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Directors Report of IDBI Bank Ltd.

Mar 31, 2023

Your Bank''s Board of Directors is pleased to present the Report on the Bankâs business and operations for the financial year ended March 31,2023.

In the Financial Year (FY) 2022-23, the global economy staged a broad-based recovery from the COVID-19 pandemic induced output contraction but was confronted with new challenges stemming from the escalation in geo-political tensions. This resulted in higher commodity prices and thus, worsening the existing inflationary pressures. To combat the heightened price pressures, several economies across the world embarked on monetary tightening which led to increase in interest rates globally. Amidst the recessionary fears, sporadic surges in the COVID-19 cases also impacted the global demand, thereby leading to a slowdown in the cross-border trade flows. The simultaneous occurrence of these challenges weighed down the global growth momentum during the year.

Like the rest of the world, India also was confronted with these challenges but withstood them better than most large economies, aided by inherent strengths that have been reinforced by wide-ranging initiatives and policy reforms in the recent years. In the post-pandemic period, the revival in economic activities has been led by the concerted policy incentives for the most vulnerable and pandemic-affected segments, higher public capex, release of pent-up consumption demand, higher investment & capacity utilisation as well as rapid normalisation of movement of people and goods. Consequently, the Indian economy continued to witness healthy economic growth in FY 2022-23. With this, India continued to remain one of the fastest growing major economies in the world. In the year 2022, India also emerged as the fifth largest economy globally with a nominal GDP of US$ 3.4 trillion.

('' in crore)
	As on	As on
	March 31, 2022	March 31,2023
Capital	10,752	10,752
Reserves & Surplus	30,910	34,566
Deposits	2,33,134	2,55,499
Borrowings	14,345	12,638
Other Liabilities & Provisions	12,462	17,047
Total Liabilities	3,01,603	3,30,502
Cash & Balances with RBI	27,796	16,639
Balances with Banks & Money at Call & Short Notice	7,915	12,646
Investments	82,988	99,690
Advances	1,36,955	1,62,568
Fixed & Other Assets	45,949	38,959
Total Assets	3,01,603	3,30,502

For the period	2021-22	2022-23
Total Income	22,982	24,942
Total Expenses (other than provisions)	15,487	16,206
Provisions (other than tax)	3,887	3,498
Profit/ (Loss) Before Tax	3,609	5,238
Provision for Tax	1,169	1,593
Profit/ (Loss) After Tax	2,439	3,645

Key Financials

Gaining traction from the improvement in the macroeconomic conditions, the banking sector further consolidated its financial health and saw a sustained improvement in its performance. Backed by stronger balance sheets and comfortable capital positions, the banks were well-positioned to cater to the growing credit demand in the economy. The improved economic prospects saw a broad-based uptick in the credit growth from all the segments. Though the rate cycle was on upswing, the credit demand remained healthy on the back of higher capacity utilisation and higher corporate profitability. With the interest rates on deposits also increasing in tandem with the monetary policy rate, there has been a renewed shift in favour of bank deposits as an investment avenue, thereby supporting the deposit growth in the economy. Aided by the healthy growth in deposits and credit, most banks in India recorded an improvement in the financial performance during the year.

Taking advantage of the conducive business environment, your Bank adopted a series of strategic measures that helped it in recording further improvement in various financial and operational parameters during the year.

FINANCIAL HIGHLIGHTS

As on March 31,2023, your Bankâs aggregate deposits and advances touched '' 2,55,499 crore and '' 1,62,568 crore, respectively. Your Bankâs business highlights for the period under review are presented in the following table:

During the year under review, your Bank''s total income amounted to '' 24,942 crore, comprising interest income of '' 20,570 crore and other income of '' 4,372 crore. Interest expenses stood at '' 9,139 crore and operational expenses at '' 7,067 crore, accounting for total expenditure (excluding provisions and contingencies) of '' 16,206 crore.

The increase in Net Interest Income (NII) and reduction in provisions (excluding tax expenses) enabled the Bank to earn a net profit of '' 3,645 crore during FY 2022-23.

While the Earnings per Share (EPS) during the year was '' 3.39, the Book Value per Share (excluding intangible assets and Deferred Tax Asset (DTA)) stood at '' 23.67 as on March 31,2023.

The Board of Directors have recommended a dividend of '' 1 (Rupee One only) per Equity Share of face value of '' 10 each of the Bank for the financial year ended March 31, 2023, subject to approval of the shareholders at the Annual General Meeting.

REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES AND JOINT VENTURE INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT AS ON MARCH 31,2023
	Net Assets i.e. total assets minus total liabilities		Share on profit or loss
Name of the Entity	As % of consolidated net assets	Amount ('' in crore)	As % of consolidated profit or loss	Amount ('' in crore)
Parent : IDBI Bank Ltd.	97.55%	45,318.48	98.35%	3,645.09
Subsidiaries
Indian :
1. IDBI Capital Market & Securities Ltd.	0.71%	330.09	0.22%	8.26
2. IDBI Intech Ltd.	0.24%	110.95	0.36%	13.27
3. IDBI Asset Management Ltd.	0.29%	134.49	0.34%	12.67
4. IDBI MF Trustee Co. Ltd.	0.00%	1.72	0.00%	0.04
5. IDBI Trusteeship Services Ltd.	0.66%	305.70	1.31%	48.37
Foreign:	NA	NA	NA	NA
Minority Interest in all Subsidiaries	0.30%	138.48	0.59%	21.91
Associates (Investment as per the equity method)#
Indian:
1. Biotech Consortium India Ltd.	NA	NA	-	-
2. National Securities Depository Ltd.	NA	NA	1.11%	41.13
3. North Eastern Development Finance Corporation Ltd.	NA	NA	-	-
4. Pondicherry Industrial Promotion Development & Investment Corporation Ltd. (PIPDICL)	NA	NA	NA	NA
Foreign:	NA	NA	NA	NA
Joint Ventures (as per proportionate consolidation/ investment as per the equity method)
Indian:
Ageas Federal Life Insurance Company Ltd. (Consolidated up to September 20, 2022)	NA	NA	0.12%	4.36
Foreign:	NA	NA	NA	NA
Total	99.75%	46,339.92	101.22%	3,751.27
Elimination	0.25%	117.81	(1.22%)	(45.21)
Net Total	100.00%	46,457.73	100.00%	3,706.06

Note: None of the above subsidiaries have any subsidiary.

# Out of the four Associates, the financials for one of the Associates, viz., National Securities Depository Ltd. (26.10%), have been included in the consolidated financial results for the period up to December 31, 2022 and in respect of two Associates, viz. North Eastern Development Finance Corporation Ltd. (25.00%) and Biotech Consortium India Ltd. (27.93%), the accounts have been included in the consolidated financial results for the period up to March 31, 2022. In case of Pondicherry Industrial Promotion Development and Investment Corporation Ltd. (21.14%), the investment in the said company has been written down to '' 1. The impact of Associates on the consolidated financial results is not material.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL POSITION OF IDBI BANK WHICH HAVE OCCURRED DURING THE END OF FINANCIAL YEAR AND THE DATE OF BOARD REPORT

There were no material changes and commitments affecting the financial position of the Bank, which occurred between the end of the financial year, i.e. March 31,2023 and the date of the Directors'' Report.

THE DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

According to Section 143(3)(i) of the Companies Act 2013, the report of the Statutory Auditors should state whether the Bank has adequate Internal Financial Controls (IFCs) system in place and what is the operating effectiveness of such controls, in the context of the financial statements. The IFCs, as referred to in Section 143(3)(i) of the Companies Act, 2013, relate to the Internal Financial Controls Over Financial Reporting (IFCO-FR). The Bank''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank, considering the essential components of internal control stated in the Guidance Note on Audit of IFCO-FR issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bank''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, as required under the Companies Act, 2013, the Banking Regulation Act, 1949 and the RBI guidelines. Your Bank has put in place an IFCO-FR Framework for evaluation of the existing internal financial controls system and appointed a Consultant for validating the compliances with respect to the documentation, certification, reporting process of the controls across all business verticals/ departments and ascertaining the adequacy and effectiveness of the controls in the Bank in all material respects with respect to financial reporting. During FY 2022-23, the Consultant has submitted the Internal Compliance Certificate for the quarters ended June 2022, September 2022, December 2022 and March 2023 after carrying out the testing and validation of all the underlying processes as per the Bank''s IFCO-FR framework. During the year under review, the Consultant reviewed the compliance of 591 Risk Control Matrices (RCMs) and

reported seven observations for further compliance, of which four observations have been addressed by the Bank and is complied with. The Bank is taking necessary action to ensure compliance and closure of the remaining three open observations.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATE PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH A DETAILED EXPLANATION THEREOF, INCLUDING

Particulars	2021-22	2022-23	Comments
Return on Assets	0.84%	1.20%	Net profit for FY 2022-23 was '' 3,645 crore as compared to net profit of '' 2,439 crore in FY 2021-22.
Debt Equity Ratio (excluding intangibles)	0.73%	0.50%	Borrowings made in India and outside India significantly decreased by '' 1,707 crore and Net Worth improved by '' 5,726 crore.
Net NPA Ratio	1.36%	0.92%	Net NPA decreased by '' 369 crore as also there was an increase in net advances by '' 25,613 crore.
Gross NPA Ratio	20.16%	6.38%	The Bankâs Gross NPA decreased by '' 23,146 crore.

CAPITAL ADEQUACY

Your Bank''s âTotal Capital CCB'' ratio was 20.44% as against the minimum regulatory requirement of 11.50% as on March 31,2023. Similarly, your Bank''s âCommon Equity Tier 1 (CET1) CCB'' ratio was 18.08% as against the regulatory requirement of 8.00%. Your Bank''s âTier 1 CCBâ ratio stood at 18.08% as on March 31,2023 as against the regulatory requirement of 9.50%. Your Bank''s Leverage Ratio as on March 31,2023 was 7.86% as against the minimum regulatory requirement of 3.50%.

BUSINESS STRATEGY

Considering the emerging opportunities and the potential challenges, your Bank continued to pursue the broad contours of the business strategy envisaged for its turnaround. The well-designed turnaround strategy of your Bank had helped in ensuring an expeditious and broad-based improvement in its financial and operational health. The Bank''s core strategy was on driving profitable business growth while ensuring strong balance sheet, fortified by healthy capital position with adequate provisioning. To cater to the growing credit demand, the Bank also took concerted efforts to augment its low-cost deposits, viz. CASA and retail term deposits, and supplemented it with growth in bulk deposits. Targeting a granular and well-diversified asset portfolio, the Bank focussed on ramping up the lending to the RAM (Retail, Agri & MSME) segment. At the same time, the Bank cautiously stepped up its lending to the corporates by selectively assisting well-rated corporates. The Bank also tapped the business synergies arising from its association with the Life Insurance Corporation of India (LIC) to drive growth in its business and improve its fee income by offering best-in-class, innovative, specialised customised products & services to the employees, agents and subsidiaries of the LIC for meeting their banking requirements. The strategic endeavours of the Bank helped it to maintain its Cost of Deposits and Cost of Funds at competitive levels. Improvement in the earning assets helped the Bank to record an improvement in the Net Interest Margin (NIM) during the year. The Bank''s stringent credit appraisal and credit monitoring standards also helped in maintaining slippages at a manageable level. The Bank also stepped up its recovery and upgradation efforts through various legal and regulatory routes to resolve the stress in its delinquent asset portfolio.

Complementing its business strategies, the Bank focussed on ensuring better experience for all its customers by concentrating on customer-centric initiatives. Emphasising on customer convenience and ease, the Bank focussed on enhancing accessibility for its customers by expanding its physical branch network and adding to the functionalities of its digital channels, viz. mobile and internet banking. The Bank also endeavoured to create a seamless multi-channel transactional experience for its customers as a part of its intent of ensuring customer delight. Revisiting its existing offerings and introducing new offerings, the Bank ensured that its gamut of products & services is attuned to the emerging needs and preferences of its customers.

Focussing on ensuring sustained and stable business growth, the Bank has been driving a robust risk and compliance culture by encouraging all its employees to integrate best practices in their day-to-day activities. Furthermore, the Bank is committed to upholding and adhering to the highest standards in corporate governance. The Bank promotes

fairness, ethics and transparency in all its dealings to maintain the trust of all its stakeholders and position itself as most trusted and preferred bank.

The strategic measures taken by the Bank, complemented by continued process and product improvements, helped it to report a broad-based improvement in its operational and financial performance in FY 2022-23.

KEY BUSINESS INITIATIVES

As an organisation, your Bank places customers at the core of its business strategy and undertook a number of customer-centric business initiatives during the year. The Bank leveraged its physical touchpoints of 1,928 branches and 3,334 ATMs and 58 e-lounges as well as its digital channels to connect with its diverse customer base spread across the country. Apart from offering traditional banking products and services, your Bank has also been offering innovative banking and financial solutions to its customers. Taking into cognisance the ever-changing business landscape, the Bank has been reviewing its existing product offerings and business processes and fine-tuning it to cater to the emerging customer requirements. Your Bank has also been offering various value-added products and services to its customers, keeping in view their risk profile and financial goals. Furthermore, the Bank has been taking proactive measures to ramp-up its digital infrastructure to cater to the pandemic-induced acceleration in the pace of digital adoption and ensure seamless, contactless, convenient, safe and secure âAnytime and Anywhere'' banking experience for all its customers. Your Bank provides a wide range of services on a round-the-clock basis through a wide range of digital channels such as Mobile Banking, Internet Banking, WhatsApp Banking, UPI, Debit Cards, Credit Cards, Point of Sale (PoS) terminals (both physical and digital), Internet Payment Gateway, ATMs, etc. Additionally, your Bank has also been taking concerted efforts to promote usage of these digital offerings as also increasing awareness among its customers regarding safe banking practices while conducting banking transactions digitally.

Being true to its intended positioning as a retail-centric bank, your Bank has been catering to a progressively large retail customer base by offering an entire bouquet of retail-centric products such as Housing Loan (HL), Loan Against Property (LAP), Personal Loan (PL), Education Loan (EL), Auto Loan (AL), Loan Against Securities (LAS), among other products. Your Bank has put in place an Automated Loan Processing System (ALPS) to ensure faster turnaround time in loan processing. Additionally, your Bank continued to augment its customer engagement approach by extensive usage of data analytics and adoption of Customer Relationship Management (CRM) tools.

Your Bank continued to contribute significantly towards lending to the priority sectors by extending credit to Agriculture and Micro, Small & Medium Enterprises (MSME) sectors. Your Bank has also been leveraging its Business Correspondent (BC)/ Business Facilitator (BF) network to expand its reach to unserved and underserved sections of the society. Your Bank has been proactive in furthering the objective of financial inclusion by ensuring access to financial products and services needed by vulnerable sections of the society at affordable cost in a fair and transparent manner. Towards this end, the Bank, inter alia, has been extending loans under various government sponsored schemes and ensuring access to various social security schemes and initiatives of the Government of India.

While the retail portfolio, viz., Retail, Agri & MSME, continued to be the business focus, the Bank has also been targeting a calibrated growth in its corporate loan book in alignment with its overall business strategy. Towards this end, your Bank has been focussing on fresh acquisition of well-rated corporate accounts to ramp up its corporate portfolio. Apart from this, your Bank also targeted growth in interest and fee-based income through focussed improvement in utilisation of sanctioned fund-based and non-fund based limits and also by cross-selling of products to deepen its existing relationship.

As a prudent measure, your Bank, while growing its asset book, has also been focussing on maintaining its asset quality by closely monitoring slippages to minimise fresh slippages. Simultaneously, your Bank has also been endeavouring to upgrade or implement timely resolution for its stressed assets and NPA cases, along with augmenting its standard advances loan book.

Your Bank offers a wide range of transaction banking products and services to its corporate and retail customers at competitive pricing. Your Bank has been constantly evolving and improving its core banking platform as also offering digitised trade processing to increase customer engagements and make every step of the trade operation process seamless and convenient. Your Bank has put in place appropriate operational and compliance alerts to enable round-the-clock fraud monitoring.

Your Bank acts as an agent of the RBI in handling receipt and payment transactions of the Central Government and the State Governments. Your Bank has enabled online collection of Employees'' Provident Fund Organisation (EPFO) and Employees'' State Insurance Corporation (ESIC) dues. Your Bank is also authorised to collect the Central Government taxes, to offer Small Savings Schemes, and to disburse Central Civil, Defence and Railway Pensions. Your Bank has gone live with more advanced and secured module for collection of direct taxes, i.e. Tax Information Network (TIN) 2.0.

Your Bank has integrated treasury operations in various market segments like Money Market, Fixed Income, Foreign Exchange, Derivatives and Equities. Your Bank''s Treasury is supported by a pan-India sales team for effective marketing of foreign exchange, fixed income and derivative products to its corporate as well as retail clients and provide them with solutions for effectively managing exposures in currencies and also advising them with investment solution in debt instruments.

In addition to these business initiatives, your Bank continued to bring about operational and process improvements to augment its overall business efficiency. Furthermore, the Bank has also been making steady progress towards technological innovation, upgradation and improvement in its IT infrastructure, both software and hardware, to support its business operations.

The detailed description of the Bank''s initiatives undertaken during the year is outlined in the Management Discussion and Analysis section of the Annual Report.

IMPACT OF COVID-19 PANDEMIC ON THE BANKâS BUSINESS

The COVID-19 virus, a global pandemic affected the world''s economy over the last two to three years. The extent to which new wave of COVID-19 pandemic will impact the Bank''s operations and asset quality will depend on on-going as well as future developments, which are uncertain at this stage. The management of the Bank is closely monitoring the developments in this regard, including the likelihood of rise in customer defaults, corresponding increase in provisioning requirements and taking necessary steps to mitigate the same.

BOARD OF DIRECTORS

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 2013, the Articles of Association of the Bank and the requirements of Corporate Governance, as envisaged in the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). The Board functions directly as well as through various Board-level committees constituted to provide focussed governance in the important functional areas of the Bank. As per the Articles of Association, the Board of Directors shall not be less than three and more than fifteen members consisting of a Chairman appointed by the Board, one Whole-time MD & CEO and two DMDs to be appointed by the Board, two Nominee Directors of LIC, two Nominee Directors of GoI and eight Non-rotational Independent Directors (including the Chairman and one Woman Independent Director).

As on March 31, 2023, the Board comprised fifteen Directors, viz., Shri T. N. Manoharan, Independent Director

and Part-Time Chairman, Shri Rakesh Sharma, MD & CEO, Shri Samuel Joseph Jebaraj & Shri Suresh Khatanhar, DMDs, as Whole Time Directors; Shri Manoj Sahay & Shri Sushil Kumar Singh, Government Nominee Directors; Shri Mukesh Kumar Gupta & Shri Raj Kumar, LIC Nominee Directors, as Non-Executive Directors; Shri Gyan Prakash Joshi, Shri Bhuwanchandra B. Joshi, Shri Samaresh Parida, Shri N. Jambunathan, Shri Deepak Singhal, Shri Sanjay Gokuldas Kallapur and Smt. P. V. Bharathi as Independent Directors. The strength of 15 (fifteen) Directors on the Board as on March 31,2023 meets the requirement provided under Article 114(a) of the Articles of Association of the Bank.

APEX COMMITTEES

The Board has a total of thirteen committees to oversee various functional areas of your Bank''s business and operations. The Board committees include Audit Committee of the Board, Executive Committee, Nomination & Remuneration Committee, Stakeholders'' Relationship Committee, HR Steering Committee, Frauds Monitoring Committee, Recovery Review Committee, Risk Management Committee, Corporate Social Responsibility Committee, Non-Cooperative Borrowers'' Review Committee, Customer Service Committee, Wilful Defaulters'' Review Committee and Information Technology Strategy Committee.

CORPORATE GOVERNANCE

Your Bank is committed to adopt the best Corporate Governance practices. It believes that effective Corporate Governance is not just a requirement for regulatory compliance, but also a facilitator for excellence in governance including enhancement of stakeholders'' value. The details of your Bank''s Corporate Governance practices are given in this Annual Report as a separate section under the Corporate Governance Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The Securities & Exchange Board of India (SEBI), vide its circular dated May 5, 2021, amended the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. As per the amendment, with effect from FY 2022-23, the top one thousand listed entities based on market capitalisation are mandated to submit a Business Responsibility & Sustainability Report (BRSR) in the format as specified in SEBI Circular dated May 10, 2021. The BRSR is intended towards having quantitative and standardised disclosures on ESG (Environment, Social and Governance) parameters to enable comparability across companies, sectors and time. The Bank''s BRSR for FY 2022-23 has been hosted on its website (https://www.idbibank.in/business-responsibility-and-sustainabilitv-report.aspx).

STATEMENT UNDER SECTION 134 OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

There was one personnel in your Bank''s service, during the financial year under review, who received remuneration of over '' 1.02 crore annually. Further, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of '' 8.50 lakh per month. Also, there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by Managing Director & CEO or Deputy Managing Directors of the Bank and who held by himself or along with his spouse and dependent children, not less than 2.0% of the equity shares of the Bank.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Conservation of Energy

The Bank has been taking several initiatives towards conservation of energy. The Bank has replaced the conventional light fixtures with energy efficient light fixtures, lamps and tubes to conserve power in various premises. The Bank is using inverter type/ Variable

Refrigerant Flow (VRF) energy efficient air-conditioners (ACs) in some of the new branches/ Zonal Offices (ZOs). Depending on the requirement of the local electricity boards, your Bank has installed Automatic Power Factor Control (APFC) panel at some of its Zonal Offices and a few metro branches for energy conservation.

b) Technology Absorption

Your Bank has been proactively evaluating and absorbing the latest technology-based innovations

which has the potential to empower its business functions, enrich its customer experience and optimise its readiness towards opportunities and challenges of the future.

During the year, your Bank further strengthened its IT infrastructure with the initiative of second phase of industry standard technologies that includes Software Defined Wide Area Network (SD-WAN) for additional branches, implemented new-age security technologies ((Security Orchestration, Automation & Response (SOAR), Network Behaviour Anomaly Detection (NBAD), Packet Capture (PCAP), User & Entity Behaviour Analytics (UEBA) & Threat Intelligence Platform (TIP)) for building a Next Generation Security Operations Centre (SOC) at both Data Centre (DC) & Disaster Recovery (DR) site. Further, your Bank has implemented enterprise solution for IT Operations Management and is also at an advanced stage of implementation of Integrated Collection & Recovery Module (ICnRM).

Your Bank has implemented Real Application Cluster (RAC) in the Core Banking System (CBS) to improve performance and resilience. Your Bank has upgraded the entire private cloud hardware and software to meet the increasing needs of the business for just-in-time provisioning of IT infrastructure resources. Your Bank has deployed the latest analytics solution which uses the latest storage and server hardware. Your Bank is building IT infrastructure to set up state-of-the-art Enterprise Data Warehouse for addressing various reporting requirements and for obtaining business insights. Your Bank conducts regular Disaster Recovery (DR) drills for critical IT systems that ensure seamless availability and provides the assurance of the resilience of the critical systems. On the digital front, your Bank has implemented state-of-the-art Application Programming Interface Management (APIM) solution in an approach to facilitate digital transformation, adoption with seamless integration with other applications on a need basis with minimal effort and increased go-to-market capabilities of your Bank by going live for e-Bank Guarantee application (e-BG) in partnership with National e-Governance Services Ltd (NeSL).

On the data refinement and enrichment fronts, your Bank is continuously refining the process of the RBI return generation by removing manual intervention. Your Bank has converted Automated Data Flow (ADF) output into eXtensible Business Reporting Language (XBRL) format for majority of the returns out of applicable returns from the list of 32 returns released

by the RBI in the first phase and is in the process of converting remaining returns. Further, the Centre of Excellence (CoE) for Data Analytics has been set up by your Bank with the objective of achieving improved customer wallet share.

Details of other initiatives undertaken in the Information Technology have been provided in the Management Discussion and Analysis section of this Annual Report.

c) Foreign Exchange Earnings and Outgo

During the year, the total foreign exchange earned by the Bank was '' 579.65 crore (excluding foreign currency cash flows in derivatives and foreign currency exchange transactions) and the total foreign exchange outgo was '' 57.58 crore towards the operating and capital expenditure requirements.

DIRECTORSâ RESPONSIBILITY STATEMENT

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

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

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Bank''s Board of Directors is grateful to the Government of India, the Reserve Bank of India (RBI), the Securities & Exchange Board of India (SEBI), all the other statutory/ regulatory authorities and the Life Insurance Corporation of India (LIC) for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and

other banks/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. The Board appreciates the sincere and devoted services rendered by its entire staff and highly values their commitment and contributions towards the Bank.

Mar 31, 2022

Your Bank''s Board of Directors is pleased to present the Report on the Bank''s business and operations for the financial year ended March 31,2022.

The COVID-19 pandemic continued to afflict the lives of people across the world in the Financial Year (FY) 2021-22. Mutations of the coronavirus caused second and third waves in India which saw exponential surge in infection rates. However, these waves had a limited impact on the economy as compared to the first wave on account of largely localised restrictions which allowed for a semblance of normal operations by various sectors of the economy. Furthermore, proactive measures taken by the Government of India (Gol) and the Reserve Bank of India (RBI) shielded the vulnerable segments of the populace and businesses against the excesses of the economic impact of the pandemic. The policy support helped in steering the economy towards the path of recovery as is evidenced by a real Gross Domestic

Product (GDP) growth of 8.7% in FY 2021-22 as compared to a contraction of 6.6% in FY 2020-21. Notwithstanding the impact of the resurgent waves of the pandemic, the banking sector continued to be resilient, aided by structural reforms taken by the Government of India (GoI) in the recent years as well as measures announced by the policymakers in the wake of the pandemic. Despite this, the continued uncertainty due to the pandemic and dented consumer & business sentiments weighed down the credit growth to some extent for a substantial part of the year. It is essential to view the financial performance of your Bank in the backdrop of these developments for a nuanced perspective.

FINANCIAL HIGHLIGHTS

As on March 31,2022, your Bank''s aggregate deposits and advances touched '' 2,33,134 crore and '' 1,45,772 crore, respectively. Your Bank''s business highlights for the period under review are presented in Table 1.

Table 1: Key Financials

('' in crore)
As on March 31,2021		As on March 31,2022
Capital	10,752	10,752
Reserves & Surplus	26,059	30,910
Deposits	2,30,852	2,33,134
Borrowings	15,908	14,345
Other Liabilities & Provisions	14,193	12,278
Total Liabilities	2,97,764	3,01,419
Cash & Balances with RBI	13,013	13,593
Balances with Banks & Money at Call & Short Notice	22,209	13,117
Investments	81,023	82,988
Advances	1,28,150	1,45,772
Fixed & Other Assets	53,369	45,949
Total Assets	2,97,764	3,01,419

For the period	2020-21	2021-22
Total Income	24,497	22,985
Total Expenses (other than provisions)	17,462	15,490
Provisions (other than tax)	4,666	3,887
Profit/ (Loss) Before Tax	2,369	3,608
Provision for Tax	1,009	1,169
Profit/ (Loss) After Tax	1,359	2,439

During the year under review, your Bank''s total income amounted to '' 22,985 crore, comprising interest income of '' 18,295 crore and other income of '' 4,690 crore. Interest expenses stood at '' 9,133 crore and operational expenses at '' 6,357 crore, accounting for total expenditure (excluding provisions and contingencies) of '' 15,490 crore.

Total provisioning of your Bank decreased for the year due to lower provisioning towards standard assets in the year under review which was offset by increase in provisioning for Non-Performing Assets (NPAs) due to lower reversal of

provisions in comparison with previous year. The provisions include '' 3,252 crore towards provision for NPAs, bad debts written-off and investments. The increase in Net Interest Income (NII), other income and reduction in provisions enabled the Bank to earn a net profit of '' 2,439 crore during FY 2021-22.

While the Earnings per Share (EPS) during the year were '' 2.27, the Book Value per Share (excluding intangible assets and Deferred Tax Asset (DTA)) stood at '' 18.35 as at end-March 2022. The Board of your Bank has not recommended any dividend for FY 2021-22.

REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES & JOINT VENTURE INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT AS ON MARCH 31,2022
	Net Assets i.e. total assets minus total liabilities		Share in profit or loss
Name of the Entity	As % of Consolidated Net Assets	Amount (In '' crore)	As % of Consolidated Profit or Loss	Amount (In '' crore)
Parent : IDBI Bank Ltd.	97.57%	41,661.98	96.27%	2,439.27
Subsidiaries
Indian :
1. IDBI Capital Markets & Securities Ltd.	0.77%	329.51	0.66%	16.75
2. IDBI Intech Ltd.	0.24%	103.90	0.67%	16.95
3. IDBI Asset Management Ltd.	0.29%	121.82	0.33%	8.45
4. IDBI MF Trustee Co. Ltd.	0.00%	1.69	0.00%	0.08
5. IDBI Trusteeship Services Ltd.	0.66%	282.97	2.04%	51.66
Foreign :	NA	NA	NA	NA
Minority Interest in all Subsidiaries	0.30%	128.19	0.92%	23.40
Associates (Investment as per the equity method)#
Indian
1. Biotech Consortium India Ltd.	NA	NA	-	-
2. National Securities Depository Ltd.	NA	NA	1.55%	39.33
3. North Eastern Development Finance Corporation Ltd.	NA	NA	-	-
4. Pondicherry Industrial Promotion Development & Investment Corporation Ltd. ( PIPDICL)	NA	NA	NA	NA
Foreign :	NA	NA	NA	NA
Joint Ventures (as per proportionate consolidation/ investment as per the equity method)
Indian
1. Ageas Federal Life Insurance Company Ltd.	0.60%	257.24	0.93%	23.58
Foreign	NA	NA	NA	NA
Total	100.44%	42,887.30	101.54%	2,572.68
Elimination	-0.44%	-187.41	-1.54%	-39.01
Net Total	100.00%	42,699.89	100.00%	2,533.67

Note: None of the above subsidiaries have any subsidiary.

# - The financials of three associates, viz. North Eastern Development Finance Corporation Ltd. (25%), Biotech Consortium India Ltd. (27.93%) and Pondicherry industrial Promotion Development and Investment Corporation Ltd. (21.14%) are not considered for consolidation on account of non-receipt of Financial Statement for FY2021-22 and in case of one Associate, National Securities Depository Ltd. (26.10%), the financials has been taken up to December 2021, impact of whicf on Consolidated Financial Statements is not material. in case of the Associate, Pondicherry industrial Promotion Development and investment Corporation Ltd. the investment in the said company has been written down to '' 1.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL POSITION OF IDBI BANK WHICH HAVE OCCURRED DURING THE END OF FINANCIAL YEAR AND THE DATE OF BOARD REPORT

There were no material changes and commitments affecting the financial position of the Bank, which occurred between the end of the financial year, i.e. March 31,2022 and the date of the Directors'' Report.

THE DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

According to Section 143(3)(i) of the Companies Act 2013, the report of the Statutory Auditors should state whether the Bank has adequate Internal Financial Controls (IFCs) system in place and what is the operating effectiveness of such controls in the context of the financial statements. The IFCs, as referred to in Section 143(3) (i) of the Companies Act, relate to Internal Financial Controls Over Financial Reporting (IFCO-FR). The Bank''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by it, considering the essential components of internal control stated in the Guidance Note on Audit of IFCO-FR issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bank''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, as required under the Companies Act, 2013, the Banking Regulation Act, 1949 and the guidelines issued by the RBI. Your Bank has put in place an IFCO-FR Framework for evaluation of the existing internal financial controls system and appointed a Consultant for validating the compliances with respect to the documentation, certification, reporting process of the controls across all business verticals/ departments and ascertaining the adequacy and effectiveness of the controls in the Bank in all material respects with respect to financial reporting. During FY 2021-22, the Consultant has submitted the Internal Compliance Certificate for all the quarters of FY 2021-22 after carrying out the testing and validation of all the underlying processes as per the Bank''s IFCO-FR framework. The Consultant reviewed the compliance of all the 591 Risk Control Matrices as on March 31, 2022 and reported four open issues for further compliance. The departments concerned are working closely for addressing

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DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATE PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH A DETAILED EXPLANATION THEREOF, INCLUDING:

Particulars 2020-21	2021-22	Comments
Return on 0.46% Assets	0.84%	Net profit for FY 2021-22 is '' 2,439 crore as compared to net profit of '' 1,359 crore in FY 2020-21
Return 10.06% on Equity (excluding intangibles)	13.60%	Net profit for FY 2021-22 is '' 2,439 crore as compared to net profit of '' 1,359 crore in FY 2020-21.
Debt Equity 1.00% Ratio (excluding intangibles)	0.73%	Borrowings made in India and outside India have significantly decreased by '' 1,563 crore and improvement in net worth by '' 3,778 crore
Net NPA ratio 1.97%	1.27%	Net NPA has decreased by '' 663 crore.

CAPITAL ADEQUACY

In adherence to the Pillar 1 guidelines of the RBI under Basel III framework, your Bank computes regulatory capital requirement for credit, market and operational risks on a quarterly basis. As per the Basel guidelines, banks in India are mandated to maintain the Capital Conservation Buffer (CCB) in a phased manner commencing from March 31, 2016.

In line with RBIâs notification dated February 5, 2021, your Bank has implemented the last tranche of Capital Conservation Buffer (CCB) with effect from October 1, 2021. Accordingly, the minimum regulatory requirement of âTotal Capital CCB'' was 11.50% as on March 31,2022. Your Bankâs âTotal Capital CCBâ ratio was 19.06% as on March 31, 2022. Similarly, your Bankâs âCommon Equity Tier 1 (CET1) CCB'' ratio was 16.68% as against the regulatory requirement of 8.00%. Your Bankâs âTier 1 CCBâ ratio stood at 16.68% as on March 31, 2022 as against the regulatory requirement of 9.50%. Your Bankâs Leverage Ratio as on March 31, 2022 was 7.42% against the minimum regulatory requirement of 3.50%.

BUSINESS STRATEGY

The second wave of the pandemic in India, which peaked during the months of April 2021 and May 2021, saw lakhs of citizens in the country being affected by the coronavirus. In order to curb the spread of the virus, various State Governments re-imposed restrictions at localised levels, which permitted several economic activities to continue as usual, albeit at a smaller/ contained scale, in adherence with

COVID-19 protocols. The policymakers also continued to extend targeted policy support to the vulnerable sections of the society to minimise the economic impact of the pandemic on the lives and livelihoods of individuals.

Against this backdrop, your Bank continued to remain committed towards its core objective of ensuring customer delight by serving its customers with a bouquet of products and services for meeting their banking and financial requirements. Considering the pandemic-led restriction on physical movement, various business enablers were put in place by the Bank to extend uninterrupted and seamless banking services to its customers, thereby enhancing its operational resilience. Equipped with the experience gained during the initial phase of the pandemic, the Bank was able to adopt a more targeted approach by fine-tuning its product and services to align with the emerging expectations and preferences of its customers and to ensure a holistic banking experience. Thus, it is evident that the measures initiated by the Bank in the previous financial year to navigate through an environment disrupted by the outbreak of the pandemic gained further traction in FY 2021-22.

Apart from displaying operational flexibility, the Bank also exhibited tangible improvements in its business and financial performance. The FY 2021-22 started on a strong footing with the Bank further consolidating its position aided by robust fundamentals as also improvement in its business prospects upon the removal of restrictions placed on it with the Bank''s exit from the RBI''s Prompt Corrective Action (PCA) framework in March 2021. The strategic imperatives pursued by the Bank within the broad contour of the overall business strategy paved the way for a broad-based turnaround in its performance during the year. In consonance with its overarching agenda of positioning itself as a retail-oriented bank, the Bank augmented the share of loans to retail and small & medium-sized enterprises in its total asset book. At the same time, the Bank also pursued growth in the corporate credit book, especially in the mid-size units, in a risk-calibrated manner. Towards this end, the Bank exercised caution while augmenting the asset portfolio (both retail and corporate) by taking into consideration the associated risk parameters. On the liability side, your Bank continued to boost the share of its low-cost deposit base, i.e. CASA deposits and retail term deposits to the total deposits while strategically lowering the reliance on bulk term deposits. The strategic imperatives adopted by the Bank on the asset and liability front aided in reduction in the key cost parameters, viz. cost of funds and cost of deposits. In addition to this, the Bank continued to realise the full potential of the business synergies arising from its association with the Life Insurance Corporation of India (LIC), which aided in further improving its income. The measures to augment its income were aptly supported by cost rationalisation measures to strengthen its bottom-line.

Taking cognisance of the importance of asset quality in ensuring a stable and profitable growth path, your Bank continued to emphasise on improving its asset quality with special focus on maximising recovery and up-gradation efforts of its delinquent asset portfolio through legal and regulatory routes in a bid to resolve the existing stress in its asset book. Dedicated teams set up for both corporate and retail portfolio accelerated the overall recovery process. In order to closely monitor the onset of stress in the portfolio and also prevent further slippages in its asset quality, the Bank also undertook proactive measures to strengthen its credit monitoring mechanism. These measures initiated by the Bank aided in reducing incipient stress, limiting slippages and enhancing its credit quality.

Your Bank also undertook measures to further strengthen its Risk Management and Corporate Governance framework. Furthermore, your Bank also continued to promote a strong compliance culture by promoting and ensuring meticulous adherence to key laws, rules, regulations, internal policies and procedures and various codes of conduct, to maintain its reputation and win the trust of customers, investors and regulators.

These strategic measures were supplemented by a number of structural and systemic improvements, such as organisation restructuring, investment in technological up-gradation, augmenting data analytics prowess, further digitalisation of both internal as also customer-facing processes, introduction of innovative products & services, numerous employee-friendly initiatives, etc. The cohesive measures taken by your Bank paved the way for a holistic turnaround of the Bank in FY 2021-22.

KEY BUSINESS INITIATIVES

Customer centricity is at the core of your Bank''s business strategy. Your Bank, through its physical touch-points of 1,886 branches, 3,403 ATMs and 58 e-lounges, offers a wide range of banking products and services to cater to the emerging financial and investment requirements of its diverse customer base. Apart from fine-tuning its existing bouquet of products and services, your Bank also introduced a number of innovative banking solutions in line with the changing business landscape and evolving customer preferences. Your Bank further leveraged the increased digital adoption by the customers by broad-basing its digital offerings and contactless solutions. Furthermore, your Bank also automated and digitised its processes to ensure seamless banking services and enhanced ease of banking, thereby offering a holistic customer experience. In alignment with the changing business landscape, your Bank proactively strengthened and revamped its digital infrastructure and capabilities for smooth, convenient, safe and secure âAnytime, Anywhere'' banking experience for its customers. Your Bank also established a forward looking approach towards cyber security to reinforce its vision of being the preferred and trusted bank for all its stakeholders.

Your Bank continued to target a progressively larger retail business portfolio in alignment with its overall business strategy of positioning itself as a retail-focussed bank by offering awiderangeof retail-centric products suchas Housing Loans, Loan against Property, Personal Loans, Education Loans, Auto Loans, Loan against Securities, MSME Loans, Agri Loans, Gold Loans, among others. In order to ensure a faster turn-around time, your Bank processes these loans on an Automated Loan Processing System. Furthermore, the Bank also embarked on several IT initiatives for ensuring better customer experiences.

Your Bank continued to contribute significantly towards Priority Sector Lending (PSL) as mandated by the RBI by focussing on lending to Micro Enterprises, Direct Agri Non-Corporate (DANC) and Small & Marginal Farmers (SFMF). Your Bank also leveraged its Business Correspondent (BC)/ Business Facilitator (BF) channel to expand its reach, especially in the rural and semi-urban areas. Your Bank also entered into co-lending agreements to ramp up its Priority Sector Lending (PSL) portfolio. Your Bank is taking concerted efforts to further the objective of financial inclusion by ensuring convenient access to appropriate financial products & services to the vulnerable and financially excluded sections of the society at affordable cost in a fair and transparent manner. Your Bank has been making extensive use of technology and promoting financial literacy to ensure inclusive growth. Your Bank has been also extending loans under various social security schemes and initiatives of the Government of India.

In addition to meeting the financial requirements of its Retail, Agri and MSME (RAM) customers, your Bank endeavoured to cater to the financing needs of its corporate clientele in a risk-calibrated manner by extending term loans, working capital loans, packing credit and post-shipment credit to exporters, bill discounting, intra-day limits, channel financing & vendor financing, lending to Non-Banking Financial Companies (NBFCs) for on-lending to customers from the Priority Sector Lending (PSL) segment, etc.

Your Bank leveraged the business synergies with the Life Insurance Corporation of India (LIC) by offering a wide array of innovative, specialised/ customised products and services to the employees, agents and subsidiaries of the LIC for meeting their banking and investment requirements.

Your Bank has a dedicated Trade Finance Department, which offers a wide range of products and services to its large corporate, mid corporate and retail customers at competitive pricing. The Bank also undertook a number of IT initiatives to make the transactional executions error-free and faster. With a view to benefitting from the emerging usage of Distributed Ledger Technology (DLT) in the sphere

of Trade Finance, your Bank became one of the equity holders in Indian Banks'' Blockchain Infrastructure Co. Pvt. Ltd. (IBBIC), which is expected to facilitate in building processes to digitise and automate inter-organisation trade finance operations. Your Bank instituted effective system control mechanisms to mitigate cyber fraud risk in crossborder payments.

Your Bank acts as an agent of the RBI in handling receipt and payment transactions of the Central Government and the State Governments. Your Bank is authorised to collect Central Government taxes, offer Small Savings Schemes, and to disburse Central Civil, Defence and Railway Pensions. Your Bank is active in collection of State Receipts in 14 States and two Union Territories. Your Bank also provides 24x7 internet banking facilities for tax payments.

Your Bank offers customised and comprehensive range of Cash Management Services (CMS) for collection, payment and transaction banking solutions to suit the varied needs of the corporates. Your Bank offers various solutions like National Automated Clearing House (NACH), Virtual Account Facility, utility payments, direct debit facilities and other customised e-solutions that are technologically integrated (Host-to-Host) with client systems. Your Bank added two new digital products for corporates and with institutions, i.e. Corporate Liquidity Management Solutions (C-LMS) and Government Liquidity Management Solution (G-LMS) to cater to the liquidity management needs of corporates/ institutions. Among other services, your Bank is authorised to participate in e-freight payment system of the Indian Railways and for FASTag issuance and FASTag Acquiring Business. Your Bank also offers CMS collection and payment services to the LIC''s branch offices, divisional offices, Pension & Group Schemes (P & GS) offices, Individual Pension Policy (IPP) offices and other offices.

Your Bank''s Treasury caters to the requirements of its corporate and retail clients by effectively marketing foreign exchange, fixed income and derivative products and also providing them with solutions to effectively manage their exposures. Your Bank also advises its clients on their investment in debt instruments (Government Securities, Non-Statutory Liquidity Ratio (NSLR) Bonds, etc.) through Constituents'' Subsidiary General Ledger (CSGL) accounts.

Your Bank has also set up a dedicated Financial Institutions Group (FIG) to focus on domestic and foreign Financial Institutions (FIs) for offering various products/ services of the Bank. This group acts as a coverage group for offering products/ services relating to trade, cash management services, payments, forex, derivatives, money market and retail banking. The FIG also engages with the FIs for increasing the breadth of coverage and deepening the FI business.

Your Bank has been increasingly using data analytics and Machine Learning (ML) to improve its capabilities for customer acquisition and retention, to launch customised campaigns based on the analytics-driven input; to recommend business solutions for addressing complex business problems and issues; for assessment of credit risk and business potential; and taking corrective action with respect to loan accounts on a real-time basis with a focussed approach etc. Data analytics has aided the Bank in not only augmenting its business, NPA prediction, loan recovery and churn reduction but has also aided in number of process re-engineering.

The detailed description of the Bank''s initiatives undertaken during the year is outlined in the Management Discussion and Analysis section of the Annual Report.

IMPACT OF THE COVID-19 PANDEMIC ON THE BANKâS BUSINESS

During FY 2020-21, the COVID-19 pandemic resulted in nation-wide lockdown during April-May 2020 period which substantially impacted the economic activity in the country. The subsequent easing of lockdown measures led to gradual improvements in the pace of economic activity and resulted in shift towards normalcy in the second half of FY 2020-21. In FY 2021-22, India witnessed two more waves of the pandemic and the re-imposition of the localised/ regional lockdown measures in certain parts of the country. At present, there has been a gradual lowering of COVID-19 cases and the countries around the world are witnessing a gradual revival in their economies, including India. The Bank has geared itself on all fronts to meet the challenges imposed by the pandemic. The Bank''s capital and liquidity position is strong and would continue to be the focus area for your Bank.

BOARD OF DIRECTORS

LIC, two Nominee Directors of GoI and eight Non-rotational Independent Directors (including the Chairman and one Woman Independent Director).

As on March 31, 2022, the Board comprised of fourteen Directors, viz., Shri M. R. Kumar, Non-Executive Chairman, Shri Rakesh Sharma, MD & CEO, Shri Samuel Joseph Jebaraj and Shri Suresh Khatanhar, DMDs, as Whole Time Directors; Shri Anshuman Sharma, as Government Nominee Director and Shri Mukesh Kumar Gupta, LIC Nominee Director, as Non-Executive Directors; Shri Gyan Prakash Joshi, Shri Bhuwanchandra B. Joshi, Shri Samaresh Parida, Shri N. Jambunathan, Shri Deepak Singhal, Shri Sanjay Gokuldas Kallapur, Smt. P. V. Bharathi and Shri T. N. Manoharan as Independent Directors. The strength of 1 4 (fourteen) Directors on the Board as on March 31, 2022 meets the requirement provided under Article 114(a) of the Articles of Association of the Bank.

APEX COMMITTEES

CORPORATE GOVERNANCE

BUSINESS RESPONSIBILITY REPORT

As per Regulation 34 of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, the

Bank''s Business Responsibility (BR) Report for

FY 2021-22 has been hosted on its website under the link (https://www.idbibank.in/business-responsibilitv-report.asp). The BR Report describes initiatives taken by the Bank from an environmental, social and governance perspective.

STATEMENT UNDER SECTION 134 OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

There were no personnel in your Bank''s service, during the financial year under review, who received remuneration of

over '' 1.02 crore annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of '' 8.50 lakh per month. Further, there were no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by Managing Director & CEO or Deputy Managing Directors of the Bank and who held by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Bank.

STATEMENT UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 FOR YEAR ENDED MARCH 31, 2022 - DETAILS OF TOP TEN EMPLOYEES
Sr. No. Name	Designation	Annual Remuneration received (?)	Nature of employment, whether contractual or otherwise	Qualifications and experience of the employee	Date of commencement of employment	Age of such employee	The last employment held by such employee before joining the company
1 Shri Rakesh Sharma	MD & CEO	8721245.16	Contractual	Post Graduate in Economics and CAIIB Experience in IDBI Bank: 3 years	10-Oct-18	63 years	Canara Bank
2 Shri Suresh Khatanhar*	DMD	7158124.98	Contractual	M.Com, CAIIB and ICWA Experience in IDBI Bank: 24 years	23-Jun-97	58 years	Dena Bank
3 Shri Ashok Kumar Gautam#	Head-Treasury	6571671.68	Contractual	B.Sc, MBA and FRM Experience in IDBI Bank: 2 years	24-Jun-19	59 years	Axis Bank
4 Shri Samuel Joseph Jebaraj	DMD	6494752.38	Contractual	BE (Hons.) and MBA Experience in IDBI Bank: 2 years	20-Sep-19	53 years	Exim Bank
5 Shri Nagaraj Garla	ED	5431515.92	Full Time	B.Com, M.B.A, M.Com, I.C.W.A (Inter), Certification Programme in IT and Cyber Security for Senior Management, CAIIB, Certificate Examination in Trade Finance and Certificate Examination in SME Finance and CIMA Advanced Diploma in Management Accounting (UK) Experience in IDBI Bank: 22 years	17-Feb-00	52 years	ING Vysya Bank
6 Shri Ajoy Nath Jha	ED	5398230.61	Full Time	M.A (Economics), M. Phil, CFA, Certified Information Security Professional, CAIIB and FRM Experience in IDBI Bank: 27 years	27-Dec-94	59 years	Reserve Bank of India

Sr. No.	Name	Designation	Annual Remuneration received (?)	Nature of employment, whether contractual or otherwise	Qualifications and experience of the employee	Date of commencement of employment	Age of such employee	The last employment held by such employee before joining the company
7	Shri Madhav Vasant Phadke^A	ED/ Advisor	5360444.29	Full Time	B.A. LLM, MLL & LW -Diploma in Banking Experience in IDBI Bank: 30 years	16-May-91	60 years	Maharashtra State Financial Corporation
8	Shri Anilkumar R. Jaiswara	CGM	5238289.88	Full Time	B.Com and CAIIB Experience in IDBI Bank: 33 years	25-Aug-88	56 years	M/s. Malhotra Graphics
9	Shri Pradip Kumar Das	ED	5223140.50	Full Time	B.SC and MBA (Finance) Experience in IDBI Bank: 21 years	23-Jan-01	60 years	Central Bank of India
10	Shri Ajay Sharma	ED	5213701.79	Full Time	M.B.A, M.Com, I.C.W.A (Inter) and CAIIB Experience in IDBI Bank: 34 years	02-Nov-87	59 years	Punjab National Bank

*- Date of commencement of current designation for Shri Suresh Khatanhar as DMD in the Bank is w.e.f. January 15, 2020;

# - Shri Ashok Kumar Gautam was in employment for part of the FY 2021-22;

^A - Shri M. V. Phadke was in full time employment for part of FY 2021-22 and continued as an advisor thereafter;

Remuneration includes basic salary, allowances, perquisites as per the Income Tax rules but excludes employer''s contribution to PF/ Pension, non-monetary perquisite tax and accrued retirement benefits.

The above list does not include employees sent on deputation whose salary is reimbursed by the other companies.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

b) Technology Absorption

Your Bank has been proactively evaluating and absorbing the latest technology-based innovations that have potential to empower its business functions, enrich its customer experience and optimise its readiness towards opportunities and challenges of the future.

A few noteworthy technology-driven reforms adopted by your Bank include enhancing the capabilities of Video KYC Account Opening (VAO) process to offer digital convenience to the customers to open savings bank accounts and implementing the Digital Rights Management (DRM) solution for protecting customer data shared with vendors providing various services. Your Bank further strengthened its IT infrastructure with the industry standard technologies that includes Software Defined Wide Area Network (SD-WAN) which is in an advanced stage of implementation and further implementing new-age security technologies (Security Orchestration, Automation & Response

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Conservation of Energy

Your Bank took several measures for conservation of energy. For instance, the Bank replaced conventional light fixtures with energy efficient LED light fixtures, lamps & tubelights at the Bank''s Head Office building at Mumbai as well as all other office and residential buildings of the Bank in order to conserve power. The Bank is fitting new signages at its branches with LED lights in place of conventional powerconsuming light fixtures. For all new or refurbished branches, your Bank is using LED lights in place of conventional lights. The Bank built water harvesting facility in the new residential buildings constructed at the Jawaharlal Nehru Institute of Banking and Finance (JNIBF), Hyderabad.

(SOAR), Network Behaviour Anomaly Detection (NBAD), Packet Capture (PCAP), User & Entity Behaviour Analytics (UEBA) & Threat Intelligence Platform (TIP)) for building a Next Generation Security Operations Centre (SOC) at both Data Centre (DC) & Disaster Recovery (DR) site. Further, your Bank is also procuring an enterprise solution for IT Operations Management and also initiated a process of implementation of Integrated Collection & Recovery Module.

Your Bank upgraded the Core Banking Servers to the latest hardware, which brings about improved performance and resilience. Your Bank upgraded the entire private cloud hardware and software to meet the increasing needs of the business for Just-in-Time provisioning of IT infrastructure resources. Your Bank is now running the latest analytics solution and has set it up using the latest storage and server hardware and building IT infrastructure to set up state-of-the-art Application Programming Interface Management (APIM) micro-services platform. Your Bank conducted periodic Disaster Recovery (DR) drills for critical IT systems that ensured seamless availability even in the midst of the COVID-19 pandemic and mitigated the risk of disruption of IT services.

On the data refinement and enrichment fronts, your Bank successfully implemented Automated Data Flow (ADF) application and is continuously refining the process of the RBI returns generation by eliminating manual intervention. The RBI has launched a project, viz., Centralised Information Management System (CIMS) with the purpose of creating a single repository for collating banks'' data through system-to-system approach for regulatory submissions. Your Bank converted ADF output into extensible Business Reporting Language (XBRL) format for returns released by the RBI. Further, your Bank has set up the Centre of Excellence (COE) for Data Analytics with the objective of achieving improved customer wallet.

Your Bank, in the Advanced Analytics ecosystem, has been using cutting-edge tools & technologies, devising & implementing Statistical/ Predictive Models & Machine Learning Algorithms for providing quantifiable and actionable inputs. It is utilising diverse sources of data for Comprehensive Analysis, Customer Profling, Predictive Modelling,

Forecasting, Trend Analysis, Marketing Analysis & Risk Analytics and recommending business solutions to address complex business problems and issues.

Details of other initiatives taken in the Information Technology ecosphere have been provided in the Management Discussion and Analysis section of this Annual Report.

c) Foreign Exchange Earnings and Outgo

During the year, the total foreign exchange earned by the Bank was '' 96.53 crore (excluding foreign currency cash flows in derivatives and foreign currency exchange transactions) and the total foreign exchange outgo was '' 26.19 crore towards the operating and capital expenditure requirements.

DIRECTORSâ RESPONSIBILITY STATEMENT

The Board of Directors, hereby, declares and confirms

that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Bank''s Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI), all other statutory/ regulatory authorities and Life Insurance Corporation of India (LIC) for their valuable co-operation and guidance. The Board also

acknowledges, with gratitude, the co-operation and support received from various State Governments and other banks/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. The Board appreciates the sincere and devoted services rendered by its entire staff and highly values their commitment towards the Bank.

Mar 31, 2021

Your Bank''s Board of Directors is pleased to present the Report on its Business and Operations for the financial year ended March 31,2021.

The Financial Year (FY) 2020-21 was characterised by unprecedented challenges to lives and livelihood posed by the COVID-19 pandemic. The socio-economic consequences of the pandemic were more severe than initially anticipated due to the uncertainty regarding its path, duration and magnitude. This warranted policy response at an unprecedented scale from governments and central banks globally. The Indian economy also experienced pandemic-led fallout with widespread economic impact. The banking sector, like most sectors, encountered challenges and uncertainties caused due to the economic disruptions. However, deployment of timely and collaborative policy interventions by the Government of India (GoI) and the Reserve Bank of India (RBI) paved the way for gradual revival of the economic activities. The policy response was directed towards stabilising the economy and putting in place necessary enablers to kick-start the economy on a sustainable basis. This was evidenced by the improvement in

India''s economic performance in Q3 and Q4 of FY 2020-21 which saw positive Gross Domestic Product (GDP) growth of 0.5% and 1.6%, respectively. However, two consecutive quarters of decline in Q1 and Q2 of FY 2020-21 weighed down the overall growth performance with GDP registering a contraction of 7.3% in FY 2020-21. While the fiscal and monetary support extended by the policymakers aided in minimising the impact of the pandemic on key sectors, it was only in the second half of the year that there was an uptick in economic activity on the back of rolling back of restrictions. As the economy is yet to reach its potential growth trajectory, it is imperative to view the performance of your Bank in this context.

Financial Highlights

As on March 31,2021, your Bank''s aggregate deposits and advances touched '' 2,30,898 crore and '' 1,28,150 crore, respectively. Your Bank''s business highlights for the period under review are presented in Table 1.

