The Board of Directors of your Bank is immensely pleased to
present the 105^th Annual Report on the business and operations
of the Bank together with the audited accounts for the financial
year ended March 31, 2024.

KEY PERFORMANCE INDICATORS

Your Bank has been able to achieve significant growth in all
areas of operation and delivered a striking performance during
the financial year 2023-24, which depict the aptness of the
strategies implemented during the last few years. The essence
of the performance for the financial year 2023-24 is as below:

TOTAL BUSINESS

Your Bank's total business grew by ' 22,730.26 Crore and reached
' 1,63,535.94 Crore as on March 31, 2024, from ' 1,40,805.68
Crore as on March 31, 2023, registering a growth of 16.14%.

DEPOSITS

The Gross Deposits grew by ' 12,475.13 Crore and reached
' 89,112.72 Crore as on March 31, 2024, from ' 76,637.59
Crore as on March 31, 2023, recording a growth of 16.28%.

The Term Deposits grew by ' 10,839.01 Crore and reached
' 62,027.67 Crore as on March 31, 2024, from ' 51,188.66
Crore as on March 31, 2023, registering a growth of 21.17%.

Your Bank's CASA balances grew by ' 1,636.13 Crore and reached
' 27,085.06 Crore as on March 31, 2024 from ' 25,448.93
Crore as on March 31, 2023, recording a growth of 6.43%.
The CASA balance as on March 31, 2024 is constituted by
Savings Bank deposits of ' 18,801.67 Crore and Other Demand
Deposits of ' 8,283.39 Crore. The CASA ratio of the Bank as on
March 31, 2024 stood at 30.39%.

ADVANCES

During the year, your Bank's credit portfolio grew by ' 10,255.13
Crore and reached ' 74,423.22 Crore as on March 31, 2024,
from ' 64,168.09 Crore as on March 31, 2023, registering a
growth of 15.98%. Growth in Advances is majorly contributed by
Commercial, Retail and Agriculture during the period under review
along with cautious growth of 4.55% in the Corporate book. The
details of the Advances portfolios for financial year 2023-24 and
financial year 2022-23 along with their comparative growth is
furnished in the table below:

CLASSIFICATION OF ADVANCES PORTFOLIO

As on March 31, 2024, the Priority Sector Lending of your
Bank reached ' 30,287.61 Crore and constituted 47.39% of
its Adjusted Net Bank Credit (ANBC) as against the statutory
requirement of 40%.

AGRICULTURE ADVANCES

Your Bank's average Agriculture Advances, in terms of RBI
guidelines, reached ' 12,269.61 Crore as on March 31, 2024
which constitute 19.72% of Average ANBC as against the
regulatory stipulation of 18%. Average Advances to Micro
Enterprises and Weaker Sections stood at 8.25% and 13.01% on
Average ANBC respectively. Your Bank has continuously achieved
and surpassed the statutory Agriculture target by its focused
lending strategies to the Agriculture and its allied sectors.

ASSET QUALITY

Your Bank has a dedicated vertical (Credit Monitoring and Recovery
Department) that takes care of recovery. It plays a pivotal role in
ensuring the health and stability of our bank's loan portfolio. In
the face of economic fluctuations and market challenges, your
Bank diligently manages Non-Performing Assets (NPAs) to
minimize risks and optimize recovery strategies. High value NPA
accounts are taken care by eight Asset Recovery Branches spread

across India for effective recovery. Your bank has also engaged
recovery agencies to assist the Asset recovery Branches to reach
the end customers and for continuous follow-up.

The Gross NPAs of your Bank curtailed by ' 416.51 Crore and
contained to ' 1,041.64 Crore as on March 31, 2024, from the
level of ' 1,458.15 Crore as on March 31, 2023. Correspondingly,
Net NPA of your Bank curtailed by ' 170.18 Crore and contained
to ' 297.97 Crore as on March 31, 2024 from the level of
' 468.15 Crore as on March 31, 2023. In terms of percentage, your
Bank's Gross Non-Performing Assets (Gross NPA) and Net Non¬
Performing Assets (Net NPA) well contained at 1.40% and 0.40%
as against 2.27% and 0.74% of the previous year respectively.
Further, your Bank's SMA30 levels has been managed well
and confined to 0.38% as against 0.56% of previous year. Your
Bank has carried out focused recovery drive on a continuous basis
which resulted in improved recovery performance during the past
three years. The Provision Coverage Ratio stood at 94.85% and
your Bank is continuously strengthening the ratio for the past five
years. Your Bank will take all possible steps to curtail slippages
and expedite recovery in existing SMA / NPAs.

Your bank has implemented several measures to minimize
slippages and enhance recovery, including strengthening
credit risk assessment processes, implementing proactive
monitoring systems, offering timely restructuring options for
stressed borrowers, collaborating with specialized recovery
agencies, leveraging data analytics for early warning signals,
and streamlining legal and recovery frameworks. These steps
ensure proactive identification of potential defaults, prompt
action for resolution, and efficient recovery processes, ultimately
contributing to the reduction of slippages and improved
recovery rates.

INVESTMENTS

Your Bank's investment portfolio grew by ' 3428.72 Crore
and reached ' 22,840.44 Crore as on March 31, 2024, from
' 19,411.72 Crore as on March 31, 2023, registering a growth
of 17.66%. The average investment for the financial year
2023-24 stood at ' 21,374.82 Crore. The investment portfolio's
composition is consistent with the Investment Policy of the Bank
and lays stress on liquidity and regulatory management besides
providing gains.

Interest income earned on investments during the financial year
2023-24 was ' 1,331.01 Crore as against ' 1,099.13 Crore in
financial year 2022-23. Profit made on sale of investments was
at ' 39.76 Crore for the fiscal 2023-24. With a view to prevent
large volatility, Modified Duration of overall portfolio including
Held to Maturity (HTM) was maintained at a lower level of 2.93
years. Liquidity position was maintained at comfortable levels
throughout the financial year 2023-24.

FOREIGN EXCHANGE TRANSACTIONS

Your Bank's merchant turnover reached ' 25,297 Crore
during the financial year 2023-24 as against previous year's
achievement of ' 23,345 Crore. Bank's Export credit reached
' 1,554.30 Crore during the financial year 2023-24 as against
previous year's position of ' 1,270.50 Crore. Total Income earned
through foreign exchange transactions was ' 57.85 Crore for the
financial year 2023-24 as against ' 65.12 Crore for the previous
financial year. Exchange Profit of ' 30.44 Crore and Commission
& others of ' 27.41 Crore forms part of total Income earned
through foreign exchange transactions.

INCOME

Your Bank's Interest Income grew by ' 1,687.39 Crore and
reached ' 8,203.94 Crore for the financial year 2023-24 from
' 6,516.55 Crore for the financial year 2022-23, registering
a growth of 25.89%. Net Interest Income of your Bank grew
by ' 460.39 Crore and reached ' 3,809.20 Crore for financial
year 2023-24 from ' 3,348.81 Crore for the financial year
2022-23, an increase of 13.75%. The growth in Net Interest
Income is in tandem with the topline growth in loan books of
the Bank. Further, your Bank's Non-Interest Income grew by
' 499.75 Crore and reached ' 1,658.69 Crore for the financial
year 2023-24 from ' 1,158.94 Crore for the financial year
2022-23, an increase of 43.12%. The Yield on Advances and
Investment stood at 9.93% and 6.23% respectively.

EXPENDITURE

Your Bank's Interest expenditure increased by ' 1,227 Crore
reached ' 4,394.74 Crore for the financial year 2023-24 as
against ' 3,167.74 Crore for the financial year 2022-23. The
Operating expenses also increased to ' 2,638.75 Crore during
the financial year 2023-24 from ' 2,031.96 Crore of the previous
financial year in line with the business growth and on account of
one-time impact of employees' wage revision arising from the
12^th bipartite settlement and various new initiatives taken by
the Bank. Your Bank regularly monitored both its operating and
establishment expenses during the year and tight controls were
exercised on the expenditures.

