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Directors Report of RBL Bank Ltd.

Mar 31, 2023

The Board of Directors of RBL Bank Limited ("the Bankâ) take great pleasure in presenting the 80th Annual Report of the Bank along with the Audited statement of accounts for the financial year ended March 31, 2023.

A. FINANCIAL PERFORMANCE

The comparative standalone financial performance of the Bank for the financial year ended March 31, 2023 with that of March 31, 2022 is summarized in the following table:

Particulars	FY 23	FY 22	(R in crore) Change(%)
Advances (Net)	70,209	60,022	17.0%
Deposits	84,887	79,007	7.4%
Net interest income	4,451	4,027	10.6%
Other income	2,490	2,340	6.4%
Net total income	6,941	6,367	9.0%
Operating expenses	4,738	3,622	30.8%
Provisions and contingencies	1,320	2,820	(53.2)%
Net profit	883	(75)	-
Gross NPA ratio	3.37%	4.40%	-
Net NPA ratio	1.10%	1.34%	-
Capital Adequacy Ratio	16.92%	16.82%	-
Business per employee	14.06	15.02	(6.4)%
Business per branch	299.99	276.95	8.3%
Appropriations
Transfer to Statutory Reserve	221	-	-
Transfer to Capital Reserve	3	43	-
Transfer to Revenue and Other Reserves	200	-	-
Transfer to Investment Fluctuation Reserve	187	(36)	-
Transfer to Special Reserve	10	-	-
Dividend for the year, including tax thereon	-	-	-

Analysis Report which forms an integral part of the Annual Report.

C. FINANCIAL DISCLOSURES Dividend

In view of the overall performance of the Bank, your Directors are pleased to recommend a dividend of R 1.50 (15%) per Equity (ordinary) Share of the face value of R 10/- each for the financial year ended March 31,2023.

In terms of the Income Tax Act, 1961, the dividend income is taxable in the hands of the Members. Therefore, the dividend will be paid to the Members after deduction of applicable tax, if any.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, (SEBI Listing Regulations), the Bank has formulated

The Bank posted a net total income of R 6,941 crore and net profit of R 883 crore for the financial year ended March 31, 2023 as against a net total income of R 6,367 crore and net loss of R 75 crore for the financial year ended March 21, 2022.

The Bank proposes to transfer an amount of R 221 crore to the Statutory Reserve. An amount of R 226 crore is proposed to be retained in the Statement of Profit and Loss.

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

B. BUSINESS UPDATE AND STATE OF AFFAIRS OF THE BANK

The details on the business update and state of affairs of the Bank are separately provided in Management Discussion and

and adopted a Dividend Distribution Policy duly approved by the Board and the same is available on the website of the Bank at https://ir.rblbank.com/codes-and-policies.aspx.

The Policy aims at balancing the dual objectives of appropriately rewarding shareholders through dividends and retaining capital in order to maintain a healthy capital adequacy ratio to support future growth.

Share Capital

During the financial year ended March 31,2023, your Bank added ? 0.71 crore (including premium) through allotment of 54,300 equity shares pursuant to exercise of stock options by the employees of the Bank under various Employees Stock Option Plans.

Consequent to the above, the paid-up Equity Share Capital of your Bank increased by ? 0.05 crore and share premium increased by ? 0.65 crore.

The paid up Equity Share Capital of the Bank as on financial year ended March 31, 2023 stood at ? 599.57 crore divided into 59,95,68,063 equity shares of ? 10/- each.

During the financial year under review, there has been no change in the Authorized share capital of the Bank. The Authorized share capital of the Bank as at March 31, 2023 stood at ? 700 crore divided into 700,000,000 equity shares of ? 10/- each.

During the financial year under review, the Bank has not issued any sweat equity shares or equity shares with differential voting rights.

The Equity Shares of your Bank continue to remain listed on BSE Limited and National Stock Exchange of India Limited.

The Bank has paid the listing fees as payable to BSE Limited and National Stock Exchange of India Limited for the financial year ended March 31,2023.

Debt Securities

Pursuant to the authority granted vide the resolution passed by the Members of the Bank at the 78th Annual General Meeting held on September 21, 2021, for borrowing / raising of funds by issue of debt securities, the Bank in the first quarter of financial year ended March 31, 2023 raised funds by issue of USD denominated unsecured Tier 2 subordinated notes in accordance with the Reserve Bank of India''s Master Circular -Basel III Capital Regulations dated April 1, 2022, as amended from time to time ("Basel III Capital Regulationsâ) aggregating up to USD 100 million (equivalent ? 776.98 crore) [the "Notes"] offered under Section 4(a)(2) of the United States Securities Act of 1933, as amended to United States International Development Finance Corporation ("USDFC").

The Unsecured Redeemable Non-Convertible Debentures ("NCDsâ) issued by the Bank on a private placement basis aggregating to ? 330 crore which were listed on BSE Limited were fully redeemed on April 15, 2023, with the redemption of said NCDs, the Bank has redeemed all its outstanding NCDs listed with BSE Limited and as on date of this report there are no outstanding NCDs listed with the Stock Exchanges.

Capital Adequacy Ratio

Your Bank is well capitalized with a Capital Adequacy Ratio ("CARâ) of 16.92 % as on March 31,2023, as against the minimum requirement of 11.50%. Your Bank complies with the Capital Adequacy guidelines of Reserve Bank of India, also known as ''Basel III Guidelines''.

Net Worth

Your Bank''s net worth as on March 31, 2023 is ? 12,996.26 crore. It comprises of paid-up Equity Share Capital of ? 599.57 crore and Reserves of ? 12,396.69 crore (excluding Revaluation Reserve, Foreign Currency Translation Reserves and Deferred Tax assets).

D. CORPORATE GOVERNANCE

Your Bank''s philosophy on Corporate Governance is aimed at efficient conduct of business operations and meeting its obligations towards the stakeholders. Your Bank is committed to be transparent and merit-based organization and ensures fairness, transparency and responsiveness in all its dealings. The Bank understands its responsibility towards all the stakeholders and strives hard to meet their expectations. The corporate structure, business, operations and regulatory compliance of the Bank have been strictly aligned to the Corporate Governance Philosophy of the Bank.

A detailed Corporate Governance Report as envisaged under Regulation 34(3) of the SEBI Listing Regulations is annexed as Annexure I to this Report.

The Certificate issued by M/s. Alwyn Jay & Co., Practicing Company Secretaries, confirming compliance with the conditions of Corporate Governance as stipulated in SEBI Listing Regulations is annexed as Annexure IA and forms an integral part of this Report.

E. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34 (2) (f) of the SEBI Listing Regulations, a Business Responsibility and Sustainability Report ("BRSRâ) has to be furnished by the top One Thousand listed companies based on market capitalization in the format prescribed by SEBI. Accordingly, the report describing the initiatives taken by the Bank from an Environmental, Social and Governance ("ESGâ) perspective is presented in a separate section forming part of this Annual Report. The BRSR is also available on the website of the Bank at https://ir.rblbank.com/.

The Bank has identified sustainability as a key core area of operations. Therefore, it has decided to come up with an integrated report as per the International Integrated Reporting Council''s (IIRC) recommendations. The Bank also published standalone sustainability reports based on GRI framework during financial year ended 2017-18 to financial year ended 2019-20. From financial year ended 2019-20, the sustainability report is part of the integrated report. This integrated report is a testament of maturity of Bank''s ESG framework over time. The integrated sustainability report for the financial year ended March 31,2023, also forms an integral part of this Report.

Any Member interested in obtaining a copy of BRSR may write to the Company Secretary of the Bank at the Registered Office of the Bank or by email at [email protected].

F. STATUTORY DISCLOSURES Annual Return

In terms of Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014; the Annual Return of the Bank in the prescribed Form MGT-7, is being made available on the website of the Bank at https://ir.rblbank.com/.

Conservation of Energy and Technology Absorption

Summary of measures taken by your Bank with respect to conservation of energy and technology absorption are covered in Management Discussion and Analysis Report and Business Responsibility and Sustainability Report forming part of this Annual Report. Your Bank is constantly pursuing its goal of upgrading technology to deliver quality services to its customers in a cost-effective manner.

Foreign Exchange Earnings and Outgo

During the financial year ended March 31,2023, your Bank earned ? 254.40 crore and spent ? 230.84 crore in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.

Board of Directors

The Board of Directors ("Boardâ) of your Bank is constituted in accordance with the provisions of the Companies Act, 2013, the Banking Regulation Act, 1949 ("the BR Act, 1949â), SEBI Listing Regulations and the Articles of Association of the Bank.

The Bank has always embraced the importance of a diverse Board with an optimum combination of Independent & NonIndependent Directors, equipped with appropriate balance of both technical and behavioral skills, experience and diversity of perspectives as relevant for the banking business; thereby ensuring effective Board governance while discharging its fiduciary obligations towards the stakeholders of the Bank.

Thus, in line with the above, the Board of the Bank is well structured and comprises of eminent personalities having

wide, diverse and practical experience and comprehensive professional credentials, has appropriate balance of skill sets and knowledge, which helps the Bank to gain insights for strategy formulation and direction setting, thus adding value to its growth objectives.

The Bank adheres to the process and methodology prescribed by the Reserve Bank of India in respect of the ''Fit & Proper'' criteria as applicable to Private Sector Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible to be appointed/re-appointed as a Director of the Bank. The said declarations are obtained from all the Directors on an annual basis and also at the time of their appointment / reappointment, in compliance with the said laws. An assessment on whether the Directors fulfil the said criteria is also carried out by the Nomination & Remuneration Committee and the Board on an annual basis and before considering their candidature for re-appointment.

As on March 31, 2023, the Board comprised of thirteen (13) Directors, of these, Eleven (11) were Non-Executive Directors of which Seven (7) Directors were Non-Executive Independent Directors (one of whom being the part-time Chairman of the Bank and one being an Independent Woman Director), Three (3) Directors were Non-Executive Non Independent Directors (including one Woman Director) and One (1) Director was an Additional Director (appointed by Reserve Bank of India). The remaining Two (2) Directors were Whole time Directors of which one is Managing Director & CEO and the other is an Executive Director. Further details have been provided in the below section.

Details of Directors and Key Managerial Personnel

During the financial year under review and upto the date of this Report, the following changes took place in the composition of the Board and Key Managerial Personnel:

Appointment of Regular Managing Director & CEO

Mr. Vishwavir Ahuja (DIN: 00074994), Managing Director & CEO of the Bank proceeded on leave effective December 25, 2021. The Board appointed Mr. Rajeev Ahuja (DIN 00003545), Executive Director as interim Managing Director & CEO on December 25,

2021. The said appointment of Mr. Rajeev Ahuja as interim Managing Director & CEO was approved by the Reserve Bank of India and Members of the Bank vide postal ballot on May 27,

2022.

The Board of the Bank initiated the steps to identify and evaluate candidates for the position of regular Managing Director & CEO and constituted a Search Committee for this purpose. The Board at its meeting held on April 20, 2022, basis the recommendations of the Nomination & Remuneration Committee and pursuant to the provisions of Banking Regulation Act, 1949 and the extant Reserve Bank of India guidelines finalized the names

Appointment/Re-appointment/Retirement by rotation approved/concurred by the Members at the 79th Annual General Meeting of the Bank held on September 21, 2022:

â¢ Mr. Vijay Mahajan (DIN: 00038794), Non-Executive Non Independent Director whose term of office was to retire by rotation, expressed his desire not to seek re-appointment upon expiry of his term at the 79th Annual General Meeting.

â¢ Appointment of Mr. R Subramaniakumar (DIN: 07825083) as Director of the Bank and further as Managing Director & Chief Executive Officer of the Bank for a period of three (3) years, effective June 23, 2022 (A/N - Afternoon) upto June 22, 2025.

â¢ Appointment of Dr. Sivakumar Gopalan (DIN: 07537575) as Non-Executive Independent Director of the Bank for a period of 5 (five) years i.e. from August 22, 2022 to August 21, 2027.

â¢ Appointment of Mr. Gopal Jain (DIN: 00032308) with effect from August 22, 2022 as Non-Executive Non Independent Director of the Bank, liable to retire by rotation.

Re-appointment of Executive Director

Basis the recommendations of Nomination & Remuneration Committee, the Board at its Meeting held on October 10,

2022, approved the re-appointment of Mr. Rajeev Ahuja (DIN:00003545) as an Executive Director of the Bank for a period of 3 years effective from February 21,2023 till February 20, 2026, which was approved by the Reserve Bank of India on February 7,

2023. The re-appointment was further approved by Members of the Bank vide Ordinary Resolution passed on April 27, 2023, by means of Postal Ballot.

Key Managerial Personnel

During the financial year under review, there was a casual vacancy caused in the office of Chief Financial Officer (CFO) due to sad and untimely demise of Mr. Amrut Palan who had been associated as a CFO with the Bank since August 2019. The Bank placed on record its appreciation for his contribution and the benefits gained from his vision and leadership during his tenure. With respect to the casual vacancy, the Bank with the approval of the Board, elevated Mr. Deepak Ruiya, Head-Financial Control to the position of Deputy CFO with effect from March 6, 2023. Till such time a CFO is appointed, Mr. Deepak Ruiya in his capacity as Deputy CFO is responsible for all the functions as are executed by a CFO and is also designated as a Key Managerial Personnel of the Bank.

Mr. R. Subramaniakumar (DIN: 07825083), Managing Director & CEO, Mr. Rajeev Ahuja, (DIN: 00003545), Executive Director, Mr. Deepak Ruiya, Deputy Chief Financial Officer and Ms. Niti Arya,

of candidates for the position of regular Managing Director & CEO of the Bank, application in this regard was duly submitted to the Reserve Bank of India. The Reserve Bank of India vide letter dated June 10, 2022 approved the appointment of Mr. R. Subramaniakumar (being one of the candidates as proposed by the Bank) as the Managing Director & CEO of the Bank for a period of three years with effect from the date on which he assumes charge as Managing Director & CEO (RBI Approval).

The Nomination & Remuneration Committee and Board at their respective Meetings held on June 11, 2022, noted the aforesaid RBI Approval and further at their meetings held on June 23, 2022 approved / noted the below:

â¢ Appointment of Mr. R Subramaniakumar (DIN: 07825083) as an Additional Director of the Bank, with effect from June 23, 2022.

â¢ Appointment of Mr. R. Subramaniakumar as the regular Managing Director & Chief Executive Officer and Key Managerial Personnel of the Bank for a period of three (3) years commencing from June 23, 2022 (A/N - Afternoon) up to June 22, 2025, subject to approval of the Members of the Bank.

â¢ Mr. Rajeev Ahuja''s position as interim Managing Director & CEO was an interim position approved by the Reserve Bank of India till June 24, 2022 or till the appointment of a regular Managing Director & CEO whichever is earlier. Hence, consequent to the aforesaid appointment of Mr. R. Subramaniakumar as regular Managing Director & CEO, Mr. Rajeev Ahuja ceded the title of interim Managing Director & CEO effective June 23, 2022 (F/N-Forenoon) and continued to perform his role as Executive Director on the same terms and conditions as approved by the Reserve Bank of India and Members of the Bank.

â¢ Consequent to the appointment of Mr. R. Subramaniakumar as the regular Managing Director & CEO of the Bank effective June 23, 2022 (A/N - Afternoon), Mr. Vishwavir Ahuja''s term as Managing Director & CEO of the Bank ended on June 23, 2022 (F/N - Forenoon).

The Nomination & Remuneration Committee and Board at their respective Meetings held on August 22, 2022, inter alia approved the below:

â¢ Appointment of Dr. Sivakumar Gopalan (DIN: 07537575), as an Additional Non-Executive Independent Director of the Bank w.e.f. August 22, 2022, for a term of five (5) years.

â¢ Appointment of Mr. Gopal Jain (DIN: 00032308), as an Additional Non-Executive Non Independent Director of the Bank.

Company Secretary were the Key Managerial Personnel of the Bank pursuant to Sections 2(51) and 203 of the Companies Act,

2013.

Retirement by rotation

In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Bank, Mr. Vimal Bhandari (DIN: 00001318), Non-Executive Non Independent Director of the Bank retires by rotation at the ensuing (80th) Annual General Meeting. Although being eligible he has not offered himself for re-appointment. Accordingly, he would cease to hold the office as Non-Executive Non Independent Director of the Bank on expiry of his term ending at the ensuing (80th) Annual General Meeting and the vacancy so created be not filled. Consequently, he would cease to be Chairman/Member of the respective Board Committees from the said date. The Board places on record its sincere appreciation for the significant contributions made by Mr. Bhandari in guiding and supporting the management during his tenure with the Bank.

The resolution for the same is included in the Notice convening the 80th Annual General Meeting.

Independent Directors

As on March 31, 2023, Mr. Prakash Chandra (DIN: 02839303), Mr. Ishan Raina (DIN: 00151951), Ms. Ranjana Agarwal (DIN: 03340032), Dr. Somnath Ghosh (DIN: 00401253), Mr. Chandan Sinha (DIN: 06921244), Mr. Manjeev Singh Puri (DIN: 09166794) and Dr. Sivakumar Gopalan (DIN: 07537575) are Non-Executive Independent Directors of the Bank. All the Independent Directors have submitted their respective declarations stating that they meet the criteria prescribed for independence under Section 149(6) of the Companies Act, 2013 & Rules made thereunder and Regulation 16 of the SEBI Listing Regulations. In the opinion of the Board the Independent Directors fulfill the aforesaid criteria and possess requisite integrity, qualifications, proficiency, experience, expertise and are independent of the management.

The Independent Directors of the Bank have complied with the requirements of Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 read with the Companies (Appointment and Qualifications of Directors) Rules,

2014. Further, the Independent Directors who were required to complete the online proficiency self assessment test by March 31,2023 have duly completed the same within required timelines.

During the financial year under review, none of the Independent Directors of the Bank had resigned before the expiry of their respective tenure(s).

None of the Independent Directors of the Bank is due for reappointment at the ensuing Annual General Meeting.

Board Level Performance Evaluation

The performance evaluation of the Board as a whole as well as that of its Committees, Directors (including Independent

Directors) and Chairman of the Board is carried out by the Board based on the criteria for evaluation / assessment as laid down by the Nomination & Remuneration Committee, in accordance with the relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and the SEBI Listing Regulations.

The manner in which the said performance evaluation has been carried out is outlined in the Corporate Governance Report forming part of this Report as an Annexure I.

Particulars of Employee Remuneration

A. The ratio of the remuneration of each director to the median employee''s remuneration and other details in terms of Section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are given below:

1. The ratio of the remuneration of each director to the median remuneration of the employees of the Bank for the financial year 2022-23 are as under:
Sr. No.	Name of the Director	Designation	Ratio
1	Mr. Prakash Chandra	Non-Executive Independent Director (Part-time Chairman)	8.08x
2	Mr. R Subramaniakumar	Managing Director & CEO	34.54x
3	Mr. Rajeev Ahuja	Executive Director	34.07x
4	Mr. Ishan Raina	Non-Executive Independent Director	6.04x
5	Ms. Ranjana Agarwal	Non-Executive Independent Director	5.70x
6	Dr. Somnath Ghosh	Non-Executive Independent Director	5.93x
7	Mr. Chandan Sinha	Non-Executive Independent Director	4.95x
8	Mr. Manjeev Singh Puri	Non-Executive Independent Director	5.13x
9	Dr. Sivakumar Gopalan	Non-Executive Independent Director	1.37x
10	Mr. Vimal Bhandari	Non - Executive Non Independent Director	4.91x
11	Ms. Veena Mankar	Non - Executive Non Independent Director	4.76x

Sr. No.	Name of the Director	Designation	Ratio
12	Mr. Gopal Jain	Non - Executive Non Independent Director	1.63x
13	Mr. Yogesh Dayal	Additional Director (appointed by RBI)	Note 2
''x'' denotes the median remuneration of the employees.

Note 1 - During the financial year under review, the Bank has not paid any compensation in the form of fixed remuneration to Non-Executive Directors of the Bank except for the payment of honorarium to Mr. Prakash Chandra, Non-Executive Independent Director (Part-time Chairman) as per approval received from RBI and hence sitting fees paid to other Non Executive Directors (excluding additional director appointed by RBI) have been considered as remuneration while calculating the ratio of the remuneration to the median remuneration of the employees of the Bank.

Note 2 - The sitting fees is not paid to the Additional Director appointed by the Reserve Bank of India.

The per Chief E Compar 2022-2: Sr. No.	entage increase in xecutive Officer, iy Secretary of th 3 are as under: Name of the Director / KMP	remuneration of ea Chief Financial ( e Bank for the fin Designation	ch Director, fficer and ancial year % Increase
1.	Mr. R Subramaniakumar	Managing Director & CEO	Note 3
2.	Mr. Rajeev Ahuja	Executive Director	Note 4
3.	Mr. Deepak Ruiya	Deputy Chief Financial Officer	Note 5
4.	Ms. Niti Arya	Company Secretary	15%

The percentage increase in remuneration for Mr. Vishvavir Ahuja who held the position of Manging Director & CEO till June 23, 2022 (F/N) and Mr. Amrut Palan who held the position of CFO upto September 8, 2022 was Nil.

Note 3 - Mr. R. Subramaniakumar was appointed as the Managing Director & CEO for a period of three years with effect from June 23, 2022 (A/N), on the terms of remuneration as approved by the Reserve Bank of India. The said appointment and remuneration were further approved by Members of the Bank at the 79th Annual General Meeting held on September 21, 2022.

Note 4 - Mr. Rajeev Ahuja held the position of interim Managing Director & CEO upto June 23, 2022 (F/N) and thereafter continued to perform his role as Executive Director of the Bank.

Reserve Bank of India vide its letter dated February 7, 2023 approved the revision in the annual fixed pay to Mr. Rajeev Ahuja from t 2.13 Crore per annum to t 2.34 Crore per annum with effect from February 21, 2022. Further, the RBI also approved variable pay of t 1.7 Crore comprising of cash variable pay of t 0.85 Crore and non-cash variable pay (share-linked instruments) of t 0.85 Crore for FY2021-22 to Mr. Rajeev Ahuja. The above revision in remuneration and variable pay was approved by the Members of the Bank vide

postal ballot on April 27, 2023. Accordingly, on receiving Members'' approval, the revision in his Fixed Pay with effect from February 21, 2022, along with Variable Pay -Cash (as per deferral schedule in line with the Bank''s Policy) was paid in the month of May 2023.

Note 5 - Mr. Deepak Ruiya was appointed as the Deputy CFO and Key Managerial Personnel w.e.f. March 6, 2023 and is responsible for all the functions as are executed by CFO (till such time a regular CFO is appointed). From the date of his appointment as Deputy CFO till March 31, 2023, there was no increase in his remuneration.

There is no percentage increase in the remuneration paid to Non-Executive Part time Chairman, who apart from being paid sitting fees for the Board/Committee meetings attended by him is eligible to a honorarium of t 18 lakh per annum as per approval of the Reserve Bank of India. The other Non-Executive Directors (excluding additional director appointed by Reserve Bank of India) were only paid sitting fees for the Board/Committee meetings attended by them during FY2022-23.

3. The percentage increase in the median remuneration of employees in the financial year

The percentage increase in the median remuneration of employees in the financial year was 9%.

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

The number of permanent employees on the rolls of the Bank as on March 31,2023 was 10,759.

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

Average increase in remuneration is 11.4% for employees other than managerial personnel and 6.07% for managerial personnel (including Managing Director & CEO, Executive Director, Chief Financial Officer and Company Secretary).

It is hereby affirmed that the remuneration paid to Directors and KMPs is as per the remuneration policy of the Bank and where applicable has been approved by the Reserve Bank of India.

B. The statement containing particulars of employees as required under Section 197(12) of Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, forms part of this report. In terms of Section 136 of Companies Act, 2013 read with second proviso of Rule 5 (3) Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, the Annual Reports are being sent to the Members of the Bank, excluding the information as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, as mentioned aforesaid and the same is open for inspection electronically on all working days between 11:00 a.m. to 01:00 p.m. upto the date of Annual General Meeting. A copy of this statement may be obtained by the Members by writing to the Company Secretary of the Bank at the Registered Office of the Bank or by email at [email protected].

Remuneration Policy

Remuneration policy for employees

Your Bank''s compensation policy keeps in mind the strategy, ethos and financial performance of the Bank and market compensation trends at any given time. Your Bank recognizes that talent is critical to the long-term growth and success of the Bank, and it is a pre-requisite to have a compensation structure comparable with the industry.

Your Bank has set out its Compensation Policy based on the concept of CTC (Cost to Company) and TEC (Total Employee Compensation), to make compensation packages for officers across all grades, competitive enough to attract, nurture and retain high caliber professionals in the Bank and have an organization structure that reflects specialization, focus and scale.

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

Your Bank strongly believes that an equity component in the compensation goes a long way in aligning the objectives of employees with those of the Bank. The underlying philosophy of stock options is to enable the employees, present and future, to get a share in the value that they help to create for the Bank over a certain period of time. This Policy is available at the Bank''s website at the web-link: https://www.rblbank.com/pdf-pages/ bank-policies.

Policy on appointment & compensation to Non-Executive Directors (including Independent Director) and Criteria for evaluation of Board and its Directors

In terms of the provisions of Companies Act, 2013 and SEBI Listing Regulations, the Board has, on recommendations of the Nomination & Remuneration Committee framed a Policy on appointment & Compensation to Non-Executive Directors [including Independent Director and Criteria for evaluation of Board and its Directors ("Policyâ)] which inter alia specifies the criteria for identifying persons who are qualified to be appointed

as Non-Executive Directors (including Independent Director) and the appointment and the remuneration structure of the aforesaid Directors, along with criteria for evaluating their performance.

The Policy is based on the principles of Board diversity with respect to representation on the Board of the mandatory areas of special knowledge/practical experience and also other areas of expertise that would be beneficial to the Bank. The Nomination & Remuneration Committee will thus determine the optimum size of the Board which would be commensurate to the size, scale and operations of the Bank. The Nomination & Remuneration Committee while shortlisting candidates will be guided by fit and proper credentials, criteria of independence and other aspects as prescribed by the Reserve Bank of India guidelines, Companies Act, 2013 and SEBI Listing Regulations as amended from time to time.

The Policy as mentioned above is available on the website of the Bank at https://ir.rblbank.com/.

Remuneration of Managing Director and Executive Director

The Board considers the recommendations of Nomination & Remuneration Committee and approves the remuneration of the Managing Director and Executive Director, with or without modifications, subject to the approval of Members of the Bank and applicable regulatory approval.

The remuneration payable to the Managing Director and Executive Director is subject to prior approval of the Reserve Bank of India and hence the remuneration or revision in remuneration is payable to them only post receipt of the approval from the Reserve Bank of India.

Remuneration of Chairman

The Nomination & Remuneration Committee recommends the remuneration (honorarium) of the Chairman to the Board which is considered and approved by the Board subject to the approval of Members of the Bank and applicable regulatory approval.

The remuneration (honorarium) payable to the Chairman is subject to prior approval of the Reserve Bank of India. Therefore, the remuneration (honorarium) or any revision therein is payable to the Chairman only post receipt of the approval from the Reserve Bank of India.

The Chairman is also entitled to reimbursement of expenses for participation in the meetings of the Board and Committees thereof. Apart from the payment of sitting fees for attending meeting of the Board of Directors or any Committees thereof, the Chairman is also entitled to a honorarium of t 18 lakh per annum as per the last approval granted by the Reserve Bank of India and the Members.

Remuneration of Non-Executive Directors (NEDs)

The remuneration payable to Non-Executive Directors (NEDs) is governed by the provisions of Banking Regulations Act, 1949,

recipients. ESOP has been designed and implemented in such a manner that the compensation structure goes a long way in aligning the objectives of an individual with those of the Bank. In addition, during the year your Bank continued with its plan of rewarding long-serving employees with ESOPs thus making them true partners in the Bank''s growth.

The Nomination & Remuneration Committee inter alia administers and monitors the ESOP The Bank has two active ESOP schemes viz. Employee Stock Option Plan 2013 (ESOP 2013) and Employee Stock Option Plan 2018 (ESOP 2018) under which stock options are issued to the employees of the Bank.

In terms of Regulation 7(1) of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations 2021 (SBEB & SE Regulations), the Nomination & Remuneration Committee and the Board at their respective meetings held on August 22, 2022 also approved certain amendments to ESOP 2013 as well as few amendments to ESOP 2018 which required approval of Members and few other amendments not being of a nature requiring approval of Members which was only for the purpose of meeting the regulatory requirements of SBEB & SE Regulations. The amendments made to the ESOP 2013 and ESOP 2018, respectively are not detrimental to the interest of the existing option grantees.

The Members of the Bank at the Annual General Meeting held on September 21, 2022, approved the amendment to ESOP 2018 relating to definition of Employee, Exercise Price and the enhancement in the quantum of equity stock options for the purpose of grant. The Members of the Bank approved to create, offer, issue and grant / allot 1,75,00,000 additional equity stock options exercisable into not more than 1,75,00,000 equity shares of face value of ? 10 each. Post this approval, the maximum limit with respect to the aggregate number of equity shares upon exercise of options under ESOP 2018 available to be granted to eligible employees of the Bank and its subsidiary is 5,50,00,000 Equity Shares of face value of ? 10 each.

ESOP 2013 and ESOP 2018 schemes of the Bank are in compliance with the SBEB & SE Regulations and there were no material changes made to the said Schemes except as described above. The certificate from the Secretarial Auditors of the Bank certifying that the Bank''s Employees Stock Option Plans are being implemented in accordance with the provisions of the SBEB & SE Regulations and the respective resolutions passed by the Members of the Bank, shall be available for inspection electronically by the Members at the ensuing Annual General Meeting.

