3. Transfer to Reserves

As per the requirement of RBI Regulations, the
Bank has transferred the following amounts to
various reserves during the year ended March 31,
2026.

4. Deposits

Being a Bank, the disclosures relating to deposits
as required under Rule 8 (5) (v) and (vi) of the
Companies (Accounts) Rules, 2014 read with
Sections 73 and 74 of the Companies Act, 2013
(“ the Act”) are not applicable. The Bank receives
and accepts deposits, the details of which are
enumerated in the financial statements for
FY 2025-26.

5. Capital Adequacy

The Capital Adequacy Ratio stood at 20.31%
as on March 31, 2026 as against the minimum
requirement of 15% stipulated by the Reserve
Bank of India (RBI). The Net worth of the Bank as
on the said date was ' 6,12,483.26 Lakhs.

6. Material changes and commitments affecting
the Financial Position of the Bank after the
Balance Sheet date as on March 31, 2026

There were no material changes and commitments
between the end of Financial Year 2025-26 and the
date of this report, affecting the financial position
of the Bank.

7. Information about Financial Performance
/ Financial Position of the Subsidiaries,
Associates and Joint Venture Companies

The Bank does not have any Subsidiaries,
Associates and Joint Venture Companies.

8. Operational highlights and state of the Bank’s
affairs

The details of operations and state of affairs are
given in the Management Discussion and Analysis
[MD&A] Report.

9. Management Discussion and Analysis Report
on Corporate Governance and Business
Responsibility and Sustainability Report

The Management Discussion and Analysis
Report as stipulated under Regulation 34 (2) (e)
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, Report on
Corporate Governance for the FY 2025- 26 along
with the General Shareholder Information and the
Business Responsibility and Sustainability Report
under Regulation 34(2)(f) of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 forms part of this annual report.

10. Corporate Social Responsibility (CSR)

The Bank has laid down a Corporate Social
Responsibility (CSR) Policy, which is available
on our websiteClick here. The CSR policy of the
Bank establishes the framework, enabling the
Bank to carry out CSR activities for improving the
quality of life of the underprivileged sections of
the society through multi-faceted interventions
in education, healthcare, skill development and
dignified living conditions.

The Bank contributes to CSR activities in
accordance with statutory requirements under
the Companies Act, 2013. A robust governance
framework, including oversight by the CSR
Committee and Board, ensures effective
monitoring and utilization of funds. The Policy
is reviewed periodically to align with regulatory
requirements. During the year, the policy was
amended by the Board of Directors on June 27,
2025 to give effect to the changes as mandated
under the applicable laws.

The Bank contributes 5% of its previous year's net
profits or 2% of average net profits made during
the preceding three financial years, whichever is
higher to the implementing agencies viz., Equitas
Development Initiatives Trust (EDIT) and Equitas
Healthcare Foundation (EHF), registered Public
Charitable Trusts for carrying out CSR activities
on its behalf. A report in this regard is enclosed
as Annexure A

The Bank has constituted a CSR Committee,
which:

a) Recommends to the Board an annual activity
plan in line with the CSR policy and CSR
contribution of the Bank for the year.

12. Meetings of the Board

During FY 2025-26, the Board of Directors
of the Bank had met twelve (12) times. The
details of meetings are given in the report
on Corporate Governance. The maximum
interval between any two meetings did not
exceed 120 days, as prescribed in the Act &
the relevant Rules made thereunder and the
applicable provisions of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015.

Board Committees

The details pertaining to the Audit
Committee and other Committees of
the Board are provided in the Corporate
Governance section forming part of
this report. All the recommendations
made by the Audit Committee during
the year were accepted and implemented
by the Board. The changes in the
composition of the Committees of
the Board during the reporting period are
disclosed in the Corporate Governance
Report and the details of the Committees of
the Board is available in the website of the
BankClick here.

13. Directors and Key Managerial Personnel (KMP)

As on the date of this Report, the Bank has
Eleven (11) Directors, out of which, there are Nine
(9) Independent Directors including a Woman
Independent Director and Two (2) Whole-Time
Directors.