Your Bank's Cost of deposits for the year increased by 92 bps to
5.19% during the financial year 2023-24, and in tune with the
same, yield on advances also improved by 100 bps from 8.93%
to 9.93%. Further, yield on investments improved by 43 bps to
6.23%. Hence, spread between yield on funds (8.67%) and cost
of funds (5.23%) works out to 3.44%, as against 3.50% a year
ago. Accordingly, Net Interest Margin (NIM) of your Bank improved
by one bps to 4.19% over the previous year position of 4.18%.

PROFIT

Your Bank's Operating Profit grew by ' 353.35 Crore and
reached ' 2,829.14 Crore for the financial year 2023-24 from
' 2,475.79 Crore for the financial year 2022-23, registering a
growth of 14.27%.

The Net Profit of your Bank surpassed the historical milestone
of ' 1,500 Crore and reached ' 1,604.81 Crore for the financial
year 2023-24 as against ' 1,106.09 Crore for the financial year
2022-23, registering a significant growth of 45.09%.

APPROPRIATIONS

The Net Profit of ' 1,604.81 Crore along with ' 2.69 Crore
brought forward from the previous financial year, aggregating
to ' 1607.50 Crore, was appropriated as follows:

DIVIDEND

Your Bank has formulated the Dividend Distribution Policy as per
the requirements of Regulation 43A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, (“SEBI LODR")
and guidelines issued by Reserve Bank India. The objective of
the Policy is to ensure an equitable balance between rewarding
the shareholders through dividend and retaining sufficient funds
for future growth of the Bank subject to compliance with the
dividend pay-out ratio matrix prescribed as per extant guidelines
issued by Reserve Bank of India. The Dividend Distribution Policy
is available on the Bank's website at https://www.kvb.co.in/docs/
dividend-distribution-policy.pdf

Accordingly, considering the capital position of the Bank and the
quantum of dividend pay-out permitted, Board of Directors of the
Bank is pleased to recommend a Dividend of ' 2.40/- per equity
share of face value of ' 2/- each i.e., 120%, for the financial
year 2023-24. Your Bank has notified closure of Register of
Members and Share Transfer Books from Friday, August 02,
2024 to Wednesday, August 14, 2024 (both days inclusive)
for determining the names of members eligible for dividend on
Equity shares. The Dividend pay-out is in accordance with Bank's
Dividend Distribution Policy and is subject to the approval of the
shareholders at the ensuing 105^th Annual General Meeting and
also any regulatory/statutory authorities, if required.

In accordance with Accounting Standards 4 - Contingencies and
Events occurring after the Balance Sheet date - notified by the
MCA on March 30, 2016, the proposed dividend amounting to
' 193.05 Crore has not been shown as an appropriation from the
Profit and Loss account as of March 31, 2024 and correspondingly
not reported under Other Liabilities and Provisions as at
March 31, 2024 (is reported under balance of profit).

SHARE CAPITAL

The Authorised share capital of the Bank stood at ' 200 Crore
divided into 100 Crore equity shares with a face value of ' 2/-
each as on March 31, 2024. During the financial year under
review, there has been no change in the Authorised share capital
of the Bank.

During the financial year under review, Bank has allotted
23,23,535 Equity Shares of face value ' 2/- each to the
employees who exercised their options under KVB ESOS 2011
Scheme and KVB ESOS 2018 Scheme. Post allotment of the
aforesaid equity shares, the Issued Share Capital increased from
' 160,54,38,794 to ' 161,00,85,864 comprising 80,50,42,932
equity shares with a face value ' 2/- each and the Paid-up Share
Capital increased from ' 160,41,06,926 to ' 160,87,53,996
comprising 80,43,76,998 equity shares with a face value ' 2/-
each. Other than the aforementioned, there is no change in
capital structure of the Bank during the year under review.

The Bank's Net owned funds grew to ' 10,040.07 Crore as on
March 31, 2024 from ' 8,584.05 Crore of the previous financial
year. The Market Capitalisation of the Bank stood at ' 14,691.41
Crore as on March 31, 2024.

EARNINGS PER SHARE/BOOK VALUE

Bank's Earnings Per Share (Basic) stood at ' 19.99 for the
financial year 2023-24 as against ' 13.81 for the financial year
2022-23. The Book Value of shares was ' 122.42 per equity
share of face value ' 2/- each (fully paid up) as on March 31,2024
as against previous year position of ' 105.03.

DEBT INSTRUMENTS & CREDIT RATING

The Bank had issued Basel III Compliant Unsecured, Redeemable
Non-Convertible Tier II Bonds to the value of ' 487 Crore with a
coupon rate of 11.95% p.a. and a tenor of 123 months (maturing
on June 12, 2029) in March 2019 through Private Placement,
having a call option at 5^th Coupon Payment date i.e., March 12,
2024 or on any Coupon Payment date thereafter.

Accordingly, Bank had exercised call option at 5^th Coupon Payment
date i.e., March 12, 2024 and redeemed the Basel III Compliant
Unsecured, Redeemable Non-Convertible Tier II Bonds issued by
the Bank and also duly paid the fifth coupon interest along with

redemption. The said redemption was in line with the terms of
issue of such Bond and prior approval from Reserve Bank of India
vide letter no. DOR.CAP.S6441/21-01-002/2023-24 dated

February 07, 2024. Bank has not issued any Debt instruments
during the year under review.

*The rating was upgraded to ICRA AA- (Stable) from the previous rating ICRA A (Stable).

As per the rating schedules of respective Rating Agencies, Instruments with these ratings viz., ICRA A1 and CRISIL A1 are considered to have very
strong degree of safety regarding timely payment of financial obligations. Such securities carry lowest credit risk.

ICRA AA-(Stable): Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such
securities carry very low credit risk.

IND A /Stable: Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such
securities carry low credit risk.

CAPITAL ADEQUACY

The Bank's Capital Adequacy Ratio stood at 16.67% as on
March 31, 2024, as per BASEL III norms. This is well above the
statutory limit of 11.50% (9% plus Capital Conservation Buffer
of 2.50% is required to be maintained as of March 31, 2024) as
prescribed by the Reserve Bank of India Guidelines.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Your Bank does not have any Subsidiaries or Associates/JVs to
report during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to provisions of the Regulation 34(2) (e) of SEBI LODR,
the Management Discussion and Analysis Report for the year is
forming part of this Annual Report.

NETWORK OF BRANCHES

The selection of new branch and office locations follows a
strategic approach focused on identifying high-potential areas.
To assess the viability of potential centres, your Bank conducts a
detailed analysis leveraging data from various forums and sites.
Additionally, we rely on location-based surveys received from

respective Divisional Offices, which provide valuable insights. By
combining these sources of information, we carefully shortlist the
locations for opening new branches or offices, ensuring that our
expansion efforts align with the growth prospects of each centre.

Your Bank has added Thirty Nine (39) Regular Branches, Five (5)
KVB Smart units, One (1) Digital Banking Unit (DBU) and Two (2)
Offices viz. Divisional Office at Tirunelveli and Digital Excellence
at Chennai during the financial year 2023-24. Your Bank has
838 Branches as on March 31, 2024. The branch network
including Corporate Business Units, Business Banking Units,
Asset Recovery Branches, NEO, SMART, Digital Banking Units
and Precious Metal Division totals to 877 as on March 31, 2024,
excluding three Extension Counters and four Satellite Offices.

During the year under review, your Bank has installed 79 new
Automated Teller Machines (ATM), 23 Bunch Note Recycler
Machines (BNRM) and 26 Self Service Passbook Kiosks. As of
March 31, 2024, 1,642 Automated Teller Machines (ATM), 620
Bunch Note Recycler Machines (BNRM) and 217 Self-Service
Passbook Kiosks are providing uninterrupted Banking services
to customers.

Classification of branches and alternate channel

No. of Transactions through alternate channels FY 2023-24 (%)

CURRENCY CHEST

As on March 31, 2024, your Bank has eight Currency Chests
across different locations in Tamil Nadu, Andhra Pradesh,
Telangana and Karnataka to supply adequate cash to Branches
& ATMs in its respective areas and the Clean Note Policy of RBI
is being adhered to. Currency Chests also support the branches
maintain cash within the retention limit for smooth operations.
Bank also conducted soiled note exchange melas and distribution
of coins through Currency Chest linked branches.

