4.13. Provisions, contingent liabilities and contingent
assets
The Company creates a provision when there is a present
obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate
can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the
consideration required to settle the present obligation
at the reporting date, taking into account the risks and
uncertainties surrounding the obligation.
Provisions are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of resources would be
required to settle the obligation, the provision is reversed.
A contingent liability is disclosed in respect of a possible
obligation that arise from past events whose existence
will be confirmed only on the occurrence or non¬
occurrence of one or more uncertain future events not
wholly within the control of the Company or from a
present obligation that arises from past events which are
not recognised because:
a) it is not probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation; or
b) the amount of the obligation cannot be measured
with sufficient reliability
Contingent assets are not recognised in the financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income
are recognised in the period in which the change occurs.
4.14. Provision for reward points redemption
The Company has a reward points program which allows
card members to earn points based on spends through
the cards that can be redeemed for cash, gift vouchers
and retail merchandize. The Company makes payments
to its reward partners when card members redeem their
points and creates provisions , based on the actuarial
valuation by an independent valuer, to cover the cost
of future reward redemptions. The liability for reward
points outstanding as at the year-end and expected to
be redeemed in the future is estimated based on an
actuarial valuation.
4.15. Cash and Cash Equivalent
Cash and Cash equivalents comprise cash balances on
hand, cash balances in bank, funds in transit lying in nodal
account of intermediaries/payment gateway aggregators
and highly liquid investments with original maturity period
of three months or less from date of investment that
are readily convertible to known of cash and which are
subject to an insignificant risk of change in value.
4.16. Critical accounting judgements and key sources
of estimation uncertainty
(I) Revenue Recognition: Application of the various
accounting principles in Ind AS 115 related to the
measurement and recognition of revenue requires
us to make judgments and estimates such as
identifying performance obligations, wherein the
Company provides multiple services as part of the
contract. Specifically, complex arrangements with
nonstandard terms and conditions may require
significant contract interpretation to determine the
appropriate accounting. The Company consider
various factors in estimating transaction volumes
and estimated marketing activities target fulfilment,
expected behavioural life of card etc.
(II) Business development incentive: Estimation of
business development incentives relies on forecasts
of payments volume, card issuance etc. Performance
is estimated using, transactional information -
historical and projected information and involves
certain degree of future estimation.
(III) Card life: Estimation of card life relies on behavioural
life trend established basis past customer behaviour
/ observed life cycle at a portfolio level.
(IV) Differences between actual results and our estimates
are adjusted in the period of actual performance
(V) Management is required to assess the probability
of loss and amount of such loss with respect
to legal proceedings, if any, in preparing of
financial statements
(VI) Property, Plant and equipment: The Company
reviews the estimated useful lives of property,
plant and equipment at the end of each reporting
period. The lives are based on historical experience
with similar assets as well as anticipation of future
events, which may impact their life, such as change
in technology.
(VII) Impairment of financial assets: A number of
significant judgements are also required in applying
the accounting requirements for measuring ECL
such as;
• Establishing groups of similar financial assets
for the purposes of measuring ECL (Portfolio
segmentation)
• Defining default
• Determining criteria for significant increase in
credit risk.
• Choosing appropriate models and assumptions
for measurement of ECL.
• Use of significant judgement in estimating future
economic scenario to calculate management
overlay over base ECL model.
(VIII) Fair value measurements and valuation processes
• I n estimating the fair value of an asset or a
liability, the Company uses market-observable
data to the extent it is available. Where Level 1
inputs are not available, the Company engages
third party qualified valuers to perform the
valuation. The management works closely with
the qualified external valuers to establish the
appropriate valuation techniques and inputs to
the model.
• I nformation about the valuation techniques
and inputs used in determining the fair value
of various assets and liabilities are disclosed
in note 36.
• All assets and liabilities for which fair value
is measured in the financial statements are
categorised within the fair value hierarchy,
described as follows, based on the lowest level.
