D) Overseas Assets, NPAs and Revenue

The Bank does not have any overseas loan assets as on March 31, 2026 and March 31, 2025.

E) Divergence in asset classification and provisioning

In terms of the RBI guidelines banks are required to disclose the divergence in asset classification and provisioning consequent to RBI's annual supervisory process in their notes to accounts to the financial statements, wherever the additional provisioning assessed / additional gross NPAs identified by RBI exceeds the threshold specified by RBI. The threshold for provisioning is 5 per cent (Previous year 5 per cent) of the reported profit before provisions and contingencies for the reference period and that for additional gross NPAs is 5 per cent (Previous year 5 per cent) of the published incremental Gross NPAs for the reference period. Based on the above, there was no reportable divergence in asset classification and provisioning for NPAs in current year and previous year.

F) Transfer of Loan Exposures

Details of loans transferred & acquired excluding through Inter- Bank Participation Certificate (IBPC) during the year ended March 31, 2026 under the RBI Master Direction on "Commercial Banks - Transfer and Distribution of Credit Risk" Directions, 2025 dated November 28, 2025 are given below:

(

I

F) Unhedged Foreign Currency Exposure

During the year ended March 31, 2026, the Bank made provision of ? 1.02 crore (Previous Year: ? 0.16 crore) towards unhedged foreign currency exposure. As on March 31, 2026, the Bank held cumulative provision towards un-hedged foreign currency exposure of ? 12.58 crore (Previous Year: ? 11.56 crore).

As on March 31, 2026, the Bank is required to provide additional Capital of ? 122.34 crore (Previous Year: ? 90.17 crore) towards borrowers having un-hedged foreign currency exposures in accordance with RBI guidelines and Bank's policy.

G) Intra Group Exposures

The Bank did not have any intra group exposure during the year ended March 31, 2026 and March 31, 2025.

H) Factoring Exposures

The Bank did not have any factoring exposure during the year ended March 31, 2026 and March 31, 2025.

D) New Labour Codes

On November 21, 2025, the Government of India notified the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively, the ""Labour Codes""), consolidating 29 existing labour laws. The Ministry of Labour & Employment has published draft Central Rules and FAQs to facilitate assessment of the financial impact arising from changes in the regulatory framework.

As per the actuarial valuation, the management has assessed and disclosed the incremental impact of the Labour Codes on its employee benefit obligations based on the information available as on date, in a manner consistent with the guidance issued by the Institute of Chartered Accountants of India (""ICAI""). Based on the preliminary assessment, the Bank has estimated and recognized an additional liability of ? 121.39 crore (Previous Year: NIL) towards past service cost on gratuity which is included under ""Payments to and provisions for employees"" during the year ended March 31, 2026. The incremental impact primarily arises from changes in the definition of wages, resulting in an increase in gratuity.

The Bank continues to monitor the finalisation of Central and State rules and upon clarifications / notification issued by the Government in relation to the Labour Codes will be appropriately accounted for.

E) Disclosure on amortisation of expenditure on account of enhancement in family pension of employees of banks

The bank has not incurred any expenditure on account of enhancement in family pension of employees of bank during the year ended March 31, 2026 and March 31, 2025

18.11 Segment Reporting

A) Segment Identification

Pursuant to the guidelines issued by RBI on AS 17 - Segment Reporting, the following business segments have been reported:

i) Treasury:

Treasury operations include investments in sovereign securities and trading operations. The Treasury segment also includes the central funding unit.

ii) Retail banking:

Includes lending to individuals/small businesses through the branch network and other delivery channels subject to the orientation, nature of product, granularity of the exposure and low value of individual exposure thereof. It also includes liability products, card services, internet banking, mobile banking, ATM services and NRI services. All deposits sourced by branches are classified in retail category.

iii) Corporate/Wholesale Banking:

Includes corporate relationships not included under Retail Banking.

iv) Other Banking Business:

Include para banking activities like third party product distribution and other banking transaction not covered under any of the above three segments.

v) Unallocated:

Includes items such as tax paid in advance net of provision, deferred tax and provisions to the extent reckoned at the entity level

Income, expenses, assets and liabilities are either specifically identified with individual segments or are allocated to segments on a systematic basis.