FINANCIAL INCLUSION

Financial Inclusion ensures availability of basic banking services
and products to all, thereby reaching the unreached, un-banked
and under-banked areas. Bank has been actively pursuing the
agenda of Financial Inclusion with key interventions in offering
appropriate financial products, using technology and financial
literacy. Bank is providing various Business Correspondents (BCs)
services & implementing comprehensive Financial Inclusion
programme through effective utilisation of BCs in Sub Service
Area (SSA). SSA is a cluster of few villages and is linked to one
base branch of the Bank.

Your Bank has reached the underprivileged segment of the
society and extended its focused financial services through 153
Bank Mitras in rural villages, 3 Bank Mitras in urban locations
including 39 Ultra Small Branches. The Bank Mitra use Micro ATM
for providing the banking services to the customers.

Your Bank continues to provide basic financial products including
Basic Savings Bank Deposit Account (BSBDA), Social security
schemes of Insurances like., Pradhan Mantri Jeevan Jyoti Bima
Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY)
and Pension product like., Atal Pension Yojana (APY) and thereby
support the Government in implementation of various social
welfare schemes.

Pradhan Mantri Jan Dhan Yojana (PMJDY):

Your Bank has opened 1,624 PMJDY accounts during the year
under review. The balances outstanding in the PMJDY accounts
as on March 31, 2024 was ' 19.98 Crore. The Bank has issued
1,624 Rupay Debit Cards under PMJDY accounts during the year.
Micro ATM devices are provided to Bank Mitras for facilitating
payments, which are enabled for accepting Rupay Card
transactions/Aadhaar enabled Payment system (AePs)/Third
Party deposit, Balance enquiry, Mini statement. Bank Mitras have
done 5.38 Lakh transactions, amounting to ^ 60.01 Crore during
the year under report which includes of DBT/Old Age Pension/
MGNREGS transactions.

Micro credit (SHGS Bank linkage):

Your Bank is providing credit facilities to Self-Help Groups (SHG)
/ Joint Liability Groups (JLG) to meet the credit needs of the poor.

As on March 31, 2024, the Bank has 41,813 JLG loans with
outstanding of ' 162.82 Crore.

Financial literacy:

Financial Literacy campaigns are intended to provide basic banking
knowledge to people across various corners of the Society. Your
Bank has been in the forefront in creating awareness to the
rural masses on the financial services and products through
the Financial Literacy Campaigns. During the FY 2023-24, your
Bank has conducted 108 financial literacy campaigns in Rural,
Semi Urban/Urban areas, including RBI Financial Literacy week
campaign 2024.

TECHNOLOGY INITIATIVES

Your Bank is always inclined to plan and implement the latest
trends, technological advancements, and innovations. Such long¬
term projects are initially taken up as study projects. Based on
their technical feasibility, these study projects are converted into
regular action plan projects to benefit our customers. The bank
has been integrating AI and ML into its operations to improve
decision-making processes, risk assessment, and customer
service. These technologies help in providing personalized
banking experiences and optimizing operational workflows.
Presently your bank is exploring adoption of Do It Yourself (DIY)
journeys, Customer Relationship Management (CRM), ONDC
(Open Network Digital Commerce) integration in DLite app and
redesign of the DLite mobile banking interface.

Your Bank has implemented the following customer centric
projects during the financial year 2023-24:

• Mobile Banking and Internet Banking Initiatives - Your
bank has significantly upgraded its mobile and internet
banking platforms, incorporating new features and
enhancing security measures. These upgrades are designed
to offer customers a more user-friendly and secure banking
experience and digital loan processing systems that reduce
turnaround times and simplify the application process
for customers.

• Mutual fund Solution - Online mutual fund distribution
solution is a digital platform that enables investors to
purchase, manage, and redeem mutual fund investments
through the Internet and Mobile banking. These platforms
offer a convenient and user-friendly interface, allowing
users to compare various mutual funds, access detailed
performance analytics, and execute transactions seamlessly.

• ICEGATE - It allows customers to pay customs duty through
KVB portal, streamlining and digitizing the process of
international trade transactions.

• Electronic Bank Guarantee with NeSL Tie Up -The eBG
system will replace the traditional paper-based process
for issuing and managing bank guarantees, offering an
electronic bank guarantee for our bank customers by using
the Digital Document Execution (DDE) platform provided by
NeSL (National e-Governance Services Limited).

• Instant V-KYC in DLite - Instant VKYC (Video Know Your
Customer) in the DLite application is a streamlined process
that allows users to complete their KYC verification quickly
and remotely via a video call. This feature eliminates the
need for physical paperwork and in-person verification,
enhancing convenience and speed for users.

• Voice Biometric Implementation in Mobile Banking -

Previously, we are offering three authentication modes for
our customers to login to the DLite mobile application viz
Login Pin, Finger print based biometric access and face
authentication (only for IOS). Voice Biometric has turned
up as an additional authentication mechanism wherein the
customer's voice is used to verify the identity. This is an
alternate for the authentication in addition to entering a
text or password.

• Green Deposit in Internet and Mobile Banking - This
feature would facilitate customers to open green deposit
through Internet Banking and mobile banking. Green Fixed
Deposits' are the term deposits where the deposit proceeds
will be used to finance or re-finance assets supporting
themes under United Nations Sustainable Development
Goals (SDGs).

• NPS Integration through DLite app - This feature would
facilitate customers to do enrolment in NPS through DLite
- Mobile Banking. "NPS integration through DLite app" aims
to enable users to manage their National Pension System
(NPS) accounts directly through the KVB DLite mobile
banking application, providing convenient access to pension
fund management and related services.

• DIGI Gold Loan Customization - Kisan Express Overdraft
Module - Customization for KVB Kisan Express Phase - I
Integration enhancements on Digital Jewel Loan application.
The digital gold loan offerings and integrating an overdraft
module specifically designed for farmers under the Kisan
Express scheme, enhancing their financial flexibility and
accessibility to credit.

INFORMATION SECURITY

The Board and Senior Management of your Bank have envisaged

the risks associated with adoption of Information Technology and

Digital Transformation initiatives to enhance customer service.

Your Bank has established an Information Security Group headed

by Chief Information Security Officer (CISO), which is specialised
in Information and Cyber Security risk management to protect the
Bank's Information Assets.

The CISO is responsible for setting the strategic direction of
Information Security initiatives within the bank, and reports
to the Chief Risk Officer. Also, responsible for overall security
Governance, Risk Management, Policy creation, Security
Monitoring on 24x7x365 days, Cyber Incident response, and
ensuring that your Bank complies with relevant laws and RBI
regulations, relating to Cyber Security.

The CISO Office establish the Information Security Policy, Digital
Payment Security controls policy and Cyber Crisis management
plan which are approved by the Board and reviewed annually. The
CISO office is committed to work towards aligning itself with the
evolving threat landscape with dedicated People implementing
Processes and Technology.

Your Bank is compliant with ISO/IEC 27001, which is the
international standard for Information Security, duly certified
by M/s TUV SUD since 2018. Accordingly, the CISO Office
has defined documented ISMS procedures which includes the
processes to be followed for Change Management and Incident
Management. In respect of security issues arising due to any
reason, the CISO Office has a robust process for Incident
Response which requires Root Cause Analysis (RCA) for each
incident and implementation of corrective actions to plug the
gaps, if any. Your Bank is also established best practices of
Baselines for the IT systems.

Your Bank's ISMS reinforces not only the Confidentiality, Integrity
and Availability of information but also other security principles
such as Authenticity, Non-Repudiation and Accountability. Thus,
your Bank's ISMS ensures the following objectives:

• Safety and privacy of sensitive customer and
Bank information.

• Prevent IT Assets and Information System from
Unauthorized Access.

• Protect the Data / IT Systems from threats such as Phishing,
Ransomware and other malware, malicious actors targeting
cloud services and integrated systems in multiple locations
over the Internet and zero-day attacks.

• Timely availability of Data / IT Systems to the
authorised users.

To provide awareness on recent trends in Information security
and understanding on the crucial role in safeguarding the data,
Bank has been arranging Virtual training, Cyber awareness

workshops, Phishing campaigns, awareness Email and SMS, etc.,
to its employees and also circulating the awareness Email and
SMS to its customers.