• Input that is significant to the fair value
measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.
• For assets and liabilities that are recognised in
the financial statements on a recurring basis,
the Company determines whether transfers
have occurred between levels in the hierarchy
by re-assessing categorisation (based on the
lowest level input that is significant to the fair
value measurement as a whole) at the end of
each reporting period.
(IX) Cost of reward points: The cost of reward point
includes the cost of future reward redemption which
is determined using actuarial valuations. An actuarial
valuation involves making various assumptions that
may differ from actual developments in the future.
(X) Defined Benefit Plans (Gratuity): The cost of the
defined benefit gratuity plan and the present value
of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate; future
salary increases and mortality rates. Due to the
complexities involved in the valuation and its long¬
term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
(XI) Lease: The Company evaluates if an arrangement
qualifies to be a lease as per the requirements of Ind
AS 116. Identification of a lease requires significant
judgment. The Company uses significant judgement
in assessing the lease term (including anticipated
renewals) and the applicable discount rate.
The Company determines the lease term as the non¬
cancellable period of a lease, together with both periods
covered by an option to extend the lease if the Company
is reasonably certain to exercise that option; and periods
covered by an option to terminate the lease if the Company
is reasonably certain not to exercise that option. In
assessing whether the Company is reasonably certain to
exercise an option to extend a lease, or not to exercise an
option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for
the Company to exercise the option to extend the lease,
or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in
the non-cancellable period of a lease. The discount rate
is generally based on the incremental borrowing rate
specific to the lease being evaluated or for a portfolio of
leases with similar characteristics.
4.17. Card plastic Cost
Card plastic procured is specifically designed for issuance
of cards by the Company. Owing to specific use, only
for the Company, the net realizable value of card plastic
is considered as immaterial, hence the purchase cost
of card plastic is recognized as expense in the period
of procurement.
Disaggregation of Revenue
Disaggregation of revenue is not required as the Company’s primary business is to provide credit card facility and interest on
loans which is governed by Ind AS 109.
Transaction price allocated to the remaining performance obligations
The Company applies practical expedient in Ind AS 115 and does not disclose information about remaining performance obligations
wherein the Company has a right to consideration from a customer in an amount that directly corresponds with the value to the
customer of entity’s performance till date.
The Company’s performance periods for its incentive arrangements with network partners are typically long-term in nature
(typically ranging from 3-5 years). Consideration is variable based upon the number of transactions processed and volume of
activity on the cards. As at March 31,2026, the estimated aggregate consideration allocated to unsatisfied performance obligations
for these other value-added services is ' 30.14 Crores (previous year: ' 12.54 Crores)
Contract costs
The contract cost primarily relates to:
• I ncremental costs that are directly linked to obtaining a new contract with a customer and which would not have been
incurred if the contract had not been obtained, are recognised in the statement of profit and loss over behavioral life of
the portfolio.
• A part of sales promotion expense, fees and commission expense and advertisement expenses which are in the nature of
card value proposition offered to customers, etc and are directly related to selling card membership to new customers are
deferred over the membership period consisting of 12 months.
35 CAPITAL MANAGEMENT
Capital risk is the risk that the Company has insufficient capital resources to meet the minimum regulatory requirements to
support its credit rating and to support its growth and strategic options. The Company’s capital plans are deployed with the
objective of maintaining capital that is adequate in quantity and quality to support the Company’s risk profile, regulatory
and business needs.Asset Liability Management Committee [ALCO] is responsible for ensuring the effective management of
capital risk. Capital risk is measured and monitored using limits set out in in relation to the capital and leverage, all of which
are calculated in accordance with relevant regulatory requirements.
(A) Regulated capital:
Tier 1 capital consists of Equity share capital, Reserve & Surplus (netted off Intangibles).
Tier 2 capital consists of Provision for Standard Assets & Subordinated debts as per RBI Prudential norms for NBFCs.