Table 1: Key Financials		('' in crore)
Ason March 31, 2020		Ason March 31, 2021
Capital	10,381	10,752
Reserves & Surplus	23,644	26,059
Deposits	2,22,424	2,30,898
Borrowings	36,749	15,908
Other Liabilities & Provisions	6,730	14,147
Total Liabilities	2,99,928	2,97,764
Cash & Balances with RBI	10,539	13,013
Balances with Banks & Money at Call & Short Notice	19,892	22,209
Investments	81,780	81,023
Advances	1,29,842	1,28,150
Fixed & Other Assets	57,875	53,369
Total Assets	2,99,928	2,97,764

For the period	2019-20	2020-21
Total Income	25,295	24,557
Total Expenses (other than provisions)	20,183	17,466
Provisions (other than tax)	14,079	4,722
Profit/ (Loss) Before Tax	(8,967)	2,369
Provision for Tax	3,920	1,009
Profit/ (Loss) After Tax	(12,887)	1,359

During the year under review, your Bank''s total income amounted to '' 24,557 crore, comprising interest income of '' 19,932 crore and other income of '' 4,625 crore. Interest expenses stood at '' 11,414 crore and operational expenses at '' 6,052 crore, accounting for total expenditure (excluding provisions and contingencies) of '' 17,466 crore.

Total provisioning of your Bank declined for the year due to reversal of provisioning for Non-Performing Assets (NPAs). The provisions include '' 2,395 crore towards provisions for NPAs, bad debts written-off and investments. The increase in Net Interest Income (NII), other income and reduction in

operating expenses and provisions enabled the Bank to post a net profit of '' 1,359 crore during FY 2020-21.

While the Earnings per Share (EPS) during the year was '' 1.30, the Book Value per Share (excluding intangible assets and Deferred Tax Asset (DTA) ) stood at '' 14.83 as at end-March 2021.

Given that the âsecond wave'' significantly increased the number of COVID-19 cases in India and as the outlook is likely to remain uncertain for a considerable duration, the Board of Directors of the Bank, at its meeting held on May 03, 2021, considered it prudent to not propose dividend for the financial year ended March 31,2021.

Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement as on March 31,2021

	Net Assets i.e. total assets minus total liabilities		Share in profit or loss
Name of the Entity	As % of Consolidated Net Assets	Amount (in '' crore)	As % of Consolidated Profit or Loss	Amount (in '' crore)
Parent : IDBI Bank Ltd.	97.54%	36,811.07	89.79%	1,359.46
Subsidiaries
Indian :
1. IDBI Capital Markets & Securities Ltd.	0.83%	312.76	0.50%	7.51
2. IDBI Intech Ltd.	0.24%	90.06	0.80%	12.07
3. IDBI Asset Management Ltd.	0.30%	113.38	0.30%	4.53
4. IDBI MF Trustee Co. Ltd.	0.00%	1.61	0.00%	0.03
5. IDBI Trusteeship Services Ltd.	0.66%	249.41	2.65%	40.09
Foreign :	NA	NA	NA	NA
Minority Interest in all Subsidiaries	0.30%	112.98	1.20%	18.16
Associates (Investment as per the equity method)#
Indian
1. Biotech Consortium India Ltd.	NA	NA	0.00%	0.00
2. National Securities Depository Ltd.	NA	NA	5.51%	83.46
3. North Eastern Development Finance Corporation Ltd.	NA	NA	0.00%	0.00
4. Pondicherry Industrial Promotion Development & Investment Corporation Ltd. ( PIPDICL)	NA	NA	NA	NA
Foreign :	NA	NA	NA	NA
Joint Ventures (as per proportionate consolidation/investment as per the equity method)
Indian
1. Ageas Federal Life Insurance Company Ltd.	0.69%	259.65	2.19%	33.22
Foreign	NA	NA	NA	NA
Total	100.56%	37,950.91	100.54%	1,522.22
Elimination	-0.56%	-209.89	-0.54%	-8.25
Net Total	100.00%	37,741.02	100.00%	1,513.97

Note: None of the above subsidiaries have any subsidiary.

# - The financials of four Associates viz., National Securities Depository Ltd.(26.10%), North Eastern Development Finance Corporation Ltd. (25%), Biotech Consortium India Ltd. (27.93%) and Pondicherry Industrial Promotion Development & Investment Corporation Ltd. (21.14%) are not considered for consolidation on account of non-receipt of Financial Statements for Q4 of FY 2020-21, impact of which on the Consolidated Financial Statements is not material. In case of Pondicherry Industrial Promotion Development & Investment Corporation Ltd., the investment in the said company has been written down to '' 1.

Material changes and commitments, if any, affecting financial position of IDBI Bank which have occurred during the end of financial year and the date of Board Report.

There were no material changes and commitments affecting the financial position of the Bank, which occurred between the end of the financial year of the Bank, i.e. March 31,2021 and the date of the Directors'' Report.

The details in respect of adequacy of internal financial controls with reference to the financial statements.

According to Section 143(3)(i) of the Companies Act 2013, with effect from FY 2015-16, the report of the Statutory Auditors should state whether the Bank has adequate Internal Financial Controls (IFCs) system in place and the operating effectiveness of such controls, in the context of the financial statements. IFCs as referred to in Section 143(3)(i) of the Companies Act relate to Internal Financial Controls Over Financial Reporting (IFCO-FR). The Bankâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of IFCO-FR issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bankâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, as required under the Companies Act, 2013, the Banking Regulation Act, 1949 and the guidelines issued by the RBI.

Your Bank has put in place an IFCO-FR Framework for evaluation of the existing internal financial controls system and appointed a Consultant for validating the compliances with respect to the documentation, certification, reporting process of the controls across all business verticals/ departments and ascertaining the adequacy and effectiveness of the controls in the Bank in all material respects with respect to financial reporting.

During FY 2020-21, the said Consultant has submitted the Internal Compliance Certificate for the quarters ended June 2020 to December 2020 after carrying out the testing and validation of all the underlying processes as per the Bankâs IFCO-FR framework. The Consultant reviewed the compliance of 570 Risk Control Matrices as on December 31, 2020 and reported five open issues for further compliance. The departments concerned are working closely for addressing the open issues.

Details of significant changes (i.e. change of 25% or more as compared to the immediate previous financial year) in key financial ratios, along with a detailed explanation thereof, including:

Particulars 2019-20	2020-21	Comments
Net Interest 2.61% Margin (%)	3.38%	Interest Income increased due to increase in interest on income tax refund by '' 943 crore to '' 1,313 crore for FY 2020-21 as against '' 370 crore for FY 2019-20 and decrease in interest expenses by '' 2,433 crore.
Return on -4.26% Assets	0.46%	Net profit for FY 2020-21 is '' 1,359 crore as compared to loss of '' 12,887 crore in FY 2019-20.
Net NPA% to 4.19% Net Advances	1.97%	Net NPA decreased by '' 2,920 crore.
Debt to Equity 3.16 ratio	1.00	Borrowings made in India and outside India significantly decreased by '' 20,841 crore and Net Worth improved by '' 4,319 crore.

Capital Adequacy

In adherence to the Pillar 1 guidelines of the RBI under Basel III framework, your Bank computes the regulatory capital requirement for credit, market and operational risks on a quarterly basis. As per the Basel guidelines, banks in India are mandated to maintain Capital Conservation Buffer (CCB) in a phased manner commencing from March 31, 2016. In line with the RBIâs notification dated September 29, 2020 whereby the transitional arrangements of Basel III capital regulations were reviewed, the applicable CCB for March 31, 2021 was stipulated at 1.875%. Accordingly, the minimum regulatory requirement of âTotal Capital CCB'' was 10.875% as on March 31,2021. Your Bankâs âTotal Capital CCBâ ratio was 15.59% as on March 31, 2021. Similarly, your Bankâs âCommon Equity Tier 1 (CET1) CCBâ ratio was 13.06% as against the regulatory requirement of 7.375%. Your Bankâs âTier 1 CCBâ ratio stood at 13.06% as on March 31, 2021 as against the regulatory requirement of 8.875%. Your Bankâs Leverage Ratio as on March 31,2021 was 6.08% against the applicable minimum regulatory requirement of 3.50%.

Your Bank has a Board-approved policy on Internal Capital Adequacy Assessment Process (ICAAP) in line with the Pillar 2 norms of the Basel III framework. This policy enables your

Bank to internally assess and quantify those risks which are not covered under Pillar 1 as well as to develop appropriate strategies to manage and mitigate risks under normal and stressed conditions.

Your Bank has also put in place a comprehensive stress testing framework in line with the RBI guidelines. The stress testing framework enables your Bank to assess its performance under exceptional but plausible events and facilitates appropriate proactive strategies to meet unforeseen contingencies. The framework also includes scenario analysis and reverse stress testing. Scenario analysis enables the Bank to understand the impact of adverse macroeconomic indicators on the capital and profitability of the Bank. Your Bank also separately created scenarios to make a preliminary assessment of the detrimental impact of the COVID-19 pandemic on the various sectors to which the Bank has exposure, which in turn will adversely affect the Bank''s profitability. The mechanism of reverse stress testing has been added to the framework to find the level of stress which may adversely impact the capital to take it to a pre-determined floor level.

Your Bank has adopted a Disclosure Policy in accordance with the Pillar 3 requirements under the Basel norms. Accordingly, disclosures as at the end of each quarter are hosted on your Bank''s website, thereby exhibiting high degree of transparency.

Your Bank follows the Standardised Approach under Credit Risk for computation of capital charge. Your Bank follows Basic Indicator Approach (BIA) to compute regulatory capital charge for Operational Risk. A comprehensive set of Key Risk Indicators (KRIs) and Risk & Control Self-Assessment (RCSA) framework have been rolled out across different business segments for ensuring effective control mechanism. For Market Risk, your Bank uses Standardised Measurement Method (SMM) to compute regulatory capital requirements.

Qualified Institutional Placement (QIP)

Your Bank had raised Equity Capital amounting to '' 1,435.18 crore through the Qualified Institutional Placement (QIP) route in Q3 of FY 2020-21. The Bank raised capital for the first time after a gap of 25 years since its maiden Initial Public Offering (IPO) in 1995. Under this QIP, 44 Qualified Institutional Buyers (QIB) participated and were issued equity shares of 37,18,08,177 (nos.) at '' 10/- each fully paid up with a share premium of '' 28.60 per share aggregating to '' 1,435.18 crore.

Business Strategy

FY 2020-21 commenced in the midst of the first phase of the nationwide lockdown imposed by the GoI as a preventive measure to mitigate the spread of the coronavirus. The immediate imperative before the Bank as a provider of essential service was to ensure uninterrupted banking services without compromising on the safety measures

for both customers and employees. Apart from ensuring that most branches were functional with proper COVID-19 protocols for providing in-person servicing, where essential, your Bank redirected key business processing activities to alternate locations within the country for uninterrupted and time-bound processing of customer requests. Furthermore, customers were also encouraged to use digital and other alternate channels to carry out their banking transactions. During the year, your Bank continued to pursue a risk-calibrated business strategy to ensure stable and profitable growth, especially in view of the challenging operating environment. In tandem with its overall business strategy of re-orienting itself as a retail-centric bank, your Bank augmented its retail asset book with increased focus on Structured Retail Assets (SRA), Agri and MSME loan portfolio, while simultaneously limiting its corporate exposure. On the liability side, your Bank continued to boost the share of its low-cost deposit base i.e. CASA deposits to the total deposits while reducing reliance on bulk term deposits. Consequent upon the majority stake acquisition by the Life Insurance Corporation of India (LIC), the Bank has been accelerating its efforts to realise the full potential arising out of business synergies with the LIC. Apart from augmenting income, the Bank also continued to make concerted efforts to rationalise its expenses in order to ensure a robust bottom-line.

Recognising the importance of asset quality in ensuring a profitable and sustained turnaround, your Bank has been aggressively pursuing recovery and upgradation of its delinquent asset portfolio through legal and regulatory routes in a bid to resolve the existing stress in its asset book. Your Bank has also set up dedicated teams to drive recovery in corporate and retail portfolio. Additionally, as a proactive measure, your Bank has also strengthened its credit monitoring mechanism in order to closely monitor the onset of stress in its portfolio and to prevent slippages in asset quality. These initiatives have aided in reducing incipient stress, containing slippage and improving credit quality of your Bank.

Your Bank has also undertaken measures to strengthen its risk management and corporate governance framework. In addition to this, your Bank also continued to promote a strong compliance culture by adhering to key laws, rules, regulations, internal policies & procedures and various codes of conduct to maintain its reputation and win the trust of customers, investors and regulators.

Your Bank has always been committed towards its vision of emerging as a trusted and preferred bank in India''s banking space. Towards this end, your Bank has adopted a customercentric policy to focus on enhancing customer delight and experience. Your Bank has also been leveraging its data analytics capabilities to introduce a wide-range of customised products and services to cater to the emerging customer preferences. Furthermore, your Bank has continued to invest

in technological innovation and up-gradation in order to ensure better customer service and experience. Your Bank has also remained committed towards the GoI''s Enhanced Access and Service Excellence (EASE) to ensure ease of banking.

These strategic measures were supplemented by a number of structural and systemic improvements which paved the way for a smooth and successful turnaround process.

Key Business Initiatives

Your Bank, as a customer-centric bank, offers an entire gamut of banking and investment products and services to cater to the emerging financial requirements of its customers. In order to minimise the pandemic-led disruptions, your Bank has been ramping up its digital capabilities by embracing technological innovation and also by upgrading and augmenting its software/ hardware capabilities. While the Bank continued to serve its customers through its network of 1,886 branches, 3,388 ATMs and 58 e-lounges, the strengthening of its digital infrastructure enabled your Bank to offer a number of digital and contactless solutions to its customers in a safe and secure manner, thereby ensuring last-mile connectivity to its customers. This proactive measure by your Bank also enabled it to remain connected with its customers and provide uninterrupted and seamless banking services without diluting the safety measures and social-distancing norms.

In response to the evolving customer preferences and requirements, your Bank introduced a number of innovative products and services, viz. WhatsApp banking, online account opening facility through mobile app - âI Quick'', Account Opening/ Re-KYC through Video KYC (VAO), virtual debit card, doorstep banking facility for senior citizens and differently-abled persons, state-of-the-art Loan Processing System for Agri and MSME loans, among others, to ensure ease of banking and customer delight.

Your Bank continued to remain committed towards supporting the priority sectors by significantly contributing to Priority Sector Lending (PSL), thereby also adhering to the RBI''s mandate. Your Bank is proactively promoting the national agenda of financial inclusion with interventions in three key areas, viz. ensuring access to appropriate financial products and services by the vulnerable sections of the society at an affordable cost in a fair and transparent manner, making extensive use of technology to connect with customers and enhancing customer awareness through financial literacy. Your Bank has also been engaging its network of Business Correspondents (BCs)/ Business Facilitators (BFs) in an effort to increase penetration in rural and semi-urban areas. This has aided in furthering the financial inclusion agenda as also providing an added impetus to its PSL business.

Your Bank has been leveraging the business synergies with

the LIC by offering a wide array of innovative, specialised/ customised products and services to the employees, agents and subsidiaries of the LIC for meeting their banking and investment requirements.

Your Bank offers a wide range of Trade Finance (TF) products and services to its large corporate, mid corporate and retail customers. As a part of its transformation plan, your Bank has transitioned to a centralised trade processing system, which operates on a hub-and-spoke model at three major metro centres, viz. Mumbai, Chennai and Delhi and facilitates standardised processing, efficient communication and faster turnaround time. Your Bank, as an Authorised Dealer (AD) Category I bank, has 39 dedicated TF centres, which are authorised to handle all types of foreign exchange transactions.

Your Bank acts as an agent for Central Government and State Governments to manage their receipts and payments. Your Bank is authorised to collect Central Government Taxes, State Receipts in select States and Union Territories. Your Bank is also authorised by the Government to offer Small Savings Schemes through its branches and disburse Central Civil, Defence and Railway Pensions. Your Bank also provides 24x7 internet banking facilities for tax payments. Your Bank has enabled online collection of Employees'' Provident Fund Organisation (EPFO) and Employees'' State Insurance Corporation (ESIC) dues.

Your Bank is committed towards providing state-of-the-art Cash Management Services (CMS) to help corporates accelerate their collections, handle their bulk payments efficiently and smoothen their flow of funds. Your Bank offers a comprehensive range of CMS collections, payment and transaction banking solutions to suit the needs of corporates so that they have a complete control of their cash position.

Your Bank is setting up a dedicated Financial Institutions Group (FIG) to focus on domestic and foreign Financial Institutions (FIs) for offering various products/ services of the Bank. This group shall act as a coverage group for offering products/ services related to trade, cash management services, payments, treasury, forex, derivatives, money market & capital markets and retail banking. The FIG shall also engage with the FIs for increasing the breadth of coverage and deepen the FI business.

To address the economic fallout of the pandemic, your Bank undertook a number of measures such as providing moratorium to all the eligible customers, extending additional funding by way of Working Capital Term loan to MSMEs/ business enterprises and individual borrowers, launching a Credit Guarantee Scheme for Subordinated Debt (CGSSD) to provide personal loans to the promoters of the stressed MSMEs, introducing Loan Resolution Plan for borrowers having financial stress on account of COVID-19, among other measures, to help its customers.

Your Bank has a dedicated Centre of Excellence for Data Analytics which works across business areas on projects related to business analytics, decision strategies, forecasting models, machine learning and rule engines. Your Bank continues to leverage technology and analytics for deeper insights into customer on-boarding, micro-segmentation of customers, behavioural pattern, smooth and frictionless transaction, spending behaviour, risk portfolio etc. Data analytics and Machine Learning (ML) have enabled your Bank to get better at acquiring, serving and retaining customers by offering analytics-driven next best products. Your Bank is leveraging these technologies to maximise its digital impact and make its digital campaigns more intelligent, sharp and cost-efficient.

The detailed description of the Bank''s initiatives undertaken during the year is outlined in the Management Discussion and Analysis section of the Annual Report.

Impact of the COVID-19 pandemic on the Bankâs business

The SARS-CoV2 virus responsible for the COVID-19 has resulted in a significant decline and volatility in global and Indian markets and economic activity. Implementation of lockdown and extensions has resulted in disruptions of business and common life. The Bank is gearing itself on all fronts to meet the challenges imposed by the COVID-19 pandemic including the likelihood of rise in customer defaults and an increase in provisioning requirements. The second wave of the COVID-19 from mid-March 2021 is again threatening to disrupt the economic activities in many states, where the pandemic is more severe with possibilities of lockdown getting extended in case the situation does not improve. The Bank''s capital and liquidity position is strong and would continue to be the focus area for the Bank during this period.

Board of Directors

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 2013, the Articles of Association of the Bank and the requirements of corporate governance, as envisaged in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). The Board functions directly as well as through various Board level committees constituted to provide focussed governance in the important functional areas of the Bank. As per the Articles of Association, the Board of Directors shall not be less than three and more than fifteen members consisting of the Chairman of the LIC as NonExecutive Chairman of the Bank, MD & CEO, two DMDs, one Official Nominee Director of the LIC, two Nominee Directors

of GoI and eight Independent Directors including one Woman Independent Director.

As on March 31, 2021, the Board comprised fourteen Directors, viz., Shri M. R. Kumar, Non-Executive Chairman, Shri Rakesh Sharma, MD & CEO, Shri Samuel Joseph Jebaraj and Shri Suresh Khatanhar, DMDs, as Whole Time Directors; Ms. Meera Swarup and Shri Anshuman Sharma, as Government Nominee Directors and Shri Rajesh Kandwal, LIC Nominee Director, as Non-Executive Directors; Shri Gyan Prakash Joshi, Shri Bhuwanchandra B. Joshi, Shri Samaresh Parida, Shri N. Jambunathan, Shri Deepak Singhal, Shri Sanjay Gokuldas Kallapur and Smt. P. V. Bharathi as Independent Directors. The present strength of fourteen Directors on the Board meets the requirement provided under Article 114(a) of the Articles of Association.

Apex Committees

Corporate Governance

Your Bank is committed to adopt the best corporate governance practices. It believes that effective corporate governance is not just a requirement for regulatory compliance, but also a facilitator for excellence in governance including enhancement of stakeholders'' value. The details of your Bank''s corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.

Business Responsibility Report

Securities and Exchange Board of India (SEBI), vide Gazette Notification dated December 26, 2019, amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per the amendment, the Annual Report of the top one thousand listed entities based on market capitalisation must include Business Responsibility Report (BRR). The BR Report should describe initiatives taken by the listed entity from an environmental, social and governance perspective. The Bank''s Business Responsibility Report has been hosted on the website of the Bank (https://www.idbibank.in/business-responsibility-report.asp).

Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There were no personnel in your Bank''s service, during the financial year under review, who received remuneration of over '' 1.02 crore annually. Besides, there were no personnel

in the service of the Bank for a part of the year who received remuneration in excess of '' 8.50 lakh per month. Further, there were no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by Managing Director & CEO or Deputy Managing Director of the Bank and who held by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Bank.

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

a) Conservation of Energy

Your Bank has taken the following measures towards

conservation of energy:

â¢ Conventional light fixtures have been replaced with energy efficient LED light fixtures/ lamps/ tubes to save power consumption at the Bank''s Head Office building at Mumbai as well as all other office and residential buildings of the Bank.

â¢ The new signages of the Bankâs branches are being fitted with LED lights in place of conventional power consuming light fixtures.

â¢ For all new or refurbished branches, LED lights are being used in place of conventional fluorescent/ PL lamps.

â¢ Solar panels have been installed for common lighting, pumps etc. in the Bank''s new office buildings as well as residential buildings developed by NBCC (India) Ltd. at New Delhi and new residential buildings at the Jawaharlal Nehru Institute of Banking and Finance (JNIBF),

Hyderabad. The Bank has also been considering LED light fixtures for furnishing of new office premises.

â¢ Water harvesting facility has also been provided in new residential buildings constructed at the JNIBF, Hyderabad.

b) Technology Absorption

Your Bank accords top priority to technology-led banking. Your Bank believes that digital is the way forward and tech-led initiatives would empower its customers as well as its business functions. It would also take the Bank forward in addressing the challenges of the future. Your Bank adopted a few noteworthy technology-driven reforms such as making official e-mail available on-the-go to the employees and providing Virtual Private Network (VPN)/ Virtual Desktop Infrastructure (VDI) based access to the Bank''s systems, adapting to e-tendering and video conference-based bidding procedures, up-gradation of the Security Operations Centre (SOC) at the Data Centre (DC) location and setup of a SOC at the Disaster Recovery (DR) location in Chennai, implementation of a Domain-based Message Authentication, Reporting and Conformance (DMARC) analytics platform,

implementation of Honey Pot solution, implementation of an Enterprise Network Monitoring Solution (ENMS), implementation of satellite/ GPS based Network Time Protocol (NTP) solution and upgradation of the Bank''s ATM switch software version, introduction of Video KYC Account Opening (VAO), I-Quick mobile application for account opening, roll-out of WhatsApp Banking facility, launch of a fully digitised Loan Processing System (LPS) for various MSME and Agri loan products and implementation of Automated Data Flow (ADF) application. Under the Enterprise Data Warehouse project (EDW), your Bank has built various analytical/ predictive models for Non-Performing Asset (NPA) prediction for various loan products, churn prediction for portfolio of Agri/ MSME, current/ saving account, cross-sell/ up-sell model, customer profiling and segmentation, etc.

Your Bank is in advanced stage of implementation of many technology-based solutions and enhancements which include, implementation of Voice Onetime Password (OTP) and software token-based authentication as an alternate to SMS-based OTP, implementation of an Application Performance Monitoring solution, implementing Application Programming Interface Management (APIM) solution, implementation of chat bot facility for 24x7 customer assistance and exploring the usage of new age security technologies such as Security Orchestration, Automation & Response (SOAR), Network Behaviour Anomaly Detection (NBAD), Packet Capture (PCAP), User & Entity Behaviour Analytics (UEBA) & Threat Intelligence Platform (TIP) for building a Next Generation SOC at both DC & DR locations.

Details of other initiatives taken in the Information Technology space have been provided in the Management Discussion and Analysis section of this Annual Report.

c) Foreign Exchange Earnings and Outgo

During the year, the total foreign exchange earned by the Bank was '' 51.36 crore (excluding foreign currency cash flows in derivatives and foreign currency exchange transactions) and the total foreign exchange outgo was '' 36.23 crore towards the operating and capital expenditure requirements.

Exit from the RBIâs Prompt Corrective Action (PCA) framework

Your Bank has provided a commitment to the RBI that it would comply with the norms of minimum regulatory capital, Net Non-Performing Asset (NPA) and Leverage ratio on an on-going basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the Bank in continuing to meet these commitments. Based on the commitment and the Bank''s reported Capital To Risk Weighted Asset Ratio (CRAR) at 14.47%, Common Equity Tier 1 (CET1) at 12.22%, Net NPA at 1.94% and Leverage Ratio at 5.71% as at end-December 2020, which were not in breach of the PCA framework, the RBI, vide its letter dated March 10, 2021, has decided to lift the restrictions imposed on the Bank under the PCA framework subject to certain conditions and continuous monitoring.

Directorsâ Responsibility Statement

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Bank''s Board of Directors is sincerely grateful to the GoI, the RBI, all other statutory/ regulatory authorities and the LIC for their valuable cooperation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banks/ financial institutions. The Board thanks various

multilateral institutions and international banks/ institutions for their support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. The Board appreciates the sincere and devoted services rendered by its entire staff and highly values their commitment towards the Bank.

[Suresh Khatanhar] [Samuel Joseph Jebaraj] [Rakesh Sharma]

Deputy Managing Director Deputy Managing Director Managing Director & CEO

Place: Mumbai Date: May 03, 2021

Mar 31, 2019

The Bankâs Board of Directors is pleased to present the Report on its Business and Operations for the financial year ended March 31, 2019.

India''s economic growth decelerated in 2018-19 as compared to the previous year on account of slowdown in agriculture and services sector. While deceleration in the economic activity in India was partly on account of domestic factors such as deficient and uneven monsoon, muted consumption and investment demand, among others, global volatilities also impacted the overall growth momentum. Banks play a major role in Indiaâs growth story as they continue to remain the major source of debt funding by a large margin compared to any other source. Taking this into consideration, various reform measures such as recapitalisation of public sector banks, resolution of stressed assets under the Insolvency and Bankruptcy Code, among other measures, were initiated to strengthen the banking sector. These measures are expected to improve the financial health of banks and subsequently lead to credit off-take in the economy. While these measures are enabling banks to improve their financial position, the overall turnaround in the banking sector performance will be realised with a lag. It is crucial to view the performance of your Bank in this context.

Financial Highlights

As on March 31, 2019, your Bankâs aggregate deposits and advances touched Rs. 2,27,372 crore and Rs. 1,46,790 crore, respectively. Your Bankâs business highlights for the period under review are presented in Table 1:

Table 1: Key Financials (In Rs. crore)

	As on March 31, 2018	As on March 31, 2019
Capital	3,083.86	7,736.30
Reserves & Surplus	18,125.87	29,875.40
Deposits	2,47,931.61	2,27,371.72
Borrowings	63,185.53	45,28772
Other Liabilities & Provisions	17,758.85	10,013.35
Total Liabilities	3,50,085.72	3,20,284.49
Cash & Balances with RBI	13,163.69	12,730.47
Balances with Banks & Money at Call & Short Notice	20,522.40	8,503.23
Investments	91,606.06	93,072.63
Advances	1,71,739.94	1,46,790.43
Fixed & Other Assets	53,053.63	59,18773
Total Assets	3,50,085.72	3,20,284.49

For the period	2017-18	2018-19
Total Income	30,040.11	25,371.53
Total Expenses (other than provisions)	22,130.90	21,319.41
Provisions (other than tax)	20,501.74	26,879.29
Profit/ (Loss) Before Tax	(12,592.53)	(22,82717)
Provision for Tax*	(4,354.61)	(7,710.87)
Profit/ (Loss) After Tax	(8,23792)	(15,116.30)

* Net of Current Income Tax and Deferred Income Tax

During the year under review, your Bankâs total income amounted to Rs. 25,372 crore, comprising interest income of Rs. 22,071 crore and other income of Rs. 3,300 crore. Interest expenses stood at Rs. 16,166 crore and operational expenses at Rs. 5,154 crore, accounting for total expenditure of Rs. 21,319 crore (excluding provisions and contingencies).