CALL CENTRE

The Call Centre of your Bank is a one stop Contact point of the
bank which addresses queries / requests from customers and
works seamlessly round the clock. Contact Centre handles a
wide range of customer interactions including incoming calls,
outgoing calls, emails & chat. Contact centre serves a primary
point of contact between customers and organisation, by
providing support, information & other services. Contact Centre
works on Dialer & CRM to record the customer interactions.
This includes IVRS, ACD & CRM. The agents are the frontline
employees who primarily interact with customers on behalf of
the organization. They are trained to handle customer inquiries,
resolve issues, provide information & deliver a positive and
delightful customer experience.

Inbound Contact Centre:

Inbound contact centre plays a critical role in managing customer
interactions via both calls / e-mails round the clock, thereby
ensuring excellent customer service, which helps to build strong
relationship with customers.

Dedicated team is set to execute the requirements received from
customers via calls / email by maintaining a stipulated TAT. The
rightness of transactions executed by customers are verified
by our employees by performing outbound calls based on the
data available in the CrossFraud portal for fraud transaction
monitoring. In addition, Inbound contact centre also performs
Mobile number change verification calls for the changes in
registered Mobile number requested through DLite app &
Internet Banking by customers, obtaining feed-back for Door¬
step banking services initiated by the branches and outcall IVRS
call back requests.

Outbound Contact Centre:

Outbound Contact Centre engages in various functions which
includes telesales, debt collection, reminder call, welcome call to
customers. Welcome call: Outcall initiated to customers who have
newly opened, CASA / loans & Credit cards in order to apprise
them of the Product features & Benefits, and also address the
customers enquiries on various products of the bank by Cross¬
selling & Upselling. Tele-collection activities are designed with
a view to improve the collection efficiency and consist of two
segments viz., Pre-due calling and Post-due Calling. Pre-due
calling is initiated to remind the customers of their due date
and the EMI amount which is due to be paid. This calling helps
customer to ensure that the EMI's are serviced on time. Post Due
Date calling is initiated to customers who have missed to pay their
dues on the stipulated Due date. The intensity of outbound calls

for collection are segregated based on Severity of delinquency,
No of Days Past Due, Track on repayment and customer's
Relationship with bank. Tele Sales to generate Revenue and to
service our existing and potential customers. Apart from this,
adhoc activities are performed at our Call Centre as and when
required by the management.

CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business of the Bank during
the financial year under review.

SYSTEM FOR INTERNAL FINANCIAL CONTROL AND
ITS ADEQUACY

Your Bank has on par computerized solutions like New-gen Private
Sector Banks to serve its customers in respect of all banking
requirements. Adequate infrastructure has been established in
processing the day to day transactions. “Flexcube" is the CBS
platform used in the Bank which is commonly used in several well-
known banks in the Country. The CBS platform has well defined
set-up to ensure internal financial controls viz maker-checker
requirements with adequate credentials. Automation of interest
& charges application and accounting transactions ensures
necessary internal financial control. IT audit in respect of CBS
is also being conducted as per the stipulated periodicity which
ensures adherence to the regulatory and mandatory guidelines.
Exclusive unswerving reporting software is used by Bank with
appropriate systems and protocols which have periodical review.
The same ensures reporting of Bank's business without any
ambiguity. The Bank has standardised operating procedures in
monitoring the account operations to have effective internal
controls. Separate monitoring team has been identified to
prevent and detect frauds and errors in the Bank. Compliance
of regulatory /mandatory requirements are being taken care by
an individual team which has its exclusive procedure in adhering
to regulated and framed policies besides reporting of financial
information in a disciplined manner. These systems enable
the Bank to have established internal control over financial
information reporting.

The Bank has Board approved policies in respect of various
banking activities like lending, investment, borrowing etc. with
well-defined hierarchy of officials vested with sanctioning powers.
Inspection Department and Risk Management Department review
various aspects of internal control, adherence to procedure and
review credit assessment protocols periodically.

Internal Financial controls of the branches are verified by the
statutory branch auditors during their branch audit and covered
in the report. Statutory Central Auditors of the Bank audit
the internal controls over financial reporting of the Bank and
submit a separate report containing the salient features of their
observations to the Board of directors.

RISK MANAGEMENT

Risks are inherent in any business and banking is not an exception
to this. Your Bank has adopted a multi-layered risk management
process to identify, assess, monitor, and manage risks through
the effective use of processes and information technology.

Objective of risk management of the Bank is to balance the
trade-off between risk and return and ensure that the Bank
operates within the Board approved risk appetite statement. An
independent risk management function ensures that the risk
is managed through policies and processes approved by the
Board of Directors encompassing independent identification,
measurement, and management of risks across the various
businesses of the Bank. The risk management function in
the Bank strives to proactively anticipate vulnerabilities at the
transaction as well as at the portfolio level, through quantitative
or qualitative examination of the risks. The Bank continues to
focus on refining and improving its risk measurement systems
including automation of processes, not only to ensure compliance
with regulatory requirements, but also to ensure optimal capital
utilization with a better risk-adjusted return. The Board reviews
the risk profile of the Bank at periodic intervals and ensures that
risk levels are within the defined risk appetite.

The Board is responsible for overseeing the overall risk
management framework by approving various policies relating to
the Risk functions and has delegated powers to Board Level Risk
Management and Asset Liability Management Committee (RM
& ALM) for monitoring the implementation of Risk Governance
Framework, compliance to various policies & processes. The
RM & ALM Committee ensures the same by closely monitoring
& guiding the functions through Executive Level Credit Risk
Management Committee, Market Risk Management Committee,
Operational Risk Management Committee and Asset Liability
Management Committee, which regularly assess the functional
efficiency of the Bank's risk management processes. Minutes
of these Committee meetings are placed to the RM & ALM
Committee of the Board for its perusal and further guidance.
The Board is reviewing the performance of these executive level
committees on half yearly basis.

Risk Management department examines various policies of
the Bank to ensure risk management aspects are addressed
in those policies. Risk department also maintains various risk
management policies viz., Credit risk rating, Market risk, Liquidity
risk, Operational risk, Risk culture, Strategic risk management,
Reputational risk, Integrated risk management, Stress testing
and ICAAP.

Bank's risk management objectives broadly cover proper
identification, assessment, measurement, monitoring, controlling,
mitigation and reporting of the risks across various business
segments of the Bank. The risk management strategy adopted

by the Bank is based on a clear understanding of the risks and
level of risk appetite, which is dependent on the willingness
of the Bank to take risks in the normal and stressed course of
business operations.

All material risks of the Bank emerging during its business are
identified, assessed, monitored, managed, and mitigated with the
effective control measures in place.

Bank is well capitalized; CRAR stands at 16.67% as on
March 31, 2024. Capital provides the required buffer to manage
and meet any unexpected risks / losses that materialize despite
prudent and timely risk management actions. In view of the
foregoing, apparently there are no material risks which threaten
the existence of the Bank.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

In compliance with RBI Guidelines, provisions of the Companies
Act, 2013, SEBI LODR and SEBI (Prohibition of Insider Trading)
Regulations, 2015 as amended, your Bank has in place the
“Whistle Blower Policy” since 2011. The Policy also incorporates
the Protected Disclosure Scheme (PDS) for Private Sector Banks,
instituted by the Reserve Bank of India. The Audit Committee
of the Board reviews the complaints received through Vigilance
Mechanisms on quarterly basis and none of the whistle blowers
have been denied access to the Audit Committee of the Board.
The Bank's Whistle Blower Policy is in synchronization with all
statutory and regulatory guidelines on Vigilance Mechanism. The
details of the Whistle Blower Policy is available on the website of
the Bank https://www.kvb.co.in/docs/whistle-blower-policy.pdf

Bank is encouraging the staff to share all kinds of unlawful/
unethical instances/practices followed by any employees to take
appropriate action upon review. Further, Bank is ensuring that the
details shared are kept confidential and protection of staff who
blown the whistle. In this regard, awareness programs are being
provided to all employees as part of training session.

DISCLOSURES PERTAINING TO THE SEXUAL
HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT,
2013

The details related to Internal Complaints Committee under
the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 are furnished in
the Corporate Governance Report that forms part of this
Annual Report.