The Company makes all efforts to comply with the above requirements. Further, the Company has complied with all
externally imposed capital requirements and internal and external stress testing requirements.
The Board of Directors approved the Dividend Distribution Policy which is in line with the regulatory requirement
and guidelines as prescribed by RBI from time to time. The policy focuses on the internal and external factors (which
includes long term growth plan, cash flow position, auditors’ qualification, supervisory findings of RBI on divergence
in classification and provisioning in Stage 3 assets, prevalent economic conditions and market practices etc) which the
Board shall consider before declaring the dividend.
(C) Interim dividend on equity shares declared: During the year ended March 31, 2026, the Board of Directors have
declared interim dividend of 25% (' 2.50 per equity share of the face value of ' 10.00) for the financial year 2025-26
in accordance with Section 123(3) of the Companies Act, 2013, as amended. (March 31,2025 - ' 2.50 per equity share
of the face value of ' 10.00)
Hierarchy of Fair value measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly
or indirectly;
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.
37 FINANCIAL RISK MANAGEMENT37.1 Financial risk factors
The Company has exposure to the following types of risks from financial instruments:
• Market risk;
• Credit risk; and
• Liquidity risk;
The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Risk Management Committee manages the risk management framework and risk appetite of the
Company. The Board of Directors has established the Enterprise Risk Management Committee (ERMC) which is responsible
for approving and monitoring Company’s risk management framework. The risk management policies risk, processes of the
Company and tools are reviewed regularly to reflect changes in market conditions and the Company’s business activities.
37.1.1 Market risk
Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a change in
variables such as changes in the interest rates, foreign currency exchange rates and other market changes that affect market
risk sensitive instruments.
The Company uses a wide range of qualitative and quantitative tools to manage and monitor various types of market risks
it is exposed to. Quantitative analysis such as net income sensitivities, stress tests etc. are used to monitor and manage
Company’s market risk appetite.
A. Interest risk
Interest rate risk is the risk of loss from fluctuations in the future cash flows or fair value of financial instruments because
of changes in market interest rates.
Company's investments are categorized under HTM (Held to Maturity) category. Investments are done in Government
securities (T-Bill/ G Sec) only, hence there is no credit risk involved. The interest rate risk on these investments is
monitored through agreed and approved metrics such as Modified Duration by the ALCO and is also reported to
Enterprise Risk Management Committee (ERMC) through KRI reporting. The Company is also exposed to interest rate
risk on account of repricing rights of its floating rate debt.
Foreign currency risk monitoring and management
The Company’s currency risk management policy lays down the appropriate systems and controls to identify, measure
and monitors, the currency risk for reporting to the management. Parameters like hedging ratio, un- hedged exposure,
exposure limit with banks etc. are continuously monitored as a part of currency risk management. Exchange rate
exposures are managed within approved parameters using forward foreign exchange contracts. Foreign currency
exposure under borrowings is fully hedged at the time of taking the loan itself.
Derivative financial instruments
The Company enters into derivative financial instruments such as foreign currency forward contracts to mitigate the
risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is a bank.
Contracts included in hedge relationship
NIL for the year ended March 31, 2026 and March 31, 2025
Contracts not designated under hedge relationship
NIL for the year ended March 31, 2026 and March 31, 2025
37.1.2 Credit Risk
Credit risk is the risk of financial loss arising out of customer’s failing to meet their contractual obligations to the Company.
The Company has a board approved Credit Risk policy. The ownership of Credit Risk policy is with the Chief Risk Officer
(CRO) and Chief Credit Officer(CCO).
Credit risk arises mainly from retail and corporate customers on account of facilitating credit card loans to customers. The
Company also has exposure to credit risk arising from other financial assets such as cash and cash equivalents, other financial
assets including fixed deposits with banks, other receivables from contracts with customers and contract assets etc.
Credit risk on Cash and Cash equivalents is limited as the Company generally invest in deposits with banks and financial
institutions with high credit ratings assigned by international and domestic credit rating agencies.