Total provisioning of your Bank increased in view of continued stress in the Bankâs corporate loan portfolio. The provisions include Rs. 25,747 crore towards provision for non-performing assets, bad debts written-off and investments. As a result, your Bank incurred a net loss of Rs. 15,116 crore during FY 2018-19.

While the Earnings per Share (EPS) during the year was negative due to the losses, the Book Value per Share (excluding intangible assets) stood at Rs. 14.40 per Share as at end-March 2019. In view of the losses incurred, the Board of Directors have not recommended any dividend for the year.

Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement as on March 31, 2019

Name of the entity	Net Assets, i.e., total assets minus total liabilities		Share in profit or (loss)
Name of the entity	As % of consolidated net assets	Amount (In Rs. crore)	As % of consolidated profit or (loss)	Amount (In Rs.crore)
1	2	3	4	5
Parent : IDBI Bank Ltd.	97.09	37,611.70	(101.00)	(15,116.30)
Subsidiaries:
Indian:
1. IDBI Capital Markets & Securities Ltd.	0.81	314.91	0.00	0.26
2. IDBI Intech Ltd.	0.15	56.34	0.06	8.84
3. IDBI Asset Management Ltd.	0.28	108.09	(0.03)	(4.34)
4. IDBI MF Trustee Company Ltd.	0.00	1.47	0.00	0.04
5. IDBI Trusteeship Services Ltd.	0.54	207.37	0.25	37.51
Foreign:	NA	NA	NA	NA
Minority Interests in all subsidiaries	0.25	96.98	0.11	16.99

Associates (Investment as per the equity method)
Indian:
1. Biotech Consortium India Ltd.	NA	NA	0.00	0.51
2. National Securities Depository Ltd.	NA	NA	0.19	28.78
3. North Eastern Development Finance	NA	NA	0.09	13.92
Corporation Ltd.
4. Pondicherry Industrial Promotion Development	NA	NA	NA	NA
& Investment Corporation Ltd. (PIPDICL)*
Foreign:	NA	NA	NA	NA

Joint Venture (as per proportionate consolidation/ investment as per the equity method)
Indian:
1. IDBI Federal Life Insurance Company Ltd.	1.13	438.06	0.43	63.73
Foreign:	NA	NA	NA	NA
TOTAL	100	38,737.94	(100.00)	(14,967.04)
Elimination	(101)	(391.23)	(0 13)	(1971)
Net Total	98.99	38,346.71	(100.13)	(14,986.76)

*- In respect of PIPDICL, the Bank has not received any financial statements and transaction details from the company hence information not consolidated in the above. The Bank has written down investment in PIPDICL to Rupee one.

Material changes and commitments, if any, affecting financial position of IDBI Bank which have occurred during the end of financial year and the date of Board Report.

There are no material changes and commitments affecting the financial position of the Bank which have occurred between the end of the financial year of the Bank, i.e. March 31, 2019 and the date of the Directorsâ Report.

The details in respect of adequacy of internal financial controls with reference to the financial statements.

According to Section 143(3)(i) of the Companies Act 2013, w.e.f. Financial Year 2015-16, the report of the Statutory Auditors shall state whether the Bank has adequate Internal Financial Control (IFC) system in place and the operating effectiveness of such controls, in the context of the financial statements. IFCs as referred to in Section 143(3)(i) of the Companies Act relates to Internal Financial Controls Over Financial Reporting (IFC-FR). The Bankâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of IFC-FR issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bankâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013, the Banking Regulation Act, 1949 and the guidelines issued by the Reserve Bank of India.

Your Bank has put in place an IFC-FR Framework for evaluation of the existing internal financial controls system and appointed a Consultant for validating the compliances with respect to the documentation, certification, reporting process of the controls across all business verticals/ departments and ascertaining the adequacy and effectiveness of the controls in the Bank in all material respects with respect to financial reporting.

During 2018-19, the Consultant submitted the Internal Compliance Certificate for the quarters ended June 2018 to March 2019 after carrying out the testing and validation of all the underlying processes as per the Bankâs IFC-FR framework.

Details of Significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with a detailed explanation thereof, including:

In terms of compliance with the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations 2018, the key financial ratios for the Bank are as follows:

Particulars	2017-18	2018-19	Comments
Return on Average Net Worth	(58.30%)	(155.20%)	The Net Loss for the year has increased to Rs. 15,116.30 crore in FY 2018-19 from Rs. 8,23792 crore in FY 2017-18 mainly on account of additional provisioning on NPAs. The Net Worth as on March 31, 2019 was Rs. 11,140.35 crore as against Rs. 12,031.01 crore as on March 31, 2018.
Return on Average Assets	(2.46%)	(4.68%)
Gross NPA % to Gross Advances	27.95	27.47	Total NPA Provisions have increased by Rs. 3,266.10 crore from Rs. 19,126.14 crore for FY 2017-18 to Rs. 22,392.24 crore for FY 2018-19.
Net NPA % to Net Advances	16.69	10.11
Provision Coverage Ratio (including Technical Write-offs)	63.40%	82.88%
CASA to % of total deposits	37.15%	42.54%	CASA balance increased to Rs. 96,730.41 crore as on March 31, 2019 as against Rs. 92,102.09 crore as on March 31, 2018 and Total Deposits have reduced to Rs. 2,27,371.72 crore as on as on March 31, 2019 from Rs. 2,47,931.61 crore as on as on March 31, 2018.

Capital Adequacy

Your Bank computes regulatory capital requirement for credit, market and operational risks as prescribed under the Pillar 1 guidelines of the Basel III framework on a quarterly basis. Your Bankâs âTotal Capital Capital Conservation Buffer (CCB)â ratio was 11.58% as on March 31, 2019. Similarly, your Bankâs âCommon Equity Tier 1 (CET1) CCBâ ratio was 8.91% as against the regulatory requirement of 7.375%. Your Bankâs âTier 1 CCB'' ratio stood at 9.13% as on March 31, 2019 as against the regulatory requirement of 8.875%.

Your Bank has a Board-approved policy on Internal Capital Adequacy Assessment Process (ICAAP) in line with the Pillar 2 norms of the Basel III framework. This policy enables your Bank to internally assess and quantify those risks which are not covered under Pillar 1 as well as to develop appropriate strategies to manage and mitigate risks under normal and stressed conditions. In line with the RBIâs guidelines on stress testing, your Bank has also put in place a comprehensive stress testing framework. This framework enables your Bank to assess its performance under exceptional but plausible events and facilitates appropriate proactive strategies to meet unforeseen contingencies. The framework has been strengthened during the period under review by inclusion of scenario analysis and reverse stress testing. Your Bank has adopted a Disclosure Policy in accordance with the Pillar 3 requirements under the Basel norms. Accordingly, disclosures as at the end of each quarter are hosted on your Bankâs website, thereby exhibiting high degree of transparency. Your Bank follows the Standardised Approach under Credit Risk for computation of capital charge, Basic Indicator Approach (BIA) to compute regulatory capital charge for Operational Risk and Standardised Measurement Method (SMM) to compute regulatory capital requirement for market risk.

Business Strategy

During the year, your Bank embarked on a strategic initiative to position itself as a retail-focused bank. Towards this end, the business strategy of the Bank was focussed on driving growth through accretion of a low-cost deposit base and granular asset mix through growth in retail asset book. Measures to enhance CASA and retail deposit base has aided in containing the cost of deposits. Additionally, augmenting growth in Retail, Agri and MSME (RAM) advances has enabled the Bank to reduce its Risk Weighted Assets (RWA). Simultaneously, your Bank consciously restricted its corporate portfolio, thereby furthering the process of de-risking its business portfolio mix.

The majority stake acquisition by Life Insurance Corporation of India (LIC) has opened up several business avenues for your Bank. The Bank and LIC, through its collective network of branches, offices and workforce, have been leveraging on the mutual business synergies, especially in various revenue generating areas such as bancassurance, cash management and premium collection services, investment and advisory services, among others.

To capitalise on these synergies, your Bank has created dedicated teams, overseen by the top management, to drive its business growth. Additionally, your Bank has also put in place necessary business enablers to bring the convenience of banking and insurance services at one stop for all its customers.

As a customer-centric bank, the Bank is scaling up its capabilities, especially in Information Technology (IT). Digitalisation is a prominent feature of your Bankâs strategy as it would help in ensuring greater degree of customer convenience as well as enable your Bank to enhance its operational efficiency. Your Bank is making efforts to further strengthen its Customer Relationship Management (CRM) and business intelligence capabilities that will help in better understanding of customer preferences and thereby, provide an impetus to targeted sales. Furthermore, your Bank remains committed to the Government of Indiaâs PSB Reforms Agenda aimed at Enhanced Access and Service Excellence (EASE) and is taking necessary steps towards its implementation.

In addition to putting in place necessary business enablers, the Bank continues to remain focussed on improving its asset quality. Towards this end, your Bank has set up a Collection & Recovery War Room to bring focused and accelerated efforts towards collection and recovery in consonance with the Bankâs objective to drive improvement in its asset quality. Furthermore, your Bank is in the process of putting in place Early Warning Signals to ensure close monitoring of advances to preclude further slippages.

Underpinning these strategic endeavours, the Bank is proactively reinforcing its risk management practices to ensure a stable growth path. Simultaneously, the Bank is fostering a robust compliance culture to meet key regulatory/ policy objectives and consequently, protect interest of all stakeholders.

Key Business Initiatives

In line with the business strategy of positioning itself as a retail-focussed bank, your Bank has initiated measures to broad-base the products and services offering to its diversified customer base. Your Bank continued to introduce new products and upgraded its existing products to cater to the evolving industry trends, regulatory landscape and customer preferences. Additionally, your Bank also offered various value-added products and services to its customers, keeping in view their risk profile and financial goals. Subsequent to stake acquisition by LIC, your Bank has also introduced specially designed product variants to cater to the banking and investment requirements of employees, agents and subsidiaries of LIC.

Your Bank served its customers through its network of 1,892 branches, 3,700 ATMs and 58 e-lounges. The Bank also extended a wide range of digital offerings to make banking more convenient and inclusive to the needs of its customers.

In line with the Governmentâs DigiDhan Mission of promoting seamless digital payments, your Bank has designated one officer from every retail branch as ''Digital Guru'' to act as a single point of contact for all digital product related queries.

Acknowledging the significance of promoting the priority sector segment, your Bank has been actively contributing to Priority Sector Lending (PSL), thereby also adhering to the RBIâs mandate. Your Bank has also been proactive in furthering the national objective of inclusive growth by ensuring access to financial products and services to the vulnerable sections of the society at affordable cost in a fair and transparent manner. Apart from offering appropriate financial products and expanding its reach by making intensive use of technology, your Bank also placed emphasis on financial literacy to ensure an inclusive and holistic growth. Your Bank leveraged the Business Correspondents (BCs)/ Business Facilitators (BFs) network to increase penetration in rural and semi-urban areas to ensure greater financial inclusion as also provide an added impetus to its PSL business.

Your Bank conducts its Trade Finance (TF) business through its 39 Category B Authorised Dealer TF centres and 177 designated retail TF branches in various locations pan-India. During the year, your Bank got approval from the GoI for dealing in Indo-Iran trade settlements in Indian Rupee for both oil and non-oil transactions. As part of your Bank''s ongoing digital transformation, various IT initiatives have been taken during the year under review to automate the process flow of transaction with a view to enhance security control measures as well as to improve operational efficiency and productivity.

Your Bank also acts as an agent for Central and State Governments to manage their receipts and payments. Your Bank is authorised to collect Central Government taxes (direct and indirect), Goods & Services Tax (GST), Government receipts, online collection for Employee Provident Fund Organisation (EPFO) and Employee State Insurance Corporation (ESIC), offer Small Saving Schemes and extend facility to submit Life Certificate for Central Government pensioners digitally, among others.

Your Bank offers a wide array of collection and payment products as part of its Cash Management Services (CMS). Your Bank is authorised to participate in e-freight payment system of Indian Railways. Your Bank is also authorised to facilitate utility bill payments through Bharat Bill Payment (BBPS).

Your Bank has laid special emphasis on the upgrade and overhaul of many of its critical IT hardware systems and committed long-term investments in enrichment of its assets to ensure that the deployed hardware meets the business needs. Furthermore, your Bank is also embracing technological innovation to ensure seamless customer service and highest level of user experience. Your Bank has also responded to the industry-wide information security concerns by installing various high-end security solutions.

In order to promote analytics driven sales, your Bank has setup a Centre of Excellence (COE) for Data Analytics with the objective of achieving higher customer wallet share by delivering the right product at the right time.

Your Bank strived to identify and digitise activities as part of its objective to automate the existing processes, and thereby, enhance service delivery as well as rationalise related costs.

Your Bank has a Board-approved CSR policy which underscores the Bankâs inclination to make a meaningful contribution towards the welfare of the society. Your Bank, through its various interventions, aims to create long-term social and economic value for the society.

The detailed description of the Bankâs initiatives undertaken during the year is outlined in the Management Discussion and Analysis section of the Annual Report.

Board of Directors

Your Bankâs Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 2013, the Articles of Association of the Bank and the requirements of corporate governance, as envisaged in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [LODR Regulations]. The Board functions directly as well as through various board committees constituted to provide focussed governance in the important functional areas of the Bank. Post-acquisition of 51% controlling stake by LIC, the Board of your Bank has been reconstituted in accordance with the amended Article 116(1) of the Articles of Association and is also in compliance with section 10A of the Banking Regulation Act, 1949. The Board of Directors, as per the amended Articles of Association of the Bank, includes 15 members with the Chairman of LIC as Non-Executive Non Whole-Time Chairman of the Bank, MD & CEO and two DMDs nominated by LIC, one Official Nominee Director of LIC, two Nominee Directors of GOI and eight Independent Directors including one Woman Director.

As on March 31, 2019, the Board comprised of thirteen Directors, including Managing Director and CEO (MD & CEO), two Deputy Managing Directors (DMDs), three Non-Executive Directors and seven Independent Directors. Shri Rakesh Sharma, MD & CEO, Shri K. P. Nair & Shri G. M. Yadwadkar, DMDs as Whole Time Directors; Shri Pankaj Jain & Shri Sudhir Shyam, Central Government official Nominees and Shri Rajesh Kandwal, LIC Nominee Director, as NonExecutive Directors; Shri Gyan Prakash Joshi, Dr. Ashima Goyal, Shri Bhuwanchandra B. Joshi, Shri Samaresh Parida, Shri N. Jambunathan, Shri Deepak Singhal and Shri Sanjay Gokuldas Kallapur as Independent Directors constituted the Board. The present strength of 13 (thirteen) Directors on the Board meets the requirement provided under Article 114(a) of the Articles of Association.

Apex Committees

The Board has a total of fourteen committees to oversee various functional areas of your Bank''s business and operations. The Board committees include Audit Committee of the Board, Executive Committee, Nomination and Remuneration Committee, Stakeholdersâ Relationship Committee, HR Steering Committee, Frauds Monitoring Committee, Recovery Review Committee, Risk Management Committee, Independent Directorsâ Committee, Corporate Social Responsibility Committee, Non-Cooperative Borrowersâ Review Committee, Customer Service Committee, Wilful Defaultersâ Review Committee and Information Technology Strategy Committee.

Corporate Governance

Your Bank is committed to adoption of best corporate governance practices. It believes that effective corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholdersâ value. The details of your Bankâs corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.

Business Responsibility Report

The Securities and Exchange Board of India (SEBI), vide its notification dated December 22, 2015, has mandated the inclusion of Business Responsibility (BR) Report as part of the Annual Report for Top 500 listed entities based on market capitalisation at BSE and NSE. The BR Report should describe initiatives taken by the listed entity from an environmental, social and governance perspective. The Bankâs Business Responsibility Report has been hosted on the website of the Bank (www.idbibank.in).

Dividend Distribution Policy

Your Bank has a Board-approved Dividend Distribution Policy which is hosted on the website of the Bank (www.idbibank.in).

Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There were no personnel in your Bankâs services, during the financial year under review, who received remuneration of over Rs. 1.02 crore annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 8.50 lakh per month. Further, there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by Managing Director & CEO or Deputy Managing Director of the Bank and who held by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Bank.

Statement under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for year ended March 31, 2019 - Details of Top Ten Employees

The statement indicating details of top ten employees of the Bank in terms of remuneration drawn during FY 2018-19 is as follows:

Sr. No.

Name

Designation

Remuneration received (Rs.)

Nature of employment, whether contractual or otherwise

Qualifications and experience of the employee

Date of commencement of employment

The last employment held by such employee before joining the company

The age of such employee

Shri Umesh Jain

CGM

42,11,622

Confirmed Employee

M.Tech., CAIIB, Diploma in Business Finance, M.D.B.A.

31 yrs. 2 months

17-Mar-1988

Voltas Ltd.

59 yrs 11 months

2	Smt. Maya Chakravorty	CGM	38,67,042	Confirmed Employee	B.Sc. (Engg), M.M.S., C.F.A. 25 yrs. 9 months	17-Aug-1993	Oil & Natural Gas Commission	53 yrs 11 months
3	Shri Rajeev Kumar	CGM	37,60,017	Confirmed Employee	B.Tech., M.B.A., CAIIB 25 yrs. 8 months	17-Sep-1993	State Bank of India	56 yrs 5 months
4	Shri Krishnan Srinivasan	GM	37,15,869	Confirmed Employee	B.Com., ICWA (Inter), CAIIB 34 yrs 5 months	17-Dec-1984	Modella Woollens Ltd.	58 yrs 2 months
5	Shri K. R. Murali Mohan	CGM	37,08,185	Confirmed Employee	B.Com., CAIIB 31 yrs	27-May-1988	Indian Overseas Bank	60 yrs
6	Shri Sunit Sarkar	CGM	36,98,482	Confirmed Employee	B.Tech., ICWA, CAIIB, Post Graduate Diploma in Business Management 25 yrs 8 months	1-Sep-1993	ESAB India Ltd.	52 yrs 9 months
7	Shri Shankar V.	GM	36,85,908	Confirmed Employee	B.Sc., M.D.B.A., P.G.D.F.M., JAIIB 34 Yrs. 8 months	24-Sep-1984	NABARD	56 yrs 9 months
8	Shri Swapan Kumar Bagchi	CGM	36,77,071	Confirmed Employee	M.Sc. in Exploration Geophysics, M.Tech., P.G.D.M., CAIIB 25 yrs 4 months	25-Jan-1994	Perfect Computers Ltd. and then Self Employed	59 yrs 3 months
9	Shri Nagraj Garla	CGM	36,31,806	Confirmed Employee	B.Com., M.Com., MBA, ICWA (Inter), CAIIB 19 yrs 3 months	17-Feb-2000	The Vysya Bank Ltd.	50 yrs 1 month
10	Shri Krishnendu Banerjee	CGM	35,71,071	Confirmed Employee	M.A., JAIIB 31 yrs 6 months	2-Nov-1987	State Bank of India	58 yrs 5 months

Notes:

1. None of the employees listed above hold 2% or more of the paid-up share capital of the Bank as at March 31,2019.

2. None of the employees listed above is a relative of any director of the Bank.

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

a) Conservation of Energy

Various initiatives taken by Bank towards conservation of energy are as follows:

- All conventional light fixtures at the Head Office, Mumbai and Annexe building at CBD-Belapur, Navi Mumbai have been replaced with energy efficient LED light fixtures/ lamps/ tubes to save power consumption. Occupant sensors have been used to control cabin lighting to save power consumption.

- Lifts with variable frequency drive have been installed at the Head Office, Mumbai and Annexe building at CBD-Belapur, Navi Mumbai.

- Energy efficient screw chillers have been installed for air-conditioning at Head Office, Mumbai and Annexe building at CBD-Belapur, Navi Mumbai.

- Solar panels have been installed to cater to common lighting at Annexe building at CBD-Belapur, Navi Mumbai. Installation of solar panels is in progress at Jawaharlal Nehru Institute of Banking and Finance (JNIBF), Hyderabad.

- Solar water heaters are installed at the JNIBF campus. In addition to the above, the Bank is adopting water and energy conservation measures in all its new projects and renovation of existing premises. Further, LED light fixtures are being used for power saving in the new branch furnishing and old branch relocation process.

b) Technology Absorption

Your Bank has been proactively scrutinising and absorbing the latest technology-based innovations which have potential to empower its business functions, enrich its customer experience and optimise its readiness towards opportunities and challenges of the future. A few technology-driven reforms adopted recently by your Bank include deployment of solutions for automation and monitoring of DC/ DR drills from centralised consoles, implementation of enterprise-level proxy solution and upgrades to the Active Directory (AD) and Security Operations Centre (SOC) to strengthen the security posture of the Bank, enhancement of capacity under the private cloud architecture to adequately provide for future business growth, and digitisation of processes like onetime settlement of debt and over-the-counter investments in third party financial instruments aimed at ease of business. Your Bank has also taken steps to increase digital foot-prints/ touch-points by introducing new âAll in oneâ mobile banking app for giving various services to customers.

While your Bank has already embarked upon implementation of various solutions like Early Warning Signal System (EWS) to contain fresh slippages and an Online Loan Review System for automation of the lending related processes, the Bank is also in the process of implementing many security initiatives like Enterprise DLP and Data Classification Solution, Honeypot Solution, Backup Solution for endpoints and encryption, Distributed Denial-of-Service (DDoS) prevention tool to protect internal threats etc. The Bank is also evaluating and exploring the absorption of nascent technologies like Chat Bots/ Voice Bots, Block Chain Technology, API Layer Integration, Artificial Intelligence and Robotic Process Automation to its competitive advantage in the near future. Details of other initiatives taken in the Information Technology ecosphere have been provided in the Management Discussion & Analysis section of this Annual Report.

c) Foreign Exchange Earnings and Outgo

During the year, the total foreign exchange earned by the Bank was Rs. 53.38 crore (excluding foreign currency cash flows in derivatives and foreign currency exchange transactions) and the total foreign exchange outgo was Rs. 87.16 crore towards the operating and capital expenditure requirements.

RBIâs Prompt Corrective Action (PCA)

The RBI, vide its letter dated May 05, 2017, initiated PCA for your Bank in view of its high net Non-Performing Assets (NPA) and negative Return on Assets (ROA). The Bank has been taking necessary actions to comply with the RBIâs directive in this regard. The Bank has also put in place a comprehensive turnaround strategy to improve its financial position. Furthermore, in compliance with the RBI directive with regard to restriction on fresh corporate exposure, the Bank has reviewed its internal credit policy and has been working towards limiting its corporate exposure.

Directorsâ Responsibility Statement

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Bankâs Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI), all other statutory/ regulatory authorities and Life Insurance Corporation of India (LIC) for their valuable cooperation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banks/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. The Board appreciates the sincere and devoted services rendered by its entire staff and highly values their commitment towards the Bank.

[G. M. Yadwadkar] [Rakesh Sharma]

Deputy Managing Director Managing Director & CEO

Place: Mumbai

Date: May 30, 2019

Mar 31, 2018

Directorsâ Report

The Bankâs Board of Directors is pleased to present the Report on its business and operations for the financial year ended March 31, 2018.

Indiaâs economic milieu in the financial year 2017-18 was characterized by conducive policy environment which aided in strengthening its macroeconomic fundamentals. Banking industry, especially in an economy like India, is a critical enabler for ensuring sustainable economic growth. Growth in the Indian economy is, inter alia, contingent upon widening and deepening of the banking penetration, and this, in turn, requires a more robust public sector banking framework, considering their dominance. However, the year proved to be a difficult one for the banking sector due to various factors. The performance of your Bank can be considered reasonable given this difficult banking sector environment.

Table 1: Key Financials

(In Rs, crore)

	As on March 31, 2017	As on March 31, 2018
Capital	2,058.81	3083.86
Reserves & Surplus	20,504.83	18,125.87
Deposits	2,68,538.10	2,47,931.61
Borrowings	56,363.98	63,185.53
Other Liabilities & Provisions	14,408.75	17,986.77
Total Liabilities	3,61,874.47	3,50,313.64
Cash & Balances with RBI	13,346.92	13,163.69
Balances with Banks & Money at Call & Short Notice	19,337.16	20,522.40
Investments	92,934.41	91,606.06
Advances	1,90,825.93	1,71,739.95
Fixed & Other Assets	45,430.05	53,281.54
Total Assets	3,61,874.47	3,50,313.64
For the period	2016-17	2017-18
Total Income	31,799.20	30,035.41
Total Expenses (other than provisions)	27,180.52	22,130.90
Provisions (other than tax)	13,236.70	20,497.05
Profit/ (Loss) Before Tax	(8,618.02)	(12,592.53)
Provision for Tax*	(3,459.88)	(4,354.61)
Profit/ (Loss) After Tax	(5,158.14)	(8,237.92)

* Net of Current Income Tax and Deferred Income Tax

Financial Highlights

As on March 31, 2018, your Bankâs aggregate deposits and advances touched Rs, 2,47,931.61 crore and Rs, 1,71,739.95 crore, respectively. Your Bankâs business highlights for the period under review are presented in Table 1.

During the year under review, your Bankâs total income amounted to Rs, 30,035.41 crore, comprising interest income of Rs, 23,026.53 crore and other income of Rs, 7,008.88 crore. Interest expenses stood at Rs, 17,386.21 crore and operational expenses at Rs, 4,744.69 crore, accounting for total expenditure (excluding provisions and contingencies).

Total provisioning of your Bank increased in view of continued stress in the Bankâs corporate loan portfolio. The provisions include Rs, 22,118.86 crore towards provision for non-performing assets, bad debts written-off and investments. As a result, your Bank incurred a net loss of Rs, 8,237.92 crore during FY 2017-18.

Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement as on March 31, 2018

Name of the entity	Net Assets, i.e., total assets minus total liabilities		Share in profit or (loss)
	As % of consolidated net assets	Amount (In Rs, crore)	As % of consolidated profit or (loss)	Amount (In Rs, crore)
1	2	3	4	5
Parent : IDBI Bank Ltd.	95.37%	21,209.73	101.86%	-8,237.92
Subsidiaries:
Indian:
1. IDBI Capital Market Services Ltd.	1.45%	321.46	-0.16%	12.73
2. IDBI Intech Ltd.	0.21%	47.50	-0.04%	3.01
3. IDBI Asset Management Company Ltd.	0.51%	112.44	-0.10%	8.01
4. IDBI MF Trustee Company Ltd.	0.01%	1.42	0.00%	0.22
5. IDBI Trusteeship Services Ltd.	0.78%	173.49	-0.45%	36.45
Foreign:	NA	NA	NA	NA
Minority Interests in all subsidiaries	0.39%	85.96	-0.20%	16.51
Associates (Investment as per the equity method)
Indian
1. Biotech Consortium India Ltd.	NA	NA	-0.01%	0.42
2. National Securities Depository Ltd.	NA	NA	-0.33%	26.85
3. North Eastern Development Finance Corporation Ltd.	NA	NA	-0.17%	13.95
Foreign:	NA	NA	NA	NA
Joint Venture (as per proportionate consolidation/ investment as per the equity method)
Indian
1. IDBI Federal Life Insurance Company Ltd.	1.68%	374.33	-0.60%	48.45
Foreign	NA	NA	NA	NA
TOTAL	100%	22,240.36	100%	-8,087.83
Elimination	-1.49%	-332.41	0.55%	-44.57
Net Total	98.51%	21,907.96	100.55%	-8,132.40

While the Earnings per Share (EPS) during the year was negative due to the losses, the Book Value per Share (excluding intangible assets) stood at Rs, 39.01 as at end-March 2018. In view of the losses incurred, the Board of Directors have not recommended any dividend for the year.