RELATED PARTY TRANSACTIONS

All transactions entered into by your Bank with related parties are
not material and repetitive in nature in ordinary course of business
and on an arm's length basis. Omnibus approval is obtained from

the Audit Committee for transactions which are repetitive in
nature and the same are reviewed on periodic basis. The Bank's
policy on Related Party Transactions can be viewed at: https://
www.kvb.co.in/docs/related-party-transactions-policy.pdf.

During the year, your Bank has not entered into any materially
significant transactions with the related parties, which could
lead to potential conflict of interest. Therefore, pursuant to
Section 134(3)(h) of the Companies Act, 2013 with Rule 8(2)
of the Companies (Accounts) Rules, 2014, there are no related
party transactions to be reported under Section 188(1) of
the Companies Act, 2013 and Form AOC-2 is not applicable
to the Bank.

AUDIT COMMITTEE RELATED DISCLOSURE UNDER
SUB-SECTION 8 OF SECTION 177 OF THE COMPANIES
ACT, 2013

The Bank has constituted a Board level Audit Committee in line
with the requirements of the Companies Act, 2013, SEBI LODR
and Reserve Bank of India guidelines, as amended from time
to time. Board has accepted all the recommendations of the
Audit Committee. The details of the composition of the Audit
Committee are disclosed in the Corporate Governance Report
that forms part of this Annual Report.

DISCLOSURE RELATED TO DETAILS OF DEPOSITS
ACCEPTED UNDER RULE 8(5) (V) OF COMPANIES
(ACCOUNTS) RULES, 2014

Being a Banking company, the disclosures required as per Rule
8(5) (V) of Companies (Accounts) Rules, 2014, read with Section
73 and 74 of the Companies Act, 2013 are not applicable.

PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

Pursuant to Section 186 (11) 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 any investment made by a banking company
in the ordinary course of business. Hence, the particulars of
loan and guarantees as required under Section 134(3)(g) of
the Companies Act, 2013 are not required to be disclosed. The
particulars of investments made by the Bank are disclosed in
the Financial Statements as per the applicable provisions of the
Banking Regulation Act, 1949.

AUDITORS

Statutory Auditors

The present Joint Statutory Central Auditors of the Bank viz.,
M/s R G N Price & Co., Chartered Accountants (Registration
No. FRN 002785S) and M/s Sundaram & Srinivasan, Chartered
Accountants (Registration No. FRN 004207S) were appointed
at the 102^nd Annual General Meeting of the Bank held for

FY 2020-21 and continue to hold office till the conclusion of the
ensuing AGM of the Bank to be held for FY 2023-24.

Pursuant to the Guidelines for Appointment of Statutory Central
Auditors (SCAs)/Statutory Auditors (SAs) of Commercial
Banks (excluding RRBs), UCBs and NBFCs (including HFCs)
dated April 27, 2021 issued by the Reserve Bank of India (‘RBI
Guidelines'), Banks may appoint the SCAs/SAs for a continuous
period of three years. Since M/s R G N Price & Co., Chartered
Accountants (Registration No. FRN 002785S) and M/s
Sundaram & Srinivasan, Chartered Accountants (Registration No.
FRN 004207S) have already completed three years as Statutory
Auditors of the Bank, they are liable to retire on the conclusion of
the 105^th Annual General Meeting of the Bank and are not eligible
for reappointment.

The RBI guidelines mandate that for Banks with an asset size
of ' 15,000 Crore and above as at the end of previous year,
the statutory audit should be conducted under joint audit of a
minimum of two audit firms. Accordingly, as the Bank continues
to appoint minimum of two joint statutory auditors as per RBI
guidelines, the Board of Directors, on the recommendation of the
Audit Committee, finalised the list of Audit firms in the order of
preference and recommended the same to RBI for its approval.

RBI vide its letter CO.DOS.RPD.NO.S532/08.12.005/2024-25
dated April 19, 2024 had approved the names of M/s. Kalyaniwalla
& Mistry LLP, Chartered Accountants (Firm Registration No.
104607W/W100166) and M/s. Varma & Varma, Chartered
Accountants (Firm Registration No. 004532S) as Joint Statutory
Central Auditors of the Bank for the FY 2024-25.

Accordingly, it is proposed to appoint M/s. Kalyaniwalla & Mistry
LLP, Chartered Accountants (Firm Registration No. 104607W/
W100166) and M/s. Varma & Varma, Chartered Accountants
(Firm Registration No. 004532S) as Joint Statutory Central
Auditors of the Bank, subject to approval of the shareholders
at the ensuing Annual General Meeting. The appointments of
Joint Statutory Central Auditors along with the relevant details
are proposed to the members in the Notice of the 105^th Annual
General Meeting and the Members are requested to consider the
said Appointment of Joint Statutory Central Auditors of the Bank.

Independent Auditors' Report

The Joint Statutory Central Auditors of the Bank viz., M/s R G
N Price & Co., Chartered Accountants (Registration No. FRN
002785S) together with M/s Sundaram & Srinivasan, Chartered
Accountants (Registration No. FRN 004207S), have audited the
accounts of the Bank for the financial year 2023-24 and their
Report forms part of this Annual Report. Pursuant to Section
143(3) (i) of the Companies Act, 2013, the Statutory Auditors
have also reported on the adequacy and operating effectiveness
of the internal financial controls system over financial reporting,

which has been enclosed as “Annexure A" to Independent
Auditor's Report.

There are no qualifications, reservations or adverse remarks
made by the Statutory Auditors in their report for the financial
year 2023-24.

During the period under review, no frauds were reported by the
Auditors under sub-section (12) of Section 143 of the Companies
Act, 2013.

Secretarial Audit and secretarial compliance report

In line with Section 204 of the Companies Act, 2013 and
Regulation 24A (1) of the SEBI LODR, your Bank has appointed
M/s S.A.E. & Associates LLP, Company Secretaries, Chennai to
undertake the Secretarial Audit of the Bank for the financial
year 2023-24. The Bank produced all necessary records to
the Secretarial Auditors for smooth conduct of their Audit.
The Secretarial Audit Report for the financial year 2023-24 is
annexed to this report as Annexure - I.

There are no qualifications, reservations or adverse remarks
made by the Secretarial Auditors in their report for the financial
year 2023-24.

Pursuant to regulation 24A (2) of the SEBI LODR and SEBI
circular No. CIR/CFD/CMD1/27/2019 dated February 09, 2019,
the Bank has obtained Secretarial Compliance Report, from the
Secretarial Auditors of the Bank on compliance of all applicable
SEBI Regulations and circulars/guidelines issued thereunder and
the copy of the same was submitted to Stock Exchange within
Sixty days from the end of the Financial Year.

Implementation of Indian Accounting Standards
(Ind AS)

Pursuant to RBI guidelines, Proforma IndAS statements have to
be submitted on half-yearly basis and accordingly submitted to
RBI. During the FY 2022-23, RBI had issued discussion paper on
introduction of Expected Credit Loss Framework for provisioning
by banks and the final guidelines are awaited. Further details are
given in Schedule 18 - Notes to Account of the Balance Sheet.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the financial year 2023-24, your Bank is in compliance
with the applicable Secretarial Standards issued by The Institute
of Company Secretaries of India.

STATUTORY DISCLOSURES

Disclosures relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, pursuant
to Section 134(3)(m) of the Companies Act, 2013 read with

Rule (8)(3) of the Companies (Accounts) Rules, 2014 are
detailed as under:

Conservation of Energy

Your Bank has undertaken various energy efficiency improvement
initiatives for energy conservation at its branches / offices by
installing LED lights in a phased manner. VRF (Variant Refrigerant
Flow) AC units have been installed in back offices across various
cities to save electricity by energy conservation technology.

Your Bank owns a 850 kW Wind Turbine Generator in
Govindanagaram, Theni District, Tamilnadu and the said wind mill
has generated 13,81,209 units during the year under review.
Bank is utilizing the power generated by Wind Turbine for its
Central office at Karur and Divisional Office at Chennai. Roof
top solar power plant (38 kW) has been installed at our Bank's
own building at Hyderabad Divisional Office for utilization of
renewable energy.