Further details of the ESOP are given in the notes to accounts in the attached financial statements and the statutory disclosure as mandated under Regulation 14 of SBEB & SE Regulations forms part of this report and the same is available electronically on the website of the Bank at https://ir.rblbank.com/.

Reserve Bank of India guidelines issued from time to time and provisions of the Companies Act, 2013 and rules made thereunder to the extent it is not inconsistent with respect to provisions of the Banking Regulations Act, 1949 or the Reserve Bank of India guidelines.

The NEDs (other than Additional Director appointed by RBI) are paid sitting fees for attending each meeting of the Board of Directors or any Committees thereof. NEDs are paid sitting fee of ? 1 lakh for attending meetings of the Board, ? 50,000 for attending meetings of Audit Committee, Risk Management Committee and Nomination & Remuneration Committee, respectively and ? 30,000 for the remaining Committees, names of which are mentioned in the section on Audit Committee and other Board Sub-Committees. All NEDs are entitled to reimbursement of expenses for participation in the meetings of the Board and Committees thereof. The Bank does not grant any Stock Options to NEDs.

RBI vide its Circular RBI/2021-22/24 DOR.GOV.

REC.8/29.67.001/2021-22 dated April 26, 2021 prescribed that, in addition to sitting fees and expenses related to attending meetings of the Board and its Committees as per extant statutory norms/ practices, the bank may provide for a payment of compensation to Non-Executive Directors of the Bank, other than the Part Time Non-Executive Chairperson, in the form of fixed remuneration not exceeding ? 20,00,000 (Rupees Twenty Lakh Only) per annum which is commensurate with the individual director''s responsibilities and demands on time and which are considered sufficient to attract qualified competent individuals.

Pursuant to the above regulatory provisions, the Members of the Bank at their 78th Annual General Meeting held on September 21, 2021 had accorded their consent to pay compensation to each Non-Executive Director of the Bank (other than the Part Time Non-Executive Chairman) in the form of fixed remuneration not exceeding ? 20,00,000 (Rupees Twenty Lakh Only), per annum, for a period of five (5) years, with effect from the financial year 202122. The Board determines the amount of fixed remuneration to be paid to the Non-Executive Directors within the above overall limit.

The fixed remuneration for the financial year ended March 31,

2023 which will be paid during financial year ending March 31,

2024 is appropriately disclosed in the Corporate Governance Report annexed as Annexure I to this Report.

Employees Stock Option Plan (ESOP)

The Bank has formulated and adopted Employee Stock Option Plans (ESOP) in terms of the Regulations/Guidelines issued by the Securities and Exchange Board of India.

Board Meetings

Your Bank holds atleast four Board meetings in a year, one in each quarter, inter-alia to review the financial results of the Bank and the dates of the Board meetings are finalized well in advance after seeking concurrence of all the Directors. All the decisions and urgent matters approved by way of circular resolutions are placed and noted at the subsequent Board meeting. In case of urgent matters, additional Board meetings are held in between the quarterly meetings to address business or regulatory requirements.

During the financial year under review, Eighteen (18) Board meetings were convened and held. The intervening gap between the Board meetings was within the period prescribed under the Companies Act, 2013 and SEBI Listing Regulations. The details of the Board composition, its meetings held during the year alongwith the attendance of the respective Directors thereat are set out in the Corporate Governance Report forming part of this Report as Annexure I.

Audit Committee and other Board Sub-Committees

Your Bank has a duly constituted Audit Committee as per the provisions of Section 177 of the Companies Act, 2013, provisions of the SEBI Listing Regulations and the Reserve Bank of India Guidelines.

As on March 31, 2023, the Audit Committee comprised of six Directors of which four were Independent Directors including the Chairman of the Committee and the remaining two were Non-Executive Non Independent Directors of which one was an Additional Director appointed by the Reserve Bank of India.

The Board of Directors have also constituted other subcommittees. During the financial year under review, certain changes, apart from the changes to the composition of the Committee, were approved by the Board to some of the subcommittees as detailed hereinafter. The Board at its meeting held on May 6, 2022, considered, and approved the segregation of the Customer Service, Branding & Marketing Committee into two different Committees of the Board, with the nomenclature "Customer Service Committee (CSC)â and "Branding, Marketing & Communications Committeeâ (BMCC), respectively. The Board at its meeting held on September 29, 2022 inter alia approved merger of Wilful Defaulter Review Committee ("WDRCâ) and Non-Cooperative Borrower Review Committee ("NCBRCâ) into a single committee with the nomenclature "Review Committee for Wilful Defaulters and Non-Cooperative Borrowersâ. The Board at its meeting held on January 19, 2023 approved the change in the nomenclature of Anti Fraud Committee to "Fraud Monitoring Committeeâ.

As on March 31, 2023, there were twelve sub-committees of the Board namely - Audit Committee, Stakeholders'' Relationship Committee, Board Investment & Credit Committee, Fraud Monitoring Committee, Nomination & Remuneration Committee,

Risk Management Committee, Capital Raising Committee, Corporate Social Responsibility Committee, IT Strategy Committee, Customer Service Committee, Branding Marketing & Communications Committee and Review Committee for Wilful Defaulters and Non-Cooperative Borrowers.

The details of composition of the Board sub-committees, their terms of reference and other details are set out in the Corporate Governance Report forming part of this Report as Annexure I.

The Audit Committee and other Board sub-committees meet at regular intervals and ensures to perform the duties and functions as entrusted upon them by the Board.

Related Party Transactions

Your Bank has in place a Policy on Dealing with the Related Party Transactions as per the provisions of the SEBI Listing Regulations and the Companies Act, 2013 read with the rules made thereunder.

The Bank obtains approval of the Audit Committee before entering into any Related Party Transactions and subsequent material modifications, if any. Approval of the Board of Directors in terms of the Companies Act, 2013 is also obtained for entering into Related Party Transactions by the Bank, as applicable. A quarterly update on the Related Party Transactions is provided to the Audit Committee and the Board of Directors for their review and consideration.

All Related Party Transactions entered during the financial year under review were in the ordinary course of business and on an arm''s length basis. There were no material transactions entered into by the Bank with any related party during the financial year under review. Pursuant to Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188 (1) of the Companies Act, 2013. Accordingly, the disclosure of Related Party Transactions, as required under Section 134 (3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Bank.

Details of related party transactions as per Accounting Standard 18 (AS-18) entered into during the financial year ended March 31, 2023 are given in Note No. 14 in Schedule 18, forming part of ''Notes to Accounts''.

The Policy on Dealing with the Related Party Transactions of the Bank is available on the website of the Bank at https://ir.rblbank.com/.

Subsidiary Company

As on March 31,2023, your Bank has one wholly owned subsidiary i.e. RBL FinServe Limited (RFL) (formerly Swadhar Finserve Private Limited), which is not a material subsidiary as per the SEBI Listing Regulations. RBL Finserve Ltd; headquartered in

Mumbai, India, is a Business Correspondent, distributing various financial services and products for the Bank, in the rural and semi urban markets. Currently, RFL has presence across 18 states and 295 districts with a network of 821 branches. As on March 31, 2023, RBL Finserve Ltd was sourcing the following products for RBL Bank through its branches:

â¢ Micro-finance loans

â¢ Small savings accounts

RBL Finserve Ltd has an active client base of 2.85 million customers and an AUM of ? 6,767 crore across the above businesses.

Pursuant to Section 129(3) of Companies Act, 2013 read with Rules made thereunder, your Bank has prepared consolidated financial statements of the Bank with its wholly owned subsidiary company, RBL FinServe Limited, in the same form and manner as that of the Bank which forms part of this Annual Report and shall be laid before the ensuing Annual General Meeting of the Bank along with the laying of the Bank''s Standalone Financial Statements under Section 129(2) of the Companies Act, 2013.

A statement containing the salient features of the financial statements of the wholly owned subsidiary company in Form AOC-1, pursuant to the provisions of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed to the Financial Statements forming part of the Annual Report.

Further, in accordance with the fourth proviso of Section 136(1) of the Companies Act, 2013 read with the applicable rules, the audited annual accounts of the said wholly owned subsidiary company of the Bank have been hosted on the Bank''s website at https://ir.rblbank.com/ Any Member interested in obtaining a physical copy of the said financial statements may write to the Company Secretary at the Registered Office of the Bank or by email at [email protected]. The same is also open for inspection by the Members of the Bank and Trustees of the Debenture holders electronically on all working days between 11:00 a.m. to 01:00 p.m. upto the date of Annual General Meeting.

Names of Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the financial year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Bank.

Adequacy of Internal Financial Controls with reference to Financial Statements

Proper internal financial controls were in place and the financial controls were adequate and were operating effectively. Further, the statutory auditors have, in compliance with the requirements of Companies Act, 2013, issued an opinion with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such

controls, details of which may be referred to in the Independent Auditor''s report attached to the financial statements of financial year ended March 31, 2023.

Material changes and commitments affecting the financial position of the Bank

There are no material changes and commitments, affecting the financial position of the Bank that have occurred between the end of the financial year of the Bank i.e. March 31, 2023 upto the date of the Directors'' Report i.e. July 22, 2023, except as disclosed.

Deposits

Being a Banking company, the disclosures required as per Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of Companies Act, 2013 are not applicable to your Bank. The details of the deposits received and accepted by your Bank as a banking company are enumerated in the financial statements for the financial year ended March 31, 2023.

Nature of Business

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

Particulars of Loans, Guarantees and Investments

Pursuant to Section 186(11) read with Section 134(3)(g) of the Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided or acquisition of securities by a banking company in the ordinary course of business. The particulars of investments made by the Bank are disclosed in note number 8 of Schedule 18 of the financial statements for the financial year ended March 31, 2023, as per the applicable provisions of the Banking Regulation Act, 1949.

Auditors

The Reserve Bank of India vide its Circular No. RBI/2021-22/25 Ref.No.DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 had issued Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) (''RBI Guidelines''). The provisions prescribed that Statutory Auditors shall be appointed for a continuous period of three years, subject to the Audit firms satisfying the eligibility norms as stipulated therein, each year. Further, Clause 4 of the said RBI Guidelines provided that the Statutory Audit of banks with asset size above ^ 15,000 Crore as end of previous financial year should be conducted under joint audit with a minimum of two eligible audit firms. Pursuant to these requirements, M/s. CNK & Associates LLP, Chartered Accountants, (Firm Registration No. 101961 W/W100036) and M/s G.M. Kapadia & Co., Chartered Accountants, Mumbai, (Firm Registration Number:104767W) are the joint statutory auditors of the Bank as per the details of their appointment being mentioned hereinafter.

The Members of the Bank at the 78th Annual General Meeting held on September 21, 2021 approved the appointment of M/s. CNK & Associates LLP, Chartered Accountants, (Firm Registration No. 101961 W/W100036) as Joint Statutory Auditor for a period of three (3) years to hold office till the conclusion of the 81st Annual General Meeting. M/s. Haribhakti & Co LLP who was the other joint Statutory Auditor whose appointment was approved by the Members of the Bank at the 77th Annual General Meeting held on July 17, 2020 to hold office upto the conclusion of the 79th Annual General Meeting had been debarred by Reserve Bank Limited vide their Press Release dated October 12, 2021 from undertaking any type of audit assignments in the entities regulated by RBI for a period of two years, effective April 1,2022.

Accordingly, the Bank had sought and obtained the approval of the Members of the Bank at the 79th Annual General Meeting for appointment of M/s G.M. Kapadia & Co., Chartered Accountants, Mumbai, (Firm Registration Number:104767W), as the other Joint Statutory Auditor for a period of three (3) years to hold office from the conclusion of the 79th Annual General Meeting until the conclusion of 82nd Annual General Meeting, subject to the approval of the Reserve Bank of India every year and on such terms and conditions, including remuneration, as may be approved by the Audit Committee.

M/s. CNK & Associates LLP, Chartered Accountants and M/s. G.M. Kapadia & Co., Chartered Accountants have confirmed their eligibility under Section 141 of Companies Act, 2013 read with the relevant rules made thereunder and the RBI Guidelines, to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors of the Bank. Further, as required under the relevant provisions of the SEBI Listing Regulations, both the Joint Statutory Auditors have also confirmed that they had subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of ICAI. Further, they have confirmed that they fulfill the eligibility norms for appointment of Statutory Auditor of Private Sector Banks as prescribed by the Reserve Bank of India.

Reserve Bank of India vide its letter dated June 27, 2023 has approved the appointment of M/s. CNK & Associates, LLP and M/s. G. M. Kapadia & Co as the Joint Statutory Auditors of the Bank for the financial year 2023-24 for their third and second year, respectively.

Pursuant to Section 204 of Companies Act 2013, the Board had appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries, Mumbai as its Secretarial Auditors for the financial year ended March 31, 2023. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit as prescribed under Companies Act, 2013. The Secretarial Audit Report for the financial year ended March 31,2023 is annexed to this report as Annexure II.

During the financial year under review, your Bank has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

During the financial year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported any matter under Section 143 (12) of the Companies Act, 2013 to the Audit Committee or Board, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Companies Act, 2013 in connection with frauds reported by auditors.

During the financial year under review, there was no revision of financial statements and Director''s Report of the Bank.

Qualifications/Reservation in Statutory and Secretarial Audit Reports

There were no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors or the Secretarial Auditors in their respective Reports.

Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Bank has Zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman executive working in the Bank. The Bank has formulated a Policy and has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank created a mandatory e-learning module for all the employees called "Prevention of Sexual Harassment (POSH)â. The information relating to complaints received and disposed-off / resolved during the financial year ended March 31, 2023 is disclosed under Corporate Governance Report annexed as Annexure I to this Report.

Whistle Blower Policy (Vigil Mechanism)

Details required to be disclosed in this regard have been provided under Corporate Governance Report annexed as Annexure I to this Report.

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

During the financial year under review, there were no significant/ material orders passed by the Regulators / Courts/ Tribunals etc. which would impact the going concern status of the Bank and its future operations.

for the financial year ended March 31, 2023, the details of CSR activities with the brief outline of CSR Policy including overview of the programs/ Projects undertaken by the Bank, amount spent and other relevant details are furnished in Annexure III to this report.

The CSR Policy of the Bank is available on the website of the Bank at https://ir.rblbank.com/.

Corporate Social Responsibility Committee (CSR Committee)

The Bank has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Bank in fulfilling the corporate social responsibility objectives of the Bank.

As on March 31, 2023, the CSR Committee comprised of five members including three Independent Directors including the Part time Non-Executive Chairman who is the Chairman of the Committee and Managing Director & CEO and Executive Director. The composition of the CSR Committee and its terms of reference are detailed in the Corporate Governance Report forming part of this report as Annexure I.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the financial year under review, as per Regulation 34(2)(e) of the SEBI Listing Regulations is presented in a separate section forming part of this Annual Report.

Awards and Recognitions

During the financial year under review, your Bank was recipient of the following awards:

â¢ IBA Banking Technology Awards 2022 - Best Technology Bank

â¢ Asiamoney Best Bank Awards 2022 - Best Bank For Digital Solutions In India

â¢ Digital Payments Award by MeitY - Onboarding maximum merchants on digital payment modes in Jammu & Kashmir

Ratings

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

Your Bank''s Certificate of Deposits carries a rating of "A1 â by ICRA which indicates the lowest short term credit risk. Further, your Bank''s Fixed Deposit programme carries rating of "AA-â with Stable Outlook by ICRA which indicates low credit risk and the

There is no application or proceedings pending against the Bank under the Insolvency and Bankruptcy Code 2016 during the financial year under review.

Risk Management Policy

The Board of the Bank has constituted a Risk Management Committee in accordance with the provisions of Regulation 21 of the SEBI Listing Regulations and the Reserve Bank of India Guidelines. The details with respect to its terms of reference, composition and meetings held during the year under review are set out in the Corporate Governance Report forming part of this Report as Annexure I.

Your Bank has a robust Risk Management framework with dedicated policies to manage specific risks, in place. The details of the Credit Policy and its framework are separately provided in Management Discussion and Analysis Report which forms an integral part of this Annual Report.

G. OTHER DISCLOSURES Code of Conduct for Employees

For a financial institution, trust is the most important asset. To this end, your Bank strives to ensure that its actions are in accordance with the highest standards of personal and professional integrity and highest level of ethical conduct. Your Bank has adopted a Code of Conduct which all its employees have to adhere to. The employees have to conduct duties according to the aforesaid Code and avoid even the appearance of improper behaviour. Some of the areas which are covered by the Code of Conduct are fairness of employment practices, protection of intellectual property, integrity, customer confidentiality, conflict of interest, prevention of insider trading, etc.

Bribery and Corruption

Your Bank has a responsibility both towards the Members of the Bank and to the communities in which we do business to be transparent in all our dealings. Your Bank''s Code of Conduct requires that we do not engage in bribery or corruption in any form and explicitly mentions that the Bank will not pay or procure the payment of a bribe or unlawful fee to encourage the performance of a task or one which is intended or likely to compromise the integrity of another. Your Bank & its employees will not accept any payment, gift or inducement from a third party which is intended to compromise our own integrity. The Code of Conduct also includes procedures dealing with Gifts & Entertainment, Conflicts of Interest and other important matters.

Corporate Social Responsibility (CSR)

Your Bank strives to proactively encourage inclusive growth and development, thereby participating towards building a sustainable future.

Your Bank also has a Board approved Policy on Corporate Social Responsibility ("CSR Policyâ) in place. In alignment with the CSR Mission Statement, the Bank has focused on various initiatives

Bank''s short term fixed deposit programme carries a rating of "A1 â by ICRA which indicates lowest credit risk.

Your Bank''s ratings were reaffirmed by ICRA in September 2022 and by CARE in October 2022

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

Your Bank complies with the RBI''s KYC/AML guidelines. The Bank''s KYC/ AML Policy is prepared in accordance with the Prevention of Money Laundering Act, 2002 and RBI/IBA (Indian Banks'' Association) guidelines. Various regulatory reporting requirements, as set out by the Financial Intelligence Unit (FIU) of the Government of India, are complied with by the Bank. Your Bank uses automated transaction monitoring system under supervision of centralised AML team. Further, your Bank''s employees are imparted training on KYC/AML aspects on a regular basis. Executives of the Bank also attend periodic workshops/seminars organised by FIU, RBI, IBA, Centre for Advanced Financial Research & Learning (CAFRAL) and College of Agricultural Banking (CAB), Pune to enhance their awareness in evolving KYC AML issues.

Requirement for maintenance of cost records

The Bank is not required to maintain cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013.

CEO/CFO Certificate

Pursuant to the provisions of Regulation 17(8) of SEBI Listing Regulations, the certificate issued by the Managing Director & CEO and Deputy CFO of the Bank (appointed as KMP responsible for the role & responsibility of a CFO till the appointment of a regular CFO), for the financial year ended March 31, 2023 was placed before the Board of Directors at its meeting held on April 29, 2023.

The said certificate is forming part of this Report as an Annexure IC to Corporate Governance Report.

H. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

i. The applicable accounting standards have been followed in preparation of the annual accounts for the financial year ended 2022-23 and there have been no material departures;

ii. Accounting policies have been selected and applied consistently and reasonably, and prudent judgments and estimates have been made to give a true and fair view of the Bank''s state of affairs and of its Profit for financial year ended 2022-23;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

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

v. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

vi. Proper Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGMENT

The Board is grateful to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, IBA, other Regulatory Authorities, Rating Agencies, Financial Institutions, banks and correspondents in India and abroad for their valuable and unflinching support as well as co-operation and guidance to the Bank from time to time. The Board acknowledges the trust and confidence reposed by the depositors, clients and investors and convey their deep appreciation and request for their continued patronage.

The Board conveys its deep gratitude and appreciation to all the employees of the Bank for their tremendous efforts as well as their exemplary dedication and contribution to the Bank''s performance. The Board appreciates the healthy relationship with the Officer''s Association and Employee Union, which has facilitated the growth and development of the Bank and has created a positive work environment.

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

The Directors would also like to thank its Customers, Vendors, Business Partners, Government and all other Business Associates for their continued support to the Bank and the Management.

For and on behalf of the Board of Directors

Prakash Chandra R Subramaniakumar

Chairman Managing Director & CEO

(DIN: 02839303) (DIN: 07825083)

Place : Mumbai Date : July 22, 2023

Mar 31, 2022

The Board of Directors of RBL Bank Limited ("the Bankâ) take great pleasure in presenting the 79^th Annual Report of the Bank along with the Audited statement of accounts for the financial year ended March 31,2022.

A. FINANCIAL PERFORMANCE

The comparative standalone financial performance of the Bank for the financial year ended March 31, 2022 with that of March 31, 2021 is summarized in the following table:

Particulars	FY 22	FY 21	(R in crore) Change(%)
Advances (Net)	60,022	58,623	2.4%
Deposits	79,007	73,121	8.0%
Net interest income	4,027	3,788	6.3%
Other income	2,340	1,884	24.3%
Net total income	6,367	5,672	12.3%
Operating expenses	3,622	2,755	31.5%
Provisions and contingencies	2,820	2,409	17.0%
Net profit	(75)	508	-
Gross NPA ratio	4.40%	4.34%	-
Net NPA ratio	1.34%	2.12%	-
Capital Adequacy Ratio	16.82%	17.50%	-
Business per employee	15.02	16.86	(10.9)%
Business per branch	276.95	307.10	(9.8)%
Appropriations
Transfer to Statutory Reserve	-	127	-
Transfer to Capital Reserve	43	58	-
Transfer to Revenue and Other Reserves	-	300	-
Transfer to Investment Fluctuation Reserve	(36)	39	-
Transfer from Investment Reserve	-	(8)	-
Dividend for the year, including tax thereon	-	-	-

The Bank posted a net total income of R 6,367 crore and net loss of R 75 crore for financial year ended 2021-22 as against a net total income of R 5,672 crore and net profit of R 508 crore for financial year ended 2020-21.

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

B. BUSINESS UPDATE AND STATE OF AFFAIRS OF THE BANK

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

C. UPDATE ON COVID-19 PANDEMIC

The impact of coronavirus ("COVID-19â) Pandemic on India has been largely disruptive in terms of economic activity as well as a loss of human lives. In view of COVID-19 outbreak and consequent measures taken by national/ various state governments, your Bank has taken various precautionary measures in line with various guidelines issued by the Reserve Bank of India ("RBIâ) and Indian Banks'' Association ("IBAâ).

During the COVID-19 Pandemic, the Bank had taken proactive actions, across all aspects of risks impacting the business, safety of staff and business continuity from operational risk, likely impact on asset quality from credit risk, trading risk due to sharp change in underlying risk factors in the investment book

and liquidity pressure owing to disruptions under civic lockdown etc.

The Reserve Bank of India and the Government of India came out with several policies and guidelines to mitigate the impact of the COVID-19 Pandemic and provide relief to the borrowers impacted by the pandemic. In accordance with the applicable regulatory guidelines related to the COVID-19 Pandemic, your Bank framed various policies and guidelines, and took all necessary steps for their proper implementation, as were required in this regard.

The Bank''s capital and liquidity position remained strong and will continue to be one of the key focus areas for the Bank.

D. FINANCIAL DISCLOSURES Dividend

During the financial year ended 2021-22 the Bank has incurred losses. Accordingly, the Directors did not recommend dividend on equity shares for the financial year ended 2021-22.

The Dividend Distribution Policy formulated in accordance with the provisions of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulationsâ), as approved by the Board is available on the website of the Bank at https://ir.rblbank.com/.

Capital Raising

During the financial year ended 2021-22, your Bank added R 19.08 crore (including premium) through allotment of 14,93,365 equity shares pursuant to exercise of stock options by the employees of the Bank under various Employees Stock Option Plans.

Consequent to the above, the paid-up equity share capital of your Bank increased by R 1.49 crore and share premium increased by R 17.59 crore.

The paid up Equity Share Capital of the Bank as on financial year ended March 31, 2022 stood at R 599.51 crore divided into 59,95,13,763 equity shares of R 10/- each.

During the financial year under review, there has been no change in the Authorized share capital of the Bank. The Authorized share capital of the Bank as at March 31, 2022 stood at R 700 crore divided into 700,000,000 equity shares of R 10/- each.

The Equity shares of your Bank continue to remain listed on BSE Limited and National Stock Exchange of India Limited. The

Unsecured Redeemable Non-Convertible Debentures issued by the Bank, on a private placement basis are listed on BSE Limited.

The Bank has paid the listing fees as payable to the BSE Limited and National Stock Exchange of India Limited for the financial year ended 2021-22.

Fund Raising by Issue of Debt

Pursuant to the authority granted vide the resolution passed by Members on September 21, 2021 for borrowing/raising of funds by issue of debt securities, the Bank in the first quarter of FY2022-23 raised funds by issue of USD denominated unsecured Tier 2 subordinated notes in accordance with the Reserve Bank of India''s ("RBI") Master Circular - Basel III Capital Regulations dated April 1, 2022, as amended from time to time ("Basel III Capital Regulations") aggregating up to R 776.98 crore (the "Notes") offered under Section 4(a)(2) of the United States Securities Act of 1933, as amended to United States International Development Finance Corporation ("USDFC").

Capital Adequacy Ratio

Your Bank is well capitalized with a Capital Adequacy Ratio ("CARâ) of 16.82 % as on March 31,2022 as against the minimum requirement of 11.50%. Your Bank complies with the Capital Adequacy guidelines of Reserve Bank of India ("RBIâ), also known as ''Basel III Guidelines''.

Net Worth

Your Bank''s net worth, as on March 31,2022 is R 12,006.32 crore. It comprises of paid-up equity share capital of R 599.51 crore and reserves of R 11,406.81 crore (excluding Revaluation Reserve, Investment Reserve, Foreign Currency Translation Reserves, ESOP Reserves and Intangible and Deferred Tax assets).

E. CORPORATE GOVERNANCE

A detailed Corporate Governance Report as envisaged under Regulation 34(3) of the SEBI Listing Regulations is annexed as Annexure I to this Report.

Board of Directors

The Board of Directors ("Boardâ) of your Bank is constituted in accordance with the provisions of the Companies Act, 2013, the Banking Regulation Act, 1949 ("the BR Act, 1949â), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations) as amended and the Articles of Association of the Bank.

The Bank has always embraced the importance of a diverse Board with an optimum combination of Independent & Non Independent Directors, equipped with appropriate balance of both technical and behavioral skills, experience and diversity of perspectives as relevant for the banking business; thereby ensuring effective Board governance while discharging its fiduciary obligations towards the stakeholders of the Bank.

Thus, in line with the above, the Board of the Bank is well structured and comprises of eminent personalities having wide, diverse and practical experience and comprehensive professional credentials, appropriate balance of skill sets and knowledge, which helps the Bank to gain insights for strategy formulation and direction setting, thus adding value to its growth objectives.

The Bank adheres to the process and methodology prescribed by the Reserve Bank of India in respect of the ''Fit & Proper'' criteria as applicable to Private Sector Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible to be appointed/re-appointed as a Director of the Bank. The said declarations are obtained from all the Directors on an annual basis and also at the time of their appointment / reappointment, in compliance with the said laws. An assessment on whether the Directors fulfil the said criteria is also carried out by the Nomination and Remuneration Committee and the Board on an annual basis and before considering their candidature for re-appointment.

As on March 31, 2022, the Board comprised of twelve (12) Directors, of these, Ten (10) were Non-Executive Directors of which Six (6) Directors were Non-Executive Independent Directors (one of whom being the part-time Chairman of the Bank and one being an Independent Woman Director), Three (3) Directors were Non-Executive Non Independent Directors (including one Woman Director) and One (1) Director was an Additional Director (appointed by RBI). The remaining Two (2) Directors were Executive Directors of which one was Managing Director & CEO who had proceeded on leave effective December 25, 2021 and the other Executive Director was appointed as an interim Managing Director & CEO effective December 25, 2021. Further details have been provided in the below section.

Details of Directors and Key Managerial Personnel

During the year under review and upto the date of this Report, the following changes took place in the composition of the Board:

The Certificate issued by M/s. Alwyn Jay & Co., Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance as stipulated in SEBI Listing Regulations is annexed as Annexure IA and forms an integral part of this Report.

F. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, a Business Responsibility Report ("BRRâ) has to be furnished by top One Thousand listed companies based on market capitalization in the format prescribed by SEBI. Accordingly, the report describing the initiatives taken by the Bank from an Environmental, Social and Governance ("ESGâ) perspective is presented in a separate section forming part of this Annual Report. The BRR is also available on the website of the Bank at https://ir.rblbank.com/.

The Bank has identified sustainability as a key core area of operations. Therefore, it has decided to come up with an integrated report as per International Integrated Reporting Council''s (IIRC) recommendations. The Bank also published standalone sustainability reports based on GRI framework during financial year ended 2017-18 to financial year ended 2019-20. From financial year ended 2019-20, the sustainability report is part of the integrated report. This integrated report is a testament of maturity of Bank''s ESG framework over time. The integrated sustainability report for the financial year ended 202122 also forms an integral part of this Report.

Any Member interested in obtaining a copy of BRR may write to the Company Secretary of the Bank at the Registered Office of the Bank or by email at [email protected].

G. STATUTORY DISCLOSURES Annual Return

In terms of Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014; the Annual Return of the Bank in the prescribed Form MGT-7, is being made available on the website of the Bank at https://ir.rblbank.com/.

Conservation of Energy and Technology Absorption

Summary of measures taken by your Bank with respect to conservation of energy and technology are covered in Management Discussion and Analysis Report and Business Responsibility Report forming part of this Annual Report. Your Bank is constantly pursuing its goal of upgrading technology to deliver quality services to its customers in a cost-effective manner.

Foreign Exchange Earnings and Outgo

During the financial year ended March 31,2022, your Bank earned ^ 129.47 crore and spent ^ 105.57 crore in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.

â¢ Appointment/re-appointment approved by the Members

at the 78^th Annual General Meeting of the Bank

â¢ Appointment of Mr. Vimal Bhandari (DIN: 00001318) as a Non-Executive Non Independent Director of the Bank liable to retire by rotation.