A. Credit risk management approach
Managing credit risk is the most important part of Risk management framework. The CRO of the Company is responsible
for the key policies and processes for managing credit risk, which include formulating credit policies and risk rating
frameworks, guiding the Company’s appetite for credit risk exposures, undertaking independent reviews and objective
assessment of credit risk, monitoring performance and management of portfolios. The principal objectives being
maintaining a strong culture of responsible lending across the Company and robust risk policies and control frameworks,
implementing and continually re-evaluating our risk appetite and ensuring there is adequate monitoring of credit risks,
costs and its mitigation.
The basic credit risk management would cover two key areas, viz., (a) customer selection & (b) customer management.
These are governed by Board approved Credit policy and Collections Policy which is reviewed on a regular basis.
(a) Customer Selection
Key criterion for customer selection is in accordance with Board approved Credit Policy, which defines, inter alia,
type of customers, category, market segment, income criterion, KYC requirement, documentation etc. The Policy
also spells out details of credit appraisal process, delegation structure. The customer selection process aims to
ensure quality portfolio and lower delinquency.
(I) Retail Customer Selection process
All the fulfilled approved applications undergo a number of checks which include
• internal deduplication checks,
• fraud deduplication check
• scrutiny of KYC and income documents
• Sophisticated Machine Learning (ML) application models
• Bureau checks etc
The Company uses various factors such as customer profile, lieverage, income of the customer to assign
credit limits using ML Model.
(II) Unsecured Corporate customer selection process
• For all unsecured corporate card exposures, the Company conducts a detailed subjective assessment
based on information taken from the corporate, bureau reports, third party credit assessment agencies
like rating agencies and any publicly available information.
• To accurately assess the credit profile of a corporate, the Company assesses the detailed financials,
stock price performance (if listed) trends over the recent past. The critical parameters are collated as
a credit proposal and approval is done by the credit committee.
• In general, the Company evaluate the business risks associated with the corporate and its industry, its
financial profile, liquidity situation and financial flexibility. A peer comparison is also made between the
corporate and other reputed companies from the same industry.
(III) Secured Corporate customer selection process
The Company allows exposure to corporates against liquid securities (e.g. Fixed Deposit & Bank Guarantee).
For all secured corporate card exposures, certain minimum credit parameters are also checked by the
approving authority. The security is validated before any cards are issued.
(b) Customer Management
Customer management relates to credit controls once a card is issued, broadly consisting of:
i. Portfolio monitoring
The Company perform continuous monitoring of the portfolio leveraging various capabilities including ML
based behavior scores, bureau refresh, bureau alerts, payment behavior, transaction trends, and periodic
update on income estimation
ii. Portfolio management
Portfolio management activities enables the Company to lower risk in the portfolio by manageing higher
risk customer proactively. The Company has robust capabilities around dynamic limit management, cross¬
sell of term loans, balance transfers. Account management capabilities including a robust blocking strategy,
reinstatements, dispute management, and overlimit strategies
iii. Fraud control
Continuous monitoring of transactions and a risk-based approach is leveraged to identify instances of
fraud like account takeover, unauthorized access. ML models are leveraged to identify potential frauds and
proactively protect against the same
iv. Collection strategy
Customers who fail to pay their dues by the stipulated payment due dates, at various stages of delinquency
come under the purview of collection and recovery strategies. The Company has developed ML models
to prioritize collection efforts and also guide the intensity of efforts across delinquency buckets. Hardship
tools are leveraged to help resolve cases including settlements and restructuring. Post write-off, ML based
segmentation is leveraged to prioritize efforts. For secured cards, liens on FDs / BGs are invoked.
B. Credit risk analysis
This section analyses Company’s credit risk as follows;
(a) Exposure to credit risk - Analysis of overall exposure to credit risk before and after credit risk mitigation.
(b) Credit quality analysis - Analysis of overall portfolio by credit quality.
(c) Impairment - Analysis of non-performing / impaired loans.