Change in Directors & KMPs

Following were the changes in composition
of the Board of Directors and Key Managerial
Personnel:

Re-appointment of Independent Director

Re-appointment of Mr. Ramesh Rangan
(DIN: 07586413) as an Independent Director of
the Bank for a second consecutive term of three
years effective from November 09, 2025 until
November 08, 2028 (both days inclusive), not
liable to retire by rotation, which was approved
by the Members vide a Special Resolution
passed at the Ninth AGM of the Bank held on
September 10, 2025.

I n the opinion of the Board, the Independent
Director re-appointed as mentioned above
possesses the requisite integrity, qualification,
experience, proficiency and fulfils the criteria of
independence and expertise, as stipulated by
the applicable Rules and Regulations, thereby
immensely benefitting the Bank.

Appointment of Executive Director (Whole¬
Time Director) & KMP

I n adherence with the approval accorded by
the Reserve Bank of India (RBI) vide its letter
dated December 11, 2024, Mr. Balaji Nuthalapadi
(DIN: 08198456) was co-opted as an Additional
Director in the category of Whole-Time
Director from the date of his taking charge, i.e.,
March 29, 2025. The appointment of Mr. Balaji
Nuthalapadi (DIN: 08198456) as the Executive
Director (Whole-Time Director) was approved
by the Members through Postal Ballot by way of
e-voting on June 15, 2025.

Re-appointment of Directors liable to retire by
rotation

I n terms of the provisions of Section 152 of the
Act and the Articles of Association of the Bank,
Mr. Vasudevan P N (DIN: 01550885), Managing
Director & CEO retired by rotation at the last
AGM (Ninth AGM held on September 10, 2025)
and, being eligible, was duly re-appointed by the
Members of the Bank.

Re-appointment of Independent Directors

Ms. Geeta Dutta Goel (DIN: 02277155) was
appointed as an Independent Director of the Bank
for a period of five years effective from December
27, 2021. As per the provisions of Section 149 of
the Act and other applicable provisions, if any,
an Independent Director shall hold office for a
term of five consecutive years on the Board of
the Bank and is eligible for re-appointment for a
second consecutive term on passing of Special
Resolution. In accordance with Section 10A (2A)
of the Banking Regulation Act, 1949, no Director
of a Banking company, other than its Chairman
or Whole-Time Director, by whatever name
called, shall hold office continuously for a period
exceeding eight years. Ms. Geeta Dutta Goel
would complete five years as an Independent
Director of the Bank on December 26, 2026. The
Board of Directors at its meeting held on June
24, 2026 had approved the re-appointment of
Ms. Geeta Dutta Goel as an Independent Director
of the Bank for a period of three (3) years
effective December 27, 2026 until December 26,
2029, not liable to retire by rotation, subject to
the approval of the Members of the Bank. The
aforesaid re-appointment has been placed for
approval of the Members at the ensuing Annual
General Meeting.

The performance evaluation of Ms. Geeta
Dutta Goel was conducted in accordance with
the criteria approved by the Nomination and
Remuneration Committee. The evaluation
indicated that she demonstrates professionalism,
integrity and active participation, contributing
effectively to the Board and its Committees. The
Board, based on the performance evaluation and
further due diligence, considers that given her
background, experience and contribution, the
continued association of Ms. Geeta Dutta Goel
as an Independent Director in the Board of the
Bank and as a member of various Committees
of the Board would be of immense benefit to
the Bank.

Re-appointment of Managing Director & CEO

Mr. Vasudevan P N (DIN: 01550885) has been
appointed as the Managing Director & CEO of
the Bank since its inception from September
04, 2016, pursuant to the approvals of Reserve
Bank of India (RBI) from time to time. The current
tenure of Mr. Vasudevan P N as the Managing
Director & CEO of the Bank is set to end on
July 22, 2026.

The Board of Directors of the Bank, at its Meeting
held on June 24, 2026, pursuant to the approval
accorded by the RBI vide its letter dated April
23, 2026, approved the re-appointment of Mr.
Vasudevan P N as the Managing Director & CEO
of the Bank for a further term of three (3) years,
effective from July 23, 2026, up to July 22, 2029,
which is subject to the approval of Members of
the Bank.