â¢ Appointment of Dr. Somnath Ghosh (DIN: 00401253) as a Non-Executive Independent Director of the Bank for a term of five consecutive years i.e. from December 7, 2020 to December 6, 2025.

â¢ Appointment of Mr. Manjeev Singh Puri (DIN: 09166794) as a Non-Executive Independent Director of the Bank for a term of five consecutive years i.e. from May 21,2021 to May 20, 2026.

â¢ Appointment of Mr. Chandan Sinha (DIN: 06921244) as a Non-Executive Independent Director of the Bank for a term of five consecutive years i.e. from May 21, 2021 to May 20, 2026.

â¢ Re-appointment of Mr. Prakash Chandra (DIN: 02839303) as Non-Executive Independent Director of the Bank for the second term with effect from September 6, 2021 upto August 2, 2024 and reappointment of Mr. Prakash Chandra as Non-Executive (Part-Time) Chairman of the Bank for a period of three years i.e. from August 3, 2021 to August 2, 2024 alongwith revised terms of remuneration for the said tenure.

â¢ Re-appointment of Mr. Ishan Raina (DIN: 00151951) as a Non-Executive Independent Director of the Bank for the second term with effect from September 6, 2021 upto April 29, 2024 i.e. till the completion of his 8 continuous years as Director on the Board of the Bank, under Section 10A(2A) of the Banking Regulation Act, 1949.

â¢ Re-appointment of Mr. Vishwavir Ahuja (DIN: 00074994) as Managing Director & Chief Executive Officer of the Bank for a period of one (1) year, effective June 30, 2021 to June 29, 2022.

â¢ Appointments

â¢ The Board at its meeting held on December 25, 2021 took note of appointment of Mr. Yogesh K. Dayal, (DIN: 07594913), Chief General Manager, Reserve Bank of India as intimated by RBI vide letter dated December 24, 2021 in exercise of powers conferred under Section 36AB of the Banking Regulation Act, 1949 as an Additional Director on the Board of the Bank for a period of two years with effect from December

24, 2021 till December 23, 2023 or till further orders, whichever is earlier.

â¢ Mr. Vishwavir Ahuja, Managing Director & CEO (MD & CEO) of the Bank proceeded on leave effective December 25, 2021. The Board appointed Mr. Rajeev Ahuja (DIN 00003545), Executive Director as interim Managing Director & CEO (MD & CEO) basis the approval received from RBI as mentioned hereinafter. Pursuant to the approval received from RBI vide its letters dated December 29, 2021 and March 17, 2022, respectively the Board approved the appointment of Mr. Rajeev Ahuja as interim MD & CEO effective December

25, 2021 till June 24, 2022 or till the appointment of a regular MD & CEO whichever is earlier. There were no changes to the terms and conditions relating to Mr. Rajeev Ahuja''s appointment and remuneration as earlier approved by the RBI vide Letter dated February 24, 2020 and by the Members at the Annual General Meeting of the Bank held on July 17, 2020. The Members also approved the appointment of Mr. Rajeev Ahuja as an interim MD & CEO for the aforesaid period vide postal ballot on May 27, 2022.

â¢ The Board of the Bank initiated the steps to identify and evaluate candidates for the position of regular Managing Director & CEO and constituted a Search Committee for this purpose. The Board at its meeting held on April 20, 2022, basis the recommendations of the Nomination and Remuneration Committee and pursuant to the provisions of Banking Regulation Act, 1949 and the extant RBI guidelines finalized the names of candidates for the position of regular Managing Director & CEO of the Bank, application in this regard was duly submitted to Reserve Bank of India. The RBI vide letter dated June 10, 2022 approved the appointment of Mr. R. Subramaniakumar (being one of the candidates as proposed by the Bank) as the MD & CEO of the Bank for a period of three years with effect from the date on which he assumes charge as MD & CEO (RBI Approval).

The Nomination and Remuneration Committee and Board at their Meetings held on June 11, 2022, respectively noted the aforesaid RBI Approval and further at their meetings held on June 23, 2022 approved the below:

â¢ Appointment of Mr. R Subramaniakumar (DIN: 07825083), as an Additional Director of the Bank, with effect from June 23, 2022. Pursuant to the provisions of section 161 of the Companies Act, 2013, read with the Articles of Association of the Bank, Mr. R Subramaniakumar continues to hold

office as Additional Director of the Bank, upto the date of this AGM.

â¢ Appointment of Mr. R. Subramaniakumar, as the regular Managing Director and Chief Executive Officer (''MD & CEO'') and Key Managerial Personnel of the Bank for a period of three (3) years commencing from June 23, 2022 (A/N - Afternoon) up to June 22, 2025, subject to approval of the Members.

The Nomination and Remuneration Committee and

Board at their respective Meetings held on August 22,

2022 approved the below:

â¢ Dr. Sivakumar Gopalan (DIN: 07537575), was appointed as an Additional Non-Executive Independent Director of the Bank w.e.f. August 22, 2022 for a term of five (5) years by the Board of Directors at their meeting held on August 22, 2022 on the recommendation of Nomination and Remuneration Committee. In terms of Section 149(13) of the Companies Act, 2013, Dr. Sivakumar Gopalan shall not be liable to retire by rotation. Pursuant to the provisions of section 161 of the Companies Act, 2013, read with the Articles of Association of the Bank, Dr. Sivakumar Gopalan will hold office as Additional Director of the Bank, upto the date of this AGM.

â¢ Mr. Gopal Jain (DIN: 00032308), was appointed as an Additional Non-Executive Non Independent Director of the Bank by the Board of Directors at their meeting held on August 22, 2022 on the recommendation of the Nomination and Remuneration Committee. Pursuant to the provisions of section 152 and 161 of the Companies Act, 2013, read with the Articles of Association of the Bank, Mr. Gopal Jain will hold office as Additional Director of the Bank, upto the date of this AGM and his office shall be liable to retire by rotation.

Considering all the changes as above, as on the date of this Report, the Board of the Bank comprises of fourteen (14) Directors out of whom two (2) Directors are Executive/ Whole-time Directors (one of whom is Managing Director & Chief Executive Officer and the other is an Executive Director), Seven (7) Directors are Non-Executive Independent Directors (including Part-time Chairman of the Bank and one Women Independent Director) and Four (4) Directors are Non-Executive Non Independent Directors (including one Woman Director) and One (1) Director being an Additional Director (appointed by RBI).

Resolutions in respect of appointments of Mr. R. Subramaniakumar (DIN: 07825083), Dr. Sivakumar Gopalan (DIN: 07537575) and Mr. Gopal Jain (DIN: 00032308) have been included in the Notice convening the 79^th Annual General Meeting of the Bank. Your Directors recommend the same for your approval.

The brief profile and details in terms of Regulation 36 (3) of SEBI Listing Regulations and the Secretarial Standard on General Meetings (SS-2), in respect of the directors seeking appointment has been annexed to the Notice convening the 79^th Annual General Meeting of the Bank.

â¢ Other Changes in the composition of the Board

â¢ Mr. Rajeev Ahuja''s position as an interim MD & CEO was an interim position approved by RBI till June 24, 2022 or till the appointment of a regular MD & CEO whichever is earlier. Hence, consequent to the aforesaid appointment of Mr. R. Subramaniakumar as regular MD & CEO, Mr. Rajeev Ahuja ceded the title of interim MD & CEO effective June 23, 2022 (F/N-Forenoon) and continues to perform his role as Executive Director on the same terms and conditions as approved by RBI and Members of the Bank.

â¢ Consequent to the appointment of Mr. R. Subramaniakumar as the regular Managing Director & CEO of the Bank effective June 23, 2022 (A/N-Afternoon), Mr. Vishwavir Ahuja''s term as Managing Director & CEO of the Bank ended on June 23, 2022 (F/N - Forenoon).

Key Managerial Personnel (KMP)

Mr. R. Subramaniakumar (DIN: 07825083), Managing Director and Chief Executive Officer, Mr. Rajeev Ahuja, Executive Director (DIN: 00003545), Mr. Amrut Palan, Chief Financial Officer and Ms. Niti Arya, Company Secretary are the Key Managerial Personnel (KMP) of the Bank as per the provisions of Section 203 (1) of the Companies Act, 2013. The changes during the financial year with respect to KMP has been mentioned above, under the head "Appointmentsâ and "Other changes in the composition of the Boardâ.

The Board placed on record that Mr. Rajeev Ahuja had played an excellent role as an interim MD & CEO and noted his continued contribution and participation as an Executive Director. The Board also placed on record its deep appreciation for the stellar contribution made by Mr. Vishwavir Ahuja to the manifold growth of the Bank during his tenure.

The proposal for the appointment of Mr. R. Subramaniakumar as Director and Managing Director & CEO alongwith the terms of remuneration has been included in the Notice convening the 79^thAnnual General Meeting of the Bank. Your Directors recommend the same for your approval.

Retirement by rotation

In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Bank, Mr. Vijay Mahajan (DIN: 00038794), Non-Executive Non Independent Director of the Bank retires by rotation at the 79^th Annual General Meeting. Although being eligible, he has not offered himself for re-appointment. Accordingly, he would cease to hold office as Non-Executive Non Independent Director of the Bank on expiry of his term ending at the ensuing 79^th Annual General Meeting and the vacancy so created be not filled. Consequently, he would cease to be Chairman/Member of the respective Committees from the said date. The Board places on record its sincere appreciation for the significant contributions made by Mr. Vijay Mahajan in guiding and supporting the management during his tenure with the Bank.

The resolution for the same is included in the Notice convening the 79^th Annual General Meeting. Further, except for the appointments proposed in the Notice of the Annual General Meeting, no other appointment to the Board is proposed.

Independent Directors

As on March 31, 2022, Mr. Prakash Chandra (DIN: 02839303), Mr. Ishan Raina (DIN: 00151951), Ms. Ranjana Agarwal (DIN: 03340032), Dr. Somnath Ghosh (DIN: 00401253), Mr. Chandan Sinha (DIN: 06921244) and Mr. Manjeev Singh Puri (DIN: 09166794) are Non-Executive Independent Directors of the Bank. All the Independent Directors have submitted their respective declarations stating that they meet the criteria prescribed for independence under Section 149(6) of the Companies Act, 2013 & Rules made thereunder and Regulation 16 of the SEBI Listing Regulations. In the opinion of the Board the Independent Directors fulfill the aforesaid criteria and possess requisite integrity, qualifications, proficiency, experience, expertise and are independent of the management.

Dr. Sivakumar Gopalan (DIN: 07537575) who was appointed as an Additional Director and Non-Executive Independent Director by the Board at its meeting held on August 22, 2022 has also submitted the declaration of independence and the Board has taken on record that Dr. Sivakumar Gopalan meets the criteria for independence and possesses the necessary attributes as mentioned above.

The Independent Directors of the Bank have complied with the requirements of the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 read with the Companies (Appointment and Qualification of Directors) Rules, 2014.

Board Level Performance Evaluation

The performance evaluation of the Board as a whole as well as that of its Committees, Directors (including Independent Directors) and Chairman of the Board is carried out by the Board based on the criteria for evaluation/ assessment as laid down by the Nomination & Remuneration Committee, in accordance with

the relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and the SEBI Listing Regulations.

The manner in which the said performance evaluation has been carried out is outlined in the Corporate Governance Report forming part of this Report as an Annexure I.

Particulars of Employee Remuneration

A. The ratio of the remuneration of each director to the median

employee''s remuneration and other details in terms of Section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended by the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, are given below:

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

Sr. No.	Name of the Director	Designation	Ratio
1	Mr. Prakash Chandra	Non-Executive Independent Director (Part-time Chairman)	8.32 x
2	Mr. Vishwavir Ahuja#	Managing Director & CEO	35.64x
3	Mr. Rajeev Ahuja@	Executive Director and interim MD & CEO	32.97x

# Proceeded on leave effective December 25, 2021 and his term as MD & CEO ended on June 23, 2022 (F/N)

@ Appointed as interim MD & CEO with effect from December 25, 2021 till June 23, 2022 (F/N).

Note: ''x'' denotes the median remuneration of the employees.

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

Sr. No.	Name of the Director / KMP	Designation	% Increase
1	Mr. Prakash Chandra*	Non-Executive Independent Director (Part-time Chairman)	9.09%
2	Mr. Vishwavir Ahuja#	Managing Director & CEO	NIL
3	Mr. Rajeev Ahuja@	Executive Director	NIL
4	Mr. Amrut Palan	Chief Financial Officer	23.2%
5	Ms. Niti Arya	Company Secretary	43.7%

* The percentage increase was w.e.f. August 3, 2021, pursuant to approval of RBI.

# Proceeded on leave effective December 25, 2021 and his term as MD & CEO ended on June 23, 2022 (F/N)

@ Appointed as interim MD & CEO with effect from December 25, 2021 till June 23, 2022 (F/N).

3. The percentage increase in the median remuneration of employees in the financial year.

The percentage increase in the median remuneration of employees in the financial year was 12%.

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

The number of permanent employees on the rolls of the Bank as on March 31,2022 was 9,257.

Average increase in remuneration is 19.5% for employees other than managerial personnel and 8.26% for managerial personnel (including Managing Director & CEO, Chief Financial Officer and Company Secretary).

It is hereby affirmed that the remuneration paid to Directors and KMPs is as per the remuneration policy of the Bank and where applicable has been approved by the Reserve Bank of India.

B. The statement containing particulars of employees as required under Section 197(12) of Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended by the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 forms part of this report. In terms of Section 136 of Companies Act, 2013 read with second proviso of Rule 5 (3) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Annual Reports are being sent to the Members of the Bank, excluding the information as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, as mentioned aforesaid and the same is open for inspection electronically on all working days between 11:00 a.m. to 01:00 p.m. upto the date of Annual General Meeting. A copy of this statement may be obtained by the Members by writing to the Company Secretary of the Bank at the Registered Office of the Bank or by email at [email protected].

Remuneration Policy

Remuneration policy for employees

Your Bank''s compensation policy keeps in mind the strategy, ethos and financial performance of the Bank and market compensation trends at any given time. Your Bank recognizes

that talent is critical to the long-term growth and success of the Bank, and it is a pre-requisite to have a compensation structure comparable with the industry.

During the financial year under review, your Bank reviewed and revised the remuneration policy based on the Guidelines on Compensation of Whole Time Directors/ Chief Executive Officers/ Material Risk Takers and Control Function staff published by the Reserve Bank of India on November 4, 2019 vide circular ref. RBI/2019-20/89. The key highlight of the revised policy was the identification of Material Risk Takers (MRTs) based on role, responsibilities and level where actions have a material impact on the risk exposure of the bank. Employees who meet the qualitative criteria and one of the quantitative criteria were qualified as MRTs.

Policy on appointment & compensation to Non-Executive Directors (including Independent Directors) and Criteria for evaluation of Board and its Directors

In terms of the provisions of Companies Act, 2013 and SEBI Listing Regulations, the Board has, on recommendation of the Nomination and Remuneration Committee framed a Policy on appointment & Compensation to Non-Executive Directors (including Independent Director) and Criteria for evaluation of Board and its Directors ("Policyâ) which inter alia specifies the criteria for identifying persons who are qualified to be appointed as Non-Executive Directors (including Independent Director) and the appointment and the remuneration structure of the aforesaid Directors, along with criteria for evaluating their performance. The said Policy is available on the website of the Bank at https://ir.rblbank.com/.

Remuneration of Managing Director and Executive Director

The Board considers the recommendations of Nomination and the Remuneration Committee and approves the remuneration of Managing Director and the Executive Director, with or without modifications, subject to the approval of Members of the Bank and applicable regulatory approval.

The remuneration payable to the Managing Director and the Executive Director is subject to prior approval of the RBI and hence the remuneration or revision in remuneration is payable to them only after receipt of approval from the RBI.

Remuneration of Chairman

The Nomination and Remuneration Committee recommends the remuneration of the Chairman to the Board which is considered and approved by the Board subject to the approval of Members of the Bank and applicable regulatory approval.

The remuneration payable to the Chairman is subject to prior approval of the RBI. Therefore, the remuneration or any revision in remuneration of the Chairman is payable only after receipt of the RBI approval. Apart from the payment of sitting fees for attending each meeting of the Board of Directors or any Committee thereof, the Chairman is also entitled to a remuneration of ? 18 lakh per annum as per the last approval granted by RBI and the Members.

The Chairman is also entitled to reimbursement of expenses for participation in the meetings of the Board and Committees thereof.

Remuneration of Non-Executive Directors (NEDs)

The NEDs are paid sitting fees for attending each meeting of the Board of Directors or any Committee thereof. The NEDs are also entitled to reimbursement of expenses for participation in the meetings of the Board and Committees thereof.

RBI vide Circular No. DBR. No.BC.97/29.67.001/2014-15 dated June 1, 2015 issued Guidelines on Compensation of NonExecutive Directors of Private Sector Banks emphasizing that in order to enable banks to attract and retain professional directors, it is essential that such directors are appropriately compensated. Pursuant to the aforesaid RBI Circular, the maximum amount that can be paid as Commission was capped at ? 10.00 Lakh per director per annum. Also, section 197 of Companies Act, 2013 permits payment of profit based commission to the Directors who are neither Managing Directors nor Whole-time Directors not exceeding One per cent (1%) of the net profits of the company, if there is a Managing or Whole-time Director or Manager, or three per cent (3%) of the net profits in any other case.

RBI further vide its Circular RBI/2021-22/24 DOR.GOV. REC.8/29.67.001/2021-22 dated April 26, 2021 prescribed that, in addition to sitting fees and expenses related to attending meetings of the board and its committees as per extant statutory norms/ practices, the bank may provide for a payment of

compensation to non-executive directors of the Bank, other than the Part Time Non-Executive Chairperson, in the form of fixed remuneration not exceeding ? 20,00,000 (Rupees Twenty Lakh Only) per annum which is commensurate with the individual director''s responsibilities and demands on time and which are considered sufficient to attract qualified competent individuals.

Pursuant to the above, the Members of the Bank at their 78^thAnnual General Meeting held on September 21, 2021 had accorded their consent to pay compensation to each NonExecutive Director (NED) of the Bank (other than the Part Time Non-Executive Chairman) in the form of fixed remuneration not exceeding ? 20,00,000 (Rupees Twenty Lakh Only), per annum, for a period of five (5) years, with effect from the financial year 2021-22.

Since, the Bank had reported a loss (after tax) of ? 75 crore for financial year ended 2021-22, with the concurrence of the Nomination and Remuneration Committee and the Board, no commission was paid to the NEDs for financial year ended 2021-22.

The Bank does not grant any Stock Options to NEDs. NEDs (other than Additional Director appointed by RBI) are paid sitting fee of ? 1 lakh for attending meetings of the Board, ? 50,000 for attending meetings of Audit Committee, Risk Management Committee and Nomination and Remuneration Committee respectively and ? 30,000 for the remaining Committees, names of which are mentioned in the section on "Audit Committee and Other Board Sub-Committeesâ.

Employees Stock Option Plan (ESOP)

The Bank has formulated and adopted Employee Stock Option Plans (ESOP) in terms of the Regulations/Guidelines issued by the Securities and Exchange Board of India.

The underlying philosophy of the Bank''s ESOP is to enable the present and future employees to share the value that they help to create for the Bank over a period of time. ESOP is also expected to strengthen the sense of ownership and belonging among the recipients. The ESOP has been designed and implemented in such a manner that the compensation structure goes a long way in aligning the objectives of an individual with those of the Bank. In addition, during the year your Bank continued with its plan of rewarding long-serving employees with ESOPs thus making them true partners in the Bank''s growth.

The Nomination and Remuneration Committee of the Board inter alia administers and monitors the ESOP. The Bank has two active schemes ESOP 2013 and ESOP 2018 under which stock options are issued to the employees of the Bank. The Nomination and Remuneration Committee and the Board at its meetings held on August 22, 2022, subject to the approval of the Members approved to create, offer, issue and grant/allot 1,75,00,000 (One Crore Seventy Five Lakh) additional number of equity stock options

under the ESOP 2018, in one or more tranches from time to time, to the eligible employees of the Bank, (as defined under SEBI (SBEB & SE) Regulations and ESOP 2018), which upon exercise shall not exceed in aggregate (including shares arising pursuant to grant of options to eligible employees of the subsidiary(ies) of the Bank), 1,75,00,000 (One Crore Seventy Five Lakh) equity shares of face value of ? 10/- (Rupees Ten) each fully paid up, of the Bank in addition to the residual/ remaining options under ESOP 2018, which remain ungranted as approved by Members vide Special resolutions dated June 18, 2018 and July 17, 2020, respectively. The Nomination and Remuneration Committee and the Board also approved the amendments to the ESOP 2018 to update the revised limits of the stock options subject to the above limits being approved by the Members and also align the clauses in ESOP 2018 with the requirements prescribed under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''SEBI (SBEB & SE) Regulationsâ). In terms of Regulation 7(1) of the SEBI (SBEB & SE) Regulations the Nomination and Remuneration Committee and the Board at their respective meetings held on August 22, 2022 approved the necessary minimum amendments to ESOP 2013 not being of a nature requiring approval of Members only for the purpose of meeting the regulatory requirements of SEBI (SBEB & SE) Regulations. The amendments made to the ESOP 2013 and ESOP 2018, respectively are not detrimental to the interest of the existing option grantees.

The Special Resolutions w.r.t enhancement of limit for grant of equity stock options and amendments to ESOP 2018 has been included in the Notice of the 79^th Annual General Meeting for approval of the Members of the Bank and the details thereof are mentioned in the explanatory statement.

The certificate from the Secretarial Auditors of the Bank certifying that the Bank''s Employees Stock Option Plans are being implemented in accordance with the provisions of the SEBI (SBEB & SE) Regulations and the respective resolutions passed by the Members of the Bank, shall be available for inspection electronically by the Members at the Annual General Meeting.

Further details of the ESOP are given in the notes to accounts in the attached financial statements and the statutory disclosure as mandated under Regulation 14 of ''SEBI (SBEB & SE) Regulations forms part of this report and the same is available electronically on the website of the Bank at https://ir.rblbank.com/.

Board Meetings

urgent matters, additional Board meetings are held in between the quarterly meetings.

During the financial year under review, nineteen (19) Board meetings were convened and held. The intervening gap between the Board meetings was within the period prescribed under the Companies Act, 2013 and SEBI Listing Regulations. The details of the Board composition, its meetings held during the year alongwith the attendance of the respective Directors thereat are set out in the Corporate Governance Report forming part of this Report as Annexure I.

Audit Committee and other Board Sub-Committees

Your Bank has a duly constituted Audit Committee as per the provisions of Section 177 of the Companies Act, 2013, SEBI Listing Regulations and the RBI Guidelines.

The Board of Directors have constituted other committees namely, Stakeholders'' Relationship Committee, Board Investment & Credit Committee, Anti - Fraud Committee, Nomination and Remuneration Committee, Risk Management Committee, Capital Raising Committee, Corporate Social Responsibility Committee, IT Strategy Committee, Non - Cooperative Borrower Review Committee, Wilful Defaulter Review Committee and Customer Service, Branding and Marketing Committee (segregated effective May 6, 2022 into two committees viz. Customer Service Committee and Branding, Marketing & Communications Committee).

The details of composition of the Audit Committee and that of other Board Sub-Committees, their terms of reference and other details are set out in the Corporate Governance Report forming part of this Report as Annexure I.

The Audit Committee and other Board sub-committees meet at regular intervals and ensure to perform the duties and functions as entrusted upon them by the Board.

Related Party Transactions

Your Bank has in place a Policy on Dealing with the Related Party Transactions as per the provisions of the Companies Act, 2013 read with the rules made thereunder and SEBI Listing Regulations.

The Bank obtains approval of the Audit Committee before entering into any Related Party Transactions. Approval of the Board of Directors in terms of Section 188 of the Companies Act, 2013 is also obtained for entering into Related Party Transactions by the Bank wherever applicable. A quarterly update on the Related Party Transactions is provided to the Audit Committee and the Board of Directors for their review and consideration.

All Related Party Transactions entered during the financial year under review were in the ordinary course of business and

on an arm''s length basis. There were no significant material transactions entered into by the Bank with any related party during the financial year under review. Thus, the disclosure as per section 134(3)(h) of the Companies Act, 2013 in the prescribed Form AOC-2 is not applicable to the Bank.

Details of related party transactions as per Accounting Standard 18 (AS-18) entered into during the financial year ended March 31,2022 are given in Note No. 14 in Schedule 18, forming part of ''Notes to Accounts''.

The Policy on Dealing with the Related Party Transactions of the Bank is available on the website of the Bank at https://ir.rblbank.com/.

Subsidiary Company

As on March 31,2022, your Bank has one wholly owned subsidiary

i.e. RBL FinServe Limited (RFL) (formerly Swadhar Finserve Private Limited), which is not a material subsidiary as per the SEBI Listing Regulations. RBL Finserve Ltd., headquartered in Mumbai, India, is a Business Correspondent, distributing various financial services and products for the Bank, in the rural and semi urban markets. Currently, RFL has presence across 22 states and 351 districts with a network of 929 branches. As on March 31,2022, RFL was sourcing the following products for RBL Bank through its branches:

â¢ Micro-finance loans

â¢ Small savings accounts

â¢ Secured business loans

â¢ Affordable housing loans

RFL has an active client base of 2.1 million customers and an AUM of ^ 5,387 crore across the above businesses.

Pursuant to Section 129(3) of Companies Act, 2013 read with Rules made thereunder, your Bank has prepared consolidated financial statements of the Bank with its Subsidiary Company, RBL FinServe Limited, in the same form and manner as that of the Bank which forms part of this Annual Report and shall be laid before the ensuing Annual General Meeting of the Bank along with the laying of the Bank''s Standalone Financial Statement under Section 129(2) of the Companies Act, 2013.

A statement containing the salient features of the financial statement of the Subsidiary Company in Form AOC-1, pursuant to the provisions of Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed to the Financial Statements forming part of the Annual Report.

Further, in accordance with the fourth proviso of Section 136(1) of the Companies Act, 2013 read with the applicable rules, the audited annual accounts of the said subsidiary company of the Bank have been hosted on the Bank''s website at https://ir.rblbank.com/ Any Member interested in obtaining a

physical copy of the said financial statement may write to the Company Secretary at the Registered Office of the Bank or by email at [email protected]. The same is also open for inspection by the Members of the Bank and Trustees of the Debenture holders electronically on all working days between 11:00 a.m. to 01:00 p.m. upto the date of Annual General Meeting.

Adequacy of Internal Financial Controls with reference to Financial Statements

Material changes and commitments affecting the financial position of the Bank

There are no material changes and commitments, affecting the financial position of the Bank that have occurred between the end of the financial year of the Bank i.e. March 31, 2022 upto the date of the Directors'' Report i.e. August 22, 2022, except as disclosed.

Deposits

Nature of Business

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

Particulars of Loans, Guarantees and Investments

Pursuant to Section 186(11) read with Section 134(3)(g) of the Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided or acquisition of securities by a banking company in the ordinary course of business. The particulars of investments made by the Bank are disclosed in note number 8 of Schedule 18 of the financial statements for the financial year ended March 31, 2022, as per the applicable provisions of the Banking Regulation Act, 1949.

Auditors

The Members at the 77^th Annual General Meeting of the Bank had appointed M/s. Haribhakti & Co LLP, Chartered Accountants (Firm Registration No. 103523W/W100048) as the Bank''s Statutory Auditor subject to the approval of Reserve Bank of India ("RBIâ),

for a period of two (2) years, from the conclusion of the Seventy Seventh (77^th) Annual General Meeting until the conclusion of the Seventy Ninth (79^th) Annual General Meeting in connection with the audit of the accounts of the Bank. The approval of RBI for M/s. Haribhakti & Co LLP to act as Statutory Auditors of the Bank for the financial year 2020-2021 was received on March 20, 2020. Further, the Bank had received the requisite approval of the RBI for M/s. Haribhakti & Co LLP, Chartered Accountants on July 20, 2021 for the financial year 2021-2022.

Pursuant to the Reserve Bank of India Circular RBI/2021-22/25 Ref.No.DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021: Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs), the provisions prescribed that Statutory Auditors shall be appointed for a continuous period of three years, subject to the Audit firms satisfying the eligibility norms as stipulated therein, each year. Further, Clause 4 of the said RBI Guidelines provided that the Statutory Audit of banks with certain asset size threshold should be conducted under joint audit with a minimum of two eligible audit firms.

The said requirement being applicable to the Bank, the Bank sought and obtained the approval of the Members of the Bank at the 78th Annual General Meeting for appointment of M/s. CNK & Associates LLP, Chartered Accountants, (Firm Registration No. 101961 W/W100036) as the other Joint Statutory Auditor for a period of three (3) years to hold office till the conclusion of the 81^st Annual General Meeting.

Reserve Bank of India issued a press release on October 12, 2021 vide which M/s. Haribhakti & Co LLP were debarred from undertaking any type of audit assignments in the entities regulated by RBI for a period of two years, effective April 1, 2022.

Accordingly, the Board at its meeting held on May 6, 2022 basis the recommendation of the Audit Committee, pursuant to the approval received from the Reserve Bank of India and subject to the approval of Members of the Bank, approved the appointment of M/s G.M. Kapadia & Co., Chartered Accountants, Mumbai, having Firm Registration Number:104767W, as the other Joint Statutory Auditor of the Bank, to hold office as such for a period of 3 years from the conclusion of the 79^th Annual General Meeting until the conclusion of the 82^nd Annual General Meeting, subject to the approval of the RBI every year and on such terms and conditions, including remuneration, as may be approved by the Audit Committee. M/s. G. M. Kapadia & Co; Chartered Accountants is a Chartered Accountancy Firm registered with The Institute of Chartered Accountants of India (ICAI) with Firm Registration No. 104767W and they hold a valid certificate issued by the Peer Review Board of ICAI. M/s. G. M. Kapadia & Co; Chartered Accountants was established in 1938 and are providing services in the fields of audit & assurance, tax, transaction advisory, Accounting & Compliance. M/s. G. M. Kapadia & Co; Chartered Accountants have been associated as Statutory Central Auditor for various banks in India.