Material changes and commitments, if any, affecting financial position of IDBI Bank which have occurred during the end of financial year and the date of Board Report.

The details in respect of adequacy of internal financial controls with reference to the financial statements.

According to Section 143(3) (i) of Companies Act 2013, with effect from financial year 2015-16, the report of the Statutory Auditors shall state whether the Bank has adequate Internal Financial Control (IFC) system in place and the operating effectiveness of such controls, in the context of the financial statements. IFCs as referred to in Section 143 (3) (i) of Companies Act relates to Internal Financial Controls over Financial Reporting (IFC-FR). The Bankâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of IFC-FR issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Bankâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013, the Banking Regulation Act, 1949 and the guidelines issued by the Reserve Bank of India.

With a view to put in place IFC-FR framework, the Bank has appointed a Consultant to provide compliance with respect to the documentation, certification and reporting process of controls across all Business Verticals/ Departments. For the financial year 2017-18, the Consultant has validated base framework and also submitted the internal compliance certificate for the quarters ended June 2017, September 2017, December 2017 and March 2018 after validation of all processes and testing the same.

Capital Adequacy

Your Bank computes regulatory capital requirement for credit, market and operational risks as prescribed under the Pillar 1 guidelines of the Basel III framework.

As on March 31, 2018, the Capital to Risk-weighted Assets Ratio (CRAR) of your Bank was 10.41% as against the minimum regulatory requirement of 10.875%. Your Bankâs âCommon Equity Tier 1 (CET 1) Capital Conservation Buffer (CCB) ratioâ was 7.42% as against the minimum applicable ratio of 7.375% stipulated by the RBI. The âTier 1 Capital Conservation buffer (CCB) ratioâ stood at 7.73% as on March 31, 2018 against the regulatory requirement of 8.875%. Basel guidelines have introduced a mandatory Capital Conservation Buffer (CCB) with effect from March 31, 2016. CCB is designed to ensure that banks build up buffers during normal times which can be drawn down as losses are incurred during stressed periods. In line with the transitional arrangements of the regulatory guidelines, the CCB applicable for March 31, 2018 is 1.875%. Accordingly, the minimum regulatory requirement of âTotal Capital CCBâ is 10.875% as on March 31, 2018. Your Bank has a Board-approved policy on Internal Capital Adequacy Assessment Process (ICAAP) in line with the Pillar 2 norms of the Basel III framework, which enables the Bank to internally assess and quantify those risks which are not covered under Pillar 1 as well as develop appropriate strategies to manage risks under normal and stress conditions. Your Bank has adopted a Disclosure Policy in accordance with the Pillar 3 requirements under the Basel norms and accordingly, publishes disclosures on the Bankâs website at the end of each quarter.

Business Strategy

During the year, the Bank launched Project Nishchay to drive its strategic transformation through focused interventions in four major areas, viz. (i) Asset Utilization, (ii) Revenue Maximization, (iii) Operating Cost Rationalization, and (iv) Manpower Planning.

As a part of its comprehensive turnaround strategy, your Bank has been working towards realignment of its business mix in favour of retail and priority sector lending business while limiting growth in its corporate loan book, especially in large corporate segment. This strategy has been adopted in pursuance with a capital light business model as it would facilitate the Bank to reduce its Risk Weighted Assets (RWAs) as also help in improving the quality of the balance sheet. With a view to optimizing its capital, your Bank has significantly reduced the RWAs by 18% during FY 2017-18 by reducing exposure to low-rated corporate clients, ensuring incremental exposure in regulatory retail portfolio, enhancing cash security margin wherever feasible, data cleaning, etc. Simultaneously, the Bank has adopted a comprehensive action plan and road map for reduction of Non-Performing Assets (NPAs), which involves strengthening the overall structure, defining clear-cut policy guidelines, emphasizing on timely data availability/ analysis-based activity monitoring and structured review, case-specific strategy-based recovery action for large value accounts and persistent, timely, action-based approach to retail accounts. This will aid in further reduction in the capital requirement of the Bank going forward. The Bank has also embarked on divestment of its non-core assets, including sale of its stakes in certain associates and Joint Ventures and sale of its residential and commercial properties which were not being optimally utilized, to augment its capital base.

Your Bank has also taken several measures to augment its revenue streams by enhancing retail asset growth, improving retail liabilities and enhancing fee income. In alignment with this objective, the Bank has been proactively enhancing its capabilities in terms of improved customer service, field sales excellence and analytics driven sales.

As a corollary to revenue maximization for boosting its bottom-line, your Bank has been working towards rationalization of its operating costs. The Bank has identified a number of areas with significant potential for higher efficiency such as overheads expenses, rent reduction, ATM rationalization, streamlining of IT processes and reduction of outsourcing expenses.

To support this overarching strategy, your Bank has ensured that the retail business segment and credit monitoring and recovery teams are adequately staffed. Furthermore, measures are being taken to revamp the governance in your Bank. Additionally, the Bank has been leveraging its core strengths, that is, strong brand equity, efficient retail operations, excellent customer service, robust IT platform, among others, to achieve its business objectives.

During the year, the Government recapitalized Public Sector Banks (PSBs), including your Bank. Your Bank has furnished a Board-approved undertaking to the Government whereby it will meet certain milestones in a defined timeframe, for which necessary steps are being taken.

The infusion of capital by the Government is contingent upon performance of PSBs on the reform agenda. All PSBs, including your Bank, are striving towards aligning their business strategy to become more responsive and responsible banks.

Underlying its strategic initiatives, your Bank continues to remain committed towards its customers with a number of customer-centric initiatives. The Bank is also committed to the PSB Reforms Agenda aimed at Enhanced Access and Service Excellence (EASE) unveiled by the Government during the year and is taking the necessary steps towards its implementation. The EASE framework centres around six themes, viz. (i) Customer Responsiveness, (ii) Responsible Banking, (iii) Credit Off-Take, (iv) PSBs as Udyami Mitra, (v) Deepening Financial Inclusion & Digitalization and (vi) Ensuring Outcomes - HR. Your Bank has ensured that these themes are central to the various initiatives being taken by it and the progress on these fronts is monitored and evaluated on a regular basis.

Key Business Initiatives

In keeping with its intended positioning as a full-service new generation commercial bank, your Bank continues to target a broad-based retail business portfolio. In order to foster its retail business to ensure a more balanced business mix, your Bank offers an array of products and services to cater to the full spectrum of its customersâ requirements. Taking into consideration the emerging and evolving customer needs and trend, your Bank constantly launched new products and services as also fine-tuned its existing array of products, services and processes to remain competitive.

Your Bank served its customers through its network of 1,916 branches, 3,779 ATMs and 58 e-lounges. The physical network was also supplemented by a range of digital offerings to extend the convenience of transacting at any time and any place to its customers.

Your Bank has been leveraging its IT capabilities to offer financial products and services embedded with state-of-the-art technology and security features to seamlessly cater to the ever-increasing needs and demands of its customers. Your Bank is continuously embracing technological improvements to ensure highest level of user experience by guaranteeing operational convenience and enhanced efficiency. Your Bank also assigns highest significance to security and confidentiality of customersâ information and transaction details. Furthermore, proactive measures are also undertaken to sensitise customers on a periodic basis about the potential cyber threats as also to promote safe and secure banking practices.

Recognising the potential of the priority sector segment and business potential therein, your Bank has been increasingly strengthening its Priority Sector Lending (PSL) portfolio, thereby also adhering to the RBIâs mandate. Your Bank is also leveraging its network of Business Correspondents (BCs)/ Business Facilitators (BFs) in an effort to increase penetration in rural and semi-urban areas and thereby, ensuring wide-spread financial inclusion while simultaneously placing emphasis on its PSL business.

Your Bank has been actively furthering the Governmentâs agenda of ensuring inclusive growth in the economy by ensuring access to financial products and services needed by the marginalized sections of the society at an affordable cost in a fair and transparent manner. The agenda of financial inclusion is addressed through interventions in three key areas viz., offering appropriate financial products, making intensive use of technology and enhancing financial literacy. Furthermore, the Bank has also proactively participated in various social security schemes of Government of India. Simultaneously, your Bank has placed utmost importance on promoting financial literacy. Financial literacy has been identified as a pre-requisite for effective financial inclusion and an integral part of the Pradhan Mantri Jan-Dhan Yojana (PMJDY) in order to let the beneficiaries make best use of the financial services being made available to them.

Your Bank conducts its Trade Finance (TF) business through its full-fledged Authorized Dealer TF centres and Retail TF branches in various locations pan-India. In a bid to ensure greater customers convenience, various initiatives have been undertaken to automate operations which has also helped your Bank to increase its productivity and efficiency.

Your Bank also acts as an agent for Central Government and State Governments to manage their receipts and payments through its best-in-class technology platform. Your Bank is authorized to collect Central Government taxes (direct and indirect), Government receipts, electronic payment of Railway freight charges, EPFO subscription, collect stamp duty, offer Small Saving Schemes, extend Aadhaar-based authentication of Life Certificate for pensioners, among other services.

Your Bank is authorized to facilitate Utility Bill Payments using Bharat Bill Payment System (BBPS) - an RBI mandated system - aimed at offering integrated and interoperable bill payment system in India.

Your Bank has put in place a Board-approved CSR policy with effect from April 2014 in compliance with the Companies Act, 2013, underscoring your Bankâs inclination towards being a socially and environmentally responsible entity. Your Bank, through its planned interventions, has significantly contributed towards providing improved access to health services, promoting education for children, ensuring environmental sustainability, promoting gender equality, enhancement of livelihood opportunities, advancement of vocational & employable skills and holistic development of villages, among others.

The detailed descriptions of the Bankâs initiatives undertaken during the year are outlined in the Management Discussion and Analysis section of the Annual Report.

Board of Directors

As on March 31, 2018, the Board comprised of ten Directors, including Managing Director and CEO (MD & CEO), two Deputy Managing Directors (DMDs), two Non-Executive

Directors and five Independent Directors. Shri Mahesh Kumar Jain, MD & CEO, Shri K. P. Nair and Shri G. M. Yadwadkar, DMDs, Shri Pankaj Jain and Shri Praveen Garg, Central Government official Nominees as Non-Executive Directors, Shri S. Ravi, Shri Ninad Karpe, Shri Gyan Prakash Joshi, Dr. Ashima Goyal and Shri Bhuwanchandra B. Joshi as Independent Directors constituted the Board as on March 31, 2018. During May 2018, Shri S. Ravi and Shri Ninad Karpe, Independent Directors resigned from the Board while Shri Praveen Garg, Government Nominee Director was replaced by Shri Sudhir Shyam by Government of India. To fill the 2 (two) vacancies of Independent Directors, the Board has appointed Shri Samaresh Parida and Shri N. Jambunathan as Additional Directors with effect from May 19, 2018. The present strength of 10 (ten) Directors on the Board, as against the composition for maximum strength of 13 Directors provided under Article 116(1) of the Articles of Association, meets the requirement provided under Article 114(a) of the Articles of Association.

Apex Committees

The Board has a total of fifteen committees to oversee various functional aspects of your Bank''s business and operations. The committees are Audit Committee of the Board, Remuneration Committee, Executive Committee, Nomination Committee, Stakeholdersâ Relationship Committee, HR Steering Committee, Frauds Monitoring Committee, Recovery Review Committee, Risk Management Committee, Independent Directorsâ Committee, Corporate Social Responsibility Committee, Non-Cooperative Borrowersâ Review Committee, Customer Service Committee, Willful Defaulters Review Committee and Information Technology Committee.

Corporate Governance

Your Bank is committed to adopting best corporate governance practices. It believes that effective corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholdersâ value. The details of your Bankâs corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.

Business Responsibility Report

The Securities and Exchange Board of India (SEBI), vide its notification dated December 22, 2015, has mandated the inclusion of Business Responsibility (BR) Report as part of the Annual Report for Top 500 listed entities based on market capitalization at BSE and NSE. The BR Report should describe initiatives taken by the listed entity from an environmental, social and governance perspective. The Bankâs Business Responsibility Report has been hosted on the website of the Bank (www.idbi.com).

Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There were no personnel in your Bankâs services, during the financial year under review, who received remuneration over Rs, 1.02 crore annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs, 8.50 lakh per month. Further there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by Managing Director & CEO or Deputy Managing Director of the Bank and who held by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Bank.

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

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank. However, your Bank has been increasingly using information technology in its operations.

RBIâs Prompt Corrective Action (PCA)

The RBI, vide its letter dated May 05, 2017, initiated PCA for your Bank in view of its high net Non-Performing Assets (NPA) and negative Return on Assets (ROA). The Bank has been taking necessary actions to comply with the RBIâs directive in this regard. The Bank has also put in place a comprehensive turnaround strategy to improve its financial position. Furthermore, in compliance with the RBI directive with regard to restriction on fresh corporate exposure except for cases under Joint Lendersâ Forum (JLF) mechanism, the Bank has reviewed its internal credit policy and has been working towards limiting its corporate exposure.

Directorsâ Responsibility Statement

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Bankâs Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI) and all other statutory/ regulatory authorities for their valuable cooperation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banks/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment towards the Bank.

[K.P. Nair] [Mahesh Kumar Jain]

Deputy Managing Director Managing Director & CEO

Place: Mumbai

Date: May 25, 2018

Mar 31, 2017

The Bankâs Board of Directors is pleased to present the Report on its business and operations for the financial year ended March 31, 2017

In the financial year 2016-17, the Indian economyâs growth was healthy, buoyed by policy reforms and improving macroeconomic fundamentals. Against this backdrop, your Bank strived to realign its portfolio mix in favour of retail and priority sector lending business. Various critical business enablers such as leveraging on the Bankâs proven IT prowess, innovations in digital products and delivery channels, digitisation of process, capitalising on areas of core competencies such as project advisory and loan syndication business, young and talented human capital, among others has adeptly assisted the Bank to enhance value for all its stakeholders.

Financial Highlights

As on March 31, 2017, your Bankâs aggregate deposits and advances touched Rs.2,68,538 crore and Rs.1,90,826 crore, respectively. Your Bankâs business highlights for the period under review are presented in Table 1.

Table 1 : Key Financials

(In Rs. crore)

As on March 31	2016	2017
Capital	2,058.81	2,058.81
Reserves & Surplus	25,662.97)	20,504.83
Deposits	2,65,719.83)	2,68,538.10
Borrowings	70,591.64)	56,363.98
Other Liabilities & Provisions	11,356.57)	14,302.18
Total Liabilities	3,75,389.82	3,61,767.90
Cash & Balances with RBI	13,822.91	13,346.92
Balances with Banks & Money at Call & Short Notice	9,77763)	19,33716
Investments	92,99713)	92,934.41
Advances	2,15,893.45)	1,90,825.93
Fixed & Other Assets	42,898.70)	45,323.48
Total Assets	3,75,389.82	3,61,767.90
For the period	2015-16	2016-17
Total Income	31,453.46)	31,758.97
Total Expenses (other than provisions)	26,083.39)	27,180.51
Provisions (other than tax)	10,340.82)	13,196.47
Profit/ (Loss) Before Tax	(4,970.75)	(8,618.01)
Provision for Tax*	(1,305.95)\|	(3,459.87)
Profit/ (Loss) After Tax	(3,664.80)\|	(5,158.14)

* Net of Current Income Tax and Deferred Income Tax

During the year under review, your Bankâs total income amounted to Rs.31,759 crore, comprising interest income of Rs.27,791 crore and other income of Rs.3,968 crore. Total expenditure (excluding provisions and contingencies) stood at Rs.27,180.52 crore with interest expenses at Rs.22,040 crore and operational expenses at Rs.5,141 crore.

However, total provisioning of your Bank increased in view of continued stress on the Bankâs portfolio. The provisions include Rs.13,875.09 crore towards provision for nonperforming assets, bad debts written-off and investments. As a result, your Bank incurred a net loss of Rs.5,158.14 crore during 2016-17.

For each share with face value of Rs.10, Earnings per Share (EPS) during the year stood at â (25.05), while Book Value per Share (excluding Intangible Assets) stood at Rs.55.51 as at end-March 2017. For calculating Book Value per Share, the Government of India capital infusion of Rs.1,900 crore was considered, which is a part of other liability in financials, pending allotment of shares. For the financial year 2016-17, the Board of Directors has not recommended any dividend.

Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement

(In Rs.000s)

Name of the entity	Net Assets, i.e., total assets minus total liabilities		Share in profit or loss
	As % of consolidated net assets	Amount	As % of consolidated profit or loss	Amount
1	2	3	4	5
Parent : IDBI Bank Ltd. Subsidiaries: Indian:	95.94%	22,563.65	103.50%	(5,158.14)
1. IDBI Capital Market Services Ltd.	1.39%	326.79 46.07 104.42	-0.28% -0.28% -0.75%	13.74 13.95 7.26
2. IDBI Intech Ltd.	0.20%
3. IDBI Asset Management Company Ltd.	0.44%
4. IDBI MF Trustee Company Ltd.	0.01%	1.20	0.00%	0.13
5. IDBI Trusteeship Services Ltd.	0.64%	151.58	-0.84%	41.96
Foreign:	NA	NA	NA	NA
	0.30%	70.57
Minority Interests in all subsidiaries	0.30%	70.57	-0.38%	19.01
Associates (Investment as per the equity method)
Indian		NA NA	1% -0.52%
1. Biotech Consortium India Ltd.	NA			0.45
2. National Securities Depository Ltd.	NA			26.16
3. NSDL e-Governance Infrastructure Ltd.	NA	NA	-0.72%	36.05
4. North Eastern Development Finance Corporation Ltd.	NA	NA	-0.20%	9.89
Foreign	NA	NA	NA	NA
Joint Ventures
(as per proportionate consolidation / investment as per the equity method)
Indian
1. IDBI Federal Life Insurance Company Ltd.	1.39%	325.87	-0.50%	24.99
Foreign	NA	NA	NA	NA
TOTAL	100%	23,519.59	100%	(4,983.56)
Elimination	-1.09%	(25728)	0.65%	(32.35)
Net Total	98.91%	23,262.31	100.65%	(5,015.91)

Note: None of the above subsidiaries have any subsidiary

Material changes and commitments, if any, affecting financial position of IDBI Bank which have occurred during the end of financial year and the date of Board Report.

The details in respect of adequacy of internal financial controls with reference to the financial statements.

The Bank has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically.

Capital Adequacy

Your Bank computes regulatory capital requirement for credit, market and operational risks as prescribed under the Pillar 1 guidelines of the Basel III framework.

As on March 31, 2017, the Capital to Risk-weighted Assets Ratio (CRAR) of your Bank was 10.70% as against the minimum regulatory requirement of 10.25%. Your Bankâs Common Equity Tier 1 (CET 1) ratio was 5.64% as against the minimum applicable CET 1 ratio of 6.75% (including capital conservation buffer i.e. CCB of 1.25%) stipulated by RBI. The Tier-I ratio stood at 7.81% as on March 31, 2017 against the regulatory requirement of 8.25% (including CCB).

Basel guidelines have introduced a mandatory Capital Conservation Buffer (CCB) with effect from March 31, 2016. CCB is designed to ensure that banks build up buffers during normal times (i.e. outside periods of stress) which can be drawn down as losses are incurred during stressed period. In line with the transitional arrangements of the regulatory guidelines, the CCB applicable for March 31, 2017 is 1.25% (50% of total CCB of 2.5%). Accordingly, the minimum regulatory requirement of total capital CCB is 10.25% (CRAR CCB). Your Bank has a CRAR ratio of 10.70%. Similarly, your Bank has a CET 1 CCB ratio of 5.64%.

Your Bank has a Board approved policy on Internal Capital Adequacy Assessment Process (ICAAP), in line with the Pillar 2 norms of the Basel III framework, which enables the Bank to internally assess and quantify those risks that are not covered under Pillar 1 as well as develop appropriate strategies to manage risks under normal and stress conditions. Your Bank has adopted a Disclosure Policy in accordance with the Pillar 3 requirements under the Basel norms and accordingly, publishes disclosures on the Bankâs website at the end of each quarter.

Business Strategy

Rebalancing the portfolio mix continued to be the focal point of your Bankâs business strategy. In alignment with its business strategy, your Bank took various measures that targeted the retail and priority sector segment.

Your Bank has been improving its accessibility by strategically expanding its branch and ATM network.

Furthermore, your Bank, being one of the leading players in the digital banking domain, has been embracing latest cutting edge technology to provide digital offerings to seamlessly cater to its customersâ banking and financial requirements. Additionally, your Bank continued to introduce technological innovations which aided in improving its operational convenience and also enhanced efficiency and security of its systems and processes.

Key Business Initiatives

In alignment with the corporate objective of attaining a more balanced business portfolio mix, your Bank continued to take initiatives to promote its retail business. Your bank offers a wide range of products and services encompassing Asset, Liability, Third Party and Capital Market products, among others. Your Bank, through its branches, ATMs and digital channels, offers a wide range of products and services to cater to the continuously evolving as well as emerging customer needs. Your Bank has been fine-tuning its existing products and services as also designing customised products and services across various retail segments to maintain its competitive edge. To increase its accessibility to its retail customers, your Bank has been continuously striving to expand its banking footprints by strategically augmenting its branch and ATM network. As on March 31, 2017, your Bankâs network stood at 1,896 branches (including one overseas branch and one International Banking Unit) and the number of ATMs stood at 3,537.

Your Bank has proactively deployed cutting-edge technology solutions to offer various digital avenues for customers to transact at their convenience. Your Bankâs digital banking channels viz. ATM, internet banking, mobile banking, kiosks, e-lounge facility, etc. are designed to deliver a wide range of banking services in a seamless manner. Apart from being a frontrunner in digital initiatives, your Bank also places utmost importance on security and confidentiality of customer transactions, information and data. In addition to employing highly sophisticated technology to ensure safe and secure environment for the customer while transacting through digital channels, your Bank also sensitises its customers on cyber frauds and its prevention through emails, SMS and inserts sent along with Bankâs statements on a periodic basis.

In adherence to the regulatory guidelines as well as to tap the potential business opportunities, your Bank worked towards building its Priority Sector Lending (PSL) business by taking various initiatives and campaigns.

Your Bank is also leveraging its Business Correspondents (BCs)/ Business Facilitators (BFs) network, in addition to its branch and ATM network, to expand its reach to the priority sector segment, especially in the rural and semiurban areas, thereby building a sustainable PSL portfolio.

In order to ensure inclusive growth in the economy, your Bank has been actively partnering with the policymakers to further the objective of financial inclusion. Through its intervention in four key areas, viz. expanding banking infrastructure, offering appropriate financial products, making intensive use of technology and enhancing financial literacy, your Bank has been ensuring access to appropriate financial products and services needed by most vulnerable sections of the society at an affordable cost in a fair and transparent manner.

Your Bankâs corporate banking portfolio includes exposure to sectors as varied as power, textiles, cement, steel, engineering, construction, paper and paper products, electronics and electrical equipment, sugar, chemicals, automobiles, Non-Banking Financial Companies (NBFCs), among others. Your Bankâs asset products basket for corporate clients includes term loans, working capital (both fund-based and non-fund based), packing credit to exporters, receivables buyout, bill discounting, lending to NBFCs, among others. Your Bank continues to be proactive in extending project appraisal, debt syndication, structuring and advisory services across various sectors. During the year, your Bank received several mandates for appraisal and debt syndication.

While 2016-17 witnessed a number of policy reforms from the Government, the core sector industries and infrastructure sector continued to face marginal profitability and liquidity constraints, thus, leading to persistence of stress. Since your Bank has historically been a major lender for these industrial sectors, the stress in the corporate advances portfolio of the bank continued during the year. However, the Bank had initiated necessary measures for resolution of these stressed assets within the available regulatory framework like Strategic Debt Restructuring (SDR), Scheme for Sustainable Structuring of Stressed Assets (S4A), 5/25 structuring, etc. under the aegis of Joint Lenders Forum (JLF). With the recent amendments to Banking Regulation Act and revised guidelines on JLF mechanism issued by RBI, the Bank expects to have expeditious resolution of these stressed assets in the current year.

Your Bank conducts its Trade Finance (TF) business through its full-fledged Authorised Dealer TF Centres and retail TF branches. Your Bank continued to show impressive growth and set new service standards by working closely with its customers to create customer solutions in TF business. As part of your Bankâs on-going digital transformation, IDBI eTrade Portal - an innovative online facility - was revamped to enable its customers to avail a basket of facilities in a paperless mode and hassle-free manner.

Your Bank acts as an agent for Central and State Governments to manage their receipts and payments. Besides being authorised to collect various Central Government taxes, your Bank also has the mandate for collecting electronic payment of railway freight charges and Commercial Tax and other Government receipts for 23 State Governments and four Union Territories.

Your Bank has received in-principle approval for Bharat Bill Payment System (BBPS) - an RBI mandated system - which aims at offering integrated and interoperable bill payment system in the country.

Your Bank became the first public sector bank to open its IFSC Banking Unit (IBU) at Indiaâs first and only International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT). Your Bank, through its GIFT IBU branch and its overseas branch at the Dubai International Financial Centre (DIFC), Dubai, offers a wide range of corporate banking services to meet its Indian clientsâ fund requirements for their Indian operations as well as overseas ventures.

Your Bank, in its endeavour to be a socially responsible entity, appreciates the importance of Corporate Social Responsibility (CSR) activities and has put in place a Board-approved CSR policy with effect from April 1, 2014 in compliance with Companies Act, 2013. Your Bankâs CSR activities embody its commitment to contribute to the sustainable social and economic development of the society. Your Bank, through its diverse CSR activities, contributed towards providing improved access to health services, promoting education for children, promoting gender equality, promotion and installation of renewable energy systems, promotion of sports, enhancement of livelihood opportunities, advancement of vocational and employable skills and holistic development of villages by undertaking planned interventions.

The detailed descriptive of the Bankâs initiatives undertaken during the year is contained in the Management Discussion and Analysis section of the Annual Report.

Board of Directors

As on March 31, 2017, the Board comprised of nine Directors, including Managing Director and CEO (MD & CEO), two Deputy Managing Directors (DMDs), two Non-Executive Directors and four Independent Directors. Shri Kishor Kharat, MD & CEO, Shri K.P.Nair and Shri G.M.Yadwadkar, DMDs, Shri Pankaj Jain and Shri Praveen Garg, Central Government official Nominees as Non-Executive Directors, Shri S. Ravi, Shri Ninad Karpe, Shri Gyan Prakash Joshi and Ms. Neeru Abrol as Independent Directors constituted the Board as on March 31, 2017. The strength of 9 (nine) Directors on the Board, as against the composition for maximum strength of 13 Directors provided under Article 116(1) of the Articles of Association, meets the requirement provided under Article 114(a) of the Articles of Association.

Apex Committees

The Board has fifteen sub-committees, namely, Audit Committee of the Board, Remuneration Committee, Executive Committee, Nomination Committee, Stakeholdersâ Relationship Committee, HR Steering Management Discussion and Analysis Committee, Frauds Monitoring Committee, Recovery Review Committee, Risk Management Committee, Independent Directorsâ Committee, Corporate Social Responsibility Committee, Non-Cooperative Borrowersâ Review Committee, Customer Service Committee, Wilful Defaultersâ Review Committee and Information Technology Committee, to oversee various functional aspects of your Bankâs business and operations.

Corporate Governance

Your Bank is committed to adopting the best corporate governance practices. It believes that effective corporategovernance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholdersâ value. The details of your Bankâs corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.

Business Responsibility Report

Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There were no personnel in your Bankâs services, during the financial year under review, who received remuneration over Rs. 1.02 crore annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 8.50 lakh per month. Further there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by the Managing Director & CEO or the Deputy Managing Directors of the Bank and who held by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Bank.