The Board, based on recommendations of
Nomination and Remuneration Committee
(NRC) is of the opinion that Mr. Vasudevan P N
possesses the requisite qualifications, experience,
expertise and integrity, and has made significant
contributions to the growth and performance
of the Bank during his tenure. Accordingly, the
Board considers his re-appointment to be in
the best interests of the Bank. The aforesaid
re-appointment has been placed for approval
of the Members at the ensuing Annual General
Meeting of the Bank.

Directors liable to retire by rotation

Section 152 of the Act provides that two-thirds
of the total number of Directors are liable to
retire by rotation out of which one-third shall

retire from office at every AGM. In terms of
Section 149 (13) of the Act, the provisions of
retirement of Directors by rotation shall not
be applicable to Independent Directors and an
Independent Director shall not be included in
the total number of Directors liable to retire by
rotation. In compliance with the aforesaid section
and the Articles of Association of the Bank,
Mr Balaji Nuthalapadi (DIN: 08198456),
Executive Director (Whole-Time Director),
being the longest-serving Director since his last
appointment will retire by rotation at the ensuing
AGM of the Bank and being eligible, offers himself
for reappointment.

The Board of Directors recommend his
re-appointment and the same has been placed
for approval of the Members at the ensuing
Annual General Meeting. The detailed profile
of Mr. Balaji Nuthalapadi, Executive Director
(Whole-Time Director), seeking re-appointment
at the ensuing AGM as required under Secretarial
Standard 2 on General meetings and Regulation
36 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is provided as
an Annexure to the Notice of AGM.

Familiarisation Programme

The Bank has familiarised the Independent
Directors of the Bank of their roles and
responsibilities in the Bank, of the industry in
which the Bank operates, business model of
the Bank, etc. The details of the familiarisation
programmes imparted to Independent Directors
are available in the website of the BankClick here

Key Managerial Personnel (KMP)

I n terms of Section 203(1) read with Section
2(51) of the Act and Rule 8 of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Bank had the
following KMPs as on March 31, 2026:

During the year, there were no changes in
the Key Managerial Personnel of the Bank
except for the approval accorded by the
Members for the appointment of Mr. Balaji
Nuthalapadi as the Executive Director (Whole¬
Time Director), of the Bank as stated in the
foregoing paragraphs, re-appointment of
Mr Vasudevan P N by the Members of the Bank
and re-appointment of Mr. Sridharan N as the
Chief Financial Officer (CFO) of the Bank for a
period of one (1) year with effect from July 01,
2025 till June 30, 2026 which was approved at
the Board meeting held on June 27, 2025.

14. Declaration from Independent Directors

The Board has received declaration from the
Independent Directors as required under Section
149 (7) of the Act and the Board is satisfied that
the Independent Directors meet the criteria of
independence as mentioned in Section 149 (6)
of the Act and Regulation 16 (1) (b) of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Independent Directors
have complied with the Code for Independent
Directors prescribed in Schedule IV of the Act.

All the Independent Directors of the Bank
have confirmed that they are not aware of any
circumstance or situation, which exists or may
be reasonably anticipated, that could impair or
impact their ability to discharge their duties with
an objective independent judgement and without
any external influence. The Board had assessed
the confirmations submitted by the Independent
Directors and taken the same on record. In
the opinion of the Board, all the Independent
Directors are independent of the Management.

15. Evaluation of performance of the Board and its
Committees

The performance of the Board, Committees of the
Board, Chairman and individual Directors were
evaluated on the basis of criteria as approved
by the Nomination & Remuneration Committee.
The manner of performance evaluation included
the process of obtaining feedback by way of
a structured questionnaire, covering aspects
pertaining to the roles and functions, as applicable.
The Directors actively participated in the
evaluation process and provided their feedback.
The consolidated feedback were shared with the
respective Directors and feedback relating to the
Committees and the Board were discussed in the
respective Committees/Board.

16. Policy on Directors’ appointment, remuneration
and other details

Pursuant to the provisions of Section 178 of
the Act, the Bank has formulated and adopted
the Policy for Selection and Appointment of
Directors available on the website of the Bank
Click here and Remuneration & Benefits Policy,
available on the website of the BankClick here.