Qualifications/Reservation in Statutory and Secretarial Audit Reports

There were no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in the Auditor''s Report.

Further, there were no qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor in his Report.

Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Bank has Zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman executive working in the Bank. The Bank has formulated a Policy and has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank created a mandatory e-learning module for all the employees called "Prevention of Sexual Harassment (POSH)â. The information relating to complaints received and disposed-off /resolved/ action taken during the financial year ended 202122 is disclosed under Corporate Governance Report annexed as Annexure I to this Report.

Whistle Blower Policy (Vigil Mechanism)

Details required to be disclosed in this regard have been provided under Corporate Governance Report annexed as Annexure I to this Report.

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

During the financial year ended 2021-22 there were no significant/ material orders passed by the Regulators / Courts/ Tribunals etc. which would impact the going concern status of the Bank and its future operations.

Risk Management Policy

The Board of the Bank has constituted a Risk Management Committee in accordance with the provisions of Regulation 21 of the SEBI Listing Regulations. The details with respect to its terms of reference, composition and meetings held during the last financial year are set out in the Corporate Governance Report forming part of this Report as Annexure I.

Your Bank has a robust Risk Management framework and a comprehensive Risk Management Policy, in place. The details of Risk Management Policy and its framework are separately provided in Management Discussion and Analysis Report which forms an integral part of this Annual Report.

M/s CNK & Associates LLP, Chartered Accountants who were appointed by the Members at the last Annual General Meeting held on September 21, 2021 for a period of three years would continue to be the other Joint Statutory Auditor subject to the approval of RBI every year.

M/s. CNK & Associates LLP, Chartered Accountants and M/s. G.M. Kapadia & Co., Chartered Accountants have confirmed their eligibility under Section 141 of Companies Act, 2013 read with the relevant rules made thereunder and the subject RBI Guidelines, to be appointed as the Joint Statutory Auditors of the Bank. Further, as required under the relevant provisions of the SEBI Listing Regulations, both the Joint Statutory Auditors have also confirmed that they had subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of ICAI. Further, they have confirmed that they fulfill the eligibility norms for appointment of Statutory Central Auditor of Private Sector Banks as prescribed by Reserve Bank of India ("RBIâ).

RBI vide its letter dated April 8, 2022 has approved the appointment of M/s. CNK & Associates, LLP and M/s. G. M. Kapadia & Co as the Joint Statutory Auditors of the Bank for the year 202223 for their second and first year respectively. In accordance with the requirement of the aforesaid RBI Guidelines, the Bank has also framed a Board approved Policy on appointment of Statutory Auditors.

The resolution for the approval of M/s. G. M. Kapadia & Co, Chartered Accountants as one of the Joint Statutory Auditors alongwith M/s. CNK & Associates LLP, Chartered Accountants as the other Joint Statutory Auditor forms part of the Notice convening the 79^th Annual General Meeting. Your Directors recommend the resolution for your approval.

Pursuant to Section 204 of Companies Act 2013, the Board had appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries, Mumbai as its Secretarial Auditors for the financial year ended 2021-22. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit as prescribed under Companies Act, 2013. The Secretarial Audit Report for the financial year ended 2021-22 is annexed to this report as Annexure II.

During the financial year under review, your Bank has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

H. OTHER DISCLOSURES Code of Conduct for Employees

Bribery and Corruption

Your Bank has a responsibility both to the Members and to the communities in which we do business to be transparent in all our dealings. Your Bank''s Code of Conduct requires that we do not engage in bribery or corruption in any form and explicitly mentions that the Bank will not pay or procure the payment of a bribe or unlawful fee to encourage the performance of a task or one which is intended or likely to compromise the integrity of another. Your Bank will not accept any payment, gift or inducement from a third party which is intended to compromise our own integrity. The Code of Conduct also includes procedures dealing with Gifts & Entertainment, Conflicts of Interest and other important matters.

Corporate Social Responsibility (CSR)

Your Bank strives to proactively encourage inclusive growth and development, thereby participating towards building a sustainable future.

Your Bank has a duly constituted CSR Committee of the Board as per the provisions of Section 135 of the Companies Act, 2013. The composition of the CSR Committee and its terms of reference are detailed in the Corporate Governance Report forming part of this report as Annexure I. Your Bank also has a Board approved Policy on Corporate Social Responsibility ("CSR Policyâ) in place. In alignment with the CSR Mission Statement, the Bank has focused on various initiatives for the financial year ended 2021-22, the details of CSR activities with the brief outline of CSR Policy including overview of the programs/ Projects undertaken by the Bank, amount spent and other relevant details are furnished in Annexure III to this report.

The CSR Policy of the Bank is available on the website of the Bank at https://ir.rblbank.com/.

Management Discussion and Analysis Report

vi. Proper Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGMENT

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

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

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

Awards and Recognitions

During the year under review, your Bank was recipient of the following awards:

â¢ Digital Awards 2021 - Best Emerging Digital Technologies Project -Video KYC Platform

â¢ Red Hat APAC Innovation Awards 2021 - DIGITAL TRANSFORMATION AND CLOUD-NATIVE DEVELOPMENT

â¢ Infosys Finacle Innovation Awards 2021 -

TRANSFORMATION EXCELLENCE: CO-INNOVATION R&D

SET-UP WITH FINACLE CORE BANKING

â¢ India Gold Conference Excellence Awards 2021 - BEST NOMINATED BANK FOR SILVER, 2019-20 & 2020-21

â¢ Mint | Techcircle Business Transformation Awards

2021 - EXCELLENCE IN DIGITAL EXECUTION: PROCESS INNOVATION

â¢ IDC Industry Innovation Awards 2021 - INNOVATION IN OMNI-EXPERIENCE (FOR TAB BASED ACCOUNT OPENING PROJECT)

â¢ The Asset Triple A Digital Awards 2022 - BEST DATA ANALYTICS PROJECT IN INDIA (FOR RURAL VEHICLE FINANCE PROJECT)

Ratings

Your Bank''s Basel III Tier II Bonds have been rated as "AA-" with Stable Outlook by CARE Ratings Limited (CARE). ICRA has rated these bonds as "AA-" rating watch with developing implications. Instruments rated with this rating are considered to have high degree of safety regarding timely servicing of financial obligations.

Your Bank''s Certificate of Deposits carries a rating of "A1 â by ICRA which indicates the lowest short term credit risk. Further, your Bank''s Medium Term Fixed Deposit programme carries rating of "ICRA MAAâ rating watch with developing implications which indicates low credit risk and the Bank''s short term fixed deposit programme carries a rating of "ICRA A1 â which indicates lowest credit risk.

Your Bank''s ratings were retained by ICRA in February 2022 and reaffirmed by CARE in October 2021.

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

requirements, as set out by the Financial Intelligence Unit (FIU) of the Government of India, are complied with by the Bank. Your Bank uses automated transaction monitoring system under supervision of centralised AML team. Further, your Bank''s employees are being imparted training on KYC/AML aspects on a regular basis. Executives of the Bank also attend periodic workshops/seminars organised by FIU, RBI, IBA, Centre for Advanced Financial Research & Learning (CAFRAL) and College of Agricultural Banking (CAB), Pune to enhance their awareness in evolving KYC AML issues.

Requirement for maintenance of cost records

The Bank is not required to maintain cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013.

CEO/CFO Certificate

Pursuant to the provisions of Regulation 17(8) of SEBI Listing Regulations, the certificate issued by the interim MD & CEO and the CFO of the Bank for the financial year ended 2021-22 was placed before the Board of Directors at its meeting held on May 12, 2022.

The said certificate is forming part of this Report as an Annexure IB to Corporate Governance Report.

I. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

i. The applicable accounting standards have been followed in preparation of the annual accounts for the financial year ended 2021-22 and there have been no material departures;

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

v. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

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

For and on behalf of the Board of DirectorsPrakash Chandra R Subramaniakumar

Chairman Managing Director & CEO

(DIN: 02839303) (DIN: 07825083)

Place : Mumbai Date : August 22, 2022

Mar 31, 2019

DEAR MEMBERS,

The Directors have pleasure in presenting the 76th Annual Report of RBL Bank Limited (âthe Bankâ) along with the audited statement of accounts for the financial year ended March 31, 2019.

A. FINANCIAL PERFORMANCE

The comparative standalone financial performance for the financial year ended March 31, 2019 (FY19) with that of March 31, 2018 (FY18) is summarized in the following table:

(Rs. in crore)

Particulars	FY19	FY18	Change(%)
Advances (Net)	54,308.24	40,267.84	34.87%
Deposits	58,394.42	43,902.26	33.01%
Net interest income	2,539.48	1,766.28	43.78%
Other income	1,442.37	1,068.19	35.03%
Net total income	3,981.85	2,834.47	40.48%
Operating expenses	2,042.02	1,503.41	35.83%
Provisions and contingencies	1,072.88	695.98	54.15%
Net profit	866.95	635.09	36.51%
Gross NPA ratio	1.38%	1.40%	-
Net NPA ratio	0.69%	0.78%	-
Capital Adequacy Ratio	13.46%	1 5.33%	-
Business per employee	19.29	15.88	21.45%
Business per branch	347.85	317.62	9.52%
Appropriations
Transfer to Statutory Reserve	217.00	158.80	-
Transfer to Capital Reserve	9.00	9.39	-
Transfer to Revenue and Other Reserves	400.00	360.00	-
Transfer to Investment Fluctuation Reserve	78.36	-	-
Transfer from Investment Reserve	-	(2.20)	-
Dividend for the year, including tax thereon	107.00	82.17	-

The Bank posted a net total income ofRs. 3,981.85 crore and net profit ofRs. 866.95 crore for FY19 as against a net total income of Rs. 2,834.47 crore and net profit of Rs. 635.09 crore for FY18 which is an increase of 40.48% and 36.51 %, respectively over FY18

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

B. BUSINESS UPDATE AND STATE OF BANKâS AFFAIRS

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

C. FINANCIAL DISCLOSURES Dividend

Considering the overall performance during FY19 and the need to maintain a healthy capital adequacy ratio as well as to support the Bankâs future growth, the Board of Directors have recommended, subject to approval of the members at the Annual General Meeting (âAGMâ), a dividend ofRs. 2.70 (27%) per equity share for FY19, as against Rs. 2.10 (21 %) per equity share for FY18. This dividend shall be subject to tax on dividend to be paid by the Bank.

Capital Raising

During the fiscal FY19, the Bank had raised capital to the tune of Rs. 100.54 crore through issuance/allotment of equity shares pursuant to exercise of stock options by the employees of the Bank under various Employees Stock Option Plans/ Schemes.

The paid up Equity Share Capital of the Bankas on financial year ended March 31, 2019 stood at Rs. 4,267,097,280 divided into 426,709,728 equity shares ofRs. 10/- each.

Capital Adequacy Ratio

The Bank is well capitalized with a Capital Adequacy Ratio (âCARâ) of 13.46% as on March 31, 2019. The Bank complies with the Capital Adequacy guidelines of Reserve Bank of India (âRBIâ) which came into effect from April 1, 2013, known as âBasel III Guidelinesâ.

Net Worth

The Bankâs net worth, as on March 31, 2019 is Rs. 7,336.30 crore. It comprises of paid-up equity capital of Rs. 426.71 crore and reserves of Rs. 6,909.59 crore (excluding Revaluation Reserve, Investment Reserve, Foreign Currency Translation Reserves and as reduced by intangible and deferred tax assets).

D. CORPORATE GOVERNANCE

A detailed report on Corporate Governance as envisaged under Regulation 34(3) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 (âListing Regulationsâ) is annexed as Annexure I to this Report.

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

E. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the Listing Regulations, a Business Responsibility Report (âBRRâ) has to be furnished by top five hundred listed companies based on market capitalization in the format prescribed by the SEBI. Accordingly, the report describing the initiatives taken by the Bank from an environmental, social and governance perspective is presented in a separate section forming part of this Annual Report.

F. STATUTORY DISCLOSURES

Extract of Annual Return

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

Conservation of Energy and Technology Absorption

Summary of measures taken by the Bank with respect to conservation of energy and technology are covered in Management Discussion and Analysis Report and Business Responsibility Report forming part of this Annual Report. The Bank is constantly pursuing its goal of upgrading technology to deliver quality services to its customers in a cost-effective manner.

Foreign Exchange Earnings and Outgo

During the year ended March 31, 2019, the Bank earned Rs. 296.62 crore and spent Rs. 179.05 crore in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.

Board of Directors

The Board of Directors (âBoardâ) is constituted in accordance with the provisions of the Companies Act, 2013 (âCA 2013â), the Banking Regulation Act, 1949 (âthe BR Act, 1949â), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) and the Articles of Association of the Bank. The Board consists of eminent persons with considerable professional expertise in banking, finance, marketing, taxation, financial inclusion, agriculture and other related fields. Their experience and professional credentials have helped the Bank to gain insights for strategy formulation and direction setting for the Bank, thus adding value to its growth objectives.

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

During the year under review, Mr. Narayan Ramachandran (DIN: 01873080), Non-Executive Part-Time Chairman of the Bank and Mr. Vimal Bhandari (DIN: 00001318) Independent Director ceased to be a Director of the Bank due to completion of their tenure of eight years, as prescribed under section 10A of the Banking Regulation Act, 1949, w.e.f. close of working hours of May 19, 2018 and September 13, 2018 respectively. Pursuant to cessation of Mr. Narayan Ramachandran as Director/Chairman of the Bank, Mr. Prakash Chandra, (DIN: 02839303) Independent Director of the Bank since January 25, 2016, was appointed as Part-time Chairman of the Bank, w.e.f. May 20, 2018 for a period of two years. The said appointment of Part-Time Chairman was approved by the Reserve Bank of India on July 24, 2018 and shareholders at their 75th Annual General Meeting of the Bank held on August 3, 2018.

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

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

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

The details with regards to the Board and its Committees, Composition, Performance Evaluation etc. are provided in the Corporate Governance Report as Annexure I to this Report.

Key Managerial Personnel

Mr. Vishwavir Ahuja, Managing Director & CEO, Mr. RajeevAhuja, Executive Director (ED), Mr. Deepak Ruiya, Chief Financial Officer (interim) and Mr. Vinay Tripathi, Company Secretary of the Bank are the Key Managerial Personnel (KMP) as per the provisions of CA 2013.

Particulars of Employees

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

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

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

* For calculation of ratio, remuneration off 12,98,387/- for the FY 2018-19 which will be paid In the FY 2019-20 Is also Included

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

Sr. No.	Name of the Director / KMP	Designation	% Increase
1	Mr. Prakash Chandra	Non-Executive & Part-time Chairman	N.A.
2	Mr. Vishwavir Ahuja	Managing Director & CEO	15%
3	Mr. Rajeev Ahuja*	Executive Director	12%
4	Mr. Deepak Ruiya	Chief Financial Officer (interim)	20%
5	Mr. Vinay Tripathi	Company Secretary	15%

r The Increase In remuneration of Mr Rajeev Ahuja Is effective from February 21, 2019 subject to the approval of Reserve Bank of India.

3. The percentage increase in the median remuneration of employees in the financial year.

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

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

The number of permanent employees on the rolls of Bank as on March 31, 2019 was 5,843.

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

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

Notes:

- denotes the median remuneration of the employees.

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

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

Remuneration Policy

Remuneration policy for employees

The Bankâs compensation policy keeps in mind the strategy, ethos and financial performance of the Bank and market compensation trends at any given time. The Bank recognizes that talent is critical to the long-term growth and success of the Bank and it is a pre-requisite to have a compensation structure comparable with the industry.

The Bank has set out its Compensation Policy based on the concept of CTC (Cost to Company) and TEC (Total Employee Compensation), to make compensation packages for officers across all Grades, competitive enough to attract, nurture and retain high calibre professionals in the Bank and have an organization structure that reflects specialization, focus & scale.

The Bankâs Compensation Policy is designed and aimed at attracting & retaining best possible / available talent that it requires to effectively grow the business and be considered a highly respected institution. It comprises of a balanced mix of Fixed & Variable cash and non-cash compensation and benefits / perquisites to deliver maximum value to the employee and other stakeholders.

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

Remuneration Policy for Directors

In terms of the provisions of CA 2013 and Listing Regulations, the Board has, on recommendation of the Human Resource & Remuneration Committee (âHRRCâ) framed a compensation policy which inter alia deals with remuneration structure and criteria for selection and appointment of directors.

Remuneration of Executive Directors

The Board considers the recommendations of HRRC and approves the remuneration of Executive Directors (including of Managing Director & CEO), with or without modifications, subject to members and regulatory approvals.

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

Remuneration of Chairman

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

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

Remuneration of Non-Executive Directors (NEDs)

RBI vide Circular No. DBR. No.BC.97/29.67.001/2014-15 dated June 1, 2015 issued Guidelines on Compensation of Nonexecutive Directors of Private Sector Banks emphasizing that in order to enable banks to attract and retain professional directors, it is essential that such directors are appropriately compensated. Pursuant to the aforesaid RBI Circular, the maximum amount that can be paid as Commission was capped at Rs. 10.00 Lakh per director per annum. Also, section 197 of CA 2013 permits payment of profit based commission to the Directors who are neither Managing Directors nor Whole-time Directors not exceeding One per cent (1%) of the net profits of the company, if there is a Managing or Whole-time Director or Manager or three per cent (3%) of the net profits in any other case.

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

The Bank does not grant any Stock Options to NEDs.

Whistle Blower Policy (Vigil Mechanism)

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

Dividend Distribution Policy

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

Auditors

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

The Statutory Auditors have confirmed their eligibility under Section 141 of CA 2013 to continue to act as Statutory Auditors of the Bank. Further, as required under the relevant provision of the Listing Regulations, the Statutory Auditors have also confirmed that they had subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of ICAI.

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

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

Employees Stock Option Plan (ESOP)

The underlying philosophy of the Bank Employee Stock Option Plan (ESOP) is to enable the present and future employees to share the value that they help to create for the Bank over a period of time. ESOP is also expected to strengthen the sense of ownership and belonging among the recipients. The ESOP has been designed and implemented in such a manner that the compensation structure goes a long way in aligning the objectives of an individual with those of the Bank. In addition, during the year the Bank continued with its plan of rewarding long-serving employees with ESOPs thus making them true partners in the Bankâs growth.

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

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

The Bank has Zero tolerance towards any action on the part of any executive which may fall under the ambit of âSexual Harassmentâ at workplace and is fully committed to uphold and maintain the dignity of every woman executive working in the Bank. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank created a mandatory e-learning module for all the employees called âi-COMPLY Anti Sexual Harassmentâ. The information relating to complaints received and disposed-off/resolved/ action taken during the FY 2018-19 is disclosed under Corporate Governance Report annexed as Annexure I to this Report.

Deposits

Being a Banking company, the disclosures required as per Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of CA 2013 are not applicable to the Bank.

Nature of Business

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

Particulars of Loans, Guarantees and Investments

Pursuant to Section 186(11) of CA 2013 loans made, guarantees given or securities provided or acquisition of securities by a Banking company in the ordinary course of its business are exempted from disclosure in the Annual Report.

Related Party Transactions

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

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

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

Subsidiary company

Pursuant to acquisition of 100% shareholding of RBL Finserve Limited (Formerly, Swadhaar Finserve Private Limited), RBL Finserve Limited (RBL Finserve) is the Wholly Owned Subsidiary of the Bank. Further, the Bank has formulated a board approved policy for determining Material Subsidiaries.

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

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

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

Further, in accordance with the fourth proviso of Section 136(1) of the Companies Act, 2013, the audited annual accounts of the said subsidiary company of the Bank have been hosted on the Bankâs website: https://ir.rblbank.com/

Consolidated Financial Statements

Pursuant to Section 129 of CA 2013, the Bank has prepared consolidated financial statements of the Bank with its Subsidiary Company, RBL FinServe Limited, in the same form and manner as that of the Bank which shall be laid before the ensuing AGM of the Bank along with the laying of the Bankâs Standalone Financial Statement under sub-section (2) of Section 129.

Risk Management Policy

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

Qualifications in Statutory and Secretarial Audit Reports

There were no adverse observations or qualifications made by the Statutory Auditors in the Auditorâs Report.

Further, there were no audit qualifications made by the Secretarial Auditor in its Reports.

Adequacy of Internal Financial Controls

Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. Further, the statutory auditors have, in compliance with the requirements of CA 2013, issued an opinion with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls details of which may be referred to in the independent auditorâs report attached to the financial statements of FY 2018-19.

Material changes and commitments affecting the financial position of the Bank

There are no material changes and commitments, affecting the financial position of the Bank that have occurred between the end of the financial year of the Bank i.e. March 31, 2019 and the date of the Directorsâ Report i.e. April 18, 2019.

G. OTHER DISCLOSURES

Code of Conduct

For a financial institution, trust is the most important asset. To this end, the Bank strives to ensure that its actions are in accordance with the highest standards of personal and professional integrity and highest level of ethical conduct. The Bank has adopted a Code of Conduct which all employees have to adhere to. The employees have to conduct duties according to the aforesaid Code and avoid even the appearance of improper behaviour. Some of the areas which are covered by the Code of Conduct are fairness of employment practices, protection of intellectual property, integrity, customer confidentiality, conflict of interest.

Bribery and Corruption

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

Corporate Social Responsibility (CSR)

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

The Bank has a duly constituted CSR Committee of the Board consisting of majority of Independent Directors. The Bank also has the Board approved CSR Policy in place. In alignment with the CSR Mission Statement, the Bank has focused on various initiatives for FY 2018-19 as covered in the Annual Report on CSR activities detailing therein brief outline of CSR Policy, Projects undertaken, amount spent and other relevant details as furnished in Annexure IV to this report.

Management Discussion and Analysis

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

Awards and Recognitions

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

- Indiaâs Best Bank for Microfinance - Awarded at the Asiamoney Awards.

- âSilver Awardâ in âBest Private Sector Bank of the Year 2018â. - Awarded at the Outlook Money Awards.

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

- Best Enterprise Mobility - Awarded at the BFSI Digital Innovation Awards by Express Computers.

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

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

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

- Recognised under four categories i.e. Nodal Payments API Product, Reimagining Fixed Deposits, Virtual Accounts for Payments Processing & Reimaging Digital Banking for Retail and Corporate Customers - Awarded at the Infosys Finacle Client Innovation Awards 2019.

Ratings

The Bankâs Basel III Tier II Bonds have been rated as âAA- hybâ and âAA-â with Stable Outlook by ICRA Limited (ICRA) and CARE Ratings Limited (CARE) respectively. Instruments rated with this rating are considered to have high degree of safety regarding timely servicing of financial obligations.

The Bankâs Certificate of Deposits carries a rating of âA1 â by ICRA which indicates the lowest short term credit risk. Further, the Bankâs Medium Term Fixed Deposit programme carries rating of âICRA MAA (Stable)â which indicates low credit risk and the Bankâs short term fixed deposit programme carries a rating of âICRA A1 â which indicates lowest credit risk.

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

The Bank complies with the RBIâs KYC/AML guidelines. The Bankâs KYC/ AML Policy is prepared in accordance with the Prevention of Money Laundering Act, 2002 and RBI/I BA (Indian Banksâ Association) guidelines. Various regulatory reporting requirements, as set out by the Financial Intelligence Unit (FIU) of the Government of India, are complied with by the Bank. The Bank uses automated transaction monitoring system under supervision of centralised AML team. Further, the Bankâs employees are being imparted training on KYC/AML aspects on a regular basis. Executives of the Bank also attend periodic workshops/seminars organised by FIU, RBI, IBA, Centre for Advanced Financial Research & Learning (CAFRAL) and College of Agricultural Banking (CAB), Pune to enhance their awareness in evolving KYC AML issues.

H. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of CA 2013, with respect to the Directorsâ Responsibility Statement, it is hereby confirmed that:

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

ii. Accounting policies have been selected and applied consistently and reasonably, and prudent judgments and estimates have been made to give a true and fair view of the Bankâs state of affairs and of its profit for FY 2018-19;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of CA 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

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

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

vi. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively

ACKNOWLEDGMENT

The members have been the key partners in the Bankâs progress. The Board of Directors appreciates their support and is grateful for the confidence that they have placed in the Board of Directors and the Bankâs management.

The Bankâs customers have always supported the Bank in all its endeavours. The Bank would like to take this opportunity to express sincere thanks to its valued clients and customers for their continued patronage.

The Bank has undertaken a number of initiatives on the technology and business front in the recent years. Successful translation of these initiatives into business and earnings growth has been primarily due to the employees of the Bank, who have embraced the philosophy of change to help the Bank emerge as a modern and customer-centric institution. We are grateful to the employees for their continued commitment and dedication towards the Bank. The Board appreciates the healthy relationship with the Officerâs Association and Employee Union, which has facilitated the growth and development of the Bank and has created a positive work environment.

For and on behalf of the Board of Directors

Prakash Chandra Vishwavir Ahuja

Chairman Managing Director & CEO

Place: Mumbai

Date : April 18, 2019

Mar 31, 2018

Directors'' Report

DEAR MEMBERS,

The Directors have pleasure in presenting the 75^th Annual Report of RBL Bank Limited ("the Bank") along with the audited statement of accounts for the financial year ended March 31, 2018.

A. FINANCIAL PERFORMANCE

The comparative standalone financial performance for the financial year ended March 31, 2018 (FY18) with that of March 31, 2017 (FY17) is summarized in the following table:

(Rs, in crore)

Particulars	FY18	FY17	Change(%)
Advances (Net)	40,267.84	29,449.04	36.74
Deposits	43,902.26	34,588.09	26.93
Net interest income	1,766.28	1,221.33	44.62
Other income	1,068.19	755.46	41.40
Net total income	2,834.47	1,976.80	43.39
Operating expenses	1,503.41	1,056.39	42.32
Provisions and contingencies	695.98	474.36	46.72
Net profit	635.09	446.05	42.38
Gross NPA ratio	1.40%	1.20%
Net NPA ratio	0.78%	0.64%
Capital Adequacy Ratio	1 5.33%	13.72%
Business per employee	15.88	13.06	21.59
Business per branch	317.62	267.94	18.54
Appropriations
Transfer to Statutory Reserve	158.80	111.60	-
Transfer to Capital Reserve	9.39	0.31	-
Transfer to Revenue & Other Reserves	360.00	250.00	-
Transfer to / (from) Investment Reserve	(2.20)	-	-
Dividend (including tax thereon) pertaining to previous year paid during the year	82.17	-	-

In accordance with the revised Accounting Standard - 4 ''Contingencies and Events occurring after the Balance Sheet Date'', the Bank has not accounted for proposed dividend oft 88.13 crore and tax on dividend oft 18.12 crore to be paid by the Bank, as an appropriation to profit and loss account and a corresponding liability, as at March 31, 2018. The same has been mentioned in the Notes to Accounts to the financials.

The Bank posted a net total income of Rs, 2,834.47 crore and net profit of Rs, 635.09 crore for FY18 as against a net total income of Rs, 1,976.80 crore and net profit of Rs, 446.05 crore for FY17 which is an increase of 43.39% and 42.38%, respectively over FY17.

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

B. BUSINESS UPDATE AND STATE OF BANKâS AFFAIRS

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

C. FINANCIAL DISCLOSURES Dividend

Considering the overall performance during FY18 and the need to maintain a healthy capital adequacy ratio as well as to support the Bank''s future growth, the Board of Directors have recommended, subject to approval of the members at the Annual General Meeting ("AGM"), a dividend of Rs, 2.10 (21%) per equity share for FY18, as against Rs, 1.80 (18%) per equity share for FY17. This dividend shall be subject to tax on dividend to be paid by the Bank.

Capital Raising

During the fiscal FY18, the Bank had raised capital to the tune of Rs, 1,680.00 crore through issuance of 32,621,354 Equity Shares of Rs, 10/- each, fully paid-up, on Preferential basis ("Preferential Issue"), at a price of Rs, 515/- per share (including premium of Rs, 505/- per share).

During the year under review, the Bank had also added Rs, 122.06 crore to its capital, by issuance/allotment of equity shares pursuant to exercise of stock options by the employees of the Bank under various Employees Stock Option Plans/Schemes.

The paid up Equity Share Capital of the Bank as on financial year ended March 31, 2018 stood atRs, 4,196,675,470/- divided into 419,667,547 equity shares of Rs, 10/- each.

Capital Adequacy Ratio

The Bank is well capitalized with a Capital Adequacy Ratio ("CAR") of 15.33 % as on March 31, 2018. The Bank complies with the Capital Adequacy guidelines of Reserve Bank of India ("RBI") which came into effect from April 1, 2013, known as ''Basel III Guidelines''.

Net Worth

The Bank''s net worth, as on March 31, 2018 is Rs, 6,546.36 crore. It comprises of paid-up equity capital of Rs, 419.67 crore and reserves of Rs, 6,126.69 crore (excluding Revaluation Reserve, Investment Reserve, Foreign Currency Translation Reserves and Intangible assets).

D. CORPORATE GOVERNANCE

A detailed report on Corporate Governance as envisaged under Regulation 34(3) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 ("Listing Regulations") is attached as Annexure I to this Report.

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

E. BUSINESS RESPONSIBILITY REPORT

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

F. STATUTORY DISCLOSURES Extract of Annual Return

As required by the provisions of Sections 92(3) and 134(3)(a) of the Companies Act, 2013 (CA 2013) read with the rules framed there under, the extract of the annual return of the Bank in Form MGT-9 is attached as Annexure II to this Report.