The liabilities of the Bank are first used by the units generating the same. Any excess liabilities of the units are pooled to central funding unit (Treasury). Treasury then lends these funds to other units at appropriate rates.

The transfer pricing mechanism of the Bank is periodically reviewed. The segment results are determined based on the transfer pricing mechanism prevailing for the respective reporting periods.

Revenues of the Treasury segment primarily consist of fees and gains or losses from trading operations and interest income on the investment portfolio. The principal expenses of the segment consist of interest expense on funds borrowed from external sources and other internal segments, premises expenses, personnel costs, other direct overheads and allocated expenses.

Revenues of the Corporate/Wholesale Banking segment consist of interest and fees earned on loans given to customers falling under this segment and fees arising from these. Revenues of the Retail Banking segment are derived from interest earned on loans classified under this segment, fees for banking services and ATM interchange fees. Expenses of the Corporate/Wholesale Banking and Retail Banking segments primarily comprise interest expense on deposits and funds borrowed from other internal segments, infrastructure and premises expenses for operating the branch network and other delivery channels, personnel costs, other direct overheads and allocated expenses.

Segment income includes earnings from external customers and from funds transferred to the other segments. Segment result includes revenue as reduced by interest expense and operating expenses and provisions, if any, for that segment. Segment-wise income and expenses include certain allocations. Inter segment interest income and interest expense represent the transfer price received from and paid as per the transfer pricing mechanism presently followed by the Bank.

18.15 Liability for Operating Leases

The Banking Units premises are generally rented on cancellable terms for less than twelve months with no escalation clause and renewable at the option of the Company. The Head office and the Bank Branches office premises are obtained on non- cancellable lease terms. Lease payment during the year are charged in the profit & loss account.

The amount of rent expenses included in the Profit & Loss account towards operating leases aggregate to ? 394.12 crore (Previous Year: ? 364.80 crore).

18.16 Small and Micro Industries

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported cases of delays in payments to micro and small enterprises or of interest payments due to delays in such payments during the years ended March 31, 2026 and March 31, 2025. The above is based on the information available with the Bank which has been relied upon by the auditors.

18.17 Description of contingent liabilities

i) Claims against the Bank not acknowledged as debts

An amount of ? 402.36 crore (Previous Year: ? 280.77 crore) is outstanding as at March 31, 2026, as claims against the Bank not acknowledged as Debts including ? 239.97 crore (Previous Year: ? 162.90 crore) being in the nature of a contingent liability on account of proceedings pending with Tax authorities. The Bank is a party to various taxation matters in respect of which appeals are pending and various legal proceedings in the normal course of business. The Bank has reviewed and classified these items as possible obligations based on legal opinion/judicial precedents/assessment and does not expect the outcome of these proceedings to have a materially adverse effect on the Bank's Financial Statements.

ii) Liability on account of Forward Exchange contracts

The Bank has entered into foreign exchange contracts with interbank Counterparties. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. The forward exchange contracts that are not intended for trading and are entered into to establish the amount of reporting currency required or available at the settlement date of a transaction are effectively valued at closing spot rate. The premium or discount arising on inception of such forward exchange contracts is amortised over the life of the contract as interest Expense / income. The amount in contingent liability represents notional outstanding principal amount

iii) Guarantees given on behalf of constituents, Acceptances, Endorsements and Others

An amount of ? 4,276.55 crore (Previous Year: ? 2,008.19 crore) is outstanding as at March 31, 2026. As part of its commercial banking activity, the Bank issues documentary credit and guarantees on behalf of its customers. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfil its financial or performance obligations.

iv) Currency swaps & interest rate swaps

This item represents the notional principal amount of various derivative instruments which the Bank undertakes in its normal course of business. The Bank undertakes these contracts to manage its own interest rate and foreign exchange positions.

v) Other items (including Capital Commitments)

An amount of ? 244.26 crore (Previous Year: ? 187.28 crore) is outstanding as at March 31, 2026. These include:

a) Liability in respect of capital commitments relating to fixed assets amounting to ? 243.53 crore (Previous Year: ? 186.86 crore)

b) Amount transferred to RBI under Depositor Education and Awareness Fund (DEA Fund).