The said policies include a framework for the
appointment and remuneration of Directors
(including Independent Directors) as per
the criteria formulated by the Nomination
& Remuneration Committee of the Board in
compliance with the requirement of the Act
read with the relevant rules made thereunder
and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

No amendments were made to the policy for
Selection and Appointment of Directors and
Remuneration & Benefits Policy during FY 2025-26.

17. Directors’ Responsibility Statement

The Board of Directors of the Bank, to the best of
their knowledge and belief confirm that:

i) I n the preparation of the annual accounts
for the year ended March 31, 2026, the
applicable accounting standards have been

followed along with proper explanation
relating to material departures

ii) such accounting policies as specified in
Schedule 17 to the Financial Statements
have been selected and applied consistently
and judgments and estimates have been
made that are reasonable and prudent so as
to give a true and fair view of the state of
affairs of the Bank as on March 31, 2026 and
of the profit of the Bank for the year ended
on that date

iii) proper and sufficient care has been taken
for maintenance of adequate accounting
records in accordance with the provisions
of the Act for safeguarding the assets of
the Bank and for preventing and detecting
frauds and other irregularities

iv) annual accounts have been prepared on a
going concern basis

v) i nternal financial controls to be followed by
the Bank were laid down and the same were
adequate and were operating effectively and

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

2 The percentage increase in remuneration of
each Director, Chief Financial Officer, Chief
Executive Of cer, Company Secretary or
Manager, if any, in the financial year

There was no increase in the remuneration
paid to the Independent Directors during the
FY 2025-2026.

CEO Salary Increase - 6%

WTD Salary Increase - NIL

Chief Financial Officer Salary Increase - 17%

Company Secretary Salary Increase - 18%

• MD & WTD remuneration includes Basic,
HRA, Flexi Allowance, PF, Gratuity,
and Perquisites (GMC, GPA and club
membership for MD only), as per RBI
guidelines.

• CFO & Company Secretary remuneration
includes Basic, HRA, Flexi Allowance
and PF only; excludes Gratuity and
Perquisites.

3 The percentage increase in the median
remuneration of employees in the financial
year - 7%

4 The number of permanent employees on
the rolls of the Bank (as on March 31, 2026)

- 28,058

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 -
The average percentile increase in salaries of
employees, other than managerial personnel,
during the FY 2025-2026 was 6%, while for
KMP, the increase ranged from 6% to 18%.

The increase during the year is based on
remuneration policy of the Bank and reflects
the Bank's reward philosophy as well as the
results of the salary benchmarking exercise.

6 Affirmation that the remuneration is as per

the remuneration policy of the Bank -

The Management affirms that the
remuneration is as per the remuneration
policy of the Bank.

I n accordance with Section 136 of the Act
the report and accounts are being sent to
the Members and others entitled thereto,
excluding the statements prescribed under
Rule 5 (2) and 5 (3) of the Companies
(Appointment and Remuneration of
Managerial Personnel) Rules, 2014. The
aforesaid information is available for
inspection at the Registered Office of the
Bank during the business hours on any
working day of the Bank. If any Member is
interested in obtaining a copy, such Member
may write to the Company Secretary in this
regard atcs@equitas.bank.in

19. Whistle Blower Policy / Vigil Mechanism

The Bank has adopted a Whistle Blower Policy
and Vigil Mechanism in compliance with the
relevant provisions of the Act and the Rules
made thereunder and SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
This Policy provides an opportunity to address
the concerns of the Employees & the Directors
in relation to any fraud, malpractice or any other
activity or event which is against the interest
of the Bank or society as a whole. The Policy is
available on the Bank's websiteClick here

During the year under review, the Bank received
Nineteen (19) complaints under the Whistle
Blower Policy of the Bank. The functioning of the
mechanism is reviewed by the Audit Committee
on a quarterly basis. No personnel of the Bank
have been denied access to the Audit Committee.

20. Credit Ratings

The details of the credit ratings are disclosed in
the Corporate Governance Report, which forms
part of this Annual Report.