Your Bank has made a capital investment of ' 28,94,346/- and
' 45,10,400/- on Solar panels and LED Lights respectively during
the financial year 2023-24.

Technology Absorption

Your Bank has always used information technology extensively
to deliver quality service to its customer, for more details please
refer the section on Technology Initiatives of Directors Report
forming part of the Annual Report.

Foreign Exchange Earnings and Outgo

Your Bank continuously supports and encourages the country's
export efforts through its export financing operations. The
details on foreign exchange earnings and outgo are furnished
in the Foreign Exchange Transactions section that forms part
of this report.

MATERIAL EVENTS THAT HAVE OCCURRED AFTER
THE BALANCE SHEET DATE

There are no material events/changes and commitments, which
affect the financial position of the Bank between the end of the
financial year of the Bank and the date of the Directors' Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY
REGULATORS

During the financial year 2023-24, no significant and material
orders were passed by the Regulators or Courts or Tribunals
against the Bank which impacts its going concern status and
Bank's operations in future.

MAINTENANCE OF COST RECORDS

Being Banking Company, your Bank is not required to maintain
cost records as per sub-section (1) of Section 148 of the
Companies Act, 2013

ANNUAL RETURN

The Annual Return for the financial year ended March 31, 2024,
as required under Section 92 (3) and Section 134(3)(a) of
the Companies Act, 2013 is available on the Bank's website at
https://www.kvb.co.in/investor-corner/annual-general-meeting/
annual-return/

DETAILS OF APPLICATION MADE OR ANY PROCEEDING
PENDING UNDER THE INSOLVENCY AND BANKRUPTCY
CODE, 2016 (31 OF 2016) DURING THE YEAR
ALONG WITH THEIR STATUS AS AT THE END OF THE
FINANCIAL YEAR

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

However, Bank has been filing cases in NCLT under IBC, 2016 as
a part of its recovery mechanism and the status of the cases as
at the end of the financial year 2023-24 is furnished as below:

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF
THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE
TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF

Being Banking Company, the aforesaid provision is not applicable
to your Bank.

PARTICULARS OF EMPLOYEES

The information as required under Section 197(12) of the
Companies Act, 2013 read with Rule 5 of the Companies
(Appointment & Remuneration of Managerial Personnel) Rules,
2014 are annexed to this report as Annexure - II.

EMPLOYEE STOCK OPTION SCHEME

Your Bank has formulated and adopted Employee Stock Option
Schemes to provide a platform to employees for participating in

the ownership of the Bank and in its long-term growth. Bank uses
stock options as a compensation tool to attract and retain critical
talent and encourage employees to align individual performances
with that of Bank's objectives. Currently, the Bank has the
following Schemes in compliance with the provisions of SEBI
(Share Based Employee Benefits and Sweat Equity) Regulations,
2021 (“SEBI SBEB & SE Regulations”) erstwhile SEBI (Share
Based Employee Benefits) Regulations, 2014.

• Karur Vysya Bank Employees Stock Option Scheme 2011
(“KVB-ESOS-2011”)

• Karur Vysya Bank Employees Stock Option Scheme 2018
(“KVB-ESOS-2018”)

During the period under review, your Bank has granted 1,97,775
options under KVB-ESOS-2018 to Shri B Ramesh Babu, MD & CEO,
Shri J Natarajan, Executive Director (while holding the position as
President & COO) and Senior Management towards their variable
pay as a part of non-cash component. The said variable pay is in
accordance with Bank's Compensation policy read with Reserve
Bank of India circular DOR.Appt.BC.No.23/29.67.001/2019-20
dated November 04, 2019. Further, your Bank has allotted
44,326 Equity Shares to Shri B Ramesh Babu, MD & CEO and
37,609 Equity Shares to Shri J Natarajan, Executive Director
(while holding the position as President & COO), under KVB
ESOS 2018 during the year under review as a part of their non¬
cash component of variable pay for the financial year 2020-21
and 2021-22 in terms of compensation structure. Furthermore,
your Bank has allotted 8,60,612 shares to Senior Management
towards their variable pay as a part of non-cash component and
13,80,988 Equity Shares of face value ' 2 each to the employees
who have exercised their options under KVB ESOS 2011 Scheme
and KVB ESOS 2018 Scheme during the year under review.

Pursuant to Regulation 13 of SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021, (“SEBI SBEB
& SE”) Bank's Secretarial Auditors, M/s S.A.E. & Associates
LLP, Company Secretaries, have certified that the Bank's above
mentioned Schemes have been implemented in accordance
with the Resolutions passed by Shareholders for 2011 & 2018
Schemes and SEBI SBEB & SE. Disclosures as required under the
said regulation are available on Bank's website at https://www.
kvb.co.in/investor-corner/other-disclosures/esos-disclosures/

TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND

Pursuant to Sections 124 and 125 of the Companies Act, 2013
read with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF
Rules'), the dividends remaining unclaimed for period of 7 years
and all shares in respect of which dividend are not claimed
for the last 7 consecutive years are liable to be transferred to

the Investor Education and Protection Fund (‘IEPF’). The said
requirement does not apply to shares in respect of which there
is a specific Order of Court, Tribunal or Statutory Authority,
restraining transfer of the shares. Further details are provided
in the Corporate Governance Report that forms part of this
Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Articles of Association of the Bank drafted in 1916, provided
for setting aside of one percent of the annual profits to a “Charity
Account", which would be used to support the needy for their
health and education requirements. The Bank continues with that
tradition even today after 107 years in the modern avatar of
Corporate Social Responsibility. A Corporate Social Responsibility
(CSR) Committee has been constituted in accordance with the
provisions of Section 135 of the Companies Act, 2013, read with
the amended Companies (Corporate Social Responsibility Policy)
Rules, 2014.

During the year under review, your bank had CSR budget of
' 18.09 Crore, against which the Bank spent ' 18.39 Crore.
Further in line with the CSR policy of the Bank, spends have
been spread across the core focus areas viz., health, sanitation,
clean drinking water, education, skill development, women
empowerment, and environment protection, as defined in
Schedule VII of the Companies Act, 2013.

The brief outline of the CSR policy of the Bank, CSR spends
and other mandatory disclosures are enclosed to this Report as
Annexure - III.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG)

Your Bank is committed to sustainability and responsible banking
through comprehensive ESG initiatives. Bank focus on reducing
energy consumption with projects like windmill, LED lights
and solar grid. Social responsibility efforts include improving
gender diversity, supporting semi-urban and rural communities,
and prioritizing cyber security and data privacy. Governance is
strengthened by a majority of Independent Directors on our
Board, aligning our ESG policy with sustainable banking practices
and UN SDGs. Bank has integrated ESG considerations into our
Credit Policy, established an ESG due diligence framework, and
assessed ESG/Climate risk as low. Bank is in pursuit of IGBC
certification and CSR initiatives highlight our dedication to
environmental sustainability, renewable energy, and community
development. Additionally, Bank prioritize employee well-being,
ensuring a supportive and healthy work environment.

BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORTING (BRSR)

In terms of Regulation 34(2)(f) of the SEBI LODR read with SEBI
circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated

July 12, 2023, the filing of BRSR shall be mandatory for the
top 1000 listed companies (by market capitalisation) from the
FY 2023 - 2024. It is to be noted that your Bank has published
Business Responsibility and Sustainability Report from the
financial year 2021-22 itself on voluntary basis in order to adapt
to the regulatory requirements and build transparency among
our stakeholders.

The Business Responsibility & Sustainability Reporting (BRSR)
of the Bank for the financial year 2023-24 is annexed to this
Report as Annexure - IV.

BOARD MEETINGS

The composition of the Board of Directors is in compliance with all
the relevant applicable statutory regulations. The Board meets at
regular intervals to discuss and decide on Bank's business policy
and strategy, apart from other items of business. During the year
under review, Twelve Board Meetings were conducted and the
relevant periodicity for holding the meetings was complied. The
schedule of the meetings of the Board is circulated in advance
to the Members of the Board, for their consideration and
approval. Details of the composition of Board, Meetings held and
attendance of the Directors at such Meetings are provided in the
Corporate Governance Report which forms part of Annual Report.