(d) Credit risk mitigation - Analysis of collaterals held by client segment and collateral type.
(a) Exposure to credit risk
Maximum exposure to credit risk is given below:
Loans to customer includes loans secured by lien on Fixed deposits and Bank Guarantee held with third party
banks. Secured loans account for 0.49% as at March 31, 2026 (0.50% as at March 31, 2025) of total loans.
Notes:
• Loans to customers which accounts for 85.5% of total exposure to credit risk, as at March 31, 2026, is
segregated based on risk characteristics of the population to manage credit quality and measure impairment.
• Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and
financial institutions with high credit ratings assigned by international and domestic credit rating agencies.
• Investments in Government Securities are measured at amortized cost and Investments in unquoted
instruments are valued at Fair value as on balance sheet date and effect has been routed through Other
Comprehensive Income to be in line with Ind AS guideline.
• Derivative instruments taken by the Company are from the same party from whom the Company has taken
the underlying loan. Hence, default risk is on a financial institution with a high credit rating and therefore
the risk is limited.
• Company follows simplified approach for recognition of impairment loss allowance on trade receivables/
other financial assets wherein Company uses a provision matrix to determine the impairment loss allowance
on the portfolio of receivables.
Credit concentration risk
Credit concentration risk may arise from a single large exposure to a counterparty or a group of connected
counterparties, or from multiple exposures across the portfolio that are closely correlated.
(b) Credit quality analysis
Credit grading
The Company classifies credit exposure basis risk characteristics into high/medium/low risk. The Company has
in place a credit risk grading model (Internal rating model) which is supplemented by external data such as credit
bureau scoring information, financials statements and payment history that reflects its estimates of probabilities
of defaults of individual counterparties and it applies blocks(soft/hard) on accounts based on activity pattern
of the borrower. Hard blocks are permanent blocks in scenarios such as Death, Voluntary closure or NPA which
prevent any further use of the card. Soft blocks are temporary blocks put in response to certain triggers like missed
payment, over limit usage, etc. which are removed once the issue is resolved.
Credit quality by client segment
An overall breakdown of loan portfolio by client segment is provided below differentiating between performing
and non-performing loan book.
The Company segregates its credit risk exposure from loans to customers as Stage 1 (Good), Stage 2 (Increased
credit risk), Stage 3 (Impaired loans). The staging is done based on criteria specified in Ind AS 109 and other
qualitative factors.
(c) ImpairmentCollective measurement model (Retail and Corporate)
The estimation of credit exposure for risk management purposes is complex and requires the use of models,
as the exposure varies with the change in market conditions, expected cash flows and the passage of time. The
assessment of credit risk of a portfolio of assets entails further estimations as to likelihood of defaults occurring,
of the associated loss ratios, collaterals and coverage ratio etc.
The Company measures credit risk using Probability of Default (PD), Exposure of Default (EAD), Loss Given Default
(LGD). Ind-AS 109 outlines a three staged model for measurement of impairment based on changes in credit risk
since initial recognition.
• A financial instrument that is not credit impaired on initial recognition is classified in 'Stage 1',
• If a significant increase in credit risk (SICR) is identified the financial instrument moves to 'Stage 2',
• If the financial instrument is credit-impaired, the financial instrument moves to 'Stage 3' category.
The Company uses macro economic factor such as GDP growth rate to measure the ECL on a forward looking basis.
The forward-looking adjustment is incorporated in Probability of Default (PD) estimates through a Vasicek model.
Ind AS 109 requires expected credit losses to be calculated as probability-weighted across different economic
scenarios. Thus, the impact of macro economic factor is then transmitted back into our ECL model on the basis
of current weights to economic scenarios (Base, Moderate and Severe) to get the forward looking (point-in-time)
PDs and ECL model.
The Company defines default or significant increase in credit risk (SICR) based on the following quantitative and
qualitative criteria.