21. Auditors & their Report

Reserve Bank of India (“RBI”) has on April 27,
2021, issued the Guidelines for Appointment of
Statutory Central Auditors / Statutory Auditors
of Commercial banks which are applicable
from FY 2021-22 (“RBI Guidelines”). The RBI
Guidelines has capped the term of Statutory
Auditors at three years, replacing the earlier
cap of four years.

The Board of Directors of the Bank at their meeting
held on June 14, 2023 on the recommendation of
the Audit Committee had appointed M/s. A S A
& Associates LLP (ASA), Chartered Accountants
(Firm Registration No: 009571N/N500006)
as one of the Joint Statutory Auditors for the
period from FY 2023-24 to FY 2025-26. Further,
the Members of the Bank at the Seventh AGM of
the Bank held on August 29, 2023 approved the
appointment of ASA as one of the Joint Statutory
Auditors of the Bank for a period of three years
from the conclusion of the aforesaid AGM till the
conclusion of the Tenth AGM. The appointment
was approved by RBI for FY 2023-24, 2024-25,

2025- 26 vide its letters dated July 07, 2023,
May 22, 2024 and July 11, 2025 respectively. The
tenure of ASA shall end at the conclusion of the
ensuing Tenth AGM of the Bank.

Further, the Board of Directors of the Bank
at its meeting held on April 24, 2024 on the
recommendation of the Audit Committee had
appointed M/s. Suri & Co., Chartered Accountants
(Firm Registration Number: 004283S/016670) as
one of the Joint Statutory Auditors for the period
from FY 2024-25 to FY 2026-27 which was
approved by the Members at the Eighth AGM
held on September 10, 2024. The appointment
was approved by RBI for FY 2024-25, 2025-26 &

2026- 27 vide its letters dated May 22, 2024, July
11, 2025 & May 13, 2026. As per the RBI guidelines,
the appointment of Joint Statutory Auditors shall
be subject to annual approval from Reserve Bank
of India. The Audit Committee of the Board had
reviewed the performance of M/s. Suri & Co.,
during FY 2025-26 and their independence by
taking note of the eligibility letters received from

the Auditor stating that they continue to satisfy the
criteria provided in Section 141 of the Act and RBI
Regulations and their continuance, if approved,
will be in accordance with the conditions
prescribed under the Act and Rules thereunder
as well as the applicable RBI Regulations and had
accordingly recommended their continuance to
the Board. The Board of Directors of the Bank at
its Meeting held on April 30, 2026 had considered
the recommendation of Audit Committee and
approved the re-appointment of M/s. Suri & Co.,
as one of the Joint Statutory Auditors for the FY
2026-27 as they continue to satisfy the eligibility
norms as per the RBI guidelines.

The Board of Directors, as per the
recommendations of the Audit Committee of the
Bank, recommended to the RBI, appointment
of Joint Statutory Auditors consequent to the
completion of the term of ASA at the conclusion of
the ensuing Tenth AGM of the Bank. Accordingly,
RBI vide its letter dated May 13, 2026 accorded its
approval for the appointment of M/s. Sundaram
& Srinivasan, Chartered Accountants, and the
continuation of M/s. Suri & Co., as Joint Statutory
Auditors of the Bank for FY 2026-27, for their
first and third terms, respectively.

The communications between the Joint Statutory
Auditors (JSA) and Those Charged with
Governance (TCWG), i.e., the Board of Directors
as determined by the JSA, were carried out in
accordance with the requirements prescribed
by the National Financial Reporting Authority
(NFRA) vide its Circular dated 07 January 2026.

The JSA regularly apprised the Audit Committee
and the Board of significant audit matters,
audit findings, and matters required to be
communicated under the applicable auditing and
regulatory standards. The Auditors' Report was
an unmodified one with no material observation,
requiring any explanation or comment from the
Board.

Auditors’ Report

There are no qualifications, reservations or
adverse remarks made by the Joint Statutory
Auditors of the Bank, M/s. A S A & Associates
LLP, Chartered Accountants and M/s. Suri & Co.,
Chartered Accountants in their report on the
financial statements for the FY 2025-26.

Further, there any no instances of frauds
committed in the Bank by its officers or
employees during the period, under sub-section
(12) of Section 143 of the Act other than those
which are reportable to the Central Government.