Conservation of energy and technology absorption

Foreign exchange earnings and outgo

During the year ended March 31, 2018, the Bank earned Rs, 195.73 crore and spent Rs, 103.74 crore in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.

Board of Directors

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 2013 ("CA 2013"), the Banking Regulation Act, 1949 ("the BR Act, 1949"), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the Articles of Association of the Bank. The Board consists of eminent persons with considerable professional expertise in banking, finance, market research & consumer economy, marketing, taxation, financial inclusion, agriculture and other related fields. Their experience and professional credentials have helped the Bank to gain insights for strategy formulation and direction setting for the Bank, thus adding value to its growth objectives.

The Board comprises of eleven Directors out of whom two Directors are Executive Directors (one of whom is a Managing Director and Chief Executive Officer), seven Directors are Independent Directors and two Directors are Non-Executive Directors (one of whom is also the part-time Chairman of the Board).

During the year under review, Mr. Girish Godbole ceased to be a Director of the Bank due to completion of his tenure of eight years w.e.f. February 23, 2018 as prescribed under the BR Act, 1949. Further, tenure of Mr. Narayan Ramachandran, Non-

Executive Part-Time Chairman of the Bank is set for completion at the close of working hours of May 19, 2018, as prescribed under section 10A of the Banking Regulation Act, 1949 as well as tenure approved by the Shareholders of the Bank vide their resolution passed at the Annual General Meeting of the Bank held on August 26, 2014. Keeping in view the nearing of completion of tenure of Mr. Narayan Ramachandran, the Board of Directors at its meeting held on April 27, 2018 appointed Mr. Prakash Chandra, Independent Director of the Bank since January 25, 2016, as Non-Executive Part-time Chairman of the Bank, effective from May 20, 2018 for a period of two years. This appointment of Part-Time Chairman is subject to the approval of Reserve Bank of India and the shareholders of the Bank. The appointment of Mr. Prakash Chandra as Non-Executive Part-time Chairman is proposed at the 75^th Annual General Meeting of the Bank. The Board places on record its sincere appreciation for the valuable services rendered by Mr. Girish Godbole and Mr. Narayan Ramachandran during their tenure as Director/ Chairman of the Bank.

The shareholders of the Bank at 72^nd AGM of the Bank, had approved the re-appointment of Mr. Vishwavir Ahuja, w.e.f June 30, 2015, as Managing Director and Chief Executive Officer (MD & CEO) of the Bank for a period of three years. The Bank recognizes the dramatic transformation and significant progress of the Bank over the last eight years on all parameters under Mr. Ahuja''s able stewardship. In view of such all-round progress, the Bank''s excellent financial performance and the importance and criticality of Mr. Ahuja''s continued leadership, the Bank recommends re-appointment of Mr. Vishwavir Ahuja as Managing Director and CEO with effect from June 30, 2018 for a period of 3 years on such terms and conditions as detailed in the notice of the ensuing 75^th Annual General Meeting of the Bank. The Board of the Bank at its meeting held on April 27, 2018, on the recommendation of the Human Resource and Remuneration Committee, has approved the said reappointment of Mr. Vishwavir Ahuja as MD & CEO.

In terms of Section 152 of the CA, 2013, Mr. Rajeev Ahuja shall retire at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Further, the Board at its meeting held on April 27, 2018 had appointed Mr. Vijay Mahajan as an Additional Director of the Bank to hold office up to the date of the ensuing Annual General Meeting of the Bank. The appointment of Mr. Vijay Mahajan as a Non-Executive Director is also proposed at the 75^th Annual General Meeting of the Bank.

The details with regards to the Board and its Committees, Composition, Performance Evaluation etc. are provided in the Corporate Governance Report at Annexure I to this Report.

Key Managerial Personnel

Mr. Vishwavir Ahuja, Managing Director & CEO; Mr. Rajeev Ahuja, Executive Director (ED), Mr. Deepak Ruiya, Chief Financial Officer (interim) and Mr. Vinay Tripathi, Company Secretary of the Bank are the Key Managerial Personnel (KMP) as per the provisions of CA 2013.

During the financial year under review, Mr. Deepak Ruiya was appointed as Chief Financial Officer (interim) of the Bank with effect from January 25, 2018 in place Mr. Naresh Karia who had resigned from the position/service of CFO of the Bank.

Particulars of Employees

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

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

Sr. No.	Name of the Director	Designation	Ratio
1	Mr. Narayan Ramachandran	Non-Executive & Part-time Chairman	2.50x
2	Mr. Vishwavir Ahuja	Managing Director & CEO	38.77x
3	Mr. Rajeev Ahuja	Executive Director	32.94x

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

Sr. No.	Name of the Director / KMP	Designation	% Increase
1	Mr. Narayan Ramachandran	Non-Executive & Part-time Chairman	NIL
2	Mr. Vishwavir Ahuja	Managing Director & CEO	15%
3	Mr. Rajeev Ahuja#	Executive Director	10%
4	Mr. Naresh Karia*	Chief Financial Officer	4.5%
5	Mr. Deepak Ruiya^A	Chief Financial Officer (interim)	N.A.
6	Mr. Vinay Tripathi	Company Secretary	8.5%

# The increase in remuneration of Mr Rajeev Ahuja is effective from February 21, 2018 subject to the approval of Reserve Bank of India.

* Mr. Naresh Karia ceased to be CFO of the Bank at close of business hours on January 24, 2018

^A Mr Deepak Ruiya was appointed as CFO (interim) w.e.f. January 25, 2018

3. The percentage increase in the median remuneration of employees in the financial year.

The percentage increase in the median remuneration of employees in the financial year was 9.25%.

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

The number of permanent employees on the rolls of Bank, as on March 31, 2018 was 5,330.

Average increase in remuneration is 6.58% for employees other than managerial personnel and 9.46% for managerial personnel (Executive Directors including Managing Director & CEO, Chief Financial Officer and Company Secretary).

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

Notes:

I. âxâ denotes the median remuneration of the employees.

//. The remuneration of Directors is exclusive of sitting fees, wherever applicable. Therefore, the median remuneration is provided of Directors exclusive of Independent Directors since no remuneration was paid to them during FY 2017-18 apart from sitting fees for attending the meetings of the Board and its Committees.

The statement containing particulars of employees as required under Section 197(12) of CA 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of Section 136 of CA 2013, the Annual Reports are being sent to the members, excluding the information as required under Rule 5(2) as mentioned aforesaid and the same is open for inspection at the Registered Office of the Bank. A copy of this statement may be obtained by the members by writing to the Company Secretary of the Bank.

Remuneration Policy Remuneration policy for employees

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

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

Remuneration Policy for Directors

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

Remuneration of Executive Directors

Remuneration of Chairman

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

Remuneration of Non-Executive Directors (NEDs)

RBI vide Circular No. DBR. No.BC.97/29.67.001 /2014-15 dated June 1, 2015 issued Guidelines on Compensation of Nonexecutive Directors of Private Sector Banks emphasizing that in order to enable banks to attract and retain professional directors, it is essential that such directors are appropriately compensated. Pursuant to the aforesaid RBI Circular, the maximum amount that can be paid as Commission was capped at Rs, 10.00 Lakh per director per annum. Also, section 197 of CA 2013 permits payment of profit based commission to the Directors who are neither Managing Directors nor Whole-time Directors not exceeding One per cent (1 %) of the net profits of the company, if there is a Managing or Whole-time Director or Manager or three per cent (3%) of the net profits in any other case.

The members of the Bank at their 74^th Annual General Meeting had approved the payment of remuneration to NEDs (excluding the Chairman of the Bank) in the form of commission based on profit earned by the Bank w.e.f FY 2017-18. During FY 2017-18, the Bank has not paid any commission on profit to any NED. However, the Board at its meeting held on April 27, 2018 had approved criteria for payment of Commission to NEDs and the commission paid during FY 2018-19 shall be appropriately disclosed in the 76^th Annual Report of the Bank.

The Bank does not grant any Stock Options to NEDs.

Whistle Blower Policy (Vigil Mechanism)

Details required to be disclosed in this regard has been provided under Corporate Governance Report attached as Annexure I to this Report.

Dividend Distribution Policy

The Bank has formulated a Board approved Dividend Distribution Policy. This Policy is hosted on the website of the Bank at: http://rblbank.com/pdfs/bp/Dividend-Distribution-Policy.pdf

Auditors

The members at the 74^th Annual General Meeting (AGM) of the Bank had, subject to the approval of RBI, appointed M/s. BSR& Co.

LLP Chartered Accountants (Firm Registration No. 101248W/ W-l 00022) as Statutory Auditors for a period of one (1) year to hold office till the conclusion of 75^th AGM in connection with the audit of the accounts of the Bank for the year ending March 31,2018. Accordingly, M/s. BSR&Co.LLR Chartered Accountants will retire at the conclusion of the forthcoming AGM. This was their second year of appointment as Statutory Auditors of the Bank. Being eligible for re-appointment, the Board has upon recommendation of Audit Committee, proposed the re-appointment of M/s. BSR & Co. LLP for a continuous period of two years as Statutory Auditors from the conclusion of the forthcoming 75^th AGM till the conclusion of 77^th AGM of the Bank, subject to approval of RBI.

The Statutory Auditors have confirmed their eligibility under Section 141 of CA 2013 for reappointment as Statutory Auditors of the Bank. Further as required under the relevant provision of the Listing Regulations, the Statutory Auditors had also confirmed that they had subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of ICAI.

Pursuant to Section 204 of CA 2013, the Board had appointed M/s. Alwyn Jay & Co., Practicing Company Secretaries, Mumbai as its Secretarial Auditors for FY 2017-18. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2017-18 is annexed to this report as Annexure III.

Employees Stock Option Plan (ESOP)

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

More details of the ESOP are given in the notes to accounts in the attached financial statements and Annexure IV to this report.

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

The Bank has Zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman executive working in the Bank. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank created a mandatory e-learning module for all the employees called "i-COMPLY Anti Sexual Harassment".

During the year ended March 31, 2018, no complaints were received by the Bank.

Deposits

Being a banking company, the disclosures required as per Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of CA 2013 are not applicable to the Bank.

Nature of Business

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

Particulars of loans, guarantees and investments

Related Party Transactions

Details required to be disclosed in this regard has been provided under Corporate Governance Report attached as Annexure I to this Report.

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

To the best of our knowledge, there are no significant/ material orders passed by the Regulators / Courts/ Tribunals etc. during FY 2017-18 which would impact the going concern status of the Bank and its future operations.

Subsidiary / Associate companies

At the end of the previous fiscal FY 2016-17, the Bank''s shareholding in Swadhaar Finserve Private Limited ("Swadhaar") was at around 30%. During FY 2017-18, the Bank had increased its shareholding in Swadhaar to 60.48%. Accordingly Swadhaar ceased to be an Associate Company of the Bank and had become a subsidiary of the Bank. Pursuant to this development and in compliance with the provisions of the Listing Regulations, the Bank had formulated a board approved policy for determining Material Subsidiaries.

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

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

Consolidated Financial Statements

Pursuant to Section 129 of CA 2013, the Bank has prepared consolidated financial statements of the Bank with its Subsidiary Company, Swadhaar FinServe Private Limited, in the same form and manner as that of the Bank which shall be laid before the ensuing AGM of the Bank along with the laying of the Bank''s Standalone Financial Statement under sub-section (2) of Section 129.

Risk Management Policy

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

Qualifications in Statutory and Secretarial Audit Reports

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

Further, there were no audit qualifications made by the Secretarial Auditor in its Report.

Adequacy of Internal Financial Controls

Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. Further, the statutory auditors have, in compliance with the requirements of CA 2013, issued an opinion with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls details of which may be referred to in the independent auditor''s report attached to the financial statements of FY 2017-18.

Material changes and commitments affecting the financial position of the Bank

There are no material changes and commitments, affecting the financial position of the Bank that have occurred between the end of the financial year of the Bank i.e. March 31, 2018 and the date of the Directors'' Report i.e. April 27, 2018.

G. OTHER DISCLOSURES Code of Conduct

For a financial institution, trust is the most important asset. To this end, the Bank strives to ensure that its actions are in accordance with the highest standards of personal and professional integrity and highest level of ethical conduct. The Bank has adopted a Code of Conduct which all employees have to adhere to. The employees have to conduct duties according to the aforesaid Code and avoid even the appearance of improper behavior. Some of the areas which are covered by the Code of Conduct are fairness of employment practices, protection of intellectual property, integrity, customer confidentiality, conflict of interest.

Bribery and Corruption

Corporate Social Responsibility (CSR)

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

The Bank has a duly constituted CSR Committee of the Board consisting of majority of Independent Directors. The Bank also has the Board approved CSR Policy in place. In alignment with the CSR Mission Statement, the Bank has focused on various initiatives for FY 2017-18 as covered in the Annual Report on CSR activities detailing therein brief outline of CSR Policy, Projects undertaken, amount spent and other relevant details as furnished in Annexure V to this report.

Management Discussion and Analysis

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

Awards and Recognitions

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

. The Bank was awarded the ''Best Growing Small Bank'' at the Business World Magna Awards 2017.

. The Bank was honored with the ''High Growth - Private Sector Bank'' award at the Dun & Bradstreet Banking Awards 2017!

. The Bank had bagged two awards at the Business World Magna Awards 2018 - Fastest Growing Small Bank and Best Small Bank.

. RBL Bank Limited was recognized as ''Best Bank'' at the Outlook Money Awards and ''Best Small Bank'' at the Business Today Banking Awards.

Ratings

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

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

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

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

During the financial year under consideration, the Bank had received a letter from Financial Intelligence Unit - India (FIU-India), Ministry of Finance, Government of India appreciating the Bank''s efforts in helping the Law Enforcement Agency (LEAs) through the filing of STRs.

H. DIRECTORSâ RESPONSIBILITY STATEMENT

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

i. The applicable accounting standards have been followed in the preparation of the annual accounts for FY 2017-18 and there have been no material departures;

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

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

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

vi. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively

ACKNOWLEDGMENT

The Board is grateful to the Government of India, RBI, SEBI, IBA, other regulatory authorities, rating agencies, financial institutions, banks and correspondents in India and abroad for their valuable and unflinching support as well as co-operation and guidance to the Bank from time to time.

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

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

For and on behalf of the Board of Directors

Narayan Ramachandran Vishwavir Ahuja

Chairman Managing Director & CEO

Place: Mumbai

Date: April 27, 2018

Mar 31, 2017

Dear Members,

The Directors have pleasure in presenting the 74th Annual Report of RBL Bank Limited ("the Bank") along with the audited standalone statement of accounts for the financial year ended March 31, 3017

A. Financial Performance

The comparative standalone financial performance for the financial year ended March 31, 3017 (FY17) with that of March 31, 3016 (FY16) is summarized in the following table:

(Rs. in crore)

Particulars	FY17	FY 16	Change
Advances (Met)	29,449.04	21,229.03	33.72%
[Â©posits	34,588.09	24,343.65	42.05%
Net interest income	1,221.33	319.21	49.09%
Other income	755.46	490.54	54.01%
Met total income	1,976.80	1,309.75	50.93%
Operating expenses	1,056.39	767.34	37.67%
Provisions and contingencies	474.36	249.93	39.30%
Net profit	446.05	292.43	52.50%
Gross MPA ratio	1.20%	0.931
Net MPA ratio	0.64%	0.59%
Capital Adequacy Ratio	13.72%	12.94%
Business per employee	13.06	11.77	10.93%
Business per branch	267.94	231.36	15.31 %
Appropriations
Transfer to Statutory Reserve	111.60	73.20	-
Transfer to Capital Reserve	0.31	1.00
Transfer to Revenue and Other Reserves	250.00	160.00
Dividend for the year, including tax thereon	_*	53.63

* In accordance with the revised Accounting Standard - 4 ''Contingencies and Events occurring after the Balance Sheet Date'', the Bank has not accounted for proposed dividend of Rs.67.54 crore and tax on dividend of Rs.13.75 crore to be paid by the Bank, as an appropriation to profit and loss account and a corresponding liability, as at March 31, 2017. The same has been mentioned in the Motes to Accounts to the financials.

The Bank posted a net total income of Rs. 1,976.80 crore and net profit of Rs. 446.05 crore for FY17 as against a net total income of Rs.1,309.75 crore and net profit of Rs.393.48 crore for FY16 which is an increase of 50.93% and 53.50%, respectively over FY16

Appropriations from net profit have been done as detailed herein above

B. Business Update and State of Bank''s Affairs

The details on state of affairs of the Bank and the business update are separately provided in Management Discussion and Analysis Report which forms an integral part of this Report

C. Financial Disclosures

Dividend

Considering the overall performance during FY17 and the need to maintain a healthy capital adequacy ratio as well as to support the Bank''s future growth, the Board of Directors have recommended, subject to approval of the members at the Annual General Meeting ("AGM"), a dividend of 16:% per equity share for FY17, as against Rs. 1.50 (15%) per equity share for FY16 This dividend shall be subject to tax on dividend to be paid by the Bank.

Capital Raising

The paid up Equity Share Capital of the Bank as on financial year ended March 31, 3017 stood at Rs. 3,753,031,360/- divided into 375,303,136 equity shares of Rs.10/- each. During FY17, the Bank had raised capital as described here in below:

- The financial year 3016-17 turned out to be one of the important milestones in the corporate history of the Bank The Bank successfully completed its Initial Public Offering (IPO) of Rs.1,213.96 crore which received overwhelming response from the investors

The Public Issue of 53,909,628 Equity Shares of Rs. 10/-each of the Bank for cash at a price of Rs. 225/- per equity shares including a Share Premium of Rs. 215/- per equity share aggregating to Rs. 1,212.96 crore comprised of a Fresh Issue of 37,000,000 equity shares of the Bank aggregating to Rs.832.50 crore and an Offer for Sale of 16,909,628 equity shares by the existing members of the Bank.

The equity shares of Bank were listed and admitted for dealings on BSE Limited ("BSE") and National Stock Exchange Limited ("NSE") with effect from August 31, 2016.

- The Bankalso raised Rs.330 crore by issuing non-convertible, redeemable, unsecured, listed, rated, fully paid, Basel II compliant Tier II Debentures ("NCDs"). The Bank also got the existing NCDs of Rs. 400 crore listed on debt segment of BSE along with the aforesaid newly issued NCDs, post-IPO.

- The Bank also added Rs. 114.67 crore to the capital on exercise of stock options by employees

Capital Adequacy Ratio

The Bank is well capitalized with a Capital Adequacy Ratio ("CAR") of 13.72% as on March 31, 2017. The Bank complies with the Capital Adequacy guidelines of Reserve Bank of India ("RBI") which came into effect from April 1, 2013, known as ''Basel II Guidelines''.

Net Worth

The Bank''s net worth, as on March 31, 2017 is Rs. 4,242.48 crore It comprises of paid-up equity capital of Rs. 375.20 crore and reserves of Rs.3,867.27 crore (excluding Revaluation Reserve, Investment Reserve and Intangible assets)

D. Corporate Governance

A detailed report on Corporate Governance as envisaged under Regulation 34(3) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 ("Listing Regulations") is attached as Annexure I to this Report

E. Business Responsibility Report

F. Statutory Disclosures

Extract of Annual return

As required by the provisions of Sections 92(3) and 134(3)(a) of the Companies Act, 2013 ("CA 2013") read with the rules framed there under, the extract of the annual return of the Bank in Form MGT-9 is attached as Annexure II to this Report

Conservation of energy and technology absorption

The particulars to be disclosed under Section 134(3)(m) of CA 2013, relating to conservation of energy and technology absorption are not applicable to the Bank. The Bank is constantly pursuing its goal of upgrading technology to deliver quality services to its customers in a cost-effective manner

Foreign exchange earnings and outgo

During the year ended March 31, 2017, the Bank earned Rs. 86.77 crore and spent Rs. 81.61 crore in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions

Key Managerial Personnel

Mr. Vishwavir Ahuja, Managing Director & CEO; Mr. Naresh Karia, Chief Financial Officer and Mr. Vinay Tripathi, Company Secretary of the Bank are the Key Managerial Personnel (KIVIP) as per the provisions of CA 2013. Mr. Rajeev Ahuja who was appointed as an Executive Director of the Bank w.e.f. February 21, 2017 has also become a KMP w.e.f. the said date

No KMP has resigned during the year under review.

Particulars of Employees

1. The ratio of the remuneration of each director to the median remuneration of the employees of the bank for the financial year.

Sr. No.	Name of the Directors	Designation	Ratio
1	Mr. Narayari Ramacharidrari	Non-Executive Part-time Chairman	..........
2	Mr. Vishwavir Ahuja	Managing Director S CEO	26.71......
3	Mr. Rajeev Ahuja	Executive Director	23.13......

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

Sr. No.	Name of the Directors / KMPs	Designation	% Increase
1	Mr. Narayari Ramacharidrari	Non-Executive Part-time Chairman	MIL
2	Mr. Vishwavir Ahuja	Managing Director S CEO	19.0%
3	Mr. Rajeev Ahuja	Executive Director	15.2%
4	Mr. Maresh Karia	Chief Financial Officer	13.0%
5	Mr. Vi nay Tripath	Company Secretary	14.5%

3. The percentage increase in the median remuneration of employees in the financial year.

The percentage increase in the median remuneration of employees in the financial year was 2.2%.

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

The number of permanent employees on the rolls of bank, as on March 31, 2017 was 4,902

Average increase in remuneration is 11.5% for employees other than managerial personnel and 17.4%for managerial personnel (Executive Directors including Managing Director & CEO, Chief Financial Officer and Company Secretary)

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

Notes:

Denotes the median remuneration of the employees

i. The remuneration of Executive Directors is as approved by the Reserve Bank of India.

ii. Mr. RajeevAhuja was appointed as Executive Director (ED) effective February 21, 2017. His Salary as an ED has been annualized for the purpose of this disclosure

iv. The remuneration of Directors is exclusive of sitting fee, wherever applicable

Remuneration Policy

Remuneration policy for employees

The Bank has set out its Compensation Policy based on the concept of CTC (Cost to Company) and TEC (Total Employee Compensation), to make compensation packages for officers across all Grades, competitive enough to attract, nurture and retain high caliber professionals in the Bank and have an organization structure that reflects specialization, focus & scale

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

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

Remuneration Policy for Directors

Remuneration of Executive Directors

The Board considers the recommendations of HRRC and approves the remuneration of Executive Directors, with or without modifications, subject to members'' and regulatory approvals

Remuneration of Chairman

The HRRC recommends the remuneration of the Chairman to the Board which is considered and approved by the Board in the same manner subject to Members'' and regulatory approvals

Remuneration of Non-Executive Directors (NEDs)

The NEDs are paid sitting fees for attending each meeting of the Board of Directors or any committee thereof as approved by the Board, within the permissible limit prescribed under CA 2013, Listing Regulations and other regulatory/statutory guidelines, as amended from time to time. Any change in sitting fees shall be approved by the Board of Directors of the Bank.

The NEDs are also entitled to reimbursement of expenses for participation in the meeting of the Board and Committee thereof.

The RBI vide Circular No. DBR. No.BC.97/29.67.001 /2014-15 dated June 1, 2015 issued Guidelines on Compensation of Nonexecutive Directors of Private Sector Banks emphasizing that in order to enable banks to attract and retain professional directors, it is essential that such directors are appropriately compensated. Also, section 197 of CA 2013 permits payment of profit based commission to the Directors who are neither Managing Directors nor Whole-time Directors not exceeding One per cent (1%) of the net profits of the company, if there is a Managing or Whole-time Director or Manager or three per cent (3%) of the net profits in any other case

The Bank has not paid any commission on profit to NEDs in past. The Bank is now proposing to pay remuneration to NEDs (excluding the Chairman of the Bank) in the form of commission based on profit earned by the Bank, subject to approval of the members, in the ensuing Annual General Meeting. If approved by the members, the Directors will be paid commission on profit for each year commencing from April 1,2017 upto a maximum of Rupees Ten Lakhs per Director which is the maximum permitted by RBI and within the overall cap of One percent (1%) of the Net Profits of the Bank, as computed in the manner laid down in Section 198 of CA 2013.

The Bank does not grant any Stock Options to NEDs

Whistle Blower Policy (Vigil Mechanism)

Details required to be disclosed in this regard has been provided under Corporate Governance Report attached as Annexure I to this Report

Dividend Distribution Policy

The Bank has formulated a Board approved Dividend Distribution Policy. This Policy is hosted on the website of the Bank at: http://rblbank.com/pdfs/bp/Dividend-Distribution-Policv.pdf

Auditors

The members at the 73rd Annual General Meeting (AGM) of the Bank had, subject to the approval of RBI, appointed M/s BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101348W/W-100033) as Statutory Auditors for a period of one (1) year to hold office till the conclusion of 74th AGM in connection with the audit of the accounts of the Bank for the year ending March 31, 3017. Accordingly, M/s. BSR & Co LLP, Chartered Accountants will retire at the conclusion of the forthcoming AGM. This was their first year of appointment as Statutory Auditors of the Bank. Being eligible for reappointment, the Board has upon recommendation of Audit Committee, proposed the appointment of BSR & Co. LLP as Statutory Auditors from the conclusion of the forthcoming AGM till the conclusion of next AGM, subject to approval of RBI

The Statutory Auditors have confirmed their eligibility under Section 141 of CA 3013 for reappointment as Statutory Auditors of the Bank. Further as required under the relevant provision of the Listing Regulations, the Statutory Auditors had also confirmed that they had subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the Peer Review Board of ICAI

Pursuant to Section 304 of CA 3013, the Bank had appointed M/s. Alwyn Jay & Company, Practicing Company Secretaries, Mumbai as its Secretarial Auditors for FY3016-17. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY3016-17 is annexed to this report as Annexure III

Employees Stock Option Plan (ESOP)

More details of ESOP are given in the notes to accounts in the attached financial statements and Annexure IV to this report

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

The Bank has Zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual

Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman executive working in the Bank. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank created a mandatory e-learning module for all the employees called "i-COMPLY Ant Sexual Harassment".

During the year ended March 31, 3017, three complaints were received by the Bank and all of them were investigated and closed

Public Deposits

Being a banking company, the disclosures required as per Rule 8(5)(v)0(vi) of the Companies (Accounts) Rules, 3014, read with Section 73 and 74 of CA 3013 are not applicable to the Bank.

Nature of Business

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

Particulars of loans, guarantees and investments

Pursuant to Section 186(11) of CA 3013 loans made, guarantees given or securities provided or acquisition of securities by a Banking company in the ordinary course of its business are exempted from disclosure in the Annual Report

Related Party Transactions

Details required to be disclosed in this regard has been provided under Corporate Governance Report attached as Annexure I to this Report

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

To the best of our knowledge, there are no significant/ material orders passed by the Regulators / Courts / Tribunals etc. during FY17 which would impact the going concern status of the Bank and its future operations

Subsidiary / Associate companies

During the period under review, the Bank has increased its shareholding in Swadhaar Fin Serve Private Limited to 30%, thereby making it an associate company of the Bank. Other than aforesaid, no Company has become/ceased to be Subsidiary, Joint Venture or Associate of the Bank during FY17

Risk Management Policy

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

Qualifications in Statutory and Secretarial Audit Reports

There were no adverse observations or qualifications made by the Statutory Auditors in the Auditor''s Report

Further, there were no audit qualifications made by the Secretarial Auditor in its Report

Adequacy of Internal Financial Controls

Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. Further, the statutory auditors have, in compliance with the requirements of CA 2013, issued an opinion with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls details of which may be referred to in the independent auditor''s report attached to the financial statements of FY17

Material changes and commitments affecting the financial position of the Bank

There are no material changes and commitments, affecting the financial position of the Bank that have occurred between the end of the financial year of the Bank i.e. March 31, 3017 and the date of the Directors'' Report i.e. May 3, 3017

G. Other Disclosures

Code of Conduct

For a financial institution, trust is the most important asset To this end, the Bank strives to ensure that its actions are in accordance with the highest standards of personal and professional integrity and highest level of ethical conduct. The Bank has adopted a Code of Conduct which all employees have to adhere to. The employees have to conduct duties according to the aforesaid Code and avoid even the appearance of improper behavior. Some of the areas which are covered by the Code of Conduct are fairness of employment practices, protection of intellectual property, integrity, customer confidentiality, conflict of interest

Bribery and Corruption

Corporate Social Responsibility (CSR)

The Bank strives to proactively encourage inclusive growth and development, thereby participating towards building a sustainable future

The Bank has a duly constituted CSR Committee of the Board consisting of majority of Independent Directors. The Bank also has the Board approved CSR Policy in place. In alignment with the CSR Mission Statement, the Bank has focused on various initiatives for FY17 as covered in the Annual Report on CSR activities detailing therein brief outline of CSR Policy, Projects undertaken, amount spent and other relevant details as furnished in Annexure V to this report

Management Discussion and Analysis

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

Awards and Recognitions

The Bank was recognized as the ''Fastest Growing Small Bank'' for the fifth consecutive year at the Business Today Financial Awards - KPMG. The Business Today Financial Awards considered the entire value chain to identify financial service providers - banks, insurance and mutual funds, which have performed the best in their categories

The Bank also won the prestigious CNBC ASIA''S India Talent Management Award at the CNBC-TV18 ''India Business Leader Awards'' during FY17 which is considered a benchmark when it comes to recognizing the top leaders in India''s business ecosystem

The Bank was selected for the Financial Services Company of the Year award at the annual VC Circle Awards which are treated as India''s most coveted and the pre-eminent honors for disruptive and fast-growth business in the startup, private equity and venture capital ecosystem. The Bank also bagged two awards at the IBA Banking Technology 3017 Awards for Best IT Risk & Cyber Security Initiative and Best Payment initiative during the year under review.