BOARD EVALUATION

Pursuant to Section 134(3) (p) of the Companies Act, 2013,
Regulation 17(10) of SEBI LODR and other applicable regulations,
Board has carried out annual evaluation of its own performance
(Board as a whole), Committees of the Board, Non- Executive
Independent Directors including Chairperson and MD & CEO.
Further Independent Directors in their Separate Meeting have
carried out evaluation of Board as a whole and Non- Executive
Non-Independent Directors. The manner of evaluation conducted
during the financial year 2023-24 is furnished in the Corporate
Governance Report that forms part of this Annual Report.

CHANGES IN BOARD OF DIRECTORS OF THE BANK

Changes in Board of Directors of the Bank during the review
period and till the date of this report are presented below;

Appointment

CA Chinnasamy Ganesan (DIN: 07615862), was co-opted
as an Additional Director of the Bank under “Non-Executive
Independent Director" category by the Board in its meeting held
on April 25, 2023, subject to the approval of the Shareholders
of the Bank.

In terms of Regulation 17 (1C) of SEBI LODR, the listed entity
shall ensure that approval of shareholders for appointment of a
person on the Board of Directors at the next general meeting or

within a period of three (3) months from the date of appointment,
whichever is earlier.

Accordingly, the appointment of CA Chinnasamy Ganesan as
Non- Executive Independent Director of the Bank, for a period of
three (3) years with effect from April 25, 2023 to April 24, 2026
not liable to retire by rotation, was placed before the shareholders
of the Bank for their approval through Postal Ballot having remote
e-voting process and the same was approved by shareholders of
the Bank on June 30, 2023.

CA Chinnasamy Ganesan has handled many Indian and
Multi National Companies with respect to audits, advisory
on international financial reporting, taxation, due diligence
and other assurance services. He has more than 25 years of
extensive knowledge and experience in carrying out bank audit
and in training bank officials in financial reporting. He specialises
in Financial Reporting (including Ind AS, IFRS and US GAAP),
Company law matters, audit and taxation and was conferred
Honorary Doctorate (“honoris causa”) in International Financial
Reporting Standards for his extensive contribution to Ind AS and
IFRS by a renowned foreign university. He is an active resource
person for Regional Training Institute of Comptroller and Auditor
General of India, Staff training college of Indian Bank, Indian
Overseas Bank, Reserve Bank of India and several other banks.

Shri R Vidhya Shankar (DIN: 00002498), was co-opted
as an Additional Director of the Bank under “Non-Executive
Independent Director” category by the Board in its meeting held
on April 22, 2024, subject to the approval of the Shareholders
of the Bank.

In terms of Regulation 17 (1C) of SEBI LODR, the listed entity
shall ensure that approval of shareholders for appointment of a
person on the Board of Directors at the next general meeting or
within a period of three (3) months from the date of appointment,
whichever is earlier.

Accordingly, the appointment of Shri R Vidhya Shankar as Non¬
Executive Independent Director of the Bank, for a period of three
(3) years with effect from April 22, 2024 to April 21, 2027 not
liable to retire by rotation, was placed before the shareholders of
the Bank for their approval through Postal Ballot having remote
e-voting process and the same was approved by shareholders of
the Bank on July 16, 2024.

Shri R Vidhya Shankar is a senior partner of M/s Ramani &
Shankar, one of the oldest Law Firms in Western Tamil Nadu and
much sought after lawyer in western Tamil Nadu for corporate
litigations, transactions and opinions. He specialises in Corporate
Law, including in corporate transactions, corporate restructuring,
schemes and arrangements, corporate litigations, domestic and
international arbitrations, capital market, FEMA compliances,
cross-border transactions and general corporate advisory

services. He is representing Majority Sectors under the sectoral
representation such as Law, Credit Recovery, Co-operation &
Rural Economy and MSME on the Board.

Shri J Natarajan (DIN: 02710776)

In the context of growing complexities of the banking sector and
to establish an effective senior management complementing
Managing Director and CEO's position, Reserve Bank of
India vide its circular RBI/2023-24/70 DOR.HGG. GOV.
REC.46/29.67.001/2023-24 Appointment of Whole-Time
Director(s) dated October 25, 2023, has advised to ensure the
presence of at least two Whole Time Directors (WTDs), including
the Managing Director and CEO, on the Bank's Boards.

Based on the requirements of RBI circular, Nomination and
Remuneration Committee and Board of Directors of the Bank
has made the recommendation to the Reserve Bank of India
seeking approval for appointment of Shri J Natarajan as Whole
Time Director and designated as Executive Director of the Bank.

The Reserve Bank of India vide its letter No. DoR.GOV. No. S1076
/08.41.001 /2024-25 dated May 16, 2024, had accorded
its approval for the appointment of Shri J Natarajan (DIN:
02710776) as Whole-time Director (Executive Director) of the
Bank, for a period of One (1) year with effect from the date of his
taking charge, along with the terms and conditions.

Pursuant to the RBI approval, Shri J Natarajan was co-opted as an
Additional Director in the Category of Whole Time Director and
designated as Executive Director of the Bank by the Board in its
meeting held on May 22, 2024, for a period of one (1) year from
the date of taking charge. He has taken charge on May 22, 2024
as Executive Director of the Bank.

In terms of Regulation 17 (1C) of SEBI LODR, the listed entity
shall ensure that approval of shareholders for appointment of
a person on the Board of Directors at the next general meeting
or within a time period of three (3) months from the date of
appointment, whichever is earlier.

Accordingly, the appointment of Shri J Natarajan as Whole Time
Director designated as Executive Director of the Bank for a period
of one (1) year with effect from May 22, 2024, not liable to
retire by rotation was placed before the shareholders of the Bank
for their approval through Postal Ballot having remote e-voting
process and the same was approved by the shareholders of the
Bank on July 16, 2024.

Shri J Natarajan joined Karur Vysya Bank as a Trainee in the
year 1982 and moved up to different levels including General
Manager of the Bank in the year 2010, Chief General Manager
of the Bank in the year 2017 and President of the Bank in the
year 2019 reporting to MD&CEO of the Bank. He has extensive

work experience in Credit, Treasury, Finance, Human resources,
Information technology, Merchant Banking etc., He was
instrumental in Bank's digital lending journey and various other
key initiatives in the Bank.

Re-Appointment

Shri B Ramesh Babu (DIN: 06900325) was re-appointed as
Managing Director & Chief Executive Officer of the Bank for the
second term of three years (3) with effect from July 29, 2023,
not liable to retire by rotation. The said re-appointment was
approved by the shareholders of the Bank vide resolution dated
June 30, 2023 through postal ballot on the terms and conditions
recommended. Further Reserve Bank of India accorded its
approval for the reappointment vide letter dated July 14, 2023.

Dr Harshavardhan R (DIN: 01675460) was re-appointed as
Non- Executive Independent director of the Bank for second
term of five years (5) effective from July 30, 2023 pursuant to
the approval of shareholders through postal ballot having remote
e-voting process on June 30, 2023, not liable to retire by rotation.

Opinion of the Board regarding integrity, expertise
and experience (including the proficiency) of the
Independent Director appointed during the year:

In the opinion of the Board, the Independent Directors appointed
during the year possess requisite qualifications, proficiency,
expertise, track record, integrity, independence, vast and rich
experience in their respective domains. Independent Directors
appointed during the year have qualified the online proficiency
self-assessment test for Independent Director's Databank/availed
exemption, within the timelines prescribed.

Retirement by rotation

Shri R Ramkumar (DIN: 00275622), Non-Executive
Non-Independent Director, retires by rotation at the ensuing
105^th Annual General Meeting (AGM) and being eligible, offers
himself for re-appointment in terms of Section 152 of the
Companies Act, 2013. He hails from the promoter's family and
was on the Board since June 25, 2018 and would be representing
Minority Sector under sectoral representation such as Business
Management, Finance, Human Resources. Approval of the
shareholders is being requested for reappointment of Shri R
Ramkumar as Non-Executive Non-Independent Director of the
Bank, liable to retire by rotation.