18.19 Disclosures on Remuneration Qualitative Disclosures

A) Information relating to the composition and mandate of the Remuneration Committee.

The Bank's Nomination and Remuneration Committee (NRC) oversees the framing, review and implementation of the Compensation Policy on behalf of the Board of Directors. The NRC reviews the policy at least once a year to ensure that the reward design is aligned to industry best practices and is consistent with effective risk management and long term business interests of the Bank. The NRC works in close coordination with the Risk Management Committee of the Bank, to achieve the effective alignment between remuneration and risks.

As on March 31, 2026 the NRC comprises of the following directors:

Mr. Vijay Nautamlal Bhatt-Chairman of the committee

Mr. NVP Tendulkar

Mr. Subrata Dutta Gupta

The NRC functions with the following main objectives:

i) To identify persons who are qualified to become directors in accordance with the criteria laid down, recommend to the Board their appointment, re-appointment or removal and to carry out evaluation of every Director's performance;

vi) To review and recommend to the Board, the succession policy at the level of Managing Director & CEO, other WTDs, senior management one level below the Board and key roles.

B) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy

Objectives of the Remuneration Policy

The Compensation Policy reflects the Bank's objectives for good corporate governance as well as sustained and long-term value creation for stakeholders. The aims of the Bank's remuneration framework are to:

i) Attract, motivate and retain people with requisite skill, experience and ability to deliver the Bank's strategy;

ii) Create an alignment and balance between the rewards and risk exposure of shareholders and interests of employees;

iii) Link rewards to creation of long term sustainable shareholder value consistent with strategic goals and appropriate risk management; and

iv) Encourage behaviour consistent with the Bank's values and principles.

v) Support appropriate conduct and meritocratic culture through differentiated performance rewards.

To achieve the above objectives, the philosophy adopted by the Bank is as follows:

i) Market referenced: offer employees competitive salary, achieved through benchmarking with peer groups.

ii) Making fixed salary the main remuneration component.

iii) Ensure that jobs of similar internal value are grouped and pegged within a range guided by market benchmarked jobs.

iv) Risk Adjusted: By integrating non-financial considerations relating to conduct in performance assessments, employing proper mix of compensation elements and aligning

compensation incentives to risk outcomes and factoring the time horizon of risks.

v) Focus on 'Total rewards', all aspects of compensation, rewards and well defined benefits, including rewarding work environment and personal development.

vi) The focus will be to ensure that the Bank is competitive in its overall salary offer to its employees without being excessively expensive for the Bank.

The compensation structure for the MD & CEO also mirrors the Bank's philosophy of aligning with the principles of sound compensation practices to ensure:

i) Effective and independent governance of

compensation.

ii) Effective alignment of compensation with

prudent risk taking.

iii) Effective supervisory oversight and engagement by stakeholders.

Design & Structure of Remuneration process

The total compensation is a prudent mix of fixed remuneration and performance-based variable

remuneration.

The key remuneration elements are:

1) Fixed Pay

2) Discretionary Performance-based Variable

Remuneration

The Bank ensures that the fixed pay element is reasonable, taking into account the market rates and trends. The fixed pay is reviewed annually using market intelligence provided by a leading global performance/ reward consulting and benchmarking firm for financial services industry to ensure that the Bank remains competitive in marketplace and that the Bank is able to attract and retain best talent. The level of fixed pay shall be sufficient enough in order to discourage inappropriate risk-taking.