22. Details of Employee Stock Options Scheme
(ESOS)

The Bank, pursuant to the resolutions passed
by the Board and the Members of the Bank on
January 31, 2019, adopted the ESFB Employee
Stock Option Scheme (ESOS), 2019 (“ESFB ESOP
2019”). The Bank had amended the ESFB ESOP
2019 pursuant to the resolutions of the Board
and Members of the Bank dated November 07,
2019 & November 22, 2019 respectively.

Post listing of Equity shares of the Bank, the ESFB
ESOP 2019 was ratified by the Members by way
of Special Resolution dated February 08, 2021
as required by Regulation 12 of erstwhile SEBI
(Share Based Employee Benefits) Regulations,
2014. Further, as recommended by the
Nomination & Remuneration Committee of the
Board, the Board of Directors at its Meeting held
on January 28, 2022 had approved modifications
to the ESFB ESOP 2019 aligning the scheme as
per the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021.

I nformation as required under Section 62 of the Companies Act, 2013 and Rule 12 of the Companies
(Share Capital and Debentures) Rules, 2014 is as below:

B) any other employee who receives a Grant of Options in any one year, of options amounting to 5% or
more of options granted during that year:

C. I dentified employees who were granted Options, during any one year, equal to or exceeding 1% of the
issued capital (excluding outstanding warrants and conversion) of the Company at the time of Grant.

NIL

23. Secretarial Auditor

The Secretarial Audit Report issued by CS S Rajendran, Managing Partner, M/s. Shanmugam Rajendran &
Associates LLP, Practicing Company Secretaries (C.P.NO.14055) is enclosed as Annexure C. The Bank has
complied with the applicable Secretarial Standards relating to 'Meetings of the Board of Directors' and
'General Meetings' during the year. There are no qualifications or adverse remarks made by the Secretarial
Auditor.

The Securities and Exchange Board of India (“SEBI”) vide Notification No. SEBI/LAD-NRO/GN/2024/218
had introduced 'Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
(Third Amendment) Regulations, 2024' effective from December 31, 2024. As per the aforesaid regulations,
a listed entity shall appoint or re-appoint an individual as Secretarial Auditor for not more than one term of
five consecutive years or a Secretarial Audit firm as Secretarial Auditor for not more than two terms of five
consecutive years, with the approval of its Shareholders in its Annual General Meeting.

In adherence with the aforesaid regulations, the Board of Directors of the Bank based on the recommendation
of the Audit Committee had approved the appointment of M/s. Shanmugam Rajendran & Associates LLP,
Practicing Company Secretaries, Chennai as the Secretarial Auditor of the Bank for a term of five (5)
consecutive years from FY 2025-26 to FY 2029-30 which was approved by the Members of the Bank at the
Ninth AGM held on September 10, 2025.

The Secretarial Auditor has confirmed that they are duly subjected to the peer review process of the Institute
of Company Secretaries of India (ICSI) and possess a valid peer review certificate issued by the Peer Review
Board of ICSI.

24. Further information as per Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rules, 2014(A) Conservation of energy

During FY 2025-26, the Bank had no activity relating to conservation of energy.

(B) Technology absorption

During FY 2025-26, the bank had taken the

following initiatives on technology absorption:

(i) The efforts made towards technology
absorption

The Bank has undertaken focused initiatives
to strengthen technology absorption
capabilities, particularly in automation and
in-house development:

• Successfully delivered 43 out of 62
Automation Project Change Requests
(CRs) internally, achieving a 70%
internal execution rate, demonstrating
enhanced in-house technical capability
and reduced dependency on external
vendors.

• Developed and deployed in-house BOT
(Robotic Process Automation) solutions,
including design, development and
testing, thereby building sustainable
internal expertise in automation
technologies.

• Optimized resource deployment through
restructuring of the automation team,
improving productivity and efficiency of
technology implementation initiatives.

