY Anti Sexual Plarassment". The information relating tocomplaints received and disposed-off/resolved/ action taken during the FY 2018-19 isdisclosed under Corporate Governance Report annexed as Annexure I to this Report.

Deposits

Being a Banking company the disclosures reguired as per Rule 8(5)(v)&(vi) of theCompanies (Accounts) Rules 2014 read with Section 73 and 74 of CA 2013 are notapplicable to the Bank.

Nature of Business

The Bank has not changed its nature of business during the financial year under review.

Particulars of Loans Guarantees and Investments

Pursuant to Section 186(11) of CA 2013 loans made guarantees given or securitiesprovided or acguisition of securities by a Banking company in the ordinary course of itsbusiness are exempted from disclosure in the Annual Report.

Related Party Transactions

Details reguired to be disclosed in this regard has been provided under CorporateGovernance Report annexed as Annexure I to this Report.

Significant and material order passed by regulators or courts or tribunals impactingthe going concern status and operations of the Bank

To the best of our knowledge there are no significant/ material orders passed by theRegulators / Courts/ Tribunals etc. during FY 2018-19 which would impact the going concernstatus of the Bank and its future operations.

Subsidiary company

Pursuant to acguisition of 100% shareholding of RBL Finserve Limited (FormerlySwadhaar Finserve Private Limited) RBL Finserve Limited (RBL Finserve) is the WhollyOwned Subsidiary of the Bank. Further the Bank has formulated a board approved policy fordetermining Material Subsidiaries.

RBL Finserve is a dedicated Business Correspondent (BC) for RBL Bank in the financialinclusion segment servicing the Micro Finance (MF) clients and Micro and Small enterprises(MSME) segment with loans savings and insurance products. It operates in 16 states and 2Union Territories.

In accordance with the provisions of Section 129(3) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 as amended the Bank has prepared itsconsolidated financial statements including that of all its subsidiary companies whichforms part of this report.

A statement containing the salient features of the financial position of the SubsidiaryCompany in Form AOC-1 is annexed to the Financial Statements to this Report.

Further in accordance with the fourth proviso of Section 136(1) of the Companies Act2013 the audited annual accounts of the said subsidiary company of the Bank have beenhosted on the Bank's website: https://ir.rblbank.com/

Consolidated Financial Statements

Pursuant to Section 129 of CA 2013 the Bank has prepared consolidated financialstatements of the Bank with its Subsidiary Company RBL FinServe Limited in the same formand manner as that of the Bank which shall be laid before the ensuing AGM of the Bankalong with the laying of the Bank's Standalone Financial Statement under sub-section (2)of Section 129.

Risk Management Policy

The details of Risk Management Policy & its framework are separately provided inManagement Discussion and Analysis Report which forms an integral part of this Report.

Qualifications in Statutory and Secretarial Audit Reports

There were no adverse observations or gualifications made by the Statutory Auditors inthe Auditor's Report.

Further there were no audit gualifications made by the Secretarial Auditor in itsReports.

Adequacy of Internal Financial Controls

Proper internal financial controls were in place and that the financial controls wereadeguate and were operating effectively. Further the statutory auditors have incompliance with the reguirements of CA 2013 issued an opinion with respect to theadeguacy of the internal financial controls over financial reporting of the Bank and theoperating effectiveness of such controls details of which may be referred to in theindependent auditor's report attached to the financial statements of FY 2018-19.

Material changes and commitments affecting the financial position of the Bank

There are no material changes and commitments affecting the financial position of theBank that have occurred between the end of the financial year of the Bank i.e. March312019 and the date of the Directors' Report i.e. April 18 2019.

G. OTHER DISCLOSURES

Code of Conduct

For a financial institution trust is the most important asset. To this end the Bankstrives to ensure that its actions are in accordance with the highest standards ofpersonal and professional integrity and highest level of ethical conduct. The Bank hasadopted a Code of Conduct which all employees have

to adhere to. The employees have to conduct duties according to the aforesaid Code andavoid even the appearance of improper behaviour. Some of the areas which are covered bythe Code of Conduct are fairness of employment practices protection of intellectualproperty integrity customer confidentiality conflict of interest.

Bribery and Corruption

We have a responsibility both to the members and to the communities in which we dobusiness to be transparent in all our dealings. Our Code of Conduct reguires that we donot engage in bribery or corruption in any form and explicitly mentions that the Bank willnot pay or procure the payment of a bribe or unlawful fee to encourage the performance ofa task or one which is intended or likely to compromise the integrity of another. The Bankwill not accept any payment gift or inducement from a third party which is intended tocompromise our own integrity. The Code of Conduct also includes procedures dealing withGifts & Entertainment Conflicts of Interest and other important matters.

Corporate Social Responsibility (CSR)

The Bank strives to proactively encourage inclusive growth and development therebyparticipating towards building a sustainable future.