Performance-based variable remuneration may comprise cash bonus, stock linked instruments, and is awarded by ensuring:

i) an appropriate balance between fixed and performance-based components;

ii) that the fixed component represents a higher proportion of the total remuneration;

iii) that the performance-based component reflects the risk underlying the achieved result;

iv) that a substantial part of the performance-based component may be deferred;

v) that no hedging of deferred shares takes place;

Presently, the bank utilises only two form of performance based variable remuneration, viz.,cash bonus, ESOP, as referred in note no 18.32 is linked to continuous service with the Bank.

The compensation policy of the Bank is reviewed by the NRC and approved by the Board of Directors. The NRC oversees the implementation of the policy and reviews the fixed pay increases, the organizational performance threshold for bonus to be paid, cash bonus and deferred variable remuneration.

C) Description of the ways in which current and future risks are taken into account in the remuneration process

The MD & CEO, employees in the grades of SVPs and above and employees engaged in the functions of Risk Control and Compliance are included in the policy of risk alignment of compensation.

The alignment of compensation to prudent risk taking is ensured through the following:

i) Structure of remuneration is such that a significant part of performance based variable remuneration is deferred.

ii) Performance hurdles includes financial and nonfinancial parameters, ensuring compensation is aligned to both.

iii) Fixed Salary is reasonable and sufficient, thereby discouraging inappropriate risk taking.

iv) Annual Bonus Plan is managed with an independent governance framework.

v) Variable remuneration awards are conditional, discretionary and contingent upon a sustainable and risk-adjusted performance. They are

therefore capable of forfeiture or reduction at the Bank's discretion.

vi) For employees included in the policy of risk alignment of compensation, NRC has the discretion to apply malus and clawback - expost risk adjustment, allowing the Bank to adjust previously awarded remuneration to take account of subsequent performance and potential risk outcomes and thus enabling to recoup variable pay in the event of a negative contribution.

Deferral of Variable Pay

To ensure that risk measures are not focused only on the achievement of short term goals, variable payout is deferred, if it exceeds 50% of the fixed pay.

The Bank's compensation policy aims to ensure that both ex-ante estimates and ex-post outcomes of risk affect payoffs; so that one or the other, can better address the various situations or risks.

D) Description of ways in which the Bank seeks to link performance, during a performance measurement period with levels of remuneration.

The Bank has a performance measurement framework in place to assess the achievements of the organization as a whole, its business lines and organizational units as well as individual employees. In order to maximise the incentive to deliver adequate performance and to take into account any risks of the business activities, the Bank seeks to closely link remuneration outcomes with performance and risk outcomes. Accordingly, the Bank's performance management and compensation philosophy is designed in a manner to help achieve the Bank's business objectives.

The performance management system in the Bank is aligned to the balanced scorecard approach. The goal setting process helps individuals to have clarity on their roles and align their profiles in line with the broad organization strategy. Both quantitative / financial and qualitative / non-financial performance measures are considered. The qualitative or non-financial measures include customer service, adherence to risk and compliance standards, behaviour and values such as accountability, team work, etc., which builds a culture conducive to sustainable business performance.

The performance appraisal process starts with the employee conducting self-appraisal followed by the assessment of the supervisor via appraisal feedback and discussion.

Individual fixed pay increases and variable remuneration are based on the final performance ratings. In addition, the fixed pay increase is also influenced by an employee's position in the salary range and relevant market salaries. Performance related variable compensation is linked to corporate performance, business performance and individual performance. The performance ratings based bonus distribution matrix is reviewed by the NRC.

Employees engaged in all control functions including Compliance and Risk do not carry business profit targets in their goal sheets and hence are compensated based on their achievement of key result areas as per the balance score card. The aim is to ensure that the remuneration system and outcomes relating to such control functions maintain the independence of the function and Bank's robust risk management framework. Accordingly, for the control functions, the variable pay is conservative to promote prudent risk management behaviour and the 'pay mix' is skewed towards fixed pay.