The Entrepreneur of the Year (EOY) 2016 India program culminated in a grand celebratory awards banquet on 24 February 2017, wherein, our Managing Director and CEO, Mr. Vishwavir Ahuja won the prestigious Ernst & Young (EY) Entrepreneur of the Year 2016 Indian Awards in the ''Financial Services Category''

Ratings

The Bank''s Basel III Tier II Bonds have been rated "A hyb" by CRA Limited (ICRA). During FY17, the outlook for the rating has been revised from stable to positive by ICRA. Instruments rated with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

The Bank''s Certificate of Deposits carries a rating of "A1 " by CRA Limited which indicates the lowest short term credit risk. Further, the Bank''s Fixed (Term) Deposits has been rated MAA-by ICRA Limited with a positive outlook (upgraded from stable) which stands for very low credit risk

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

The Bank complies with the RBI''s KYC/AML guidelines. The Bank''s KYC/ AML Policy is prepared in accordance with the Prevention of Money Laundering Act, 2002 and RBI/IBA (Indian Banks'' Association) guidelines. Various regulatory reporting requirements, as set out by the Financial Intelligence Umt(FIU) of the Government of India, are complied with by the Bank. The Bank uses automated transaction monitoring system under supervision of centralized AML team. Further, the Bank''s employees are being imparted training on KYC/AML aspects on a regular basis. Executives of the Bank also attend periodic workshops/seminars organized by FIIJ, RBI, IBA, Centre for Advanced Financial Research & Learning (CAFRAL) and College of Agricultural Banking (CAB), Pune to enhance their awareness in evolving KYC AML issues

Consolidated Financial Statements

Pursuant to Section 129 of CA 2013, the Bank has prepared consolidated financial statements of the Bank and its Associate Company, Swadhaar FinServe Private Limited, in the same form and manner as that of the Bank which shall be laid before the ensuing AGM of the Bank along with the laying of the Bank''s Standalone Financial Statement under sub-section (2) of Section 129

H. Directors'' Responsibility Statement

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

The applicable accounting standards have been followed in the preparation of the annual accounts for FY17 and there have been no material departures;

i. Accounting policies have been selected and applied consistently and reasonably, and prudent judgments and estimates have been made to give a true and fair view of the Bank''s state of affairs and of its profit for FY17;

ii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of CA 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

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

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

vi. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively

Acknowledgment

The Board is grateful to the Government of India, RBI, SEBI, IBA, other regulatory authorities, rating agency, financial institutions, banks and correspondents in India and abroad for their valuable and unflinching support as well as co-operation and guidance to the Bank from time to time

For and on behalf of the Board of Directors

Vishwavir Ahuja D. Sivanandhan

Managing Director & CEO Director

Place : Mumbai

Date : May 2, 2017

Mar 31, 2016

DEAR MEMBERS,

The Directors have pleasure in presenting the 73rd Annual Report of RBL Bank Limited ("the Bank"), along with the audited statement of accounts for the financial year ended March 31, 2016.

A. FINANCIAL PERFORMANCE

The comparative financial performance for the financial year ended March 31, 3016 (FY16) with that of March 31, 3015 (FY15) is summarised in the following table:

(Rs. in crore)

Particulars FY16 FY15 Change

Advances (Met) 21,229.08 14,449.33 46.92%

Deposits 24,348.65 17,099.25 42.40%

Met interest income 819.21 556.36 47.24%

Other income 490.54 403.41 21.60%

Net total income 1,309.75 959.77 36.46%

Operating expenses 767.34 599.65 27.96%

Provisions arid contingencies 249.93 152.95 63.41%

Met profit 292.48 207.17 41.13%

Gross NPA ratio 0.98% 0.77% -

Met MPA ratio 0.59% 0.27% -

Capital Adequacy Ratio 12.94% 13.13% -

Business per employee 11.77 9.11 29.20%

Business per branch 231.36 172.40 34.20%

Appropriations

Transfer to Statutory Reserve 73.20 51.80 -

Transfer to Capital Reserve 1.00 2.46 -

Transfer to Revenue arid Other Reserves 160.00 105.00 -

Transfer to Investment Reserve - 1.03 -

Dividend for the year, including tax thereon 58.68 43.34 -

The Bank posted a net total income of Rs. 1309.75 crore and net profit Of Rs. 393.48 crore for FY16 as against a net total income of Rs. 959.77 crore and net profit of Rs. 307.17 crore for FY15 which is an increase of 36.46% and 41.18%, respectively over the previous year

Appropriations from net profit have been done as detailed herein above

B. FINANCIAL DISCLOSURES Dividend

An interim dividend ofRs. 1.50 per share (i.e. 15%) was declared and paid during the year. The Board recommends the same to be the final dividend for the year, i.e. no further dividend is recommended by the Board over and above the interim dividend. Last year the Bank paid a dividend ofRs. 1.20 per share (i.e. 13%).

Capital Raising and Capital Adequacy Ratio

The Bank is well capitalised with a Capital Adequacy Ratio ("CAR") of 13.94%as on March 31,3016. The Bank also completed pre-IPO preferential placement of Rs. 487.50 crore, wherein 3.5 crore shares were allotted to high pedigree investors at a price ofRs. 195/- per shares (which included a premium ofRs. 165/- per share). During the year under review, the Bank added Rs. 37.53 crore to the capital on exercise of ESOPs by employees. Further during the year, the Bank has also raised Rs. 400 crore by issuing Non-convertible, Redeemable, Unsecured, Rated, Unlisted, Basel III compliant Tier II Debentures ("NCDs").

The Bank complies with Reserve Bank of India''s ("RBI") new Capital Adequacy guidelines which came into effect from April 1, 2013, known as ''Basel III Guidelines''.

Net Worth

The Bank''s net worth, as on March 31, 2016 is Rs. 2,960.39 crore It comprises of paid-up equity capital of Rs. 324.73 crore and reserves of Rs. 2,635.66 crore (excluding Revaluation Reserve, Investment Reserve and Intangible assets)

C. CORPORATE GOVERNANCE

The Bank''s philosophy

The Bank''s philosophy on corporate governance is aimed at supporting the top management to efficiently conduct its business operations and meet its obligations towards its stakeholders. The Bank is committed to transparent and merit-based organisation and ensure fairness, transparency and responsiveness in all transactions

Constitution of the Board of Directors

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 2013 (CA 2013), the Banking Regulation Act, 1949 (the BR Act, 1949) and the Articles of Association of the Bank. The Board consists of eminent persons with considerable professional expertise in banking, finance and other related fields. Their experience and professional credentials have helped the Bank to gain insights for strategy formulation and direction setting for the Bank, thus adding value to its growth objectives

The Board comprises of twelve (12) Directors of which one is Managing Director & CEO, one is Non-executive, Non- Independent Director and part-time Chairman, six are Independent Directors, three are Additional Directors appointed under Section 61 of CA 2013 and one is an Additional Director appointed by RBI

All the Independent Directors have given the declarations that they meet the criteria of independence laid down under Section 149(6) of the CA 2013. Based on the declaration of independence provided by them and based on the applicable RBI guidelines and circulars, all aforesaid six Independent Directors would qualify to be classified as Independent Directors under Section 149 of the CA 2013.

Mr. Kiran Patil (DIN 00221662) ceased to be a Director of the Bank with effect from September 27, 2015 upon completion of 8 years''term as prescribed under Section 10A(2A) of the BR Act, 1949. The Board seeks to place on record its appreciation of the services of Mr. Patil to the Bank during his tenure as the director on the Board

Mr. Narayan Rarnachandran (DIN 01873060) was originally appointed as an Independent Director in the Annual General Meeting ("AGM") held on August 26, 2014. The Board of Directors at the meeting held on July 9, 2015 had approved and recommended to RBI payment of a remuneration of Rs.15 lacs p.a. in addition to sitting fees to him. RBI vide its letter DBR Appts.No.6639/08.49.001 /201 5-16 dated November 10, 2015 has approved aforesaid remuneration to Mr. Rarnachandran with effect from September 1, 2015. Accordingly, he ceases to be an Independent Director w.e.f. September 1, 2015 and will liable to retire by rotation. Accordingly, the Board of Directors has recommended shareholders to take on record the aforesaid RBI approval

Mr. Prakash Chandra (DIN 02839303) and Mr. Ishan Raina (DIN 00151951) were appointed as Additional Directors w.e.f. January 25, 2016 and April 30, 2016, respectively, to hold office up to the date of the ensuing AGM. Based on the declaration of independence provided by them as prescribed under Section 149(6) of the CA 2013 and based on the applicable RBI guidelines and circulars, Mr. Chandra and Mr. Raina would qualify to be appointed as Independent Directors under Section 149 of the CA 201 3.

As a part of leadership development the Board of Directors of the Bank at its meeting held on March 10, 2016 had appointed Mr. Rajeev Ahuja (DIN 00003545), Head - Strategy of the Bank, as an Executive Director for a period of three years subject to the approval of shareholders and RBI. His appointment will be effective only from the date of RBI approval

Appointments of Mr. Narayan Rarnachandran, Mr. Prakash Chandra, Mr. Ishan Raina and Mr. Rajeev Ahuja are proposed at the 73rd AGM of the Bank

Committee of the Board of Directors

The Board functions either as a full Board; or through various Committees which oversee specific operational or strategic matters. The Board has constituted 11 Committees of Directors. These Committees monitor activities falling within their terms of reference

Composition of the Committees and attendance of the Directors at the Board and Committee Meetings held during the year under review are given under Annexure I and I respectively. The terms of reference of these Committees are given under Annexure III

Board Evaluation and Remuneration Policy

The Board members have carried out an annual performance evaluation of the performance of the entire Board, performance of the chairman, the directors individually as well as the evaluation of the working of its Committees as required under Section 134(3)(p) of the CA 3013 read with the rules framed thereunder

The Board has, on recommendation of the Human Resource & Remuneration Committee, framed a compensation policy which inter alia deals with remuneration structure and criteria for selection and appointment of directors

D. STATUTORY DISCLOSURE

Extract of Annual Return to be mandatorily attached to the Directors'' Report

As required by the provisions of Sections 92(3) and 134(3)(a) of the CA 2013 read with the rules framed thereunder, the extract of the annual return of the Bank in the Form MGT-9 is attached as Annexure IV to this Report

Conservation of energy and technology absorption

The particulars to be disclosed under Section 134(3)(rn) of the CA 2013, relating to conservation of energy and technology absorption are not applicable to the Bank. The Bank is constantly pursuing its goal of upgrading technology to deliver quality services to its customers in a cost-effective manner

Foreign Exchange Earnings and Outgo

During the year ended March 31, 2016, the Bank earned Rs. 0.68 crore and spent Rs. 0.73 crore in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions

Key Managerial Personnel

Mr. Vishwavir Ahuja, Managing Director & CEO; Mr. Naresh Karia, Chief Financial Officer and Mr. Vinay Tripathi, Company Secretary of the Bank are the Key Managerial Personnel (KMP) as per the provisions of the CA 2013. No KMP has resigned during the year under review. Mr. Rajeev Ahuja will become a KMP from the date of RBI approval

Compensation of Chief Financial Officer and Company Secretary is governed by the existing compensation policy of the Bank. Compensation of Managing Director & CEO is approved by Human Resource & Remuneration Committee and RBI

Whistle Blower Policy (Vigil Mechanism)

Feedback by employees/associates is increasingly becoming important to ensure better governance standards and transparency in the running of organisations. RBI has also framed a separate Protected Disclosure Scheme, wherein employees, customers, and stakeholders of any bank can lodge a complaint with RBI on the functioning of a bank.

The Bank has established a "Whistle Blower Policy" for better governance to comply with the provisions of Section 177 of the CA 2013 read with rules frame thereunder. This policy covers malpractices and events which have taken place/ suspected to have taken place involving, but not limited to

- Abuse of authority or misappropriation or misuse of the Bank funds/assets;

- Breach of contract / employee Code of Conduct or Rules, violation of law /regulation;

- Manipulation of the Bank data/records and pilferation of confidential / proprietary information;

- Financial or compliance irregularities, including fraud, or suspected fraud;

- Criminal offence having repercussions on the Bank or its reputation;

- Other unethical, imprudent deed/behaviour.

The policy also affords protection to whistle blower raising a genuine concern to prevent harassment or victimisation

Auditors

The Statutory Auditors of the Bank, M/s. S. R. Batliboi & Co LLP, Chartered Accountants, will retire at the conclusion of the forthcoming AGM. On completion of four consecutive years of appointment as statutory auditors, M/s. S. R. Batliboi & Co LLP would not be eligible for reappointment. Accordingly, on the basis of the recommendation of the Audit Committee, the Board has proposed the appointment of BSR & Co. LLP, Chartered Accountants as Statutory Auditors for a period of one (1) year, subject to the approval of the RBI, from the conclusion of the forthcoming AGM till the next AGM

Pursuant to Section 204 of the CA 2013, your Bank had appointed M/s. Alwyn Jay & Company, Practicing Company Secretaries, Mumbai as its Secretarial Auditors for FY2015- 16. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY2015-16 is annexed to this report as Annexure V

Employees Stock Option Plan (ESOP)

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

More details of the ESOP are given in the notes to accounts in the attached financial statements and Annexure VI to this report

Number of cases filed, if any, and their disposal under Section 22 of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Bank has zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every woman executive working in the Bank. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. As a part of Anti Sexual Harassment initiatives, the Bank created a mandatory e-learning module for all the employees called "i-COMPLY Ant Sexual Harassment".

During the year ended March 31, 2016, the Bank has not received any complaint pertaining to Sexual Harassment

Deposits

Being a banking company, the disclosures required as per Rule 8(5)(v)0(vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the CA 2013 are not applicable to your Bank.

Other Statutory Disclosures:

- The Bank has not changed its nature of business during FY16.

- Pursuant to Section 186(11) of the CA 2013 loans made, guarantees given or securities provided or acquisition of securities by a banking company in the ordinary course of its business are exempted from disclosure in the Annual Report

- All related party transactions that were entered into during FY16 were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Bank with Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Bank at large. The Bank has a Related Party Transactions Policy in place for the purpose of identification and monitoring of any potential related party transactions

- To the best of our knowledge, there are no significant/ material orders passed by the Regulators / a Court/ Tribunal etc. during FY 16 which would impact the going concern status of the Bank and its future operations

- During the year the Bank had received a show cause notice from Securities and Exchange Board of India (SEBI) in relation to certain past issuances of shares. The Bank had filed a settlement application and SEBI has in- principle agreed to accept the Bank''s proposal to settle the matter, subject to the Bank complying with certain terms. The Bank has already paid the Settlement amount within the prescribed time period and is in the process of complying with other non-rnonetary terms

- During FY16, no Company has become/ ceased to be Subsidiary, Joint Venture or Associate of the Bank. Attention of the shareholders is also drawn to note number 1.2 in Schedule 18 ''Notes to accounts'' in the financial statements for the FY16

- The details of Risk Management Policy & its framework are separately defined in Management Discussion and Analysis Report

- There are no adverse observations / qualifications in the Auditors'' report

- There are no audit qualifications in the Secretarial Audit report

- All recommendations of the Audit Committee were approved by the Board

- Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

- There are no material changes and commitments, affecting the financial position of the Bank that have occurred between the end of the financial year of the Bank i.e. March 31, 2016 and the date of the Directors'' report i.e. April 30, 2016

E. OTHER DISCLOSURES

Code of Conduct

For a financial institution, trust is the most important asset To this end, the Bank strives to ensure that its actions are in accordance with the highest standards of personal and professional integrity and highest level of ethical conduct. The Bank has adopted a Code of Conduct which all employees have to ad here to. The employees have to conduct duties according to the aforesaid Code and avoid even the appearance of improper behaviour. Some of the areas which are covered by the Code of Conduct are fairness of employment practices, protection of intellectual property, integrity, customer confidentiality, conflict of interest

Bribery and Corruption

We have a responsibility both to the members and to the communities in which we do business to be transparent in all our dealings. Our Code of Conduct requires that we do not engage in bribery or corruption in any form and explicitly mentions that the Bank will not pay or procure the payment of a bribe or unlawful fee to encourage the performance of a task or one which is intended or likely to compromise the integrity of another. The Bank will not accept any payment, gift or inducement from a third party which is intended to compromise our own integrity. The Code of Conduct also includes procedures dealing with Gifts & Entertainment, conflicts of interest and other important matters

Corporate Social Responsibility (CSR)

The Bank strives to proactively encourage inclusive growth and development, thereby participating towards building a sustainable future

The Bank has a duly constituted CSR Committee of the Board consisting of majority of Independent Directors. The Board of the Bank has also approved its CSR Policy. In alignment with the CSR Mission Statement, the Bank has focused on various initiatives for FY16 as covered in the Annual Report on Company''s CSR activities detailing therein brief outline of CSR Policy, projects undertaken, amount spent and other relevant details as furnished in Annexure VII and attached to this report

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of this Annual Report

Awards

The Bank has received industry recognition at several international and local forums - a true testament of the growth journey of the Bank. RBL Bank was recognized as a Global Growth Company 2014 by the World Economic Forum. The Bank was also bestowed with the honour of being "India''s Best Bank (Growth) in the Mid-Sized Bank segment" for three consecutive years, 2012, 2013 and 2014 as well as India''s Best Bank (Small) for the year 2015 by Business Today and KPMG Further, it was recognized as the Fastest Growing Small Bank for the third year in a row by the Business World-PWC Best Bank Survey. The Bank also received the Best Bank - Priority Sector Lending (Private Sector) award at the Dun & Bradstreet Banking Awards, 2014.

Ratings

The Bank''s Basel III compliant Tier II Bonds have been rated ''A hyb'' with stable outlook by ICRA Limited. Instruments rated in this category are considered to have high degree of safety regarding timely servicing of financial obligations. The Bank''s Certificate of Deposits programme carry a rating of A1 by ICRA Limited which indicate the lowest short term credit risk. Further, the Bank''s Fixed (Term) Deposits have been rated MAA- by ICRA Limited with a stable outlook which stands for low credit risk.

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

The Bank complies with the RBI''s KYC/AML guidelines. The Bank''s KYC/ AML Policy is prepared in accordance with the Prevention of Money Laundering Act, 3003 and RBI/IBA (Indian Banks'' Association) guidelines. Various regulatory reporting requirements, as set out by the Financial Intelligence Unit (FI LI) of the Government of India, are complied with by the Bank. The Bank has a transaction monitoring process with automated system solution administered by the centralised AML team Further, the Bank''s employees are being imparted training on KYC/AML aspects on a regular basis. Executives of the Bank also attend periodic workshops/seminars organised by FI LI, RBI, IBA and NIBM (National Institute of Bank Management) to enhance their awareness in these aspects

F. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the CA, 3013, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

The applicable accounting standards have been followed in the preparation of the annual accounts for FY16 and there have been no material departures;

i. Accounting policies have been selected and applied consistently and reasonably, and prudent judgments and estimates have been made to give a true and fair view of the Bank''s state of affairs and of its profit for FY16;

ii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provision of the CA 3013, for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a ''going concern'' basis

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

Further, statutory auditors have, in compliance with the requirements of the CA 3013, issued an opinion with respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating effectiveness of such controls details of which may be referred to in the independent auditor''s report attached to the financial statements of FY16

The said independent auditor''s opinion does not have any qualifications or adverse remarks

G. PROSPECTS

Despite the challenges faced by the economy and the banking industry, the Directors expect a sustained level of growth of business of the Bank in the corning year

ACKNOWLEDGMENT

The Board is grateful to the Government of India, RBI, SEBI, BA, other regulatory authorities, rating agency, financial institutions, banks and correspondents in India and abroad for their valuable and unflinching support as well as co-operation and guidance to the Bank from time to time.

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

The Bank''s customers have always supported the Bank in all its endeavours. The Bank would like to take this opportunity to express sincere thanks to its valued clients and customers for their continued patronage in a year when the Bank has seen a substantial transformation

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

For and on behalf of the Board

Narayan Rarnachandran Vishwavir Ahuja

Chairman Managing Director &

Chief Executive Officer

Place: Mumbai

Date April 30, 3016

Mar 31, 2010

The Directors have pleasure in presenting the 67th Annual Report along with the audited Statements of Account of your Bank for the Financial Year ended 31st March 2010.

SNAPSHOT OF PERFORMANCE :

(Rs. In crores)

For the Year Ended

Particulars 31st March 2010 31st March 2009

Deposits 1585.04 1307.05

Advances (Net) 1170.44 801.11

Operating Profit 33.43 45.84

Net Profit 19,11 30.53

Profit brought forward 0.33 0.58

Total Profit available for Appropriation 19.44 31.11

Your Banks Deposits grew by 21.27% and Net Advances by 46.10%, despite the economic slowdown. The total income has gone up from Rs. 153.53 crores to Rs. 157.39 crores. Return on Assets stood to 1.05%. The earning per share of your Bank stood at Rs 1.82 during the year 2009- 10 as compared to Rs. 2.91 in the previous year.

Gross and Net Non-Performing Advances were Rs.27.64 crores and Rs. 11.36 crores as at 31st March 2010 respectively. In percentage terms Gross NPAs are now at 2.33% and Net NPAs are at 0.97% of Gross and Net advances respectively.

APPROPRIATIONS :

Appropriations from the net profit have been effected as under:

(Rs. in Crores)

Appropriations Amount

1. Transfer to Statutory Reserve 4.80

2. Transfer to Capital Reserve 0.61

3. Transfer to Other Reserve 6.00

4. Transfer to Investment Reserve 0.49

5. Proposed Dividend (@6%) 6.28

6. Tax on Dividend (@ 16.60875% of dividend) 1.04

7. Balance Profit 0.22

DIVIDEND :

The net profit for the year after provisions and taxes amounts to Rs. 19.11 crores which has decreased by Rs. 11.42 crores compared to previous year mainly on account of reduction in profit on sale of investment by Rs. 5.69 crores & reduction in yield on investment & inter bank placement.

Taking an overview of overall performance of the Bank, your Directors are pleased to recommend a dividend of 6% for the year ended on 31st March 2010. This Dividend shall be subject to tax on dividend to be paid by the Bank and subject to approval of shareholders in Annual General Meeting.

CAPITAL ADEQUACY RATIO :

Your Banks total Capital Adequacy Ratio (CAR) as on 31s1 March 2010 stood at 36.01% as per Basel I and 34.07% as per Basel II, which is well above the regulatory norm of minimum of 9%.

NET WORTH

Net Worth of the Bank as at 31st March 2010 was Rs 349.03 crores comprising of paid-up equity capital of Rs. 104.72 crores and Reserves (excluding revaluation reserve, Investment reserve and intangible assets) of Rs 244.31 crores. It may be noted that retained profit for the year 2009-10 is Rs. 11.79 crores as against Rs. 18.27 crores for 2008-09.

EMPLOYEE STOCK OPTION SCHEME :

Your Bank is embarking upon a significant transformation of its strategy, business scale, products and services and aims to become one of the pre-eminent modern banking institutions of the country over the medium term. To achieve this there is an urgent need for the Bank to attract senior and experienced talent from well established entities that can lead this transformation effort. In addition, the Bank desires to create a sense of long-term commitment amongst its current and future employees as this transformation is a multi- year effort.

With this as a background, your Bank has recommended for your approval the institution of an Employee Stock Option Scheme to enable its employees, including Whole-time Directors and other Directors, to participate in the future growth of the Bank. Under the scheme, options which upon exercise could give rise to the issue of a number of shares not exceeding in the aggregate 10% of the issued equity capital of your Bank from time to time can be granted. The Scheme will be administered by the senior leadership of your Bank under the guidance of the HR Committee of the Board.

DIRECTORS

Shri B. D. Arwade completed his term as Part-time Non-executive Chairman on 12.03.2010.

Shri D. V. Ballal, Shri D. R. Kelkar resigned from the Board of Bank w.e.f February 23, 2010. Subsequently Shri M. G. Bhandari resigned w.e.f. from May 20, 2010.

Shri Vishwavir Ahuja, over 26 years of experience in various assignments in Bank of America leading up to the position of Managing Director & CEO of their India operations from mid - 2001 and Mr. Girish Godbole, a post-graduate from the Tata Institute of Social Sciences and a renowned social development expert who has done significant work in financial inclusion, were appointed as additional director on the Board on February 23, 2010.

Subsequently Shri Narayan Ramachandran, ex- CEO Morgan Stanley, India has been appointed on the Bank Board as Additional Director on May 20,2010.

Shri S. G. Kutte voluntary retired from the office of Managing Director & CEO w.e.f. 30.06.2010. Board noted with appreciation the yeoman service rendered by Shri S. G. Kutte to the institution during his entire career, especially during the last ten years when he skillfully led the Bank during turbulent time overcoming numerous challenges by his foresight and proactive initiatives that ensured that interest of all stakeholders were protected.

In accordance with approval of Reserve Bank of India conveyed vide letter dated June 29, 2010 the Board in its Meeting held on June 30, 2010 appointed:

- Shri S. G. Kutte as Part-Time Chairman for a period for three years with immediate effect.

- Shri Vishwavir Ahuja as Managing Director and CEO for a period of three years with immediate effect.

In accordance with the Companies Act, 1956 and the Articles of Association of the Bank Shri B. D. Arwade will retire by rotation at the ensuing Annual General Meeting, being eligible, offer himself for re-appointment. The Board recommends the re-appointment of Shri B. D. Arwade.

The Board, while welcoming the new Directors also placed on record a vote of thanks / appreciation for the services rendered by the outgoing Directors.

SOCIAL OBLIGATION OF THE BANK

During the financial year, Bank has given donations to various organizations and individuals working in Social, Religious, Medical & Sports fields. The Bank also sponsored competitions of Cricket, Football and Lawn Tennis.

CORPORATE GOVERNANCE

Banks Philosophy:

The Bank philosophy on corporate governance is aimed at supporting the top management of the Bank in efficient conduct of its business and meeting its obligations towards its stakeholders. The Bank is committed to transparent and merit based management and ensures fairness transparency and responsiveness in all transactions.

Bank has adopted the following mission statement-

"The Ratnakar Bank Ltd. would endeavor to be a technology savvy, customer centric bank with multi state presence driven by highest standards of corporate governance and guided by sound ethical values."

BOARD OF DIRECTORS

i. Constitution

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 1956, Banking Regulation Act, 1949 and the provisions of Articles of Association of the Bank. The Board consists of eminent persons with considerable Professional expertise in Banking, finance, agriculture and other related fields.

The Board is comprised of seven Non- executive Directors, two Directors appointed as Additional Director by Reserve Bank of India (RBI) and one executive director (i.e. Managing Director & Chief Executive Officer), Shri Vishwavir Ahuja.

The names of directors as of March 31, 2010 and their attendance during the review year at Board/ Committee are given under the heading of Attendance of Directors

ii. Committee of Directors:

The Board has constituted 11 committees of directors to take decisions in the best interests of the Bank. These committees monitor activities falling within their term of reference. The Board committees as of 31s1 March, 2010 are as follows:

Sr. COMMITTEE MEMBERS No.

01 Audit Shri. S. G. Kutte - C. C.

Committee Shri B.D. Arwade

(ACB) Shri K.J. Patil

Shri R.S. Naik

Shri Murali Radhakrishnan

Shri T.B. Satyanarayan

02. Share Transfer Shri. R. S. Naik - C. C.

Committee Shri. VishwavirAhuja (STC)

Shri S. G. Kutte

Shri B.D. Arwade

03. Investment Shri. R. S. Naik - C. C.

Committee(IC) Shri. VishwavirAhuja

Shri. S. G. Kutte

Shri. S. N. Minche

04. Anti-fraud Shri. Girish Godbole - C. C.

Committee Shri. VishwavirAhuja (AFC)

Shri. K. J. Patil

Shri. S. G. Kutte

Shri. S. N. Minche

05. Customer Shri. S. G. Kutte - C. C.

Service Shri. VishwavirAhuja

Committee Shri. K. J. Patil

(CSC) Shri. Girish Godbole

06. Nomination Shri. B. D. Arwade - C. C.

Committee (NC) Shri. VishwavirAhuja

Shri. S. G. Kutte

Shri. R. S. Naik

07. Shareholders Shri. Narayan Ramachandran - C. C.

Redressal Shri. VishwavirAhuja

Committee Shri. B. D. Arwade

(SRC) Shri. S. N. Minche

08. Risk Shri. VishwavirAhuja-C.C.

Management Shri. S. G. Kutte

Committee Shri R.S. Naik

(RMC) Shri K. J. Patil

Shri. Narayan Ramachandra

Shri. RajeevAhuja Head of Credit, Market & Operational Risk Management Committees

09. Management Shri. VishwavirAhuja-C. C.

Committee (MC) Shri. S. G. Kutte

Shri. R. S. Naik

Shri. B.D. Arwade

10. Branch Shri S.G. Kutte - C. C.

Development Shri. VishwavirAhuja

Committee Shri. K. J. Patil

(BDC) Shri. R.S. Naik

Shri. Girish Godbole

11. Human Resources Shri S. G. Kutte - C. C.

Committee (HRC) Shri. Vishwavir Ahuja

(w.e.f. 15.05.2009) Shri R.S. Naik

iii. Meetings of Board of directors and their committees and Dates of the Month on which meetings were held:

MONTH BOD ACB STC IC AFC CSC NC SRC RMC MC BDC HRC

April 09

May 09 514 14 5 514

June 09 27 15 16

27

July 09 13 13 13 13 13 13 13 13 31

Aug. 09 22

Sept. 09 12 12 12 12 12 17

Oct. 09 29 29 29

Nov. 09

Dec. 09 17 17 17 17 17 03 17 17

Jan. 10 21 21 21

Feb. 10 23 23 23 02 23 19

Mar. 10 26 26 26 26 12

Total Meetings 9 6 6 4 2 2 4 - 4 9 1 4

iv. Details of attendance of the Directors at the meetings of the Board and its Committees

S. No Name of Director Category of B A S I A C N Director O C T C F S C D B C C C

1 S.G. Kutte MD. & C.E.O 9 6 4 2 2 4

2 B.D. Arwade Chairman 9 6 6 4

3 S.N. Minche Ind.Non-Exe. 9 4 2

4 R.S. Naik Ind.Non-Exe. 9 6 6 4 4

5 D.V. Ballal Ind.Non-Exe. 7 5 5 2 3

6 M.G. Bhandari Ind.Non-Exe. 8 1 3

7 K.J. Patil Ind.Non-Exe. 9 6 2 2

8 D.R. Kelkar Ind.Non-Exe. 5 1

8 Vishwavir Ahuja Ind.Non-Exe. 1 1

9 Girish V. Godbole Ind.Non-Exe. 1 1

10 M. Radhakrishnan RBI Norn. Dir 9 6

11 T.B. Satyanarayan RBI Nom. Dir 6 3

S R M B HRC A No.of Name of Director R M C D G Other C C C M Directorship

S.G. Kutte 4 9 1 4 Yes NM

B.D. Arwade 9 Yes NM

S.N. Minche Yes NM

R.S. Naik 4 9 1 3 Yes 2

D.V. Ballal 3 8 4 Yes NM

M.G. Bhandari 3 4 Yes 2

K.J. Patil 4 1 Yes 3

D.R. Kelkar 1 Yes 3

Vishwavir Ahuja Yes NM

Girish V. Godbole NM

M. Radhakrishnan NM

T.B. Satyanarayan NM

NM - Not a Member

* Shri D.V. Ballal and Shri D.R. Kelkar cease to be director w.e.f. 23.02.2010

* Shri Vishwavir Ahuja and Shri Girish Godbole appointed as Additional Director w.e.f. 23.02.2010

DISCLOSURES :

The Bank has not entered into any materially significant transactions, which could have a potential conflict of interest with the Bank, with its promoters, directors, management or relatives etc., other than the transactions entered into normal course of Business.