(ii) The benefits derived like product
improvement, cost reduction, product
development or import substitution

Achieved savings of '1.02 Crores through
in-house BOT development, covering 1,284
person-days of effort. Realized additional
savings of approximately '30.80 Lakhs
during FY 2025-26 through resource
optimization, including reduction in team
size from 7 to 4 members (effective July
2025), with monthly savings of '3.42 Lakhs.
Automation has significantly reduced manual
effort, improved turnaround times and
enhanced process accuracy. BOT production
executions (including FY 2025-26 deliveries
and ongoing operations) have generated
substantial value, contributing to estimated
cost savings of approximately '10.23 Crores,
based on the lowest manual Average
Handling Time (AHT). Increased in-house
execution and BOT development capabilities
have reduced reliance on external vendors
and third-party service providers.

(iii) i n case of imported technology (imported
during the last three years reckoned from
the beginning of the financial year)

(a) the details of technology imported; Not
Applicable

(b) the year of import; Not Applicable

(c) whether the technology been fully
absorbed; Not Applicable

(d) i f not fully absorbed, areas where
absorption has not taken place, and the
reasons thereof; - Not Applicable and

(iv) the expenditure incurred on Research and
Development- Not Applicable(C) Foreign exchange earnings and Outgo-

During FY 2025-26, the total foreign exchange
earned by the Bank was '40.64 lakhs and the
total foreign exchange outgo of the Bank during
the year was ' 30792 lakhs.

25. Particulars of contracts or arrangements with
related Parties

All contracts / arrangements / transactions
entered by the Bank during FY 2025-26 with
related parties were in its ordinary course of
business and on an arm's length basis. During
the year, the Bank had not entered into any
contract / arrangement / transaction with related
parties which could be considered material
in accordance with the policy of the Bank on
materiality of related party transactions or which
is required to be reported as per Section 188 and
other applicable provisions, if any, of the Act read
with the Rules made thereunder.

Accordingly, the disclosure of related party
transactions as required under Section 134(3)(h)
of the Act (Form AOC-2) is not applicable to the
Bank for the reporting period and hence does not
form part of this report. The Policy on Related
Party Transactions is available in the website of
the Bank atClick here

26. Risk Management

The Bank has formulated and adopted a robust
Risk Management framework. The Bank has also
constituted Risk Management Committee of
the Board, which periodically reviews the risks
faced by the Bank and the practices/ processes
followed to manage them. Details of the same are
covered in the MD&A report.

27. Internal Financial Controls

The Bank has clear delegation of authority
and standard operating procedures, which
are in accordance with the approved policies
of the Bank. These measures help in ensuring
that adequacy of internal financial controls
commensurate with the nature and size of
operations of the Bank. The Bank also reviews
the adequacy and effectiveness of its internal
financial controls with reference to the financial
statements. The procedures and internal controls
provide reasonable assurance on the preparation
of financial statements and the reliability of
financial reporting. The Bank also ensures that
the internal controls are operating effectively.

28. IND-AS Implementation

I n January 2016, the Ministry of Corporate
Affairs issued the roadmap for implementation
of new Indian Accounting Standards (Ind AS),
converged with International Financial Reporting
Standards (IFRS), for Scheduled Commercial
Banks, Insurance Companies and Non-Banking
Financial Companies (NBFCs). On October 07,
2025, the Reserve Bank of India (RBI) issued
Draft directions titled “Draft Reserve Bank of
India (Scheduled Commercial Banks & All India
Financial Institutions - Asset Classification,
Provisioning and Income Recognition) Directions,
2025. Subsequently, on April 27, 2026, the RBI
finalized guidelines introducing a forward-looking
Expected Credit Loss (ECL) framework for asset
classification, effective April 01, 2027.

However, Small Finance Banks are currently
excluded from the applicability of these directions.
Currently the implementation of Ind AS for
Small Finance Banks has been deferred by RBI till
further notice pending the consideration of some
recommended legislative amendments by the
Government of India. The Bank is in an advanced
stage of preparedness for implementation of Ind
AS, as and when these are made applicable to
the Indian banks.

As required by the RBI guidelines, the accounts
of the Bank are converted into Ind AS format and
submitted to the RBI at periodic intervals. The
Bank carries out the Expected Loss provisioning
using Probability of Default (PD) and Loss Given
Default (LGD) by considering historical data for
the purpose of IND AS pro-forma reporting and

product pricing. The Bank has put in a place a
comprehensive ECL Framework.