In the case of performance evaluation of the Managing Director and Chief Executive Officer of the Bank, factors such as financial performance measures, cost management initiatives, other strategic initiatives, prudential risk and compliance management, recognition and awards to the Bank, etc., is taken into account, which may vary from year to year depending on the Bank's strategic priorities. Based on the inputs from NRC, the Board reviews the performance and recommends the rate of bonus to be paid, and the increments for the MD & CEO, for regulatory approval in terms of Section 35B of the Banking Regulation Act, 1949 (B.R. Act, 1949).

E) Bank's policy on deferral and vesting of variable remuneration and bank's policy and criteria for adjusting deferred remuneration before vesting and after vesting.

In terms of RBI guidelines, the Compensation Policy specifically addresses the following categories of employees:

Category I: Managing Director &Chief Executive Officer / Whole Time Directors / Material Risk Takers

Category II: Risk Control and Compliance Staff

Category III: Other Categories of Staff (employees receiving share-linked variable pay)

The following principles are applied for grant and

deferral of performance-based variable remuneration

for the above categories of employees.

Category I

i) Variable pay shall not exceed 3 (three) times the annual fixed pay for MD & CEO and WTDs.

ii) Variable pay shall not exceed 2.5 (two and half) times the annual fixed pay for MRTs.

iii) At minimum, variable pay shall be equal to the annual fixed pay.

iv) If an executive is barred by regulation/ statute to receive grant of share-linked instruments, the variable pay shall be capped at 1.5 (one and half) times the annual fixed pay, but will be more than 50% of the annual fixed pay

v) If variable pay is up to 2 (two) times the annual fixed pay, then at least 50% of the variable pay shall be in the form of share-linked instruments (i.e. non-cash).

vi) If variable pay is between 2 (two) to 3 (three) times the annual fixed pay, then at least two-thirds of the variable pay shall be in the form of share-linked instruments (i.e. non-cash).

vii) At least 60% of total variable pay shall be deferred including at least 50% of cash-based variable pay. However, in cases where the cash component of variable pay is under INR 25 lakh, the Bank at its discretion, may not necessarily have deferral requirements.

viii) Deferral of cash based variable pay shall be for 3 years on pro-rata yearly basis (annual vesting).

ix) Deferral of share-linked variable pay shall be for 3 years on pro-rata yearly basis (annual vesting).

x) In case the employee exits the organization before the vesting of all three parts, the remaining deferred cash based variable pay will not be paid.

Category II

i) The mix of Fixed Pay and Variable remuneration will be weighed towards Fixed Pay.

ii) Variable pay shall not exceed the annual fixed pay.

iii) At least 40% of the variable pay shall be in the form of share-linked instruments (i.e. non-cash).

iv) Deferral of share-linked variable pay shall be for 4 years on pro-rata yearly basis (annual vesting).

v) The compensation will be commensurate to their key role in the Bank.

Category III

i) Variable Remuneration will be as per the NRC approved pay-out levels in terms of performance, grade and role matrix.

ii) Variable pay shall not exceed the annual fixed pay.

iii) At least 50% of the variable pay shall be in the form of share-linked instruments (i.e. non-cash).

iv) Deferral of share-linked variable pay shall be for 4 years on pro-rata yearly basis (annual vesting).

For the three categories of employees mentioned hereinabove, the awarded performance based variable pay shall be subject to in-year adjustment, malus or clawback as decided by the NRC, in the event of negative contribution of the Bank and / or relevant line of business and in material cases of detrimental conduct of individual or business.

Negative contribution of the Bank and / or relevant line of business is defined as:

Conduct related:

i) If an employee engages in certain detrimental conduct, including mis-selling practices, manipulation of interest rate benchmarks, illegal activity, breach of a fiduciary duty, etc. that causes material financial or reputational harm to the Bank.

ii) If the award was based on a material misrepresentation by the employee.

iii) If there is reasonable evidence of employee malfeasance and breach of integrity inviting disciplinary actions.

iv) Violation of Anti Hedging and Anti Pledging Policy

or Code of Conduct for Prevention of Insider Trading.