For Retail Portfolio
Definition of Default
Quantitative criteria
The borrower is more than 90 days past due on its contractual payments.
Qualitative criteria
The borrower meets unlikeliness to pay criteria, which indicates that the borrower is in significant difficulty wherein
a 'hard block' is applied on accounts and is blocked for further activity on meeting the following criteria;
• Arrangement to Pay
• Settlement
• Cardholder is deceased
• Restructured
If any facility of an obligor is moved to Stage 3, all other facilities related to that obligor will also be transferred
to Stage 3.
Further, for any borrower to be upgraded from Stage 3, the entire overdue balance on all accounts, must be cleared.
Definition of Significant increase in credit risk (SICR)Quantitative criteria
The borrower is 30-90 past due on its contractual payments.
Qualitative criteria
When borrowers are classified as "high risk" or when the account is tagged as "over-limit" i.e. when borrowers
are expected to/approach their credit limit it is considered as indicator of increased credit risk.
Additionally, if any facility of an obligor is moved to Stage 2, all other facilities related to that obligor (in Stage 1)
will be transferred to Stage 2
The default definition has been applied consistently to model the PD, LGD and EAD for measurement of ECL.
For Corporate Portfolio
Definition of Default
Quantitative criteria
The borrower is more than 90 days past due on its contractual payments.
Qualitative criteria
The borrower meets unlikeliness to pay criteria, which indicates that the borrower is in significant difficulty wherein
a 'hard block' is applied on accounts and is blocked for further activity on meeting the following criteria;
• Arrangement to Pay
• Settlement
• Restructured
• Rating Change criteria (for rating downgrade) for large exposures
• Early warning/ news/market intelligence
• Share price deterioration
• Bureau Information
If any facility of an obligor is moved to Stage 3, all other facilities related to that obligor will also be transferred
to Stage 3.
Further, for any borrower to be upgraded from Stage 3, the entire overdue balance on all accounts, must be cleared.
Definition of Significant increase in credit risk (SICR)Quantitative criteria
The borrower is 30-90 past due on its contractual payments.
Qualitative criteria
The borrower meets the below criteria showing Significant Increase in Credit Risk (SICR)
• Rating Change criteria (for rating downgrade) for large exposures
• Early warning/ news/market intelligence (The criteria is detailed in the table for Stage 3 Corporate Portfolio)
• Share price deterioration
• Bureau Information
Additionally, if any facility of an obligor is moved to Stage 2, all other facilities related to that obligor (in Stage 1)
will be transferred to Stage 2
The default definition has been applied consistently to model the PD, LGD and EAD for measurement of ECL.
Measuring ECL- Explanation of inputs, assumptions and estimation techniques
ECL is measured on either a 12 month or lifetime basis depending on whether there is an increase in SICR since
initial recognition. ECL is the discounted product of PD, LGD and EAD.
Estimation for retail accounts
PD
Month on month (MOM) default rates were calculated for all Cohorts.
Post calculating MOM default rates, cumulative yearly PDs being calculated till lifetime.
• For Stage 1 accounts 1 year marginal PD were calculated.
• For Stage 2 accounts Lifetime PDs were calculated
• For Stage 3 accounts 100% PD was taken
The Company segments the entire portfolio into Retail Unsecured, Retail Secured, Corporate Unsecured and
Corporate Secured, keeping each segment homogenous at the time of on-boarding. The Retail segment PDs are
further derived by evaluating the PDs at a sub-segment level basis CIBIL Score and Years on books (YOB). These
sub-segmented PDs are then rolled up to arrive at the overall retail PD.
LGD
All discounted recoveries net of collection costs is calculated segment wise against exposures to arrive at loss
estimates. Discount rate being considered is the yield rate across segments. LGD is floored at 0% and capped at
100%
EAD
Segment wise EAD is calculated using the below formula:
EAD = Balance Outstanding CCF*(Credit Limit - Balance Outstanding), where CCF is proportion of unutilized
credit limit which is expected to be utilized till the time of default. CCF is applicable only for stage 1 accounts, as
stage 2 and stage 3 accounts cannot utilize the unused credit limit. CCF % = Utilisation (t 12) - Utilisation (t) i.e.
change of utilization rates over next 1 year, its being floored at 0%.