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

RBIâs Prompt Corrective Action

The RBI, vide its letter dated May 05, 2017, has initiated Prompt Corrective Action (PCA) for your Bank in view of its high net Non-Performing Assets (NPA) and negative Return on Assets (ROA). The Bank is taking necessary actions to comply with the RBIâs directive in this regard.

Directorsâ Responsibility Statement

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Bankâs Board of Director s is sincerely grateful to the Government of India, Reserve Bank of India(RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India(IRDA) and all other statutory/ regulatory authorities for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banks/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognition and accolades for its excellence in the banking domain. The Board is thankful to all such organisations/ agencies for formally recognising the Bankâs efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment towards the Bank.

[K.P. Nair] [Mahesh Kumar Jain]

Deputy Managing Director Managing Director & CEO

Place: Mumbai

Date : May 18, 2017

Mar 31, 2015

Dear Members,

The Bank''s Board of Directors is pleased to present the Report on the business and operations for the financial year ended March 31,2015.

In 2014-15, the Bank strived to improve its performance on all fronts despite confronting significant challenges emanating from the macroeconomic environment as well as various other sector-specific factors. The Bank surmounted these challenges through strategic initiatives which were complemented by organisational restructuring and mission-mode approach to catalyse growth in its business. Furthermore, the Bank continued to expand its reach across the country by rapidly adding to its branch and ATM network. With the objective of ensuring highest level of customer satisfaction, the Bank focused on optimizing its customer service to provide hassle-free experience to all its customers. The Bank was also able to expand its customer base by expanding its network which allowed easier accessibility as also offering an array of customized products and services with innovative features to meet the customers'' needs in a suitable manner. As on March 31, 2015, aggregate deposits and advances touched Rs. 2,59,836 crore and Rs. 2,08,377 crore, reflecting a growth of 10% and 5%, respectively, over the previous year. Your Bank''s performance highlights for the period under review are presented in Table 1.

Profit and Appropriations

During 2014-15, your Bank''s gross income amounted to Rs. 32,162 crore, comprising interest income at Rs. 28,154 crore and other income at Rs. 4,008 crore. Interest expenses stood at Rs. 22,406 crore and operational expenses at Rs. 4,027 crore, accounting for total expenditure (excluding provisions and contingencies). Total provisions during the year were at Rs. 4,855 crore, which mainly include Rs. 3,480 crore towards provision for bad and doubtful debts and investments. During 2014-15, your Bank''s operations resulted in Profit Before Tax (PBT) of Rs. 1,287 crore. After provision of Rs. 414 crore towards tax, Profit After Tax (PAT) amounted to Rs. 873 crore. The appropriation of PAT, as approved by the Board of Directors, is given in Table 2.

Table 1 : Financial Highlights

(Rs. In crore)

As on March 31 2014 2015

Capital 1,603.94 1,603.96

Reserves & Surplus 22,034.92 22,712.96

Deposits 2,35,773.63 2,59,835.97

Borrowings 60,146.29 61,832.98

Other Liabilities & Provisions 9,429.57 10,044.69

Total Liabilities 3,28,988.36 3,56,030.56

Cash & Balances with RBI 12,711.11 13,035.77

Balances with Banks & Money at Call & Short Notice 4,106.80 1,489.99

Investments 1,03,773.50 1,20,963.21

Advances 1,97,686.01 2,08,376.87

Fixed & Other Assets 10,710.94 12,164.73

Total Assets 3,28,988.36 3,56,030.56

For the period 2013-14 2014-15

Total Income 29,576.27 32,161.62

Total Expenses (other than provisions) 23,894.88 26,433.52

Provisions (other than tax) 3,940.26 4,440.78

Profit Before Tax 1,741.13 1,287.33

Provision for Tax* 619.73 413.94

Profit After Tax 1,121.40 873.39

* Net of Current Income Tax and Deferred Income Tax

Table 2 : Appropriation of Profits

(Rs. In crore)

For the year ended March 31 2014 2015

Net Profit/(Loss) for the year 1,121.40 873.39

Profit/(Loss) brought forward 903.86 896.77

Profit available for Appropriations 2,025.26 1770.16

Appropriations

Transferred to Statutory Reserve 281.00 218.35

Transferred to Capital Reserve 9.32 229.07

Transferred to General Reserve 400.00 65.00

Transferred to Special Reserve created and maintained u/s 36(1)(viii) of 250.00 200.00 IT Act, 1961

Dividend

- Equity Shares 160.41 120.30

- Tax on Dividend 27.76 25.25

Balance of Profit carried to Balance Sheet 896.77 912.19

For each share with face value of Rs. 10, Earnings Per Share (EPS) during the year stood at Rs. 5.45, while Book Value per Share stood at Rs. 141.24 as on end-March 2015. The Directors have the pleasure in recommending dividend at 75% on the fully paid-up equity share capital for 2014-15.

Report on the Performance and Financial Position of Subsidiaries and Joint Venture included in the Consolidated Financial Statement

As required by Accounting Standard-21 issued by the Institute of Chartered Accountants of India, the Bank''s consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiaries and other consolidating entities.

The Bank holds more than 20%, but less than 50%, of equity capital of five companies. In the opinion of management, the Bank does not have any significant influence in these companies. Accordingly, these companies have not been considered as "associate companies" and the financial statements of these companies are not included in the consolidated financial statements. Financial Statements of the Joint Venture (IDBI Federal Life Insurance Company Ltd.) as incorporated in these accounts are unaudited and subject to Audit Committee/Board approval.

A statement pursuant to Section 129 of Companies Act, 2013 showing key financials of the Bank''s subsidiaries/Joint Venture is included separately in this Annual Report.

Material changes and commitments, if any affecting financial position of IDBI Bank which have ocurred during the end of financial year and the date of Board Report.

There are no material changes and commitments, affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e. March 31,2015 and the date of the Directors'' Report i.e May 26, 2015.

The details in respect of adequacy of internal financial controls with reference to the financial statements.

The Bank has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically.

Capital Adequacy

Your Bank computes regulatory capital requirement for Credit, Market & Operational Risks as prescribed under the Pillar-1 guidelines of the Basel III framework. With regard to the requirement for higher quality capital highlighted under Basel III norms, your Bank, at present, has sufficient common equity to meet the regulatory requirements as stipulated in the guidelines.

As on March 31, 2015, the Capital to Risk-weighted Assets Ratio (CRAR) of your Bank was 11.76% which is above the minimum regulatory requirement of 9.0%. Your Bank''s Common Equity Tier 1 (CET 1) ratio was 729% which is also above the minimum applicable CET 1 ratio of 5.5% stipulated by RBI. The Tier-I ratio stood at 8.18% as on March 31, 2015 against the regulatory requirement of 70%.

Your Bank has a Board approved policy on Internal Capital Adequacy Assessment Process (ICAAP), in line with the Pillar-2 norms of the Basel III framework, which enables the Bank to internally assess and quantify those risks that are not covered under Pillar-1 in addition to developing appropriate strategies to manage risks under normal and stress conditions. Your Bank has adopted a Disclosure Policy in accordance with the Pillar-3 requirements under the Basel norms and consequently, publishes disclosures on the Bank''s website at end of each quarter.

Business Strategy

During the year, your Bank continued to focus on rebalancing its business mix, through increasing accent on retail business and priority sector lending, with the intent of meeting regulatory requirements as well as de- risking its business portfolio. As a critical enabler, the Bank recalibrated its organization structure by adopting a decentralized approach by dividing the offices across the country into zones. Simultaneously, the zonal offices were vested with greater powers to facilitate better decision- making to drive the Bank''s business growth. A mission- mode approach has been adopted for strengthening the Bank''s position in retail banking as well as priority sector business while continuing to maintain predominance in industry and infrastructure financing. The Bank offers an entire gamut of products and services to cater to the financial needs of all segments of the society under one roof. These products and services are periodically reviewed and modified as well as innovative and customized features are introduced in tandem with the constantly evolving demand of your Bank''s customers to ensure high level of customer satisfaction and consequently, drive growth in its business.

Key Business Initiatives

As July 1, 2014 marked the completion of fifty epoch- making years of the Bank''s existence, various activities were planned as a part of the Golden Jubilee celebrations, commencing from the date. The opportunity was used to establish active engagement with various stakeholders of the Bank. The stakeholder engagement included activities aimed at customers (both Retail and Corporate), employees, society at large and opinion makers. The accent of all the activities was to reinforce the IDBI Bank brand identity, reiterate that we are a true friend of all our stakeholders which finally led to top-of-the-mind recall for the brand. The celebrations were kicked-off at a flagship event at Head Office on July 1, 2014. As a part of the celebrations, the Bank launched its Signature Debit Card, e-inaugurated 50 branches, inaugurated Zonal Intranet Section and launched its mobile banking services, among other such initiatives. Simultaneous events were held at all nine zonal headquarters of the Bank (viz. Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bhuwaneshwar, Bengaluru, Chandigarh and Nagpur). To mark the occasion, a special logo was designed and was displayed prominently in the Bank''s ATMs, calendar, stationery and other such collaterals. The entire set of activities was planned with the theme "celebration of 50 years of friendship" with the customer and was used as an extension of the brand positioning as ''Bank Aisa Dost Jaisa'' as well as synchronizing its advertising campaigns, including creation of IDBI Anthem, with the Golden Jubilee theme.

Your Bank continues to target a progressively larger retail business portfolio to facilitate a more balanced business mix, in keeping with its intended positioning as a full- service commercial bank. Towards this end, the Bank continued to rapidly expand its branch and ATM network to establish wide presence across the country. As on March 31, 2015, your Bank''s network stood at 1717 branches (includes one overseas branch) marking an addition of 329 branches during the year.

Pursuant to the objective of expanding the share of retail business in the overall business mix, your Bank currently offers a bouquet of Liability, Asset, Capital Market and Third Party products which are primarily aimed at meeting the customized needs of customers in the Retail Banking segment. The Bank''s important products and services for the retail segment have been listed in the Corporate Overview Section of this Report.

Your Bank undertook organizational restructuring by merging its Priority Sector Group with its Retail Banking Group to provide for a more focussed approach to Priority Sector Lending (PSL) across all its branches by leveraging its growing branch network for augmenting priority sector business. The Bank has established 29 dedicated Credit Processing Centers (CPCs) that are staffed with specially trained personnel to expedite credit process.

The Bank has continued to update and strengthen its numerous alternate channels of delivery. Expanding the bouquet of its products, your Bank launched Credit Card on Visa Platform in two variants, viz. Royale (Visa Signature Card) for elite HNI customers and Aspire (Visa Platinum Card) for other existing customers. Additionally, the Bank has launched its e-lounge facility, which is an automated banking service designed for delivering a wide range of banking services on 24x7 basis, beginning with Mumbai and has expanded its reach in a number of major centres across the country.

Your Bank''s Corporate Banking Group (CBG) has been structured as CBG-I with mandate of looking after large- sized accounts and CBG-II with mandate of looking after medium-sized accounts. CBG has presence across the country. Your Bank''s CBG accords critical importance to multi-product sales, both in assets and liabilities, in order to offer a comprehensive portfolio of financial products and services and maximise yield.

Actively providing project appraisal, debt syndication, structuring and advisory services across various sectors, your Bank, during the year, procured several mandates for appraisal and syndication of debt. Your Bank has been consistently ranked as one of the leading debt syndicators in India.

Your Bank conducts its Trade Finance (TF) business through its full-fledged TF Centres (Authorized Dealer in Foreign Exchange) with presence across the country. Furthermore, more than 60 Retail Banking branches have been enabled for undertaking Inland TF Business (LCs/ BGs) so as to reach majority of domestic TF customers.

Your Bank has continued to pursue various legal/ non- legal recovery efforts rigorously to improve asset quality and consequently, improve its bottom-line.

Proactively engaging itself in Corporate Social Responsibility (CSR) activities, the Bank has put in place a Board-approved CSR Policy which provides the platform for undertaking interventions in areas such as education, health, gender equality and socio-economic empowerment, environmental sustainability, rural development projects, etc.. In order to make an even greater impact on targeted strata of society, your Bank, during the year, has not only been associated with deserving organizations but also has been proactively involved with Government of India''s Swachh Bharat Swachh Vidyalaya Abhiyan (SBSVA).

In cognizance of the imperative to ensure inclusive growth, your Bank, in addition to various initiatives undertaken under Financial Inclusion, actively participated in the Pradhan Mantri Jan Dhan Yojana (PMJDY) which was launched as a National Mission on Financial Inclusion by the Hon''ble Prime Minister on August 15, 2014. Under the programme, your Bank opened 9.29 lakh accounts with facility of RuPay Debit cards and has been extending overdraft facility of up to Rs. 5,000/- to the eligible account holders. Additionally, your Bank has also contributed to IBA Corpus Fund for PMJDY which was created to fund the PMJDY campaign.

Your Bank''s advertising and publicity initiatives intensified during the year with focus on enhancing visibility and top- of-mind recall of the Bank by augmenting its profile in the media and financial community and thereby, reinforce stakeholder perceptions. Your Bank found numerous mentions in Print, Electronic and Digital media with an overall positive impression. The Bank''s advertisements, which essentially depict its supportive role through the visual images of everlasting friendship between kids while duly incorporating overall theme of Golden Jubilee, were released as a national television campaign and in print, Out of Home (OOH) and digital space. Various other product-specific campaigns, which focused on different products and services offerings of the Bank, were also launched to create awareness amongst the customers - existing as well as prospective.

Your Bank recognises that in the banking sector, a strong Brand Equity is extremely important for deepening and widening customer relationships as also acquisition of new customers. Accordingly, your Bank has invested on building a strong Brand Identity, reinforcing the same through multiple initiatives. As a result, the Bank witnessed a rise in its Brand Equity as reflected in brand valuation and rankings which can be accredited to appropriate strategies, consistently supported by brand development activities through advertisements, internal communications and public relations. These strengths have been recognized by leading global professional bodies and got reflected in the high growth of Brand Value and ranking. Leading global research organisations like Millward Brown (Brand Z) and Interbrand have come out with their listing of top 50 brands in India across sectors. As per Brand Z, IDBI Bank ranks 39th among the top 50 brands in the country across sectors. As per recent Interbrand rankings, IDBI Bank ranks 37th among the top 50 brands in the country across sectors. The Brand Finance Banking 500, published by Brand Finance, a leading global brand consultant, evaluates and compares the value of the world''s leading banking brands annually. As per the 2015 study, the valuation of IDBI Bank Brand has increased by 79% as at December 31, 2014 over the previous year. Globally, the ranking of IDBI Bank has improved from 351 to 255 while in India the ranking has improved from 11th to 9th position. As per ''Brand Trust Report 2015, IDBI Bank''s Brand Trust ranking has shown a considerable improvement over the past years. The Bank was ranked 159th in 2013, 85th in 2014 and 64th in 2015 as per the latest report released recently. In the BFSI category, the Bank was ranked at the 5th position while among the PSU Banks, it was ranked at the 2nd position.

Gyan Sangam-A Step towards New Banking Paradigm

Ministry of Finance, Government of India, had organised the Bankers'' Retreat - Gyan Sangam for Public Sector Banks (PSBs) on January 2-3, 2015 at Pune to take forward the Government''s commitment to reforms in the financial sector. Six working groups were formed therein for deliberating and making recommendations on following issues relating to banking sector viz. (i) Leveraging Technology and Digital to improve banking operations efficiency, (ii) Rethinking Priority Sector Lending, (iii) Achieving Universal Financial Inclusion, (iv) Improving Risk Management, Asset Quality and Recovery, (v) Building a robust people strategy for PSBs and (vi) Consolidation and Restructuring of PSBs for better efficiency, governance and capital efficiency. The Working Groups made various recommendations which were summarized into two categories with separate actionable for the PSBs and policymakers, under two different time frames 0-12 months and one-three years. Your Bank is drawing up a detailed action plan to systematically take forward actionable on the part of the Bank.

The details of your Bank''s key initiatives during 2014- 15 are featured under the Management Discussion and Analysis section of this Annual Report.

Board of Directors

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 2013, the Articles of Association of your Bank and the requirements of Corporate Governance, as envisaged in clause 49 of the Listing Agreement. The Board functions directly as well as through various Board Committees constituted to provide focused governance in the important functional areas of your Bank.

As on March 31, 2015, the Board comprised of eight Directors, including Chairman and Managing Director (CMD), two Deputy Managing Directors (DMDs), one Non-Executive Director and four Independent Directors. Shri M.S. Raghavan, Chairman & Managing Director as Executive Director, Shri B.K. Batra and Shri M.O. Rego, Dy. Managing Directors as Executive Directors, Ms. Snehlata Shrivastava, Central Government official Nominee as

Non-Executive Director, Shri P.S. Shenoy, Shri S. Ravi, Shri Ninad Karpe and Shri Pankaj Vats as Independent Directors constituted the Board as on March 31,2015.

As per Government of India''s directives, it is proposed to separate the post of CMD into two posts of a Chairman and a Managing Director & CEO by amendment of Article 116(1)(a) at the ensuing AGM.

Apex Committees

The Board has a total of sixteen committees, namely Audit Committee of the Board, Customer Service Committee, Business Review Committee, Information Technology Committee, Executive Committee, Remuneration Committee, Stakeholders'' Relationship Committee, Nomination Committee, Fraud Monitoring Committee, HR Steering Committee, Risk Management Committee, Recovery Review Committee, Corporate Social Responsibility Committee, Independent Directors'' Committee, Non-Cooperative Borrowers'' Review Committee, Wilful Defaulters Review Committee, to oversee various functional aspects of your Bank''s business and operations.

Corporate Governance

Your Bank is committed to adopting the best corporate governance practices. It believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders'' value. The details of your Bank''s corporate governance practices are given in this Annual Report as a separate section under Corporate Governance Report.

Statement under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There were no personnel in your Bank''s services, during the financial year under review, who received remuneration over Rs. 60 lakh annually. Besides, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 5 lakh per month. Further there was no personnel employed throughout the financial year or part thereof who was in receipt of remuneration at a rate, which in the aggregate, was in excess of that drawn by CMD or DMDs of the Bank and who held by himself or along with his spouse and dependent children, not less than two per cent of the equity shares of the Bank.

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

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank. However, your Bank has been increasingly using information technology in its operations.

Directors'' Responsibility Statement

The Board of Directors, hereby, declares and confirms that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d. The directors had prepared the annual accounts on a going concern basis;

e. The directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Bank''s Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banking/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year, and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in the banking domain. The Board is thankful to all such organisations/agencies for formally recognising the Bank''s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank''s performance.

Place: Mumbai [M.S. Raghavan]

Date : May 26, 2015 Chairman and Managing Director

Mar 31, 2014

Dear Members,

During 2013-14, your Bank''s gross income amounted to Rs. 29,576 crore, comprising interest income at Rs. 26,597 crore and other income at Rs. 2,979 crore. Interest expenses of Rs. 20,576 crore and operational expenses of Rs. 3,319 crore accounted for total expenditure, excluding provisions and contingencies, of Rs. 23,895 crore. Total provisions during the year were at Rs. 4,560 crore, which mainly include Rs. 1,862 crore towards provision for bad and doubtful debts and investments, Rs. 1,393 crore towards bad debts written off, Rs. 486 crore towards restructured assets, Rs. 173 crore towards incremental prudential provisions for standard assets and Rs. 620 crore towards tax. During 2013-14, your Bank''s operations resulted in Profit Before Tax (PBT) of Rs. 1,741 crore. After a provision of Rs. 620 crore towards tax, Profit after Tax (PAT) amounted to Rs. 1,121 crore. The appropriation of PAT, as approved by the Board of Directors, is given in Table 2.

(Rs. crore)

For the year ended March 31, 2013 2014

Net Profit/(Loss) for the year 1,882.08 1,121.40

Profit/(Loss) brought forward 672.65 903.86

Profit available for Appropriations 2,554.73 2,025.26

Appropriations

Transferred to Statutory Reserve 470.83 281.00

Transferred to Capital Reserve 191.82 9.32

Transferred to General Reserve 150.00 400.00

Transferred to Special Reserve created and maintained u/s 36(1)(viii) of IT Act, 1961 300.00 250.00

Dividend

- Equity Shares 466.47 160.41

- Tax on Dividend 71.75 27.76

Balance of Profit carried to Balance Sheet 903.86 896.77

For each share with face value of Rs. 10, Earnings per Share (EPS) during the year stood at Rs. 8.00, while Book Value per Share stood at Rs. 136.52 as on end-March 2014. The Directors are pleased to recommend dividend at 2.75% on the fully paidup equity share capital for 2013-14, which along with Interim dividend at 7.25% paid during the year, aggregates to 10%.

CAPITAL ADEQUACY

Your Bank computes regulatory capital requirement for credit, market and operational risks in compliance with the Pillar-I guidelines under Basel norms. Your Bank has migrated to the Basel III framework and has been calculating capital ratios on a quarterly basis as per Basel III norms since April 1, 2013. Your Bank also computes capital ratios following the Basel II norms as stipulated by RBI since March 31, 2009. With regard to the requirement for higher quality capital highlighted under Basel III norms, your Bank, at present, has sufficient common equity to meet the regulatory requirements as stipulated in the guidelines.

Currently, your Bank follows the Standardised Approach for credit risk, Standardised Measurement Method (SMM) for market risk and the Basic Indicator Approach (BIA) for operational risk. Your Bank is upgrading its systems and processes in order to migrate to advanced approaches under Basel II. To comply with the Basel Pillar II norms, your Bank has a Board-approved policy on the Internal Capital Adequacy Assessment Process (ICAAP). In compliance with the Pillar III requirements under Basel norms, your Bank has implemented a Disclosure Policy. The disclosures for every quarter are available on your Bank''s website.

As on March 31, 2014, your Bank''s Capital to Risk-weighted Assets Ratio (CRAR) works out to 11.7%, which is above the minimum regulatory requirement under Basel III of 9.0%. Similarly, your Bank has a CET1 ratio of 7.8%, which is above the minimum applicable CET1 ratio of 5.0% as stipulated by the RBI. The Tier-I ratio also stands at 7.8% as on March 31, 2014 against the regulatory requirement of 6.5%.''

BUSINESS STRATEGY

During 2013-14, your Bank has undertaken various initiatives to register growth in the retail business segment with special emphasis on higher mobilisation of Current Account and Savings Account (CASA) deposits. Your Bank followed a strategy of deepening and widening the corporate banking and investment banking relationships. Simultaneously, special emphasis was laid on acquisition and expansion of its Priority Sector Business, which includes lending to weaker sections, MSE and Agri business, to broaden its asset portfolio.

KEY BUSINESS INITIATIVES

Business initiatives in the retail banking space during the year were driven by significant expansion in branch network and matching skilled manpower. Your Bank added 309 new branches during the current financial year, taking the total number of branches to 1388 as on March 31, 2014. Your Bank, as part of customer convenience, also demonstrably strengthened its alternate delivery channels by expanding its ATM network from 1,702 as on March 31, 2013 to 2301 as on March 31, 2014.

Your Bank has emerged as one of the dominant, competitive and sought-after players in the structured retail finance segment, offering an array of innovative products catering to the financial needs of all customer segments in this domain. To ensure wider customer coverage and tap the growing opportunities emerging from the expanding delivery network, your Bank, apart from expanding its bouquet of retail asset offerings, introduced a simplified and customer friendly process for structured retail asset products. This is expected to augment your Bank''s market share. Your Bank has also leveraged its state-of-the-art technology platform to implement several key initiatives, which are detailed in the Management Discussion and Analysis section of the Report.

Your Bank continued to aggressively pursue a ramp up in its Priority Sector Lending (PSL), broadly comprising loans to weaker sections, agriculture, MSE, housing and education loan segments. As an enabler, a dedicated business vertical, viz. Priority Sector Group (PSG) was formed by merging your Bank''s Agri and MSE business verticals. In addition to six dedicated PSG Processing Centres (PPCs) with trained staff to process PSL proposals expeditiously, there are 44 dedicated branches exclusively for PSL business. Your Bank has also empowered retail branches to service the MSE and Agri customers across India. Additionally, it conducted workshops in various Agri and MSE clusters for acquainting existing and potential clients with its PSG products, facilities and services. Your Bank also actively participated in various conferences, trade fairs and promotional events to expand its reach in this sector.

Your Bank continued to strengthen its Alternate Banking Channels like ATMs, internet banking, mobile banking, among others, to reduce customers'' dependence on the branch channel, while simultaneously offering 24x7 facilities. From your Bank''s perspective, these facilities are cost-effective as the transaction cost is less compared to the branch channel. Your Bank gainfully leveraged the branch network during the festive season for maximising sales of Prepaid Card products. Your Bank also initiated various measures to induce its customers to use the IDBI Bank Debit Card more frequently for purchases at Point-of- Sale (POS) locations. The Alternate Channels and Merchant Acquisition Business provide avenues for augmenting fee based income, besides helping acquire/ deepen existing relationships. Your Bank has also been actively engaged in initiatives aimed at enhancing customer awareness on cyber frauds and its prevention. It undertook measures to improve the security level of Alternate Channels, especially through internet banking, in view of rising incidence of cyber frauds.

Your Bank has a dedicated vertical, viz. Corporate Banking Group (CBG), which caters to the financial needs of medium and large corporate clients. The Group is organised across seven regions spanning 25 cities and operates through 29 Specialised Corporate Branches (SCBs). As a strategic initiative, the portfolio was granularised to avoid concentration of risk and Non-Fund business/Fee based Income from its corporate clientele was aggressively pursued. To provide personalised services to customers, Client Service Teams (CSTs), comprising members from various product verticals, have been formed at regional and branch levels. In view of the turbulent macroeconomic environment and difficulties confronting the customers, a dedicated Focused Asset Management Group (FAMG) was established to ensure timely resolution of issues, and thereby, manage assets effectively.

During 2013-14, your Bank opened two new Nostro Accounts in EURO and GBP currencies. Further, to make available timely foreign currency funds to the exporters at a competitive rate, your Bank signed Agreements with its Foreign Correspondent Banks for Foreign Currency Borrowing.

During the year, your Bank opened 12 new full Â fledged Trade Finance (TF) Centres (Authorized Dealer in Foreign Exchange) pan-India, taking the total number of TF locations to 52. Your Bank continued to strengthen its relationship with foreign banks for facilitating Trade Finance business. During the reference period, your Bank established Relationship Management Application (RMA) with 21 major Foreign Banks, taking the total number of RMAs to 1,442. With the enhanced networking, your Bank has been able to handle bi-directional trade transactions in major parts of the world.

Your Bank continued to derive first-mover advantage in a number of key areas. It was the first Bank in India to develop online payment of stamp duty and registration fees by issuing e-SBTR (Online Secured Bank Treasury Receipt) in Maharashtra. Your Bank was the first lender to finance the toll collection projects of NHAI, awarded under a long-term Operate-Maintain-Transfer (OMT) arrangement, spanning a stretch of 275 km-long highways out of the total 1,800 km highways identified by NHAI for such OMT projects. Your Bank continued to garner awards and accolades from various quarters for operational excellence and its initiatives beyond its core banking business.

Your Bank''s advertising and publicity initiatives intensified during the year with its re-branding campaign, launched after a gap of four years, serving as its centre-piece. The campaign, which spanned from end-October 2013 to early February 2014 in assorted media, but primarily as a television commercial, focused on repositioning your Bank, using a simple concept like friendship to convey the brand attribute and positioning. A new tagline, ''Bank Aisa Dost Jaisa'', was conceived to echo the brand''s USP as a warm, friendly Bank that cares for its constituents. After the new brand campaign closed out, retail product campaigns of its flagship products were launched, drawing upon the DNA and tonality of brand campaign communication. The brand campaign also finds its echo in the core theme of this year''s Annual Report: ''Strengthening Friendship. Touching Lives.''

The details of your Bank''s key initiatives during 2013-14 are featured under the Management Discussion and Analysis section of this Annual Report.