Risk related and others:

i) If the awarded performance-based variable pay was granted on a deliberately erroneous foundation or an incorrect decision made due to gross negligence not considered as errors of judgement.

ii) If the employee who is reasonably expected to be aware of the failure, misconduct or weakness in approach that contributed to the failure, improperly or with gross negligence failed to identify, assess, report or escalate in a timely manner.

iii) If the performance, decisions or actions taken leads to the Bank or the relevant business unit suffering a significant material downturn in its financial performance.

iv) If the RBI assessed divergence in the Bank's provisioning for Non-Performing Assets (NPAs) or asset classification exceeds the prescribed threshold for public disclosure, the bank shall not pay the unvested portion of the variable compensation for the assessment year under malus clause. Further, in such a situation, there shall not be any increase in variable pay for the assessment year. In case the bank's post assessment Gross NPAs are less than 2.0%, these restrictions will apply only if the criteria for public disclosure are triggered either on account of divergence in provisioning or both provisioning and asset classification.

v) In the event of a material restatement, correction or amendment of the Bank's financial results for the relevant period.

F) Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the bank utilizes and the rationale for using these different forms.

The Bank presently utilizes multiple form of variable remuneration, viz., cash bonus and ESOPs which is linked to corporate performance, business performance and individual performance ensuring differential pay based on the performance.

18.26 Green Deposits raised by the bank

There has been no green deposits during the year ended March 31, 2026 and March 31, 2025.

18.27 Disclosure on Liquidity Coverage Ratio (A) Qualitative disclosure

The Bank has adopted the Basel III framework on liquidity standards as prescribed by RBI and has put in place requisite systems and processes to enable periodical computation and reporting of the Liquidity Coverage Ratio (LCR). The Risk department computes the LCR and reports the same to the Asset Liability Management Committee (ALCO) every month for review.

The Bank follows the criteria laid down by RBI for calculation of High Quality Liquid Assets (HQLA),gross outflows and inflows within the next 30-day period. HQLA predominantly comprises Government securities in excess of minimum SLR requirement viz. Treasury Bills, Central and State Government securities and excess of minimum cash reserve ratio (CRR).

The Board of Directors has the overall responsibility for management of liquidity risk. The Board at overall level decides the strategy, policies and procedures of the bank to manage liquidity risk in accordance with the liquidity risk tolerance/limits. The Board has constituted Risk Management Committee, which reports to the Board, and consist of Managing Director and certain other Board Members. The Committee is responsible for evaluating the overall risks faced by the bank including liquidity risk.

(iv) Disclosures on risk exposure in derivatives (a) Qualitative disclosures: Derivatives

Derivatives are financial instruments whose characteristics are derived from underlying parameters like interest rates or foreign exchange rates. These include forward contracts, swaps, etc. These transactions may expose the Bank to risks primarily in the nature of market and credit risk. The following sections outline the nature and terms of the derivative transactions undertaken by the Bank.

Interest Rate swaps undertaken by the Bank involve the exchange of interest obligations with a counterparty for a specified period without exchanging the underlying principal i.e., notional amount. The Bank has undertaken derivative transactions in Rupee Interest Rate Swaps (OIS) only on the Astroid platform of CCIL for proprietary trading.

Foreign Exchange forward contracts and Foreign Exchange Swaps are agreements to buy /sell/exchange fixed amounts of currency against another currency at an agreed exchange rate on Spot / forward date. These instruments are carried at fair value.

The Bank has adopted the following mechanism for managing risks arising out of the derivative transactions.

The derivative transactions are governed by the Investment Policy and Market Risk Management Policy of the Bank as well as by the extant RBI guidelines. The risk limits are set up and actual exposures are monitored vis-a-vis the limits allocated. These limits are set up taking into account market volatility, risk appetite, business strategy and management experience. Risk limits are in place for risk parameters viz. Value at Risk (VaR), Maximum tenor, deal size and Price Value of a Basis Point (PVBP). Actual positions are monitored against these limits on a daily basis and breaches if any are reported promptly.