STATUTORY DISCLOSURE :

Particulars of employees

There were no employees falling within the purview of the provisions of Section 217(2A) of the Companies Act, 1956 read

Conservation of energy and technology absorption :

The particulars to be disclosed under section 217 of the Companies Act, 1956 relating to conservation of energy and technology absorption are not applicable to the Bank. However appropriate measures, wherever possible have been initiated to conserve energy. The Bank has also used information technology extensively in its operations.

Directors Responsibility Statement:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2010:

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profit of the Bank for the year ended on March 31, 2010;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India; and

- The accounts have been prepared on a going concern basis

COMMENTS ON THE AUDITORS REPORT

There are no observations / qualifications in the Auditors report.

AUDITORS

M/s P.G. Bhagwat, Pune are the Central Statutory Auditors of the Bank, who retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Members are requested to appoint statutory Auditors for the year 2010-11 on remuneration to be decided by the Board of Directors.

ACKNOWLEDGMENT

The Bank has taken in the recent years a number of initiatives on the technology and business fronts. Successful translation of these initiatives into business and earnings growth has been primarily due to the staff of the Bank, which has embraced the philosophy of change to help the Bank emerge as a modern and customer-centric bank. We are grateful to our people for their continued commitment and dedication towards the Bank.

Our customers have always supported us in all our endeavors. If in the process of transformation, a few of our customers have been inconvenienced, they have borne the same with patience and equanimity. We are grateful to our customers for their continued patronage and encouragement.

Our shareholders have been our Key Partners in progress. We are grateful to them for their support and confidence that they have placed in us.

The Board of Directors of the Bank places on record its appreciation for the continued support and patronage received from its customers, shareholders, employees union & officers association and well wishers.

The Board is also indebted to the Government of India, RBI, SEBI, IBA and other regulatory authorities, various financial institutions, banks and correspondents in India for their valuable support and guidance to the Bank from time to time.

For and on behalf of

The Board of Directors

Date: 30.06.2010 Chairman

Place : Mumbai S. G. Kutte

Mar 31, 2009

The Directors have pleasure in presenting the 66th Annual Report along with the audited Statements of Account of your Bank for the Financial Year ended 31st March 2009.

SNAPSHOT OF PERFORMANCE :

(Rs. In crores)

For the Year Ended

Particulars 31st March 2009 31st March 2008

Deposits 1307.05 1101.07

Advances (Net) 801.11 585.79

Operating Profit 45.84 33.88

Net Profit 30,53 17.01

Profit brought forward 0.58 0.49

Total Profit 31.11 17.50 available for Appropriation

Your Banks Deposits grew by 18.71% and Advances by 36.76%, despite the economic slowdown. The total income has gone up from Rs. 116.01 crores to Rs. 153.53 crores. Return on Assets rose to 1.96%. The earning per share of your Bank has risen to Rs 2.91 during the year 2008-09 from Rs.1.68 in the previous year, which reflects an increase of over 73%.

Gross and Net Non-Performing Advances have been brought down to Rs.17.28 crores and Rs. 5.45 crores in FY 2008-09. In percentage terms Gross NPAs are now at 2.13% and Net NPAs are at 0.68%.

APPROPRIATIONS :

Appropriations from the net profit have been effected as under:

(Rs. in Crores)

Appropriations Amount

1. Transfer to Statutory Reserve 7.75

2. Transfer to Capital Reserve 5.27

3. Transfer to Other Reserve 5.50

4. Proposed Dividend (@ 10%) 10.47

5. Tax on Dividend (@ 16.995% of dividend) 1.78

6. Balance Profit 0.34

DIVIDEND :

The net profit for the year after provisions and taxes amounts to Rs. 30.53 crores registering a rise of 79.45 % over the net profit of Rs. 17.01 crores for the previous financial year.

Taking an overview of overall performance of the Bank, your Directors are pleased to recommend a dividend of 10% for the year ended on 31st March 2009 as against 5% for the year ended on 31st March 2008. This Dividend shall be subject to tax on dividend to be paid by the Bank and subject to approval of shareholders in Annual General Meeting.

CAPITAL ADEQUACY RATIO :

Your Banks total Capital Adequacy Ratio (CAR) as on 31st March 2009 stood at 44.87% as per Basel I and 42.30% as per Basel 11, which is well above the regulatory minimum of 9%.

NET WORTH

Net Worth of the Bank as at 31st March 2009 was Rs 338.12 crores comprising of paid-up equity capital of Rs. 104.72 crores and Reserves (excluding revaluation reserve and intangible assets) of Rs 233.40 crores. It may be noted that retained profit for 2008-09 is Rs. 18.27 crores as against Rs. 11.05 crores for 2007-08.

DIRECTORS:

In accordance with the Companies Act, 1956 and the Articles of Association of the Bank Shri. Rajendra S. Naik, Shri. Surendra N. Minche will retire by rotation at the ensuing Annual General Meeting, being eligible, offer themselves for re-appointment. The Board recommends the re-appointment of Shri. Rajendra S. Naik and Shri. Surendra N. Minche.

Shri. T. B. Satyanarayan and Shri. Murali Radhakrishnan have been appointed as additional directors by Reserve Bank of India w.e.f. 06.02.2009.

SOCIAL OBLIGATION OF THE BANK :

During the financial year, Bank has given donations to various organisations and individuals working in Social, Religious, Medical & Sports fields. The Bank also sponsored competitions of Cricket, Football and Lawn Tennis.

CORPORATE GOVERNANCE :

Banks Philosophy :

The Bank philosophy on corporate governance is aimed at supporting the top management of the Bank in efficient conduct of its business and meeting its obligations towards its stakeholders. The Bank is committed to transparent and merit based management and ensures fairness transparency and responsiveness in all transactions.

Bank has adopted the following mission statement-

"The Ratnakar Bank Ltd. would endeavor to be a technology savy, customer centric bank with multi state presence driven by highest standards of corporate governance and guided by sound ethical values."

BOARD OF DIRECTORS

i. Constitution

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 1956, Banking Regulation Act, 1949 and the provisions of Articles of Association of the Bank. The Board consists of eminent persons with considerable Professional expertise in Banking, finance, agriculture and other related fields.

The Board is comprised of seven Non- executive Directors, two

Directors appointed as Additional Director by Reserve Bank of India (RBI) and one executive director (i.e. Managing Director & Chief Executive Officer), Shri Subhash Gundappa Kutte.

The names of directors and their attendance at Board/Committee are given under the heading of Attendance of Directors

DISCLOSURES :

The Bank has not entered into any materially significant transactions, which could have a potential conflict of interest with the Bank, with its promoters, directors, management or relatives etc. Other than the transactions entered into normal course of Business.

STATUTORY DISCLOSURE :

Particulars of employees :

There are no employees falling within the purview of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)(Amendment) Rules, 2002

Conservation of energy and technology absorption :

The particulars to be disclosed under section 217 of the Companies Act, 1956 relating to conservation of energy and technology absorption are not applicable to the Bank. However appropriate measures, wherever possible have been initiated to conserve energy. The Bank has also used information technology extensively in its operations.

Directors Responsibility Statement:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2009:

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profit of the Bank for the year ended on March 31, 2009;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India; and

- The accounts have been prepared on a going concern basis. COMMENTS ON THE AUDITORS REPORT

There are no observations / qualifications in the Auditors report. AUDITORS:

M/s P.G. Bhagwat, Pune are the Central Statutory Auditors of the Bank, who retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Members are requested to appoint Statutory Auditors for the year 2009-10 on remuneration to be decided by Board of Directors.

ACKNOWLEDGMENT:

The Bank has taken in the recent years a number of initiatives on the technology and business fronts. Successful translation of these initiatives into business and earnings growth has been primarily due to the staff of the Bank, which has embraced the philosophy of change to help the Bank emerge as a modern and customer-centric bank. We are grateful to our people for their continued commitment and dedication towards the Bank.

Our customers have always supported us in all our endeavors. If in the process of transformation, a few of our customers have been inconvenienced, they have borne the same with patience and equanimity. We are grateful to our customers for their continued patronage and encouragement.

Our shareholders have been our Key Partners in progress. We are grateful to them for their support and confidence that they have placed in us.

The Board of Directors of the Bank places on record its appreciation for the continued support and patronage received from its customers, shareholders and well wishers.

The Board is also indebted to the Government of India, RBI, SEB1, IBA and other regulatory authorities, various financial institutions, banks and correspondents in India for their valuable support and guidance to the Bank from time to time.

For and on behalf of The Board of Directors

Date : 13-07-2009

Place : Kolhapur. B. D. Arwade Chairman

Mar 31, 2008

The 65th Annual Report on business and operations of the Bank together with Audited Balance Sheet and Profit & Loss Account Statement for the year ended 31st March 2008 is presented herewith.

ECONOMIC SCENARIO

During the financial year 2007-2008, there was a sign of slowdown in certain sectors of economy. The Gross Domestic Product (GDP) came down to 8.7% as against 9.4% during the last year. Agricultural production has been estimated at 2.6% as against 3.8% of last year. Industrial growth is 8.6% as against 10.60% in the previous year. There was also a decline in growth rate in services sector. As compared to 11.20% last year the growth this year is 10.60%.

The general slow-down at global level has adversely affected the Indian economy. The strong Rupee during the entire financial year has contributed towards deceleration in export.

During the financial year 2007-2008 foreign exchange reserves increased by Rs. 110.50 billion to reach Rs. 309.07 billion. Inflation based on wholesale price index stood at 7.4% in March 2008 as against 5.9% a year ago. Increase in prices of crude oil, edible oils and basic metals, contributed to rise in inflation. Government of India is taking steps to bring inflation under control.

BANKING SCENARIO

During 2007-08 aggregate deposits of Scheduled Commercial Banks increased by 22.20% and non-food credit expanded by 22.3%.

During the year 2007-2008 financial markets experienced alternating shifts in liquidity conditions. Reserve Bank of India increased Cash Reserve Ratio (CRR) by 150 basis points during financial year ended March 31, 2008 in its efforts to contain liquidity. During last quarter of financial year 2007-2008 the position of liquidity was initially comfortable, however, some tightness emerged during February.

With a view to controling the inflationary trend, Reserve Bank of India increased CRR from 6% to 7.5% during financial year 2007-2008, which resulted in immobilising sizeble funds of Banks with Reserve Bank of India.

Commercial Banks investment in Government and other approved securities increased by 22.9% as against 10.3% last year.

BANKS OWNED FUNDS

In view of expectations of Reserve Bank of India, the Bank took steps to achieve the benchmark networth level of Rs. 300 crores by augmenting its capital. As on 31st March 2008 the Banks networth has reached the level of Rs. 319.74 crores. The share capital of the Bank rose to Rs. 104.72 crores as on 31.03.2008 as against Rs. 70.44 crores as on 31.03.2007 and Reserves and Surplus rose from Rs. 82.68 crores as on 31.03.2007 to Rs. 218.29 crores as on 31.03.2008.

DEPOSITS

On Y to Y basis, deposits have shown a healthy rise of 25.64% which compares favourably with the industry growth of 22.02%. In the year 2007-08 Banks deposits have increased by Rs. 224.68 crores. The Bank has surpassed the milestone of Rs. 1100 crores of deposits during the year 2007-2008. The impressive growth in deposits is a reflection of reaffirmation of public confidence and trust.

CREDIT OPERATIONS

As compared to the year ended 31.03.2007 advances increased by Rs.55.27 crores. The growth in advances is 10.42% as against 8.08% during last year. In the Banking industry, the said growth rate is 22.03%. A cautious approach for deployment of funds has affected growth to some extent.

Total priority sector advances of the Bank stood at Rs. 240.36 crores in March 2008 as against Rs. 181.44 crores last year registering growth of 32.47%. As against the benchmark level of 40%, achievement of the Bank works out to 41.03% of net Bank Credit in March 2008. Agriculture credit increased by 27.26%. Outstanding credit to SC/ST out of total Priority Sector credit is Rs. 2.76 crores spread over 1079 accounts. Actual recovery in such accounts was Rs. 0.41 crores, which was 39.16% of demand.

MANAGEMENT OF NON PERFORMING ASSETS

The Bank has put in place several action plans for containing Non Performing Assets. Compromise and settlements have resulted in substantial recoveries. Recovery camps have been held. Steps have been taken for expediting suit proceeding at DRTs and Civil Courts. These measures have paid good results and Bank has expeditiously obtained decrees and is executing them through recovery proceedings. These multi-pronged efforts has culminated in substantial recoveries in NPAs. The Bank has achieved reduction in Gross and Net NPAs bringing down the ratios to 6.01% and 0.99% from 6.81% and 1.92% of the previous year respectively.

RISK MANAGEMENT

The Bank has put in place Risk Management Systems to identify, measure, monitor and mitigate risks arising from the activities undertaken. The Risk Management strategy is broadly based on analysis of key risk areas such as Credit Risk, Market Risk and Operational Risk, Quantification of Risk etc. There are residuary risks like Credit Concentration Risk, Interest Rate Risk, Liquidity Risk, Legal Risk etc., which need to be considered while drawing risk management strategy in addition to the basic risk referred elsewhere.

To address each risk systematically and to create a culture of integrated Risk Management, Risk Management Architecture has been evolved. The Architecture is comprised of following Committees and Support Groups dedicated to attend specific type of risks.

Risk Management Committee (Boards Sub- committee) constituted to oversee overall working of Risk Management function in Bank.

Investment and Credit Risk Management Committee (Executive Level Committee) is constituted to address Credit and Market Risk.

Support by : Pre-sanction Credit Appraisal Committee and Equity Research Group.

Operational Risk Management Committee (Executive Level Committee) is constituted to address Operational Risk and Internal Control Risk.

Asset Liability Management Committee (Executive Level Committee) is constituted to address Liquidity Risk, Earnings Risk, Business Strategy and Environment Risk. This Committee is supported by ALCO Support Group.

This is supported by the Risk Profile Templates wherein Business Risks-Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Control Risk and Compliance Risk, Management Risk are assessed with the help of the standardized questionnaries to conclude on level and direction of risks on quarterly basis.

Bank has put in place policies on various facets of operations. Policies are reviewed and revised periodically to keep up with changing regulatory requirement and experience of the Bank.

The Bank has already complied with the requirements under Basel I. The Bank is geared up to meet the requirements under Basel II i.e., New Capital Adequacy Framework, which are applicable to the Bank from 31s1 March 2009. In this context Bank has started parallel run of New Capital Adequacy Framework along with Basel I.

The Board is reviewing calculation of CRAR of the Bank under both the accords along with adequacy of MIS to implement directives issued under New Capital Adequacy Framework and ascertain impact of various elements / portfolio on the Banks CRAR under revised framework. Besides this, mechanism is put in place for validating the CRAR position reported and action taken in respect of any advice, guidance and direction given on the referred aspects.

Bank has adopted "Standardized Approach" for computing capital requirement for Credit Risk, "Basic Indicator Approach" for Operational Risk and "Standardized

Duration Method" for Market Risk.

As a part of preparedness to implement directives issued under New Capital Adequacy Framework, Bank has prepared and adopted Policy on Disclosures, Policy on Credit Risk Mitigation Techniques and Collateral Management, Operational Risk Management Policy, Policy on Internal Capital Adequacy Assessment Procedure (ICAAP) etc.

Bank is confident of implementing guidelines issued under New Capital Adequacy Framework.

INVESTMENT PORTFOLIO

The aggregate investments of the Bank as on 31st March 2008 stood at Rs. 361.32 crores as against Rs. 315.83 crores as on 31st March 2007. SLR and Non-SLR Investments amounted to Rs. 283.35 crores and Rs. 77.97 crores respectively as on 31st March 2008. The average yield on investments earned during the year is 7.22% as compared to 7.06% in the previous year.

Statutory requirement of CRR increased from 6.00% at 7.50% during the year, indicating stringent measures taken by Reserve Bank of India to control inflation. Liquidity position of the Bank was, however, comfortable throughout the year.

Bond markets were volatile during the year, while equity markets witnessed deeper corrections during second half of the financial year. The net profit on sale of investments of the Bank was Rs. 1.65 crores, as compared to Rs. 0.26 crores in the previous year.

DIVIDEND

The Board is pleased to report that the Profit rose from Rs. 3.01 crores for the year 2006-2007 to Rs. 17.01 crores in the financial year 2007-2008 constituting growth of 465%. The requirements of provisions for Statutory Reserves and other provisions have been made as per accounting standards to the satisfaction of Auditors. In terms of Reserve Bank of India guidelines maximum pay out ratio has been considered. In view of satisfactory financial and profitability position of the Bank, Board recommends dividend at 5% on (pro-rata basis) for the year ended 31.03.2008. This dividend shall be subject to tax on dividend to be paid by the Bank and subject to approval of shareholders in Annual General Meeting.

EXPANSION PROGRAMME

During the year under review the Bank opened a fully computerised branch at Karad (Dist. Satara). The Bank intends to have its presence in major and important cities of India and accordingly it has secured permission for opening 20 branches plus one service branch from Reserve Bank of India. The Bank proposes to open 20 branch in major cities like Kagal, Malkapur, Panaji, Bangalore, Hyderabad, Noida, Gurgaon, Pune, Mumbai, Kalyan-Thane. Bank also proposes to enter foreign exchange business.

HUMAN RESOURCES DEVELOPMENT

The Bank continued to engage in Human Resource Development. During the year 20 training programmes were arranged at Banks in-house training centre. In all 418 members of staff both officers and workmen employee were imparted training on various topics to improve their knowledge, skills and attitude. Besides this, 34 officers were imparted training at reputed institutions like National Institute of Bank Management, Bankers Training College and College of Agriculture & Banking of Reserve Bank of India.

Pune, Institute for Development & Research in Banking Technology, Hyderabad, Clearing Corporation of India Ltd., Mumbai, National Bank for Agriculture & Rural Development, Western India Regional Council, Mumbai. Industrial relations in the Bank remained cordial during the year. The management has a healthy relationship with officers association & employees union which faster grow and development of the Bank in a positive environment of mutual trust.

The Bank has also adopted incentive policy for better performance in insurance business to motivate and encourage employees for contributing towards improving profitability. Bank plans to have incentive plans to encourage accelerated business growth.

Per employee business increased from Rs. 2.54 crores to Rs. 3.10 crores.

INFORMATION TECHNOLOGY

The Bank has implemented Core Banking Solutions at 42 branches and would shortly bring the tally to 50 branches. Bank has plans to computerise all the remaining branches during 2008-09. The Banks ATMs would be brought under National Financial Switch for ATM sharing. Bank has plans for implementing internet banking, mobile banking and SMS banking. All these technological inputs would enable value addition in the services rendered and give clients all facilities as available in new generation banks.

TRANSFERS & TRANSMISSION OF BANKS SHARES AND DEMAT

Bank has appointed Intime Spectrum Registry Limited as Share Transfer Agent to handle the matters relating to transfer, transmission of shares of the Bank, change of address and other relevant matters. Your Directors are pleased to inform you that the Banks shares have been admitted with CDSL vide ISIN - INE 976G01028 and have been made live in the CDSL system from 21.05.2008.

PARTICULARS OF EMPLOYEES IN TERMS OF SEC 217 (2A) OF THE COMPANIES ACT, 1956

As per provisions of Sec.217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, information regarding employee drawing annual emoluments more than Rs. 12.00 lacs is required to be published. No employee of the Bank draws annual emoluments more than Rs. 12.00 lacs. Hence the information is NIL.

SOCIAL OBLIGATION OF THE BANK

During the financial year, Bank has given donations to various organisations and individuals working in Social, Religious, Medical & Sports fields. The Bank also sponsored competitions of Cricket, Football and Lawn Tennis.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby state that:-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) we have 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 company at the end of the financial year and of the profit of the company for that period;

iii) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) we have prepared the annual accounts on a "going concern" basis.

CORPORATE GOVERNANCE

1) Banks philosophy

The Basic philosophy of Corporate Governance in the Bank is to enhance shareholders value keeping in view the needs and interest of other stakeholders value.

The Bank has infused the philosophy of Corporate Governance in all its activities.

2) Board of Directors

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 1956, Banking Regulation Act, 1949 and the provisions of Articles of Association of the Bank. The Board strength was of 8 Directors as on 31s1 March 2008. The Board has an optimum combination of Executive and Non-Executive Directors. Shri. S. G. Kutte, is the Managing Director & Chief Executive Officer and other 7 Directors are independent Non - Executive Directors representing various sectors. As per the recommendations of Dr. Ganguly Committees Report on Corporate Governance, the Bank has entered into the Deed of Covenants with all its Directors. The Declarations & Undertakings as to Fit & Proper from all its Directors as on 31st March 2008 have also been obtained.

The Board has constituted committees of Directors to take decisions in the best interests of the Bank. These committees monitor activities falling within their terms of reference. The Boards committees are as follows.

S.N. COMMITTEE NAME MEMBERS

1) Audit Committee 1) Shri. D.V. Ballal - Committee Chairman 2) Shri. B. D. Arwade 3) Shri. R. S. Naik 4) Shri J. K. Ulagadde

2) ALMS Committee 1) Shri. S. G. Kutte - Committee Chairman

2) Shri. R. S. Naik 3) Shri. Mohanlal Bhandari 4) Shri. Kiran J. Patil

3) Share Transfer Committee 1) Shri. S.G. Kutte - Committee Chairman

2) Shri. B. D. Arwade 3) Shri. R. S. Naik 4) Shri. D. V. Ballal

4) Investment Committee 1) Shri. S.G. Kutte - Committee Chairman

2) Shri. S. N. Minche 3) Shri. R. S. Naik 4) Shri. Mohanlal Bhandari

5) Anti-fraud Committee 1) Shri. S.G. Kutte - Committee Chairman

2) Shri. D. V. Ballal 3) Shri. Kiran J. Patil 4) Shri. J. K. Ulagadde

6) Customer Service Committee 1) Shri. S.G. Kutte - Committee Chairman

2) Shri. J. K. Ulagadde 3) Shri. Kiran J. Patil

7) Nomination Committee 1) Shri. S.G. Kutte -Committee Chairman

2) Shri. B. D. Arwade 3) Shri. R.S. Naik 4) Shri. D. V. Ballal

8) Shareholders Redressal Committee 1) Shri. B.D. Arwade - Committee Chairman

2) Shri. S. N. Minche 3) Shri. Mohanlal Bhandari 4) Shri. Kiran J. Patil

9) Management Committee 1) Shri. S.G. Kutte - Committee Chairman

2) Shri. D. V. Bailal 3) Shri. R. S. Naik 4) Shri. B. D. Arwade

10) Risk Management Committee 1) Shri. S.G. Kutte - Committee Chairman

2) Shri. B. D. Arwade 3) Shri. R. S. Naik 4) Shri. D. V. Ballal 5) Shri. Mohanlal Bhandari 6) Shri. S. B. Mukherji General Manager 7) Shri. V. A. Langare Assistant General Manager Credit & Accounts.

8) Shri. A. D. Vardhamane Assistant General Manager Inspection & Recovery.

11) Branch Development 1) Shri. S. G. Kutte - Committee Chairman Committee 2) Shri. Kiran J. Patil

3) Shri. Mohanlal Bhandari 4) Shri. R. S. Naik 5) Shri. J. K. Ulagadde

The Board of Directors, its committees meet at regular periodic intervals.

BOARD OF DIRECTORS

As per provisions of the Companies Act 1956 and the Articles of Association of the Bank, Shri. S. N. Minche and Shri. J. K. Ulagadde, Directors of the Bank retire at the ensuing Annual General Meeting and are eligible for re-appointment. Shri. S. N. Minche has expressed his willingness to be re-appointed. Members are requested to consider his appointment.

However Shri. J. K. Ulagadde has expressed unwillingness to be reappointed. The Board takes this opportunity to express its appreciation for the Services rendered by Shri. J. K. Ulagadde during his tenure as Director. The Board also expresses its appreciation for the services rendered by Shri. B. S. Dugge and Shri. Pavan Kumar Jain who resigned during the year under consideration.

Shri. Damodar V. Ballal, Shri. Mohanlal Bhandari, Shri. Kiran J. Patil and Shri. D. R. Kelkar were appointed as additional Director of the Bank w.e.f. 17th August 2007, 28th September 2007, 28th September 2007 and 5th July 2008 respectively. In terms of provisions of Section 260 of the Companies Act, 1956 they hold office till the date of ensuing Annual General Meeting. The Bank has received notices pursuant to the provisions of Section 257 of Companies Act, 1956 proposing the candidature of Shri. Damodar V. Ballal, Shri. Mohanlal Bhandari, Shri. Kiran J. Patil and Shri. D. R. Kelkar as Directors of the Company.

STATUTORY AUDITORS

The Banks Statutory Auditors M/s. Kirtane & Pandit, Chartered Accountants, Pune retire at the conclusion of the Annual General Meeting. The shareholders are requested to appoint Statutory Auditors for the year 2008- 2009 and decide their remuneration.

ACKNOWLEDGEMENT

The Board of Directors acknowledges with gratitude valuable timely advise, guidance and support received from various authorities of Reserve Bank of India / NABARD / SEBI / CDSL etc.

The Board of Directors acknowledges with gratitude the continuous loyalty of the shareholders, depositors, clients and well wishers for their continuous whole-hearted support. The Board of Directors records the valuable contribution made by the staff at all levels and looks forward to their sustained commitment and teamwork to achieve the organisational goals.

For and on behalf of The Board of Directors

Date : 06-08-2008. S. G. Kutte Place : Kolhapur Managing Director & Chief Executive Officer

Mar 31, 2007

The 64th Annual Report on business and operations of the Bank together with Audited Balance Sheet and Profit & Loss Account Statement for the year ended 31st March 2007 is presented herewith.

* ECONOMIC SCENARIO

The Indian economy witnessed robust growth during 2006-07 for the fourth year in succession. The Gross Domestic Product (GDP) grew at 9.4% as against 9.0% during last year. Real GDP growth is at average of 8.6% during the four years period from 2003-04 to 2006-07. The acceleration in growth during 2006-07 was driven by continued momentum in the services and manufacturing sectors, both of which are expected to record double digit growth. Agriculture and allied activities growth slowed down from 6.0 per cent in 2005-06 to 2.7 per cent in 2006-07, however, Industrial growth exceeded 11 per cent during the year 2006-07, which is the highest since 1995-96. Service sector grew by more than 10%.

The rising trend in countrys Foreign Exchange reserves has continued and the reserves have reached the level of $ 199.2 billion in March 2007. Inflation, based on wholesale price index, was at 5.7% in March 2007 as against 4.1% in March 2006. The upward trend in prices of primary articles, manufactured products, higher demand for bank credit, rising asset prices are the main reasons for increase in the rate of inflation.

* BANKING SCENARIO

There was a spurt in bank deposits during financial year 2006-07, especially in Time Deposits. The Time Deposits of banks accelerated at 22.8 percent as against 15.3 percent in the previous year. This was mainly because of tax benefits under Section 80C of Income Tax Act for deposits with maturity of 5 years or more and rise in interest rates from the range 5.25% - 5.75% to 7.25 % - 9.25%.

There was good demand for bank credit during financial year 2006-07 Non-food credit registered growth of 28.50% as against 31.38% in the previous year.

Investment in gilts of commercial banks increased by 10% during financial year 2006-07 as against decline of 2.7% during the earlier year.

During the financial year 2006-07, initially, the liquidity position was very comfortable. Subsequently, factors like advance tax outflows, festival seasons, increase in CRR by Reserve Bank of India twice, created some pressure on liquidity. However, due to timely steps taken by Reserve

* BANKS OWN FUNDS

In view of expectations of Reserve Bank of India, the Bank took steps for enhancing its capital to achieve the benchmark networth level of Rs.300 crores. In addition to the 7th issue of 19,37,684 shares issued in 2006 the Bank came out with further two Right Issues viz. 8th & 9th in February 2007 and March 2007 of 13,75,731 shares at par i.e. Rs.100/- per share in the ratio of 3:1 and 55,02,925 shares of Rs.100/- each at a premium of Rs.350/- per share in the ratio of 1:1 respectively.