ORGANISATION STRUCTURE

To execute its core strategy of building a robust customer base, facilitate CASA and retail-cum-PSL growth, improve customer service and enhance inclusive banking, your Bank embarked on a calibrated branch expansion drive, while adding 309 branches during 2013-14. Of the domestic branch network of 1387 branches as on March 31, 2014, 319 branches are located in metropolitan centres, 426 in urban centres, 372 in semi-urban centres, 146 in rural centres and 124 branches at rural unbanked centres. Besides, your Bank has one fully operational overseas branch at Dubai International Financial Centre (DIFC), Dubai.

BOARD OF DIRECTORS

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, the Articles of Association of your Bank and the requirements of corporate governance, as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board-level Committees constituted to provide focused governance in your Bank''s important functional areas.

As on March 31, 2014, the Board comprised nine Directors, including the Chairman and Managing Director (CMD), two Deputy Managing Directors (DMDs), one Non-Executive Director and five Independent Directors. No Director is related to any other Director on the Board.

APEX COMMITTEES

The Board has a total of 13 committees to oversee various functional aspects of your Bank''s business and operations. Two new Committees, viz. Business Review Committee and Corporate Social Responsibility Committee, were added during the reporting period.

CORPORATE GOVERNANCE

Your Bank is committed to adopting the best corporate governance practices. It believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders'' value. The details of your Bank''s corporate governance practices are given in this Annual Report as a separate section under Management Discussion and Analysis.

STATEMENT UNDER SECTION 217 (2A) OF THE COMPANIES ACT 1956

There were no personnel in your Bank''s services, during the financial year under review, who received remuneration over Rs. 60 lakh annually. Besides, there were no personnel in the service of your Bank for a part of the year who received remuneration in excess of Rs. 5 lakh per month. The provisions of Section 217(1) (e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that: a. In the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

b. The Directors had adopted accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of your Bank at the end of the accounting year and of your Bank''s profit or loss for that year.

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, to safeguard your Bank''s assets, prevent and detect fraud and other irregularities.

d. The Directors had prepared the accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Bank''s Board of Directors is sincerely grateful to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board also acknowledges, with gratitude, the co-operation and support received from various State Governments and other banking/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to put on record its deep sense of gratitude to its loyal shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead.

During the financial year, your Bank has received various recognitions and accolades for its excellence in the core banking domain and beyond. The Board is thankful to all such organisations/ agencies for formally recognising your Bank''s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank''s performance on a sustained basis.

Place: Mumbai [M.S. Raghavan]

Date: April 30, 2014 Chairman and Managing Director

Mar 31, 2013

The Board of Directors of your Bank is pleased to present its Report on the business and operations of your Bank for the financial year ended March 31, 2013.

Your Bank''s performance during the financial year 2012-13 improved significantly on many fronts, enabled by strategic policy initiatives, enhanced reach in terms of branch and ATM network and focussed customer service delivery. As on March 31, 2013, your Bank''s aggregate deposits and advances touched Rs. 2,27,116 crore and Rs. 1,96,306 crore, respectively, reflecting a corresponding growth of 7.90% and 8.71% over the previous year. The Performance highlights of your Bank for the period under review is presented in Table 1.

Table 1 : Financial Highlights (Rs. crore)

As on March 31, 2012 2013

Capital 1,278.4 1,332.7

Reserves & Surplus 18,148.7 19,902.5

Deposits 2,10,492.6 2,27,116.5

Borrowings 53,477.6 65,808.9

Other Liabilities & Provisions 6,919.0 8,607.9

Total liabilities 2,90,316.3 3,22,768.5

Cash & Balances with RBI 15,090.2 10,544.0

Balances with Banks & Money at Call & Short Notice 2,967.4 7,380.6

Investments 83,175.4 98,801.0

Advances 1,80,572.3 1,96,306.4

Fixed & Other Assets 8,551.0 9,736.5

Total Assets 2,90,316.3 3,22,768.5

For the Period 2011-12 2012-13

Total Income 25,482.1 28,283.8

Total Expenses (other than provisions) 21,432.5 22,825.6

Provisions (other than tax) 1,419.9 2,836.4

Profit Before Tax 2,629.7 2,621.8

Provision for Tax* 598.1 739.7

Profit After Tax 2,031.6 1,882.1

* Net of current income tax and deferred income tax

PROFIT AND APPROPRIATIONS

During FY 2012-13, your Bank''s gross income amounted to Rs. 28,284 crore, comprising interest income at Rs. 25,064 crore and other income at Rs. 3,220 crore. Interest expenses of Rs. 19,691 crore and operational expenses of Rs. 3,134 crore led to total expenditure, excluding provisions and contingencies, of Rs. 22,826 crore. Total provisions during the year were at Rs. 3,576 crore, which mainly includes Rs. 1,758 crore towards provision for bad and doubtful debts and investments, Rs. 383 crore towards bad debts written off, Rs. 493 crore towards restructured assets, Rs. 172 crore towards incremental prudential provisions for standard assets, and Rs. 740 crore towards tax. Your Bank''s working during FY 2012-13 resulted in a Profit Before Tax (PBT) of Rs. 2,622 crore, After making a provision of Rs. 740 crore towards taxation, Profit After Tax (PAT) amounted to Rs. 1,882 crore. The appropriation of PAT, as approved by the Board of Directors, is given in Table 2.

Table 2 : Appropriation of Profits (Rs. crore)

For the year-ended March 31, 2012 2013

Net Profit/(Loss) for the year 2,031.6 1,882.1

Profit/(Loss) brought forward 615.0 672.6

Profit available for Appropriations 2,646.6 2,554.7

Appropriations

Transferred to Statutory Reserve 507.9 470.8

Transferred to Capital Reserve 17.0 191.8

Transferred to General Reserve 750.0 150.0

Transferred to Special Reserve created and maintained u/s 36(1)(viii) of IT Act, 1961 250.0 300.0

Dividend

- Equity Shares 388.7 466.5

- Tax on Dividend 60.3 71.7

Balance of Profit carried to Balance Sheet 672.6 903.9

For each share with a face value of Rs. 10, Earning Per Share (EPS) during the year stood at Rs. 14.70, while Book Value per Share stood at Rs. 145.89 as at the end of March 2013. The Directors have the pleasure in recommending dividend at 35% on the fully paid-up equity share capital for the FY 2012-13.

CAPITAL ADEQUACY

Your Bank is Basel-II compliant and hence, computes its Capital to Risk-weighted Assets Ratio (CRAR) in adherence to norms prescribed by the RBI in this regard. Credit Risk is computed using the Standardised Approach, Market Risk is arrived at by using Duration Method of Standardised Approach and Operational Risk exposure is based on Basic Indicator Approach. The equity shareholding of the Government of India increased to 71.72% as at end-March 2013, through infusion of fresh equity capital to the extent of Rs. 555 crore during the FY 2012-13. Against the stipulated RBI norm of 9% for total CRAR and 6% for Tier-I CRAR, your Bank''s total CRAR stood at 13.13% with Tier-I CRAR of 7.68%, as at end-March 2013.

BUSINESS STRATEGY

During FY 2012-13, your Bank undertook various initiatives to drive growth in Retail business segment, with special emphasis on mobilising higher CASA deposits. Your Bank followed a strategy of deepening and widening the corporate banking and investment banking relationships. Simultaneously, it also laid special emphasis on acquiring and expanding its Priority Sector Business, which includes the MSME and Agri business, to broaden its asset portfolio.

KEY BUSINESS INITIATIVES

Pursuant to its aim of targeting a progressively larger retail business portfolio to facilitate a balanced business-mix as also to increase the complement of low-cost funds, your Bank currently offers a bouquet of Liability, Asset, Capital Market and Third Party products, primarily aimed at meeting the customised needs of customers in the Retail Banking segment. The products are periodically reviewed and modifications/ innovations/ customisation of existing products as well as introduction of new products are carried out on a regular basis. This is done in sync with observed and latent customer preferences, both as part of customer-centric service as well as for facilitating growth in business volumes.

Business initiatives in the retail banking space are skilfully driven by enabling expansion in branch network and skilled manpower. Your Bank added 104 new brick and mortar branches during the current financial year. Your Bank, as a part of its customer convenience initiatives, continued to strengthen its alternate delivery channels by expanding its ATM network from 1,542, as on March 31, 2012, to 1,702 on March 31, 2013.

In the retail liability product segment, your Bank continued to design new products aligned to emerging customer needs. Your Bank rationalised existing products and also unveiled other customer-friendly initiatives to, inter alia, increase the complement of low-cost funds. As a tech- savvy, customer-friendly initiative for customers, who prefer to transact over the internet, your Bank enabled on-line opening of Savings Bank accounts in certain categories. Your Bank also successfully launched Online PPF Subscription Facility for its customers in February 2013. A customer maintaining PPF account with the Bank can now view his/ her PPF account details, print the account statement and also transfer funds from Savings Bank account to PPF account through Net Banking.

With a view to promote transactions through electronic mode, your Bank has made NEFT transactions up to Rs. 1 lakh free of charge for all Retail Savings and Current Account customers with effect from June 20, 2012. Further, your Bank has extended NEFT facility to walk-in customers for cash deposits up to Rs. 50,000. A Floating Rate Interest on Retail Term Deposit (FRTD) product was launched in August 2012 to enable your Bank''s customers to leverage the upside of an increase in interest rates and also hedge floating rate advances. Your Bank has been authorised to accept deposits under the Capital Gains Accounts Scheme (CGAS), 1988. Four more currencies have been added to help your Bank''s NRI customers choose from a total basket of nine currencies for booking their FCNR (B) Deposits.

In the retail lending space, a bouquet of initiatives and business enablers were put in place during the year. The objective was to ramp up business volumes in all constituents of the retail lending area in an otherwise difficult year. Your Bank proceeded with missionary zeal to bring about business growth in the socially important Education Loan segment. Towards this end, attractive and bespoke schemes were put out for various constituencies of this segment. In the Auto Loan segment, apart from attractive pricing, special festive campaigns, payout policy regarding Auto Dealers and their functionaries have been made conducive for enhanced sourcing of Auto Loan business and mutually gainful tie-ups with auto dealers/ manufacturers.

Your Bank introduced online loan application facility with tracking system during FY 2012-13, beginning with Home Loans, which was subsequently extended to Auto Loans, Personal Loans and Education Loans. It is expected that the cost-effective, fast and transparent facility will provide an additional and more convenient option to your Bank''s customers to apply for its Loan products. Simultaneously, with a view to improve the turnaround time, transparency and accuracy in loan processing as well as decision making, your Bank has launched an automated Loan Originating System (LOS). LOS is an end- to-end solution for retail loan products, which automates the loan process from login of the proposal till opening of loan account in Finacle Core.

To augment the Bank''s Priority Sector Loans (PSL) business and develop a PSL portfolio, all the personal banking branches of your Bank have been tasked with the responsibility of sourcing and processing Agri and MSME loans, along with Home Loans and Education Loans, qualifying as PSL, from the current financial year.

Your Bank continued to strengthen its Alternate Banking channels like ATMs, internet banking, mobile banking and others to provide customers with enabling options to reduce their dependence on the branch channel, while simultaneously offering 24x7 capabilities. From the Bank''s perspective, they are also cost-effective as the transaction cost is less compared to the branch channel. The Alternate Channels and Merchant Acquisition Business also provided avenues to your Bank for augmenting fee-based income, apart from helping acquire/ deepen existing relationships. Share of Alternate

Banking Transactions total Branch Banking (Financial) transactions increased by 5% during the year to around 49% by March 2013. It helped reduce your Bank''s transaction costs, apart from freeing up soft resources at the Branch for redeployment in product sales.

Your Bank was ranked among the Top 10 Banks having initiated more than 10,000 M-remit (IMPS) mobile- based transactions during the National Payment Corporation of India (NPCI) campaign conducted in August 2012. Your Bank is in the process of launching a comprehensive Mobile Banking solution, which would enable customers to have access to their accounts 24x7 on the move.

Several initiatives were also undertaken by your Bank in the internet banking area during the year. To further enhance security of the internet banking channel from phishing and various other online frauds, your Bank took the lead to expeditiously implement a Digital Signature Certificate (DSC) based authentication solution to strengthen and further secure its Corporate I-net Banking channel. To drive awareness on cyber frauds and its prevention, customers are being educated about security measures taken by the Bank through E-mails and SMS. Inserts are sent in statements on a periodic basis. A pre-Login caution page explaining safe Internet banking practices is also being displayed. A series of Safety measures (Do''s and Don''ts) to use Net Banking is also displayed on the Bank''s website. In addition to channel alerts (ATM, Net Banking and Point of Sale transactions), SMS alerts for all channel transactions, including stop payment confirmation/ cheque(s) deposited and returned are being sent to all Personal Banking Group (PBG)-tagged customers, irrespective of registration for the service, to keep them informed and avoid possible misuse.

Your Bank has constantly endeavoured to cater to the diverse needs of its MSME clients. Your Bank has also developed innovative and user-friendly products and services for the MSME sector to promote their growth in the sphere of industry and services. Considering the importance of credit rating, your Bank has signed Memorandums of Understanding (MoUs) with CRISIL and SME Rating Agency of India (SMERA) to provide credit rating-related services to the MSME clients. Your Bank has also entered into a MoU with Small Industries Development Bank of India (SIDBI) - the apex financial institution for MSME Sector - to offer Loan syndication services to the Sector. Your Bank has also entered into a Memorandum of Co-operation (MoC) with the Export Import Bank of India (Exim Bank) to co-finance, co- arrange and syndicate Rupee and Foreign Currency loans to eligible export-oriented companies, particularly in the MSME sector.

Consequent upon the reclassification of direct agriculture exposure by the Reserve Bank of India in July 2012, the Bank''s focus has veered towards catering to direct retail lending to farmers involved in crop cultivation and allied activities. To reach out to the remotest part of the country, the Bank appointed 35 Business Correspondents/ Business Facilitators (BC/BF). Your Bank continued to encourage formation of farmers'' clubs in the villages covered by rural branches for garnering higher Agri Business. Your Bank''s engagement with farmers and other agriculture intermediaries was also enhanced through participation in various ''Agri Expos'' and ''Loan Melas'' conducted at different locations in the country.

Your Bank''s Corporate Banking Group (CBG) has a strong focus on multi-product sales - both assets and liabilities - to maximise yield. With the reorganisation of Large and Mid-Corporate Group, a unified Corporate Banking Group was formed in June 2012 to cater to all corporate clients with funding requirement of more than Rs. 5 crore. To effectively operationalise the business, CBG has been reorganised into seven regions and operates through 29 Specialised Corporate Branches (SCBs) present across 25 cities.

During FY 2012-13, your Bank opened two new Nostro Accounts in AUD and SGD currencies, with Australia & New Zealand Banking Group Ltd. (ANZ), Melbourne, Australia and United Overseas Bank, Singapore, respectively, for DIFC, Dubai Branch operations. A new Nostro account was also opened in Korean Won (KRW) currency with Standard Chartered First Bank, Seoul, South Korea, for Indian operations. During the year, your Bank opened one new Trade Finance (TF) Centre at Bandra-Kurla Complex (BKC), Mumbai, thereby increasing the total number of TF locations to 40. Your Bank has been establishing inland Letters of Credit (LCs) through Structured Financial Messaging System (SFMS) developed by the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad. Your Bank implemented the SFMS system in all its 40 Specialised Trade Finance Branches for issuance of LCs according to the directive of the Ministry of Finance, with effect from January 1, 2013. SFMS is a highly secure messaging standard developed to serve as a platform for intra-bank and inter-bank applications. Your Bank is also fully ready for issuance of Bank Guarantees using this highly efficient platform. Your Bank is also among the first few institutions to issue Electronic Bank Realisation Certificate of Export Realisation (e-BRC). The process envisages direct uploading of digitally signed e-BRC covering export realisation details to Directorate General of Foreign Trade''s (DGFT) site, thereby making the process of settlement of export-related benefits/ incentives faster and hassle-free for the exporters.

Strengthening relationship with Foreign Banks continued to be your Bank''s priority to enhance Trade Finance Business, which has contributed to the augmentation of fee income.

The Singapore Dollar Bond issue by your Bank was the first benchmark public bond transaction by any Indian entity in the Singapore Dollar bond market, opening up a new source of funding and investor diversification for Indian issuers.

Your Bank became the first in the country to launch an internet-based portal dedicated to retail investors in Government Securities, christened as "IDBI Samriddhi GSEC". To popularise Certificate of Deposit (CD) as a mode of investment among retail investors, your Bank, in August 2012, launched the first online CD portal in the country, called IDBI Samriddhi CD portal. This CD portal helps retail investors subscribe online to CDs issued by your Bank with a minimum of Rs. 1 lakh and in multiples of Rs. 1 lakh thereafter. Your Bank also entered into Global Master Repurchase Agreements (GMRA) with various market participants and was the first Public Sector Bank in the country to undertake Repo deal in corporate bonds.

ORGANISATION STRUCTURE

To execute its strategy of building a robust customer base, facilitate CASA growth, improve customer service and further the cause of inclusive banking, your Bank embarked on a calibrated branch-category wise expansion drive. The Bank added 104 domestic branches during FY 2012-13. Of the domestic network of 1,076 branches, as on March 31, 2013, as many as 274 are located in metropolitan centres, 388 in urban centres, 282 in semi-urban centres and 132 in rural centres, including 21 branches at hitherto unbanked areas; besides, your Bank has one fully operational overseas branch at DIFC, Dubai. Branches at a few locations were relocated and renovated to have a uniform decor across all branches.

Customer relationship and service forms the core of your Bank''s initiatives. Accordingly, your Bank is currently organised on the lines of ''Customer Focused Vertical'' model, capable of delivering improved services. The model has achieved significant success in enhancing customer relationship management. Besides, it has improved credit delivery and brought sharper focus to business lines, which are sustainable and remunerative. Both the retail and corporate business segments of your Bank were further reorganised to enhance business delivery and reduce turnaround time.

BOARD OF DIRECTORS

Your Bank''s Board of Directors is broad-based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956 and the Articles of Association of the Bank. Your Bank''s constitution satisfies the requirements of good corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board Committees, which are constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2013, the Board comprised seven Directors with two Whole-Time Directors (viz., Chairman and Managing Director and Deputy Managing Director), one Non-Executive Director and four Independent Directors. None of your Bank''s Directors are related to each other.

APEX COMMITTEES

The Board has, in all, eleven committees, viz., Executive Committee, Audit Committee, Shareholders''/ Investors'' Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee, Remuneration Committee, Nomination Committee, HR Steering Committee and Recovery Review Committee. These committees oversee various functional aspects of your Bank''s business and operations.

CORPORATE GOVERNANCE

Your Bank is committed to adopt the best practices in corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders'' value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under the Management Discussion and Analysis.

Statement under Section 217(2A) of the Companies Act, 1956

During the entire financial year under review, there were no personnel in your Bank''s services who received remuneration over Rs. 60 lakh per annum. Further, there were no personnel in the service of the Bank for a part of the year who received remuneration in excess of Rs. 5 lakh per month. The provisions of Section 217(1)(e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

a. In the preparation of accounts, the applicable accounting standards had been followed, along with proper explanation relating to material departure.

b. The Directors had adopted such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank at the end of the accounting year and of the profit or loss of your Bank for that year;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities; and

d. The Directors had prepared the accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Board of Directors of your Bank expresses its sincere thanks to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board is equally grateful for advice received from distinguished colleagues, who ceased to be Directors of the Bank during 2012-13. The Board also acknowledges the co-operation and support received from various state governments and other banking/ financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board also takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in the banking domain. The Board is indeed thankful to all such organisations/ agencies for their appreciation of the Bank''s efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment towards improving your Bank''s performance.

(M. S.Raghavan)

Chairman and Managing Director

Place: Mumbai

Date: July 8, 2013

Mar 31, 2012

The Board of Directors of your Bank takes pleasure in presenting its Report on the business and operations of your Bank for the financial year ended March 31, 2012.

During the financial year 2011-12, the performance of your Bank has shown considerable growth on different fronts driven by strategic policy initiatives; expansion in branch network, focus on improved customer service delivery, superior product characteristics, which has resulted in improvement in key profitability indicators. Your Bank was able to widen its customer base both by expanding its outreach, as also by providing a range of innovative products and services. As on March 31, 2012 aggregate deposits and advances of your Bank touched Rs. 2,10,493 crore and Rs. 1,81,158 crore reflecting a growth of 16.63% and 15.32%. The Performance highlights of your Bank for the period under review are presented in Table 1.

Table 1: Financial Highlights

Particulars (Rs. in Crore)

As at year-end 2010-11 2011-12

Capital 984.6 1,278.4

Reserves & Surplus 13,582.0 18,148.7

Deposits 1,80,485.8 2,10,492.6

Borrowings 51,569.6 53,477.6

Other Liabilities & Provisions 6,754.8 7,439.9

Total Liabilities 2,53,376.8 2,90,837.2

Cash & Balances with RBI 19,559.0 15,090.2

Balances with Banks and 1,207.0 2,967.4

Money at Call & Short Notice

Investments 68,269.2 83,175.4

Advances 1,57,098.1 1,81,158.4

Fixed & Other Assets 7,243.5 8,445.8

Total Assets 2,53,376.8 2,90,837.2

For the period 2010-11 2011-12

Total Income 20,684.5 25,488.7

Total Expenses (other than 16,526.6 21,432.5 provisions)

Provisions (other than tax) 1,876.9 1,426.5

Profit Before Tax 2,281.0 2,629.7

Provision for Tax* 630.7 598.1

Profit After Tax 1,650.3 2,031.6

* Net of Current Income Tax and Deferred Income Tax

Profit and Appropriations

During the financial year April 2011 - March 2012, gross income of your Bank increased to Rs. 25,488.7 crore with contribution of interest income at Rs. 23,369.9 crore and other income at Rs. 2,118.8 crore. Interest expenses of Rs. 18,825.1 crore and operational expenses of Rs. 2,607.5 crore, led to total expenditure, excluding provisions and contingencies, of Rs. 21,432.5 crore during FY 2011-12. Total provisions during the year were at Rs. 2,024.6 crore, which includes Rs. 591.9 crore towards provision for bad & doubtful debts and investments, Rs. 263.7 crore towards restructured assets, Rs. 231.9 crore towards incremental prudential provisions for standard assets, and Rs. 598.1crore towards tax. The Profit before Tax (PBT) of your Bank during the FY 2011-12 stood at Rs. 2,629.7 crore. After making a provision of Rs. 598.1 crore towards taxation, Profit after Tax (PAT) amounted to Rs. 2,031.6 crore. The appropriation of PAT as approved by the Board of Directors is given in Table 2.

Table 2 : Appropriation of profits

Particulars (Rs. in Crore)

As at year-end 2010-11 2011-12

Net Profit for the year 1,650.3 2,031.6

Profit brought forward 479.1 615.0

Profit available for 2,129.4 2,646.6

Appropriations

Appropriations 2010-11 2011-12

Transferred to Statutory 413.0 507.9

Reserve

Transferred to Capital Reserve 1.5 17.0

Transferred to General 600.0 750.0

Reserve

Transferred to Special Reserve 100.0 250.0 created and maintained u/s 36(1)(viii) of IT Act, 1961

Dividend

- Equity Shares* 344.6 388.7

- Tax on Dividend** 55.3 60.3

Balance of Profit carried to 615.0 672.6

Balance Sheet

*Dividend on equity shares includes interim dividend of Rs. 2/- per share paid during 2011-12.

**Tax on dividend includes tax on interim dividend paid during 2011-12.

For each share with face value of Rs. 10, Earning Per Share (EPS) during the year stood at Rs. 20.6 and Book Value Per Share stood at Rs. 137.24 as at end-March 2012. The Directors have pleasure in recommending dividend at 35% (including 20% paid on interim basis) on the fully paid-up equity share capital for the financial year 2011-12.

Capital Adequacy

Your Bank is Basel-II compliant and the Capital to Risk weighted Assets Ratio (CRAR) is computed in adherence to norms prescribed by RBI in this regard. Credit Risk is computed using the Standardised Approach, Market Risk is measured by using Duration Standardised Approach and Operational Risk measure is Basic Indicator Approach. During FY 2011-12, the equity shareholding of Government of India has increased to 70.52% as at end-March 2012 through infusion of fresh equity capital to the extent of Rs. 810 crore and conversion of Tier I Bonds of Rs. 2,130.5 crore into equity. Against the stipulated RBI norm of 9% for total CRAR and 6% for core CRAR, your Bank's total CRAR worked out to 14.58 % with Tier-I CRAR of 8.38 % as at end-March 2012.

Vision and Mission Statement

Over the years, your Bank has undergone a number of structural and organizational changes while transforming itself into a universal commercial bank. The journey of your Bank has always encompassed enhancing value for all its stakeholders. In order to reflect of the current ethos of your Bank, new Vision and Mission Statement have been crafted. The new vision statement of your Bank is "To be the most preferred and trusted bank enhancing value for all stakeholders". With the new vision statement, your Bank has formalized a goal to share a common dream with all the stakeholders of the Bank.

Previously, there was no separate Mission statement as the Vision statement itself incorporated the mission of the Bank. Also, in consonance with the change in the Vision Statement, a new Mission statement was crafted, in line with the organization's long-term and short-term goals. Accordingly, the mission statement of your Bank is:

- Delighting customers with our excellent service and comprehensive suite of best-in-class financial solutions;

- Touching more people's lives with our expanding retail footprint while maintaining our excellence in corporate and infrastructure fi nancing;

- Continuing to act in an ethical, transparent and responsible manner, becoming the role model for corporate governance;

- Deploying world class technology, systems and processes to improve business efficiency and exceed customers' expectations;

- Encouraging a positive, dynamic and performance- driven work culture to nurture employees, grow them and build a passionate and committed work force;

- Expanding our global presence;

- Relentlessly striving to become a greener bank.

The mission statement which charts the route map has seven key elements which will make the new vision come to reality. Your Bank will strive to provide best in class services and solutions, and maintain high standards of ethical values. Your Bank will be a responsible bank that contributes to social sustainability in all its activities. The focus of your Bank would be on continuous growth and it will continue to delight every customer by its unique and innovative products and services and pioneering efforts.

Business Strategy

Your Bank's strategy during the year under review focused on aggressive growth in Retail lending and repositioning of delivery channels to realize higher CASA deposits. At the same time, your Bank sought to maintain its leadership position in the corporate banking and investment banking space, so as to meet the requirements of the corporate sector. Specific focus was laid on cross selling of your Bank's entire product and service offerings across the entire range of customers, so as to build sustainable and stable relationships. Your Bank's strategy during the year resulted in improvement in various profitability parameters and consolidated its business position across various benchmarks, so as to bring them more in line with the prevailing industry standards.

Key Business Initiatives

Your Bank continued to target a progressively larger retail business portfolio to facilitate a more balanced business mix, in keeping with its intended positioning as a full- service new generation commercial bank. Further, in order to build a strong foundation for sustainable growth on long term basis, as also ensure compliance with regulatory norms, your Bank took initiatives to build up its priority sector lending portfolio. Your Bank has been a pioneer in the field of Corporate Finance for the last nearly five decades. Your Bank has maintained its focus on corporate banking and laid Specific emphasis on cross-selling of your Bank's diverse range of products and services. Your Bank increased substantially its presence in government business and enabled higher direct and indirect tax collections.

Your Bank offers a bouquet of Liability, Asset, Capital Market and Third Party products aimed at meeting the customized needs of customers in the Retail Banking segment. Your Bank introduced a number of products in the pre-paid cards arena during the year under review. Your Bank has initiated a project on facilitating usage of ATM network to Co-operative Banks and RRBs on National Financial Switch (NFS) network in association with National Payments Corporation of India (NPCI). This would enable Co-operative Banks and RRBs to issue ATM cards to their account holders and get connected to the NFS network to have access to more than 84,000 ATMs across India.

Your Bank entered into MOUs with several reputed educational institutions across India for granting educational loans to eligible students during the year. Your Bank is also offering additional concessions to girl students from SC/ST and Minority communities.