The Treasury has entered into derivative transactions with interbank counterparties. The Bank has an independent backoffice and mid-office as per regulatory guidelines. The MTM position of the derivative portfolio is monitored on a daily basis. The risk profile of the outstanding portfolio is reviewed by the Board at regular intervals.

Derivative transactions such as foreign exchange forward contracts, foreign exchange swap and Interest rate swaps outstanding as at the Balance Sheet date and held for trading, are fair valued. The resulting profit or loss on valuation is recognized in the Profit and Loss Account. Derivatives which are not intended for trading such as, Foreign Exchange forward contracts and Forex swaps and which are outstanding at balance sheet date, are fair valued at the FEDAI closing rate. The premium or discount arising at the inception of such Forward contracts and Foreign Exchange swaps are amortised as expense or income over the life of the contract. Derivatives are classified as assets when the fair value is positive (positive marked to market value) or as liabilities when the fair value is negative (negative marked to market value). Bank has placed margin/collateral to Central Counterparty (CCIL) for various asset classes, wherever applicable.

18.32 Employee Stock Option Scheme (ESOS)

On July 26, 2017 the board of directors approved the Bandhan Bank Employee Stock Option Plan Series 1 for issue of stock options to eligible employees and directors of the Bank.

The Shareholders of the Bank at the meeting held on 23rd November, 2017 has approved the Employee Stock Option Plan Series 1 and the grant of Employee Stock Option to the employees of the Bank. The said approval accords the Board of Directors of the Bank or any Committee including the Nomination and Remuneration Committee, which the Board has constituted, to create, offer, and grant at any time to permanent employees of the Bank, including any Director of the Bank, whether whole-time or otherwise but excluding Promoter(s), Independent Directors and Directors holding directly or indirectly more than 10% of the outstanding equity shares, employee stock options from time to time in one or more tranches.

This plan was framed in accordance with the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time to time and as applicable at the time of the grant. The accounting for the stock options has been in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 to the extent applicable.

Employee Stock Option Plan Series 1 provides for the issuance of options at the recommendation of the Nomination and Remuneration Committee of the Board ('NRC') at the closing price on the working day immediately preceding the date when options are granted. The closing price of the Bank's equity share on an Indian stock exchange with the highest trading volume as of the working day preceding the date of grant set forth by the NRC at the time of grant. The period in which the options may be exercised cannot exceed five years from date of expiry of vesting period. However, if the participant's employment terminates due to retirement (including pursuant to any early/ voluntary retirement scheme), the whole of the unvested options shall vest on the first vesting date relating to the said grant, immediately following the date of superannuation. During the years ended March 31, 2026 and March 31, 2025, few modifications were made to the terms and conditions of ESOPs as approved by the NRC.

18.34 Disclosure under Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014

As part of the normal banking business, the Bank grants loans and advances to its borrowers with permission to lend/invest or provide guarantee/security in other entities identified by such borrowers or on the basis of security/guarantee provided by the co-borrower. Similarly, the Bank may accept funds from its customers, who may instruct the Bank to lend/invest/provide guarantee or security or the like against such deposit in other entities identified by such customers. These transactions are part of Bank's normal banking business, which is conducted after exercising proper due diligence including adherence to "Know Your Customer" guidelines.

Other than the nature of transactions described above:

• No funds have been advanced or loaned or invested by the Bank to or in any other person(s) or entity(ies) ("Intermediaries") with the understanding that the Intermediary shall lend or invest in party identified by or on behalf of the Bank (Ultimate Beneficiaries).

• The Bank has not received any fund from any party(s) (Funding Party) with the understanding that the Bank shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Bank ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

18.35 Disclosure of Items that exceeds one percent under respective categories:

Other expenditure includes IT Operating expenses amounting to ? 440.60 crore (Previous Year: ? 277.20 crore) and premium paid on purchase of Priority Sector Lending Certificate (PSLC) amounting to ? 353.10 crore (Previous Year: ? 239.14 crore) exceeding 1% of the total income of the Bank.