The brief profile and details in terms of Regulation 36 (3) of
SEBI LODR and the Secretarial Standard on General Meetings,
in respect of the Director seeking appointment/re-appointment
has been annexed to the Notice of the ensuing AGM and in
the Corporate Governance Report that forms part of this
Annual Report.

Retirement on completion of tenure

Shri M V Srinivasamoorthi (DIN: 00694618), Non-Executive Non
Independent Director of the Bank demitted office at the close of
office hours on August 26, 2023, consequent to completion of
his eight (8) years tenure in terms of Section 10A(2A)(i) of the
Banking Regulation Act, 1949.

Dr K S Ravichandran (DIN: 00002713), Non-Executive
Independent Director of the Bank demitted office at the close
of office hours on May 25, 2024 Consequent to completion of
his eight (8) years tenure in terms of Section 10A(2A)(i) of the
Banking Regulation Act, 1949.

Board placed on record its sincere appreciation for the valuable
services rendered and contribution made by them during their
tenure as Directors of the Bank.

Apart from the above, there were no changes in the Board of
Directors of the Bank as on the date of this report.

KEY MANAGERIAL PERSONNEL

The changes in Key Managerial Personnel of the Bank during the
review period and till the date of this report are briefed below;

Appointment

Shri M S Chandrasekaran was appointed as Chief Operating
Officer (COO) of the Bank in Chief General Manager cadre
and categorized as Key Managerial Personnel with effect from
October 16, 2023.

Shri Dolphy Jose, General Manager and Head of Consumer
Banking of the Bank, is elevated to Chief General Manager and
Head of Consumer Banking and categorized as Key Managerial
Personnel of the Bank on October 16, 2023.

Shri KVSM Sudhakar, General Manager and Chief Compliance
Officer, is elevated to Chief General Manager and categorized
as Key Managerial Personnel of the Bank and continues as Chief
Compliance Officer, with effective from April 01, 2024.

Shri J Natarajan (former President and Key Managerial Personnel
of the Bank) was appointed as an Executive Director of the Bank
on May 22, 2024 and he continues as Key Managerial Personnel
of the Bank.

Re-appointment

Shri B Ramesh Babu was reappointed as MD & CEO of the Bank,
who is a Key Managerial Personnel of the Bank, for the second
term of three (3) years, with effect from July 29, 2023.

Resignation

Shri Dolphy Jose, Chief General Manager and Head of Consumer
Banking (Key Managerial Personnel) of the Bank had tendered his
resignation for pursuing other career opportunities and relieved
from the Bank on July 01, 2024.

Apart from the above, there were no changes in the Key
Managerial Personnels as on the date of this report.

CRITERIA FOR DETERMINING QUALIFICATIONS,
POSITIVE ATTRIBUTES FOR APPOINTMENT/
REAPPOINTMENT OF DIRECTORS

Pursuant to provisions of Section 178(3) of the Companies
Act, 2013 and relevant guidelines of RBI, the Nomination and
Remuneration Committee (NRC) formulated the criteria for
determining qualifications, positive attributes and independence
of a Director to adhere the various provisions and guidelines as
detailed below:

• ‘Fit and Proper' criteria as per Dr. Ganguly Committee
Norms which stipulates age, qualification, experience, track
record, integrity, etc., and various circular instructions and
guidelines issued by Reserve Bank of India from time to time.

• Norms laid down by the Banking Regulation Act, 1949 as
amended from time to time which stipulates substantial
interest, sectorial representation as per Section 10A(2)
(a), restrictions as per Section 16 and 20 of the Banking
Regulation Act, 1949, etc.,

• Disqualification/Conflict of Interest of Directors, and other
norms as per the provisions of the Companies Act, 2013
and rules made thereunder from time to time.

• Criteria of Independence of a Director as per the provisions
of the Companies Act, 2013 and rules made thereunder and
other applicable provisions as amended from time to time.

• Applicable listing regulations as amended from time to time.

• Articles of Association of the Bank.

• Any other factors as the NRC may deem fit and in the best
interest of the Bank and its stakeholders.

The terms and conditions of appointment of Independent Director
are available on the website of the Bank at https://www.kvb.co.in/
docs/terms-and-conditions-of-appointment-of-independent-
directors.pdf. Your Bank's Nomination and Remuneration
Committee (NRC) oversees matters of succession planning of its

Directors, Senior Management and also Key Managerial Personnel
& the Board of the Bank and ensures that proper plans are put in
place for orderly succession of appointment to the Board and to
Senior Management of the Bank including KMPs.

Policy on remuneration of directors

The remuneration of Directors is governed by the Compensation
Policy of the Bank in terms of RBI circular no. DOR.Appt.
BC.No.23/29.67.001/2019-20 dated November 04, 2019,
which covers the aspects of remuneration payable to Board
of Directors, Whole Time Directors/ Chief Executive Officers/
Material Risk Takers, Key Managerial Personnels, Control Function
Staff and all other employees. This Policy is in tune with the
guidelines issued by the Reserve Bank of India, provisions of the
Companies Act, 2013 and the SEBI LODR amended from time
to time. Your Bank has adopted a board approved compensation
policy on the basis of the aforesaid regulatory guidelines and the
Policy is available on the Bank's website at https://www.kvb.co.in/
docs/investor-compensation-policy.pdf

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to Section 149(7) read with 149(6) of the Companies
Act, 2013 and Regulation 25(8) read with Regulation 16(1)(b)
of the SEBI LODR, all the Independent Directors of the Bank
has provided the necessary declarations that they meet the
criteria of independence laid down thereunder. As required under
Schedule IV of the Companies Act, 2013, Board has reviewed the
declarations submitted by the Independent Directors and opined
that, they fulfil all the conditions specified in the Companies Act,
2013 and SEBI LODR, and are independent of the management.

FAMILIARISATION PROGRAMMES OF INDEPENDENT
DIRECTORS

The Independent Directors along with all other Directors are
made familiar with their rights, roles and responsibilities in the
Bank at the time of appointment and also on a recurrent basis.
Details of familiarisation programmes attended by all Directors
including Independent Directors are provided at https://www.kvb.
co.in/docs/disclosure-on-familiarisation-programmes-for-board-
of-directors.pdf, pursuant to regulation 46 of SEBI LODR. Other
details on the same are also covered in Corporate Governance
Report forming part of Annual Report.

CORPORATE GOVERNANCE

The details on Corporate Governance standards followed by your
Bank and the relevant disclosures as stipulated under SEBI LODR
and the Companies Act, 2013 and the rules made thereunder
are deliberated in Corporate Governance Report that forms
part of this Annual Report. A certificate from M/s S.A.E. &

Associates LLP, Company Secretaries, confirming compliance to
the conditions of Corporate Governance as stipulated under SEBI
LODR is annexed to Corporate Governance Report which forms
part of this Annual Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

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

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

b) The Directors had selected such accounting policies and
applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Bank at the

end of the financial year and of the profit and loss of the
Bank for that period;

c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Bank and for preventing and
detecting fraud and other irregularities;

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

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

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

ACKNOWLEDGEMENTS

The Board of Directors takes this opportunity to convey their
gratitude to the Government of India, Reserve Bank of India,
Securities Exchange Board of India (SEBI), Ministry of Corporate
Affairs (MCA), National Stock Exchange of India Limited, BSE
Limited, Rating Agencies, Statutory Auditors, Secretarial
Auditors, various State Governments & Union Territories and
other regulatory authorities in India, for their valuable guidance
and strong support.

The Board expresses its sincere thanks to the Bank's valued
shareholders, debenture holders, esteemed customers,

all other stakeholders and well-wishers for their continued faith,
confidence, and patronage on us and look forward for their
continuous support.

Your Board expresses profound gratitude for the support extended
by the Auditors, Lawyers, and other financial institutions. The
Board also appreciates the entire staff for their sincere and
dedicated contributions to the overall performance of the Bank
during the year. The Board encourages their ongoing cooperation
in achieving the goals of the Bank in the years ahead.

For and on behalf of the Board of Directors

Dr Meena Hemchandra B Ramesh Babu

(DIN: 05337181) (DIN: 06900325)

Place: Karur Non-Executive Independent Managing Director & CEO

Date: July 18, 2024 (Part-time) Chairperson