The Bank has a duly constituted CSR Committee of the Board consisting of majority ofIndependent Directors. The Bank also has the Board approved CSR Policy in place. Inalignment with the CSR Mission Statement the Bank has focused on various initiatives forFY 2018-19 as covered in the Annual Report on CSR activities detailing therein briefoutline of CSR Policy Projects undertaken amount spent and other relevant details asfurnished in Annexure IV to this report.

Management Discussion and Analysis

Management Discussion and Analysis Report for the financial year under review ispresented in a separate section forming part of this Annual Report.

Awards and Recognitions

During the year under Review the Bank was recipient of the following awards:

• India's Best Bank for Microfinance - Awarded at the Asiamoney Awards.

• 'Silver Award' in 'Best Private Sector Bank of the Year 2018'. - Awarded at theOutlook Money Awards.

• Best Small Bank - Awarded atthe Business Today Financial Awards.

• Best Enterprise Mobility - Awarded at the BFSI Digital Innovation Awards byExpress Computers.

• Opening Highest Percentage of Aadhaar Centres - Awarded at the AadhaarExcellence Awards.

• Most Promising Company of the year - Awarded at the CNBC-AWAAZ CEO Awards.

• Best Multi-Channel Offering - Awarded at the Retail Banker International Awards.

• Recognised under four categories i.e. Nodal Payments API Product ReimaginingFixed Deposits Virtual Accounts for Payments Processing & Reimaging Digital Bankingfor Retail and Corporate Customers - Awarded at the Infosys Finacle Client InnovationAwards 2019.

Ratings

The Bank's Basel III Tier II Bonds have been rated as "AA- hyb" and"AA-" with Stable Outlook by ICRA Limited (ICRA) and CARE Ratings Limited (CARE)respectively. Instruments rated with this rating are considered to have high degree ofsafety regarding timely servicing of financial obligations.

The Bank's Certificate of Deposits carries a rating of "A1+" by ICRA whichindicates the lowest short term credit risk. Further the Bank's Medium Term Fixed Depositprogramme carries rating of "ICRA MAA (Stable)" which indicates low credit riskand the Bank's short term fixed deposit programme carries a rating of "ICRA A1+" which indicates lowest credit risk.

Know Your Customer (KYC)/Anti-Money Laundering (AML) Measures

The Bank complies with the RBI's KYC/AML guidelines. The Bank's KYC/ AML Policy isprepared in accordance with the Prevention of Money Laundering Act 2002 and RBI/IBA(Indian Banks' Association) guidelines. Various regulatory reporting reguirements as setout by the Financial Intelligence Unit (FIU) of the Government of India are complied withby the Bank. The Bank uses automated transaction monitoring system under supervision ofcentralised AML team. Further the Bank's employees are being imparted training on KYC/AMLaspects on a regular basis. Executives of the Bank also attend periodic workshops/seminarsorganised by FIU RBI IBA Centre for Advanced Financial Research & Learning (CAFRAL)and College of Agricultural Banking (CAB) Pune to enhance their awareness in evolving KYCAML issues.

H. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the reguirement under Section 134(3)(c) of CA 2013 with respect to theDirectors' Responsibility Statement it is hereby confirmed that:

i. The applicable accounting standards have been followed in the preparation of theannual accounts for FY 2018-19 and there have been no material departures;

ii. Accounting policies have been selected and applied consistently and reasonably andprudent judgments and

estimates have been made to give a true and fair view of the Bank's state of affairsand of its profit for FY 2018-19;

iii. proper and sufficient care has been taken for the maintenanceofadeguateaccountingrecords in accordance with the provisions of CA 2013 for safeguarding the assets of theBank and for preventing and detecting fraud and other irregularities;

iv. the annual financial statements have been prepared on a going concern basis;

v. proper internal financial controls were in place and that the financial controlswere adeguate and were operating effectively;

vi. systems to ensure compliance with the provisions of all applicable laws were inplace and were adeguate and operating effectively

ACKNOWLEDGMENT

The Board is grateful to the Government of India RBI SEBI IBA other RegulatoryAuthorities Rating Agencies Financial Institutions banks and correspondents in Indiaand abroad for their valuable and unflinching support as well as co-operation and guidanceto the Bank from time to time.

The members have been the key partners in the Bank's progress. The Board of Directorsappreciates their support and is grateful for the confidence that they have placed in theBoard of Directors and the Bank's management.

The Bank's customers have always supported the Bank in all its endeavours. The Bankwould like to take this opportunity to express sincere thanks to its valued clients andcustomers for their continued patronage.

The Bank has undertaken a number of initiatives on the technology and business front inthe recent years. Successful translation of these initiatives into business and earningsgrowth has been primarily due to the employees of the Bank who have embraced thephilosophy of change to help the Bank emerge as a modern and customer-centric institution.We are grateful to the employees for their continued commitment and dedication towards theBank. The Board appreciates the healthy relationship with the Officer's Association andEmployee Union which has facilitated the growth and development of the Bank and hascreated a positive work environment.

For and on behalf of the Board of Directors
Prakash Chandra Vishwavir Ahuja
Chairman Managing Director & CEO
Place: Mumbai
Date : April 18 2019