The Board is pleased to inform that these issues have helped the Bank to enhance its capital funds from Rs.55.38 crores to Rs.200.90 crores as on 31.03.2007. The Bank has subsequent to 31.03.2007 achieved net worth of Rs.303.45 crores on 10.05.2007 thus surpassing the benchmark of Rs.300 crores, prescribed by Reserve Bank of India. The Bank acknowledges the trust and loyalty displayed by the honorable shareholders in making the issues successful.

* DEPOSITS

There is a marginal rise of 0.25% in deposits. External industry level environment is the prime cause for inadequate performance on the deposits front. Merger of Ganesh Bank of Kurundwad Ltd., The Sangli Bank Ltd., The United Western Bank Ltd., several co-operative banks of Sangli / Kolhapur districts coming under direction of Reserve Bank of India, sustained press reports, articles in trade magazines unfavourable to small banks etc. has affected public perception about old Private Sector Banks negatively. As a result, growth in deposits was severely hampered. It is a tribute to the long standing of the Bank and the efforts made by the Management and staff that the Bank succeeded in retaining its deposits level, which is also an indication of customer loyalty earned through good customer service and relationship management.

* CREDIT OPERATIONS

As compared to the year ended on 31.03.2006 advances have increased by Rs.39.68 crores at the growth rate of 8.08%. The adverse impact on deposit portfolio led the Bank to take a prudent stance of maintaining higher liquidity. As such, the Credit Deposit Ratio was monitored suitably providing for unforeseen strain on liquidity. The Bank was always in readiness to meet any of its liability and has thus retained the trust and confidence of its clients and well wishers.

Total priority sector advances of the Bank stood at Rs.181.44 crores in March 2007 as against Rs.159.63 Crores last year registering growth of 13.66%. As against the benchmark level of 40%, achievement of the Bank works out to 41.41% of net Bank Credit in March 2007. Agriculture credit increased by 30.69%. Outstanding credit to SC/ST out of total Priority Sector Credit is Rs.2.14 crores spread over 924 accounts. Actual Recovery in such accounts was Rs.0.47 crores which was 51.27% of demand.

The Bank has launched a new scheme of Ratnatraya Professional for doctors, dentists, engineers, architects, Chartered Accountants.

* MANAGEMENT OF NON PERFORMING ASSETS

The Bank has put in place several action plans for curtailing Non Performing Assets. Compromise and settlements have resulted in substantial recoveries. Steps have been taken for expediting suit proceeding at DRTs and Civil Courts. These steps have given good results and Bank has expeditiously obtained decrees and is executing them through recovery proceedings. These multi-pronged efforts have culminated in substantial recoveries in NPAs. Bank has achieved reduction in Gross and Net NPAs bringing down the ratios to 6.81% and 1.92% from 7.59% and 2.61% of the previous year.

* RISK MANAGEMENT

The Bank has put in place Risk Management Systems to identify measure, monitor and mitigate risks arising from the activities undertaken. The Risk Management strategy is based on analysis of key risk areas such as credit risk, market risk, operational risk, quantification of risks etc. Risk Management Architecture has been evolved. The architecture comprises of various committees and support groups dedicated to attend to specific types of risks. Risk Profile Templates in Reserve Bank of India prescribed formats are prepared. Policies on various facets of operations have been adopted and are reviewed periodically to keep up with changing expectations, experience of the regulator and the Bank respectively.

The Bank has already complied with requirements under Basel I. The Bank is gearing up to meet the requirements under Basel II which are to be applicable from March 2009. In this context the Bank has started parallel run of New Capital Adequacy framework (Basel II) along with Basel I. Bank has adopted stadardised approach for computing capital requirement for Credit Risk, Basic Indicator approach for operational risk and standardised duration method for Market Risk. Bank has prepared and adopted policy on disclosures, credit risk mitigation, techniques and collateral management, operational risk management policy. The Board of Directors is reviewing calculation of CRAR of the Bank under both the accords along with adequacy of MIS to implement Basel II, impact of various elements / portfolio on the Banks CRAR under revised framework, mechanism is in place for validating the CRAR position reported under New Capital Adequacy framework, action taken with respect to any advise, guidance, direction given on the referred aspects. Bank is confident of implementing guidelines issued under New Capital Adequacy framework.

* INVESTMENT PORTFOLIO

The upward trend in the interest rate cycle continued during 2006-07. Maintenance of CRR increased from 5.00% to 6.00% and Repo rate increased from 6.50% to 7.75% during the year, indicating hardening of interest rates. Liquidity conditions remained tight during last quarter of the year, due to higher CD Ratio in the banking industry. In general, G-sec market and bond market witnessed lack luster activities, while equity market was volatile with bullishness over a longer term. Bank continued its cautious approach in investment trading.

The investment portfolio of the Bank increased from Rs.276.64 crores to Rs.315.83 crores during the year under review.

* PROFIT AND APPROPRIATION

Net profit increased from Rs.0.59 crores to Rs.3.01 crores in 2006-07. In terms of Reserve Bank of India guidelines, maximum payout ratio has been stipulated. Considering the requirements for provisions of Statutory Reserve and dividend payout, the allocable surplus is not significant. The Board has therefore not recommended any dividend.

* EXPANSION PROGRAMME

During the year under review the Bank has opened a fully computerised branch at Kharghar (Dist. Raigad) with ATM facility. The Bank also proposes to open new branches at various prominent business centres, and State Capital. The Bank also proposes to enter into Foreign Exchange business and has already approached the Reserve Bank of India for licence.

* HUMAN RESOURCES DEVELOPMENT

The Bank has imparted training to its staff - both inhouse and by deputing to outside agencies. The Bank conducted inhouse training programmes on Bancassurance and Core Banking. It also deputed officers to outside agencies for training programmes conducted by them on various subjects like Risk Management and Basel II, Equities / Derivatives and Portfolio Management, ALM, KYC an Anti Money Laundering, Customer Service improvement, IS Audit, Promotion of Rural Non-farm Sector, Financing Energy Efficiency Projects, SMEs in logistics-enabling capabilities etc.

Employee productivity has shown improvement during the year with per employee business from Rs.2.51 crores to Rs.2.54 crores.

* INFORMATION TECHNOLOGY

The Bank has entered into agreement with CMC Limited for installation of their Core Banking Solution TC/4. During the year under review five branches have been brought under Core Banking & Bank plans to bring 50 branches under Core Banking by September 2007. Infrastructure requirements like data centre have already been established and it is expected that all branches of the Bank will be under Core Banking System by 2008. This would enable value addition in the services rendered by offering any branch banking to the clients.

* DEPOSITORY & INSURANCE SERVICES

Last year the Bank commenced its activities as Depository Participant. This service is receiving good response. During the year under review the Bank has entered into tie-up with Kotak Mahindra old Mutual Life Insurance Ltd. for Life Insurance and has commenced marketing Life Insurance products to the customers. The Bank has also entered into agreement with Bajaj Allianz Insurance Co. Ltd., for general insurance and is providing General Insurance services through its branches. This has helped the Bank in improving its customer base and fee based income.

* PARTICULARS OF EMPLOYEES IN TERMS OF SEC. 217 (2A) OF THE COMPANIES ACT, 1956

As per provisions of Sec.217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, information regarding employee drawing annual emoluments not more than Rs. 12.00 lacs is required to be published. No employee employed in our Bank draws annual emoluments more than Rs. 12.00 lacs. Hence the information is NIL.

* SOCIAL OBLIGATION OF THE BANK

During the financial year, Bank has given donations to various organisations and individuals working in Social, Religious Institutional, Medical & Sports fields. The Bank also sponsored competitions of Cricket, Football and Lawn Tennis.

* DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby state that-

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) we have 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 company at the end of the financial year and of the profit of the company for that period;

iii) we have 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 company and for preventing and detecting fraud and other irregularities;

iv) we have prepared the annual accounts on a going concern basis.

* CORPORATE GOVERNANCE

1) Banks philosophy

The Basic philosophy of Corporate Governance in the Bank is to enhance shareholders value keeping in view " the needs and interest of other stakeholders value.

The Bank has infused the philosophy of Corporate Governance in all its activities.

2) Board of Directors

The Board of Directors is constituted in accordance with the provisions of the Companies Act, 1956 Banking Regulation Act, 1949 and the provisions c Articles of Association of the Bank. The Board strength was of 9 Directors as on 31st March 2007. The Boar has an optimum combination of Executive and Nor Executive Directors. Shri. S. G. Kutte, continues be Executive Chairman & Chief Executive Officer an other 8 Directors are independent Non - Executive Directors representing various sectors. As per the recommendations of Dr. Ganguly Committees Report on Corporate Governance, the Bank has entered into the Deed of Covenants with all its Directors. The Declaration & Undertakings as to Fit & Proper from all its Directors a on 31st March 2007 have also been obtained.

The Board has constituted committees of Director to take decisions in the best interests of the Bank These committees monitor activities falling with in their terms of reference. The Boards committee are as follows.

S.N. COMMITTEE NAME MEMBERS

1) Audit Committee 1) Shri. B.S.Dugge-Committee Chairman 2) Shri. B.D.Arwade 3) Shri. K.V. Krishnamurthy 4) Shri. J.K.UIagadde

2) ALMS Committee 1) Shri. S.G. Kutte-Chairman 2) Shri. M.R. Chougule 3) Shri. P.G. Kakodkar 4) Shri. A.T. Ligade

3) Share Transfer Committee 1) Shri. S.G. Kutte - Chairman 2) Shri. A. T. Ligade 3) Shri. S.N. Minche 4) Shri. Awade

4) Investment Committee 1) Shri. S.G. Kutte-Chairman 2) Shri. M.R.Chougule 3) Shri. S.N.Minche 4) Shri. B.S. Dugge 5) Shri. K.V. Krishnamurthy

5) Anti-fraud Committee 1) Shri. S. G. Kutte - Chairman 2) Shri. B. S. Dugge 3) Shri. S.N. Minche 4) Shri. J.K. Ulagadde 5) Shri. B.D.Arwade

(6) Remuneration Committee 1) Shri. B.S. Dugge 2) Shri. B.D.Arwade 3) Shri. S.N. Minche

7) Customer Service Committee 1) Shri. S. G. Kutte- Chairman 2) Shri.A.T. Ligade 3) Shri. S.N. Minche 4) Shri. B.D. Arwade

8) Nomination Committee 1) Shri. S.6. Kutte - Chairman 2) Shri. B. S. Dugge 3) Shri S.N. Minche 4) Shri. B.D. Arwade

9) Shareholders Redressal Committee 1} Shri. A. T. Ligade 2) Shri. S.N. Minche 3) Shri. B.D. Arwade

10) Loan Committee 1) Shri. S. G. Kutte - Chairman 2) Shri. A.T. Ligade 3) Shri. S.N. Minche 4) Shri. B.S. Dugge 5) Shri K.V. Krishnamurthy

11) Risk Management Committee 1) Shri. S.G. Kutte - Chairman 2) Shri. P.G. Kakodkar 3) Shri. J.K. Ulagadde 4) Shri. B.S. Dugge 5) Shri B.D. Arwade 6) Deputy General Manager 7) Assistant General Manager - Credit & Accounts. 8) Assistant General Manager - Inspection & Recovery.

The Board of Directors, its committees meet at regular periodic intervals.

* BOARD OF DIRECTORS

As per provisions of the Companies Act 1956 and the Articles of Association of the Bank, Shri A.T. Ligade and Shri B.S. Dugge, Directors of the Bank retire at the ensuing Annual General Meeting and are eligible for re-appointment. Shri B.S. Dugge has expressed his willingness to be re-appointed. Members are requested to consider his re-appointment. However, Shri A.T. Ligade has expressed his unwillingness to be re- appointment. The Board takes this opportunity to express its appreciation for the services rendered by Shri Ligade during his tenure as Director.

Shri. Bahubali D. Arwade and Shri. Rajendra S. Naik were appointed as additional Directors of the Bank w.e.f. 9th September 2006 and 28th June 2007 respectively. In terms of provisions of Section 260 of the Companies Act, 1956 they hold office till the date of ensuing Annual General Meeting. The Bank has received notices pursuant to the provisions of Section 257 of Companies Act, 1956 proposing the candidature of Shri Bahubali D. Arwade and Shri. Rajendra S. Naik as Directors of the Company.

Shri. Manohar Ramappa Chougule, Director resigned w.e.f. 16th April 2007. Whereas Shri. K. V. Krishnamurthy, Director resigned w.e.f. 19th June 2007 and Shri. P. G. Kakodkar, Director resigned w.e.f. 25th June 2007. The Board takes this opportunity to place on record its appreciation for services rendered by them during their tenure as directors.

* STATUTORY AUDITORS

The Banks Statutory Auditors M/s. Kirtane & Pandit Chartered Accountants, Pune retire at the conclusion of the Annual General Meeting. The shareholders are requested to appoint Statutory Auditors for the year 2007- 2008 and fix up their remuneration.

* ACKNOWLEDGEMENT

The Board of Directors acknowledges with gratitude valuable timely advise, guidance and support received from various authorities of Reserve Bank of India.

The Board of Directors acknowledges with gratitude the continuous loyalty of the shareholders, depositors, clients and well wishers for their continuous whole- hearted support. The Board of Directors records the valuable contribution made by the staff at all levels and looks forward to their total commitment and teamwork to achieve the organisational goals.

For and on behalf of The Board of Directors

Date : 28th June 2007 S. G. Kutte Place : Kolhapur Chairman and Chief Executive Officer

Mar 31, 2006

Dear Shareholders,

The 63rd Annual Report on business and operations of the Bank together with Audited Balance Sheet and Profit & Loss Account Statement for the year ended 31st March 2006 is presented herewith.

* Economic Scenario

During the financial year 2005-2006 the GDP growth registered 8.1% as against 7.5% in previous year. Agriculture sector grew by 2.3% as against 0.7% in the previous year and Services sector growth is estimated at 9.8% as compared to 8.6% in previous year. However the industrial sector grew at 7.8% as against 8.4% in the previous year.

The rising trend in countrys foreign exchange resources continued and reserves reached a level of US $ 151.6 billion in March 2006. The average inflation based on wholesale price index reduced to 4.5% in 2005-2006 as compared to 6.4% in 2004-2005. Despite rise in a petroleum prices and primary food articles, inflation, was controlled due to timely steps taken by the Government of India.

* Banking Scenario

Deposits of scheduled commercial banks grew at the rate of 16.10% in 2005-2006 as against 14.10% in the previous year. Gross credit of Scheduled Commercial Banks recorded an impressive growth rate of 36% in 2005-2006 as against 26% in the previous year. The year witnessed a surge in loans almost in all sectors. There was substantial increase in credit flow to industries like food processing, iron and steel, cotton textile, vehicles. Agriculture credit increases by 22.4%.

During the year 2005-2006 liquidity conditions were by large comfortable although there was some pressure on liquidity during the last quarter due to redemption of India millennium deposits. However, because of timely steps taken by the Reserve Bank of India the positioned eased and the banking system could sustain the pick up in demand for credit.

Due to demand for commercial credit banks choose to reduce their investment in Government Securities. There was substantial decline in the gilt portfolio of commercial banks during the year 2005-2006.

* Banks Own Funds

In view of the expectation of Reserve Bank of India to have minimum own funds of Rs.300 crores, the Bank has increased its authorised capital to Rs.300 crores in the Extraordinary General Meeting held on 28.11.2005. As an initiative for enhancing paid up capital, a Right

Issue of 19,37,684 shares was issued in the ratio of 1:1. All the shares out of the right issue have since been subscribed. In view of the interest and demand for shares the Board approved on 13.03.2006 additional issue of 5,00,000 shares aggregating to Rs.5 crores through private placement subject to approval of Reserve Bank of India out of which 215750 ordinary shares have since been allotted. The Bank has been able to increase its capital by Rs.9.10 crores by way of part realisation of application and allotment money. The Banks Own Funds have been improved from Rs.45.20 crores to Rs.54.19 crores.

* Deposits

Banks aggregate deposits reached to Rs.874.18 Crores as on 31st March, 2006 from Rs.783.75 Crores as on 31st March, 2005 recording growth rate of 11.54%. The composition of deposits has improved in favour of low cost funds. Low cost deposits now contribute 38.30% of total deposits.

* Credit Operations

The Bank continued its policy of efficient, prudent and profitable utilisation of its resources. In Credit operations, the aim was significant portfolio growth with upgraded quality, so as to optimise returns simultaneously limiting risks to acceptable levels. The Credit portfolio increased to Rs.490.83 Crores by the end of the year from Rs.423.70 Crores at the end of the previous year recording 15.83% growth. Credit Deposit Ratio has improved to 56.15%.

The total priority sector advances of the Bank stood at Rs.159.63 Crores in March 2006 as against Rs. 132.42 Crores last year registering growth of 20.55%. As against the benchmark level of 40%, achievement of the Bank works out to 41.07% of net Bank Credit in March 2006. During the year under review the main focus was on credit supply to agriculture an SSI sectors. Agriculture credit increased by 71.02% while S.S.I, increased by 37.36%. The Bank has launched two new schemes namely 1) Ratnakar Professionals and 2) Ratnakar Pro-engineers specially designed for professionals and engineers.

* Management of Non Performing Assets

The Bank has put in place several action plans for containing non performing Assets. Compromise and settlements have resulted in substantial recoveries. Steps have been taken for expediting suit proceeding at DRTs and Civil Courts. These steps have paid good results and Bank has expeditiously obtained decrees and is executing them through recovery proceedings. These mutti-pronged efforts has culminated significant recoveries from NPAs during the year under review. The Bank has also achieved reduction in Gross and also in Net NPAs to 7.59% and 2.61% from 10.30% and 5.54% of the previous year.

* Risk Management

Risk Management system has been put in place in the Bank. It is periodical revised/reviewed in light of guidelines received from Reserve Bank of India from time to time.

Supervisory Committees of directors and executives are constituted to oversee the Risk Management functioning in the Bank. These include:-

Risk Management Committee for Credit Risk, Earning Risk and Group Risk, Asset Liability Management Committee (ALCO) for Liquidity Risk, Market Risk and Business strategy and environment control Risk, Loan & Investment Review Group for Operational Risk, Regulatory Risk Committee for Internal Control Risk, Organisational Risk, Management and Compliance Risk. The Risk Management Policy Articulates terms of reference of each committee.

The Bank has undertaken self-assessment and has prepared Risk Profiles in a structured manner through risk profile templates prescribed by Reserve Bank of India. The Bank is in the process of preparedness of implementation of Basel II in scheduled time frame of Reserve Bank of India.

* ASSET LIABILITY MANAGEMENT

The Asset Liability Management Policy sets out parameters for Liquidity Risk, Market Risk, Business strategy and Environment Risk. The policy is reviewed from time to time in the line with the latest market conditions and is duly approved by Board of Directors.

Asset Liability Management Policy provides direction for growth in Assets and Liabilities to achieve optimum profitability. It prescribes acceptable gaps in inflows and outflows with a view to ensure that they are within the tolerance level prescribed by Reserve Bank of India besides covering other aspects of Asset Liability Management.

* CREDIT RISK MANAGEMENT

Risk Management Committee has been assigned Credit Risk. The Loan & Investment Review Group supports the Committee by reviewing quality of processing of loan proposals, confirming rating of accounts including investment, verifying correctness of loan documents, review level of sophistication of technology monitor Back Up Systems, Disaster Recovery and Business continuity planning etc.

Further Lending Policy of the Bank has prescribed exposure limit for Individuals, Group, Sensitive Sector, laying down the thrust restricted and prohibited areas of lending, industry exposure and Inter Bank Exposure. Bank has put in place rating system for all types of borrowers.

Pre-sanction Credit Appraisal Committee has been constituted to look into proposals of Rs.50 lakhs and above.This committee reviews credit appraisal system, recommendation of credit deportment in the view of risk involved and recommends precautionary measures and level of risk involved if facility is sanctioned. Besides this, quarterly review of large borrowal account, stock audit etc. are undertaken for monitoring accounts to ensure that level of risk is within acceptable level and if it is beyond acceptable level, precautionary measures are taken.

* OPERATIONAL RISK MANAGEMENT

Bank has assigned operational risk to Loan & Investment Review Group. This group oversees operational risk arising due to failure of internal control, people, process and systems.

As a part of Operational Risk Management, Bank has revised books of instructions on deposit and advances. Information Technology user manual has been prepared and provided to all branches. Guidelines from Reserve Bank of India are also kept in view while bring any change in the policy / manual. Training programmes are arranged on various subjects to create awareness of operational risk events.

Bank lays due emphasis on identifying risk prone areas and takes suitable remedial steps through streamlining / reviewing systems and procedures.

* Investment Portfolio

The Government Securities market continued to be subdued during the year and did not offer much opportunity for booking trading profit. Bank exercised caution towards its Investment portfolio. Bank has ventured into equity trading and has earned good returns by exploiting favourable market conditions.

The investment portfolio of the Bank has marginally increased from Rs.264.63 crores to Rs.276.64 crores.

* Profit and Appropriation

The operating profit (excluding trading profit) improved from Rs.8.72 crores of last year to Rs.10.80 crores during 2005-06 registering a rise of 23.74%.There is a Net Profit of Rs. 59 lakhs as against loss of Rs. 4.57 crores in the previous year. In terms of the prevailing Reserve Bank of India guidelines, dividend can be paid only out of current years profit. Also, maximum dividend payment parameters have also been stipulated. Considering the requirements for provisions of Statutory Reserves and norms of dividend pay out the allocable surplus is not significant. The Board has therefore not recommended any dividend.

* Branch Expansion

During the year under review the Bank has opened two fully computerised branches at Mapusa (Goa) and Kalyaninagar in Pune. The Kalyaninagar Branch Pune has an ATM facility as well.The Bank also proposes to open new branches at Kharghar (Dist.Raigad), Panaji-Goa, Bangalore, Mysore (Karnataka), Karad (Dist. Satara) and Nalasopara (Mumbai).

* Human Resources Development

The Bank continues to focus on training its employees on an ongoing basis, both on the job and through training programmes conducted by internal and external faculties.The Bank conducted internal training programmes on Credit & Credit Appraisal, Deposits, Advances, Marketing of Financial Products and for Computer - fundamentals of Computers, Know Your Customer, Anty Money Laundering & Branch Software User Training.

Employee productivity has shown considerable improvement during the year with per employee business increasing from Rs.2.21 Crores to Rs.2.51 Crores.

* Information Technology

In the present banking scenario technology upgradation has become a buzzword and all banks are now switching over towards on-line Banking. In order to provide value addition service like any branch banking and to meet the requirement of MIS to facilitate decision enabling data being available promptly, the Bank has finalised the Core Banking Solution TC/4 of CMC Ltd. All major branches of the Bank are expected to be connected within 2 years.

* Despository Participant Services

The Bank has entered into agreement with CDSL and has commenced its activities as Depository Participant during the year under review. This service has received good response.

Particulars of Employees in Terms of Sec. 217 (2A) of The Companies Act, 1956

As per the provision of sec.217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, information regarding employee drawing annual emoluments not less than Rs.12.00 lacs is required to be published. No employee employed in our Bank draw annual emoluments more than Rs. 12.00 lacs. Hence the information is NIL.

* Social Obligation of The Bank

During the financial year bank has given donations to various organisations and individuals working in Social, Religious Institutional, Medical & Sport fields. The Bank also sponsored competitions of Cricket, Football and Lawn Tennis.

* Directors Responsibility Statement

The Board of Directors hereby state that-

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) we have 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 company at the end of the financial year and of the profit or loss of the company for that period;

iii) we have 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 company and for preventing and detecting fraud and other irregularities;

iv) we have prepared the annual accounts on a going concern basis. O Corporate Governance

1) Banks philosophy : The Basic philosophy of Corporate Governance in the Bank is to enhance shareholders value keeping in view the needs and interest of other stakeholders value.

The Bank has infused the philosophy of Corporate Governance in all its activities.

2) Board of Directors : The Board of Directors is constituted in accordance with the provisions of the Companies Act, 1956, Banking Regulation Act, 1949, and the provisions of Articles of Association of the Bank. The Board has strength of 10 Directors as on 31st March 2006.The Board has an optimum combination of Executive and Non-Executive Directors. Shri S. G. Kutte, continues to be Executive Chairman & Chief Executive Officer and other 9 Directors are independent Non-Executive directors representing various sectors. Reserve Bank of India has withdrawn its representative nominee director on the Board. As per the recommendations of Dr. Ganguly Committees Report on Corporate Governance, the Bank has entered into the Deed of Convenants with all its Directors. The Declarations & Undertakings as to Fit & Proper from all its Directors as on 31st March 2006 have also been accepted.

The Board has constituted committees of Directors to take decisions in the best interests of the Bank. These committees monitor activities falling within their terms of reference. The Boards committees are as follows.

S.N. Committee Name Members

1. Audit Committee 1. Shri B. S. Dugge-Committee Chairman 2. Shri M. A. Kalmani 3. Shri S. M. Patravali

2. ALMS Committee 1. Shri S. G. Kutte - Chairman 2. Shri S. R. Parmaj 3. Shri M.R. Chougule 4. Shri C. D. Arwade

3. Share Transfer Committee 1. Shri S. G. Kutte - Chairman 2. Shri A. T. Ligade 3. Shri C. D. Arwade 4. Shri S. N. Minche

4. Investment Committee 1. Shri S. G. Kutte - Chairman 2. Shri S. R. Parmaj 3. Shri M. R. Chougule 4. Shri M. A. Kalmani 5. Shri S. N. Minche

5. Recovery Committee 1. Shri S. G. Kutte - Chairman 2. Shri B. S. Dugge 3. Shri C. D. Arwade 4. Shri S. N. Minche

6. Information & Tech. Committee 1. Shri S. G. Kutte - Chairman 2. Shri S. M. Patravali 3. ShriJ.K.UIagadde

7. Anti-fraud Committee 1. Shri S. G. Kutte - Chairman 2. Shri B. S. Dugge 3. Shri M. A. Kalmani 4. Shri S. N. Minche 5. Shri S. R. Parmaj

8. Remuneration Committee 1. Shri B. S. Dugge 2. Shri M. A. Kalmani 3. Shri C. D. Arwade

9. Customer Service Committee 1. Shri S. G. Kutte - Chairman 2. Shri A. T. Ligade 3. Shri S. N. Minche 4. Shri C. D. Arwade

10. Nomination Committee 1. Shri S. G. Kutte - Chairman 2. Shri B. S. Dugge 3. Shri C. D. Arwade 4. Shri S. N. Minche

11. Shareholders Redressal 1. Shri A. T. Ligade Committee 2. Shri S. M. Patravali 3. Shri S. N. Minche The Board of Directors and its committees meet at regular periodic intervals.

* Redressal of grievances of customers

The complaints received from the customers are attended immediately and are redressed as early as possible. Position of the redressal of customer complaints during the review period is as under -

No. of pending Complaints Complaints Closing balance complaints received redressed as on as on during the year on 31 -3-2006 01-04-2005

3 1 2 2

* Training to Directors

One day workshop was arranged for members of the Board for imparted training on various aspects such as duties / responsibilities of directors. Risk Management, Structure of Board of Directors, enhancement in Banking transparency & Corporate Governance etc. Members of the Board were also informed about recommendations under Basel II, technology upgradation in Bank and challenges in Retail Banking etc.

* Board of Directors

As per the provision of the Companies Act 1956 and the Articles of Association of the Bank the following Directors will retire by rotation and are eligible for re-election.

1) Shri. Shripal Raghoba Parmaj, Kolhapur 2) Shri. Motichand Anant rao Kalmani, Sangli 3) Shri. Surendra Nemanna Minche, Sangli

Shri. S. N.Minche has expressed his willingness to be re appointed. The members are requested to consider the reappointment of Shri. S. N. Minche as Director of the Bank.

However Shri. S. R. Parmaj and Shri. M. A: Kalmani have not expressed their willingness to be reappointment.

During the year Shri. P. G. Kakodkar and Shri. K. V. Krishnamurthy were appointed as Additional Directors of the Bank. In terms of the provisions of Section 260 of the companies Act, 1956 they hold the office till the date of the ensuing Annual General Meeting. The Bank has received notices proposing the candidature of Shri. P. G. Kakodkar and Shri. K. V. Krishnamurthy to the office of Directors of the Bank, pursuant to Section 257 of the Companies Act, 1956. The Board is of opinion that the experience of Shri. P. G. Kakodkar and Shri. K. V. Krishnmurthy in the Banking field will of immense use to the Bank and propose the appointment of Shri. P. G. Kakodkar and Shri. K. V. Krishnamurthy as Directors for further term.

* Statutory Auditors

The Banks statutory Auditors M/s. Kirtane & Pandit Chartered Accountants, Pune are retiring at the conclusion of the Annual General Meeting. The shareholders are requested to appoint Statutory Auditors for the year 2006-2007 and fix up their remuneration.

* Acknowledgement

The Board of Directors acknowledges with gratitude valuable timely advise, guidance and support received from Reserve Bank of India and various authorities of Reserve Bank of India. The Board of Directors also places on record their high appreciation for the valuable guidance and suggestions received from Shri A. K. Hirve, General Manager, Reserve Bank of India (Additional Director of the Bank) Shri. S. K. Gogia, Reserve Bank of India nominee of the Board.

The Board of Directors acknowledges with gratitude the continuous loyalty of the shareholders, depositors, clients and well wishers for their continuous whole-hearted support. The Board of Directors records the valuable contribution made by the staff at all levels and looks forward to their total commitment and teamwork to achieve the organisation goals.

For & on behalf of The Board of Directors Date: 12th August 2006 S.G.Kutte Place: Kolhapur Chairman & C.E.O.

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