18.36 Other Assets includes Investment in RIDF (Rural Infrastructure Development Fund) amounting to ? 2,774.15 crore (Previous Year: ? 4,499.88 crore)

18.37 Remuneration paid to the Non-Executive Directors (including sitting fees) during the year ended March 31, 2026 amounting to ? 5.25 crore (Previous Year: ? 5.89 crore).

18.38 Accounting Software Used for maintenance of Books of Accounts

As per the requirements of rule 3(1) of the Companies (Accounts) Rules 2014 the Bank uses only such accounting software(s) for maintaining its books of account that have a feature of recording audit trail of each and every transaction creating an edit log of each change made in the books of account along with the date when such changes were made within such accounting software. This feature of recording audit trail has operated throughout the year and was not disabled, tampered with during the year and audit trail has also been preserved in accordance with statutory record retention requirements, except-

1) The audit trail was not enabled throughout the year for certain accounting masters in respect of two accounting software(s).

2) The audit trail configured at database-level logs record only modified values in respect of two accounting software(s).

The Bank has preserved the audit trail, to the extent maintained in the prior years, as per the statutory requirements for record retention except in relation to certain software and/or databases for which the audit trail feature was not enabled.

18.39 Provision for credit card and debit card reward points

Reward points on cards are accounted for based on value per point after taking into account the probability of redemption of such reward points. The Bank is carrying a provision of ? 8.05 crore in FY 25-26 (Previous Year: ? 5.85 crore) in respect of reward points on debit & credit cards as per the actuary report.

18.44 Implementation of IFRS converged Indian Accounting Standards (Ind AS)

The RBI issued a circular in February, 2016 requiring banks to implement Indian Accounting Standards ('Ind AS') and prepare proforma Ind AS financial statements with effect from April 01, 2018. In line with the RBI guidelines on Ind AS implementation, the Bank had constituted a Steering Committee comprising members from the concerned functional areas. However, the RBI in its press release issued on March 22, 2019 has deferred the applicability of Ind AS for Scheduled Commercial Banks until further notice.

As advised by the RBI, the Bank has been submitting proforma Ind AS financial statements to RBI periodically.

The RBI, on January 16, 2023, released a discussion paper on the Expected Loss (EL) based approach for loan loss provisioning by banks to formulate a principle-based guidelines supplemented by regulatory backstops wherever necessary. Further, the RBI released draft directions titled "Reserve Bank of India (Scheduled Commercial Banks-Asset Classification, Provisioning and Income Recognition) Directions, 2025 - Draft for Comments".

Accordingly, the Bank has made a diagnostic study to identify gaps and the requisite process and system changes required for Ind AS implementation and is in the process of implementing necessary changes in its IT system and other processes. The Bank is regularly conducting workshops and training for its staff.

Subsequently, on April 27 2026, the RBI has notified "Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026" effective from April 1, 2027, introducing Expected Credit Loss (ECL) and Effective Interest Rate (EIR) Method. The Bank is currently reviewing the latest directions to identify the process and system level changes required for implementation.

18.45 The Bank has applied its significant accounting policies in the preparation of these financial statements consistent with those followed in the annual financial statements for the year ended March 31, 2025. Any circular / direction issued by RBI is implemented prospectively when it becomes applicable.

18.46 Pursuant to a review of income tax positions relating to earlier years, it was identified that certain claims / taxable income had inadvertently not been considered in the respective income tax returns. Based on expert opinion, appropriate claims / representations have since been filed with the tax authorities and the management is confident regarding admissibility of such additional claims.

Accordingly, Income Tax recoverable amounting to ? 460.10 crore (net) has been recognised during the year, with a corresponding adjustment to deferred tax assets. Consequently, there is no net impact on the Profit and Loss Account.

18.47 Previous year figures have been regrouped/reclassified, wherever necessary, to conform to current year classification.