Your Bank had launched its Internet Banking services way back in October 2001. Since then, the ambit of this channel has progressively broadened to include several value-added services. Keeping in view the need to secure online shopping/e-commerce based transactions initiated through the internet banking channel from phishing related frauds, an Online Shopping Password (OSP) security feature has been introduced by the Bank from December 2011. Your Bank also introduced an online password-generation facility for the Retail Net Banking customer, to instantly create their own login and transaction password and also set their access profile.

As part of a Financial Inclusion project in four Talukas of Gujarat, your Bank has, inter alia, launched a specially designed Co-branded Photo ATM Card on 'Rupay' Platform. The Card can be used for ATM transactions at your own as well as other Bank ATMs that are members of National Payment Corporation of India (NPCI).

Your Bank has constantly endeavored to cater to the diverse needs of its MSE clients and has continuously been developing customized MSE products. During FY 2011-12, your Bank introduced a new product, viz., "Line of Credit to Vendors of Corporates" that augments the liquidity position of MSE vendors. Considering the growing importance of credit rating for MSE clients, which enhances the confidence in MSEs while dealing with financial institutions, banks and corporates for their fi nancial needs and business opportunities, your Bank signed an MoU with Credit Analysis and Research Ltd. (CARE) for credit rating of the MSE customers at preferential rate.

Your Bank has put in place a state-of-the-art Technology Platform which is supporting the Government's dual objective of improvement of tax collection efficiency and e-governance. Your Bank had gone live in January 2012 in providing online duty payment services in respect of Customs Duty for all the 103 Electronic Data Interchange (EDI) locations across the country. With this development, taxpayers are now in a position to route all of their Central Taxes and Duties payments through IDBI Bank, making your Bank an important Agent in its pursuit of partnering the Government of India in enabling online tax payments and enhancing the tax contribution to the Exchequer.

Your Bank became the first ever Bank in the country to launch an internet based portal dedicated to retail investors in Government Securities. The portal, named "IDBI Samriddhi G-Sec" has been received favourably by the investor class. This trend setting initiative by your Bank offers retail investors the opportunity to benefit from the safety, liquidity and risk free returns that Government Securities offer.

Your Bank became the first entity from India as also other emerging markets to access foreign currency funds in the Dim Sum Market. In November 2011, your Bank raised Renminbi (RMB) 650 million 4.5% fixed rate Dim Sum Bonds for 3 year maturity. This issue provides testimony to the faith reposed by global fixed income investors in your Bank.

Organizational Structure

Your Bank has continued its thrust on improving organizational structure, which places customer relationship and service at the centre of all banking initiatives. Accordingly, your Bank is currently organized on the lines of "customer focused vertical" model, capable of delivering improved services. The model has achieved significant success in enhancing customer relationship management, improving credit delivery and bringing sharper focus to business lines which are sustainable and remunerative.

With the addition of 157 branches during FY 2011-12, including Specialized Corporate Branches, the total number of domestic branches went up to 972 as on March 31, 2012 in addition to one overseas branch at DIFC, Dubai. Of the domestic branch network, 264 are located in metropolitan centres, 377 in urban centres, 236 in semi-urban centres and 95 in rural centres.

Board of Directors

Your Bank's Board of Directors is broad based and its constitution is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956, the Articles of Association of the Bank and satisfies the requirements of good corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board Committees constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2012, the Board of Directors of your Bank comprised of six Directors with two Executive Directors (including the Chairman & Managing Director and the Deputy Managing Director), one Non Executive Director and three Independent Directors. No Director on the Board of your Bank is in any way related to any other Director on the Board of the Bank.

Apex Committees

The Board has in all eight committees, viz., Executive Committee, Audit Committee, Shareholders'/Investors' Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee and Remuneration Committee, to oversee various functional aspects of the Bank's business and operations.

Corporate Governance

Your Bank is committed to adopting the best practices in the area of corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders' value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under the Management Discussion and Analysis.

Statement under Section 217(2A) of the Companies Act, 1956

There were no personnel in the services of the Bank for the whole year, who were in receipt of remuneration of over Rs. 60 lakh per annum. Further, there were no personnel, who were in the service of the Bank for part of the year, received remuneration in excess of Rs. 5 lakh per month for the period they were in the service of the Bank.

The provisions of Section 217(1) (e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

Directors' Responsibility Statement

The Board of Directors hereby declares and confirms that:

a. in the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure;

b. the Directors had adopted such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank at the end of accounting year and of the profit or loss of your Bank for that year;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the accounts on a going concern basis.

Acknowledgements

The Board of Directors of your Bank expresses its sincere thanks to the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities for their valuable co-operation and guidance. The Board also acknowledges the co-operation and support rendered by various State Governments and other banking/financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in banking domain. The Board indeed is thankful to all such organizations/agencies for their appreciation of the Bank's efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank's performance.

Place : Mumbai R. M. Malla

Date : April 21, 2012 Chairman & Managing Director

Mar 31, 2011

Dear Members,

The Board of Directors of your Bank takes pleasure in presenting its Report, reflecting the business and operations of your Bank for the financial year ended March 31, 2011.

During the financial year 2010-11, the operations of your Bank witnessed considerable progress driven by strategic policy realignments, focus on customer delight, superior product characteristics, service delivery among others, which consequentially led to improvement in business and key profitability indicators. The approach per se reflects a paradigm shift in banking space, enabling your Bank to expand its products and services range, availed by increased number of customers which we value the most. As on March 31, 2011 aggregate deposits and advances of your Bank reached Rs 1,80,485.8 crore and Rs 1,57,098.1 crore respectively. Performance highlights of your Bank for the period under review are presented in Table 1.

Table 1 : Financial Highlights

Particulars (Rs crore)

As at year-end 2009-10 2010-11

Capital 724.9 984.6

Reserves & Surplus 9,438.4 13,582.0

Deposits 1,67,667.1 1,80,485.8

Borrowings 47,709.5 51,569.6

Other Liabilities & Provisions 8,032.9 6,754.8

Total liabilities 2,33,572.8 2,53,376.8

Cash & Balances with RBI 13,903.5 19,559.0

Balances with Banks and Money 679.4 1,207.0 at Call & Short Notice

Investments 73,345.5 68,269.2

Advances1, 38,201.8 1,57,098.1

Fixed & Other Assets 7,442.6 7,243.5

Total Assets 2,33,572.8 2,53,376.8

For the Period 2009-10 2010-11

Total income 17,563.0 20,684,5

Total Expenses(other than provoisions) 14,836.6 16,526.6

Provisions (other than tax) 1,681.7 1,876.9

Profit Before Tax 1,044.7 2,281.0

Provision for tax * 13.6 630.7

Profit after Tax 1,031.1 1,650.3

Profit and Appropriations

During the financial year April 2010 - March 2011, total income of your Bank increased to Rs 20,684.5 crore with the contribution of interest income at Rs 18,600.8 crore and other income at Rs 2,083.7 crore. Interest expenses of Rs 14,271.9 crore and operational expenses of Rs 2,254.7 crore, led to total expenditure, excluding provisions and contingencies, ofRs 16,526.6 crore during FY 2010-11. Total provisions during the period remained at Rs 2,507.6 crore, comprising Rs 1650.1 crore towards bad & doubtful debts and investments, Rs 122.6 crore towards restructured assets, Rs 104.2 crore towards incremental prudential provisions for standard assets, and Rs 630.7 crore towards tax.

Profit Before Tax (PBT) of your Bank during the FY 2010-11 came toRs 2281.0 crore. After making a provision ofRs 630.7 crore towards taxation, Profit After Tax (PAT) amounted to Rs 1650.3 crore. Appropriation of PAT as approved by the Board of Directors is given in Table 2.

Table 2 : Appropriation of Profits

Rs Crore

Parlitulars 2009-10 2010-11

Net Profit(Loss) for the year 1,031.1 1,650.3

Profit (Loss) brought forward 71.2 470.4

Profit available for 1,102.3 2,120.7 appropriations

Appropriations

Transferred to Statutory Reserve 258.0 413.0

Transferred to Capital Reserve - 1.5

Transferred to General Reserve 100.0 600.0

Transferred to Special Reserve 25.0 100.0 created and maintained u/s 36(1)(viii)of IT Act, 1961

Dividend

- Equity Shares 217.4 344.6

- Tax on Dividend 31.5 55.3

Balance of Profit carried to 470.4 606.3 Balance Sheet

For each share with face value of Rs 10, Earning Per Share (EPS) during the year stood at Rs 18.4 and Book Value Per Share stood at Rs 128.4 as at end-March 2011. The Directors have pleasure in recommending dividend at 35% on the fully paid-up equity capital for the financial year 2010-11.

Capital Adequacy

Your Bank is Basel-ll compliant and the Capital to Risk- weighted Assets Ratio (CRAR) is computed in adherence to norms prescribed by RBI in this regard. Credit Risk is computed using the Standardized Approach, Market Risk is arrived by using Duration Method of Standardized Approach and Operational Risk exposure is based on Basic Indicator Approach. During FY 2010-11, Government of India infused fresh equity capital to the extent of Rs 3119.04 crore, thereby increasing its equity holding to 65.13% as at end-March 2011. Against the stipulated RBI norm of 9% for total CRAR and 6% for core CRAR, your Bank's total CRAR worked out to 13.64% with Tier-I CRAR of 8.03% as at end-March 2011.

Business Strategy

The Bank's strategy covered a very aggressive scale up of relationship base and product offerings with elevated features. Suitable measures have been undertaken along with infrastructure repositioning, so as to realize more amounts of CASA and other retail deposits. The Bank, in its quest to granularize its loan book, plans to build priority sector lending and rfnprove upon composition of corporate- retail loans. Investment Banking continued to be a focus area which contributed significantly to growth in fee based income. Your Bank's strategy during the year resulted in improving its profitability parameters and consolidating its business parameters so as to bring them more in line with the prevailing industry benchmarks.

New Business Initiatives

Fresh business efforts undertaken during the fiscal principally aim to impart value and comfort to our increasing clientele, derive associated benefits and realize the strategic vision of escalating your Bank to a sustainable growth path. The financial year 2010-11, would be remembered in the Indian Banking space wherein your Bank, in its quest "delight for its customers" freed all charges on CASA and retail deposit accounts. This shows improved product characteristics of the Bank's deposit products over its competitors. The measure empowers your Bank to optimize its risk-return matrices associated with its business portfolio.

The Bank has also provided facility of making on-line payments for e-commerce transactions though its debit card. A new variant debit card was launched exclusively for women customers. In order to encourage customers with regard to usage of debit card, a cash back scheme for debit card usage was also offered. Within the regulatory framework, cash withdrawal was allowed on debit card at various merchant establishments.

The Bank is increasingly committed to support government initiatives offering financial services to Economically Weaker Sections (EWSs) and Lower Income Groups (LIG) of society and accordingly offered, along with others, Interest Subsidy Scheme for Housing the Urban Poor (ISHUP). In its efforts to ensure improved financial inclusion, your Bank has signed MOU with Tribal Development Department, Government of Gujarat and is exploring similar partnership with other State Governments. The Bank has also signed MOU with Unique Identification Authority of India (UIDA!) for acting as a registrar.

Your Bank understands various needs of the MSME clients and is always on the lookout to offer new products that are customized to take care of such needs. During FY2010-11, your Bank launched 'Loan Against Property' for the MSMEs to unlock value of their assets/properties. 'SME Smart Line of Credit was also introduced so that MSMEs could take advantage of emerging business opportunities. In addition, your Bank implemented the 'Artisan Credit Card' scheme of Indian Banks' Association (IBA) to take care of the credit needs of the artisan community of the nation. With a view to move towards cleaner and green energy sources, your Bank joined hands with World Resource Institute (WRI), USA, one of the top international research institutes on a non-exclusive basis in developing a loan product for implementation of Energy Saving projects.

Apart from these, your Bank has taken steps to offer tailor- made, faster solutions to the MSME clients. In this spirit, and to further enrich the MSME loan basket, your Bank has tied-up with SIDBl in an exclusive arrangement to jointly finance MSME units, initially in 10 centres viz., Ahmedabad, Bangalore, Chennai, Coimbatore, Delhi, Indore, Jaipur, Lucknow, Ludhiana and Rajkot, subsequently to be rolled out across the country.

A series of new initiatives / projects were implemented during the year in order to improve Turn Around Time (TAT), soften cost and provide error free services in various facets of our operations. A new locker management system was launched linked to Core Banking software of the Bank. It helps the Bank to have online position of locker availability and rentals at any given point of time.

Your Bank has also launched a software for Complaint Resolution Management (CRM) at branches. An escalation mechanism has been built in the CRM module whereby if the complaint is not resolved within the stipulated time, the same is forwarded to the Customer Care Centre at Corporate Office for further action.

The Bank has introduced a new system of electronic registers in bilingual form at branches which is linked to Core Banking Software. This module was launched in order to achieve significant reduction in the cost as well as paper work.

Your Bank has received ISO 9001:2008 certification for all its Currency Chests. A new Currency Chest was opened at Kochi taking the number of Currency Chests of your Bank to six.

The Bank has also received ISO 9001:2008 certification for all its Centralised Clearing Units (CCUs). Equipped with ISO 9001:2008 Certification for its Centralised Operations, Currency Chests and CCUs, IDBI Bank is in the unique position to have its entire operations for retail banking as ISO 9001:2008 certified. This apart, IDBI Bank has also implemented Lean Six Sigma Project for its Centralised Operations, another feather in its cap, to provide error-free and timely services to its customers.

Keeping pace with the ever increasing work load in retail assets portfolio and also to take care of the additional volumes arising out of merger of IDBI Home Finance Ltd. with IDBI Bank, your Bank has installed a state-of-the- art software for management of post-dated cheques. The system will facilitate the Bank to handle more number of instruments with reduced Turn Around Time.

Organizational Structure

Your Bank has continued thrust on improving organizational structure, which values customer relations as the epitome of banking. Accordingly, your Bank is currently organized on the lines of "customer focused vertical" model, capable of delivering improved services. The model has achieved significant success in enhancing customer relationship management, improving credit delivery and bringing sharper focus to business lines which are sustainable and remunerative.

With the addition of 107 branches during FY2010-11, including Specialized Corporate Branches, total number of domestic branches went up to 815 as on March 31, 2011 in addition to an overseas branch at DIFC, Dubai. Of the domestic branch network, 238 are located in metropolitan centres, 307 in urban centres, 184 in semi-urban centres and 86 in rural centres. In order to ensure improved operating domain, branches at a few locations were relocated and renovated to provide fresh look and feel, similar to other branches of the Bank. The Bank constantly endeavours to expand its branch network to execute its strategy of building sufficiently larger customer base, improved customer service and improved CASA contribution. Your Bank also has plans to increase the number of Specialized Corporate Branches and Loan Processing Centers in retail segments.

Board of Directors

Your Bank's Board of Directors is broad based and constitution thereof is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956, the Articles of Association of the Bank and satisfy the requirements of good corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions directly as well as through various Board Committees constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2011, the Board comprised of 10 Directors with two Executive Directors (including Chairman), two Non Executive Directors and six Independent Directors. Shri R.M. Malla, Chairman & Managing Director as Executive Chairman, Shri B.P. Singh, Dy. Managing Director as Whole Time Director, Shri Rakesh Singh and Shri R.P. Singh, Central Government Officials as Non Executive Directors, Shri Analjit Singh, Smt. Lila Firoz Poonawalla, Shri K. Narasimha Murthy, Shri H.L. Zutshi, Shri Subhash Tuli and Dr. B.S. Bisht as Independent Directors constitute the Board.

No Director on the Board of your Bank is in any way related to any other Director on the Board of the Bank.

Apex Committees

The Board has in total eight committees, namely, Executive Committee, Audit Committee, Shareholders'/Investors' Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee and Remuneration Committee.

Corporate Governance

Your Bank is committed to adopting the best practices in the area of corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of stakeholders' value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under Management Discussion and Analysis.

Statement under Section 217(2A) of the Companies Act, 1956

There were no personnel in the services of the Bank for the whole year, who were in receipt of remuneration of over Rs 60 lakh per annum. Further, no personnel, who were in the service of the Bank for part of the year, received remuneration in excess of Rs 5 lakh per month for the period they were in the service of the Bank.

The provisions of Section 217(1)(e) of the Act relating to conservation of energy and technology absorption do not apply to your Bank.

Directors' Responsibility Statement

The Board of Directors hereby declares and confirms that:

i. in the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

ii. the Directors had adopted such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank at the end of accounting year and of the profit or loss of your Bank for that year.

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities.

iv. the Directors had prepared the accounts on a going concern basis.

Acknowledgements

The Board of Directors of your Bank accords immense value to the direction, co-operation and guidance extended by Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/ Regulatory Authorities. The Board also acknowledges the co- operation and support rendered by the State Governments and other banking/financial institutions. The Board thanks various multilateral institutions and international banks/ institutions for their periodic support. The Board takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. During the financial year, the Bank has received various recognitions and accolades for its excellence in banking domain. The Board indeed is thankful to all such organizations/agencies for their appreciation to the Bank's efforts. The Board appreciates the sincere and devoted services displayed by its entire staff and highly values their commitment in improving your Bank's performance.

Place : Mumbai R. M. Malla

Date : April 19, 2011 Chairman & Managing Director

Mar 31, 2010

The Board of Directors of your Bank has the pleasure of presenting its Report on the business and operations of your Bank for the financial year ended March 31, 2010.

Performance of your Bank improved significantly on many fronts primarily enabled by measures like organizational restructuring, strategic policy changes and improved monitoring mechanisms. During the financial year 2009-10, business of the Bank, comprising deposits and advances, crossed Rs.3,00,000 crore. Aggregate deposits of your Bank reached Rs.1,67,667 crore with a growth of 49.2% and total advances were Rs.1,38,202 crore recording a growth of 33.6%. Performance highlights of your Bank for the period under review are presented in Tabid.

Profit and Appropriations

With interest income of Rs.15,272.6 crore and other income of Rs.2,290.9 crore, gross income of your Bank

Table.1. Financial Highlights

(Rs.crore)

Particulars

As at year-end 2008-09 2009-10

Capital 724.8 724.9

Reserves & Surplus 8,699.1 9,440.0

Deposits 1,12,401.0 1,67,667.0

Borrowings 44,417.0 47,709.5

Other Liabilities & Provisions 6,160.4 8,030.6

Total Liabilities 1,72,402.3 2,33,572.0

Cash & Balances with RBI 8,591.5 13,903.5

Balances with Banks and 2,627.8 679.4 Money at Call & Short Notice

Investments 50,047.6 73,345.4

Advances 1,03,444.5 1,38,201.8

Fixed & Other Assets 7,690.9 7,441.9

Total Assets 1,72,402.3 2,33,572.0

For the period 2008-09 2009-10

Total Income 13,021.6 17,563.5

Total Expenses (other than 11,643.7 14,836.6 provisions)

Provisions (other than tax) 392.3 682.2

Profit Before Tax 985.6 1,044.7

Provision for Tax 127.1 13.6*

Profit After Tax 858.5 1,031.1

*Net of Current Income Tax of Rs. 346.3 crore and Deferred Income Tax of Rs.(-)332.7 crore

increased to Rs.17,563.5 crore during the financial year April 2009 - March 2010. Total expenditure of your Bank during FY 2009-10, excluding provisions and contingencies, came to Rs.14,836.6 crore, consisting Rs.13,005.2 crore of interest expenses and Rs.1,831.4 crore of operational expenses. With the provision of Rs.978.7 crore towards bad & doubtful debts and investments, Rs.599.3 crore towards restructured assets, Rs.104.2 crore towards incremental prudential provisions for standard assets, and Rs.13.6 crore towards tax, total provisions during the period amounted to Rs.1,695.8 crore.

Your Banks working during the year resulted in a Profit Before Tax (PBT) of Rs.1,044.7 crore. Considering a provision of Rs.346.3 crore towards taxation and deferred tax credit of Rs.332.7 crore, Profit After Tax (PAT) amounted to Rs. 1,031.1 crore. Appropriation of PAT as approved by the Board of Directors is given in Table 2.

Table.2.Appropriation of Profits

(Rs.crore) Particulars 2008-09 2009-10

Net Profit/(Loss) for the year 858.5 1,031.1

Profit/(Loss) brought forward 21.0 71.2

Profit available for 879.5 1,102.3 appropriations

Appropriations

Transferred to Statutory 215.0 258.0 Reserve

Transferred to Capital 106.3 - Reserve

Transferred to General 250.0 100.0 Reserve

Transferred to Special 25.0 25.0 Reserve created and maintained u/s 36(1)(viii) of IT Act, 1961

Dividend

- Equity Shares 181.2 217.4

- Tax on Dividend 30.8 31.5

Balance of Profit carried to 71.2 470.4

Balance Sheet

For each share with face value of Rs.10, Earning Per Share (EPS) during the year stood at Rs.14.2 and Book Value Per Share stood at Rs. 113.1 as at end-March 2010. The Directors have the pleasure of recommending dividend at 30% on the fully paid-up equity capital for the financial year 2009-10.

Capital Adequacy

Your Bank is Basel-ll compliant and therefore, computes its Capital to Risk-weighted Assets Ratio (CRAR) in adherence to norms prescribed by RBI in this regard. Credit Risk is computed using the Standardized Approach, Market Risk is arrived by using Duration Method of Standardized Approach and Operational Risk exposure is based on Basic

Indicator Approach. Against the stipulated RBI norm of 9% for total CRAR and 6% for core CRAR, your Banks total CRAR worked out to 11.31 % with Tier-I CRAR of 6.24% as at end-March 2010.

Business Strategy

Your Bank has followed a strategy of deepening and widening its existing relationships in the large corporate sector, while gradually widening its client base in the mid- corporate sector. Simultaneously, special emphasis was laid on quick expansion of its base in the SME segment which has a large potential both for asset as well as liability relationships. Retail base would be steadily expanded commensurate with expansion in branch network and development of stable back office systems. Investment Banking continued to be a focus area which contributed significantly to growth in fee based income.

New Business Initiatives

A series of innovative steps were introduced during the financial year in line with Banks strategy. The Bank began its overseas operations by opening its first foreign branch in Dubai. A dedicated Institutional Liability & Product Development team has been set up, presenting customized value added current account products, to bolster current account. Several new products were developed with added features, namely Salary Account with Overdraft Facility and Scheme for providing Subordinated Debt. Also existing products for lending to Commercial Real Estate Sector & NBFCs and Mibor Linked Loans have been modified to make them more competitive.

In line with its vision of being the global financial conglomerate, your Bank during the fiscal has floated a wholly owned Asset Management Company (AMC) to undertake Mutual Fund (MF) business. The AMC has already launched its first product "IDBI Nifty Index Fund" during May 2010.

In order to explore value in financing infrastructure and develop associated synergy, your Bank proposes to float a subsidiary/JV to undertake private equity business. In this direction, your Bank has approached RBI for necessary approval.

During the financial year 2009-10, your Bank has opened a currency chest at Panchkula taking the total number of currency chest to five. The Bank is planning to set up some more Currency Chests in coming years commensurate with the expansion of branch network and growth of business.

Your Bank opened its first Cash Processing Centre (CPC) at Mulund, Mumbai, during the financial year 2009-10, which is offering support to 63 branches located in and around Mumbai, by providing processed cash and ATM fit notes. The second CPC has been made operative at New Delhi since March 17, 2010. Encouraged by good client response for these two CPCs, the Bank is in the process of setting up few more CPCs during 2010-11.

Your Banks Centralized Operations received the coveted ISO 9001:2008 certificate of registration in July 2009. ISO 9001:2008 is an international quality management standard developed for companies to demonstrate their ability to provide services that meet statutory and regulatory requirements and implement a planned quality management system. The certification is only awarded to companies those ensure stringent regulations for quality management systems and demonstrate highly effective operational processes, commitment to continuous quality improvement and a focus on customer satisfaction. Being among the worlds few companies and the only Centralized Operations in the country to receive the newly updated

ISO 9001:2008 certification demonstrates IDBI Banks robust systems and continued commitment to quality in the operations and back-office processes.

Organizational Structure

Your Bank is currently organized on the lines of "customer focused vertical" model which was introduced in the previous year. The model has achieved significant success in enhancing customer relationship management, improving credit delivery and bringing sharper focus on profitable business.

Your Bank opened 199 new branches, including Specialized Corporate Branches during the financial year, taking the total number of domestic branches to 708 as on March 31, 2010. Of these, 210 are located in Metropolitan centres, 281 in urban centres, 144 in semi-urban centres and 73 in rural centres. Further, 30 existing branches have been relocated and another 40 branches have been renovated to bring them on par with look and feel of other branches of the Bank. The Bank has continued thrust on expanding branch network to support its strategy to build larger customer base, improved customer service and higher CASA contribution. In addition, the Bank has the plan of increasing the number of Specialized Corporate Branches and Loan Processing Centers in retail segments.

Board of Directors

Banks Board of Directors is broad based and constitution thereof is governed by the provisions of the Banking Regulation Act, 1949, the Companies Act, 1956, the Articles of Association of the Bank and satisfies the requirements of corporate governance as envisaged in the Listing Agreement with the Stock Exchanges. The Board functions through itself as well as various Board Committees constituted to provide focussed governance in important functional areas of the Bank.

As on March 31, 2010, the Board comprised of 10 Directors with 2 Executive Directors (including Chairman), two Non Executive Directors and six Independent Directors. Shri Yogesh Agarwal, Chairman & Managing Director as Executive Chairman, Shri B.P. Singh, Dy. Managing

Director as Wholetime Director, Shri G.C. Chaturvedi and Shri R.P. Singh, Central Government officials as Non Executive Directors, Shri Analjit Singh, Smt. Lila Firoz Poonawalla, Shri K. Narasimha Murthy, Shri H.L. Zutshi, Shri SubhashTuli and Dr. Sailendra Narain as Independent Directors constitute the Board.

No Director on the Board of your Bank is in any way related to any other Director on the Board of the Bank.

Apex Committees

The Board has in total eight committees, namely, Executive Committee, Audit Committee, Shareholders/Investors Grievance Committee, Frauds Monitoring Committee, Risk Management Committee, Customer Service Committee, Information Technology Committee and Remuneration Committee.

Corporate Governance

Your Bank is committed to adopting the best practices in the area of corporate governance. Your Bank believes that proper corporate governance is not just a requirement for regulatory compliance, but also a facilitator for enhancement of shareholders value. The details of corporate governance practices followed in your Bank are given in this Annual Report as a separate section under Management Discussion and Analysis.

Disclosure regarding Remuneration of Employees under Section 217(2A) of the Companies Act, 1956

There were no personnel in the services of the Bank for the whole year, who were in receipt of remuneration of over Rs.24 lakh per annum. Further, no personnel, who were

in the service of the Bank for part of the year, received remuneration in excess of Rs.2 lakh per month for the period they were in the service of the Bank.

The provisions of Section 21 7(1 )(e) of the Act relating to conversion of energy and technology absorption do not apply to your Bank.

Directors Responsibility Statement

The Board of Directors hereby declares and confirms that:

i. in the preparation of accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

ii. the Directors had adapted such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank at the end of the accounting year and of the profit or loss of your Bank for that period.

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the regulatory provisions, for safeguardingthe assets of your Bank and for preventing and detecting fraud and other irregularities.

iv. the Directors had prepared the accounts on a going concern basis.

Acknowledgements

The Board of Directors of your Bank acknowledges the direction, co-operation and guidance extended by Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and all other Statutory/Regulatory Authorities. The Board places its sincere thanks to the State Governments and other banking/ financial institutions for their cooperation and support. The Board expresses deep sense of appreciation to various multilateral institutions and international banks/ institutions for their timely support. The Board takes this opportunity to thank all its shareholders and customers for extending their support during the year and looks forward to their continued association in the years ahead. The Board highly applauds the commitment and responsible services displayed by the Banks employee in taking up the Bank to its prominent position.

Place : Mumbai Yogesh Agarwal

Date : April 30, 2010 Chairman & Managing Director

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