29. Loans / Guarantees / Investments

Pursuant to the exemptions provided under
Section 186 (11) of the Act, the provisions of
Section 186 of the Act except sub-section (1),
do not apply to a loan made, guarantee given
or security provided by a Banking Company in
the ordinary course of business. The particulars
of investments made by the Bank are disclosed
in Schedule 8 of the Financial Statements as per
the applicable provisions of Banking Regulation
Act, 1949.

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

The Bank has in place, a Policy on Prevention of
Sexual Harassment at Workplace in line with the
requirements of Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal)
Act, 2013. The particulars of complaints under
Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
during the FY 2025-26 are as follows:

a. Number of complaints filed during the
financial year: 16

b. Number of complaints disposed of during
the financial year: 16

c. Number of complaints pending as on end of
the financial year: 0

d. Number of cases pending for more than
ninety days: 0

The Bank has complied with the provisions
relating to the constitution of Internal Complaints
Committee under the Sexual Harassment of
Women at the Workplace (Prevention, Prohibition
and Redressal) Act, 2013.

31. Compliance with the Maternity Benefit Act,
1961

The Bank has complied with the provisions
relating to the Maternity Benefit Act, 1961.

32. Depository System

As the Members are aware, the Bank's Equity
Shares are tradable in electronic form. As on
March 31, 2026, out of the Bank's total equity
paid up share capital comprising of 1,14,10,43,060

Equity Shares, only 115 equity shares are held
in physical form and the remaining shares are
held in electronic form. In view of the numerous
advantages offered by the Depository System,
the Member(s) holding shares in physical form are
advised to avail the facility of dematerialisation.

33. GENERAL DISCLOSURE

The Annual Return under MGT-7 as required
under the Act is available on the website of the
BankClick here

There have been no significant and material
orders passed by the Regulators or Courts or
Tribunals impacting the going concern status
and the future operations of the Bank .

There are no agreements entered into as per
clause 5A to para A of part A of Schedule III
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

Your Directors state that no disclosure or
reporting is required in respect of the following
matters as there were no transactions on these
matters during the year under review:

• There has been no change in nature of
business of Bank

• I ssue of equity shares with differential rights
as to Dividend, voting or otherwise pursuant
to the provisions of Section 43 of the Act
and Rules made thereunder

• The Bank has not issued any warrants

• The Bank has not bought back its shares,
pursuant to the provisions of Section 68 of
the Act and the Rules made thereunder

• The financial statements of the Bank were
not revised

• The Bank has not failed to implement any
corporate action

• There was no application made / proceeding
pending under the Insolvency and
Bankruptcy Code, 2016

• Managing Director or the Whole-Time
Directors of the Bank received any
remuneration or commission during the year,
from any of its subsidiaries - Not Applicable
as the Bank does not have any subsidiaries

• The Bank has not issued Sweat Equity Shares
to its Directors or the employees of the Bank
under any scheme

• The details regarding the difference in
valuation between a one-time settlement
and valuation for obtaining loans from banks
or financial institutions, along with reasons,
are not applicable

• The Bank has not made any provisions of
money or has not provided any loan to the
employees of the Bank for purchase of shares
of the pursuant to the provisions of Section
67 of the Act and Rules made thereunder

• Being a banking company, provisions
of Section 148(1) of the Act, relating to
maintenance of cost records is not applicable

Acknowledgement

The Board of Directors are grateful to RBI,
SEBI, Stock Exchanges, Depositories, other
Government and Regulatory Authorities, other
Banks and Financial Institutions for their support
and guidance. The Directors place on record their
sincere thanks to the valued constituents of the
Bank for their support and patronage and their
deep sense of appreciation to all the employees
of the Bank for their unstinted commitment to
the growth of the Bank.

For and on behalf of the Board of Directors of
Equitas Small Finance Bank Limited

Vasudevan P N Anil Kumar Sharma

MD & CEO Part-time Chairman &

DIN: 01550885 Independent Director

DIN:08537123

Place : Chennai

Date : June 24, 2026