The Company recalibrates the components of ECL model at regular intervals using,
1. Available incremental and recent information
2. Assessing changes to its statistical techniques for estimation.
37.1.3 Liquidity risk
Liquidity risk is the risk that the Company doesn’t have sufficient financial resources to meet its obligations as and when
they fall due or will have to do so at an excessive cost. This risk arises from the mismatches in the timing of the cash flows
which is inherent in all financing operations and can be affected by a range of company specific and market wide events.
Therefore, Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset.
The Company has put in place an effective Asset Liability Management System, constituted an Asset Liability Management
Committee (“ALCO") headed by Managing Director & CEO of the Company.
The Company manages its liquidity risk through a mix of strategies, including forward-looking resource mobilization based
on projected disbursements and maturing obligations. ALCO is responsible for managing the Company’s liquidity risk via a
combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring.
Company’s borrowing program is rated by CRISIL & ICRA. Short term rating is A1 and long-term rating is AAA/Stable by
both the agencies. There has been no change in ratings from last 10 years.
The maturity pattern of items of non-derivative financial assets and liabilities at undiscounted principal and interest cash
flows are as under:
41 SHARE BASED PAYMENTSa. SBI Card Employee Stock Option Plan 2019 (the Plan):
On February 22, 2019, pursuant to approval by the shareholders in the Extraordinary General Meeting, the Board has
been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company
under the Plan with the following key terms:
The maximum number of shares under the plan shall not exceed 3% of the paid-up share capital of the Company when
the Scheme becomes effective. The Plan shall be administered by the Nomination and Remuneration Committee of
the Board working under the powers delegated by the Board. Options granted under the plan shall vest based on the
achievement of defined annual performance parameters as determined by the administrator.
Under the plan, two types of employee stock options are granted, performance-based options & goodwill options.
During the year ended March 31, 2021 Performance based options (Performance Option-2) were granted on June
17,2020. During the year ended March 31, 2020, Performance based options ((Performance Option-1) were granted
as on September 17, 2019 and Goodwill options were granted as on September 18, 2019.
Performance based options shall vest with the participants in 4 tranches: - 10%, 20%, 30%, 40% at the end of year 1,
2, 3 and 4 of continued service respectively. However, no options shall vest before 3 months from IPO and the vesting
of options shall be contingent upon the Participant being employed with the Company and few other defined annual
performance parameters. The Goodwill options shall vest upon completion of 12 months from the Grant Date or 180
days after the date of listing of the Shares of the Company, whichever is later.
ii) Options granted during the year ended March 31, 2026 - NIL Previous Year - NIL
b. SBI Card Employee Stock Option Plan 2023 (the Plan)
On August 09, 2023, pursuant to approval by the shareholders in the Annual General Meeting, the Board has been authorized
to introduce, offer, issue and provide share-based incentives to eligible employees of the Company under the Plan.The key
terms of the plan are as follows:
Under the plan, two types of employee stock options are granted, performance share units and restricted share units. During
the year ended March 31,2024, Performance share units and restricted share units were granted on October 18, 2023. Each
employee stock option converts into one equity share of the company on exercise.
Performance based options shall vest with the participants upon completion of 3 years from the grant date. Restriction
based options shall vest with the participants in 3 tranches: - 30%, 30%, 40% at the end of year 1,2, 3 of continued service
respectively. However, vesting of options shall be contingent upon the Participant being employed with the company and
few other defined annual performance parameters.
Performance parameters will be set annually and approved by the Nomination and Remuneration Committee (NRC) and
approved parameters for each financial year will be notified to the employees. Further, the NRC and Board holds the power
to modify targets between the date of grant and vesting Date.
As per Ind AS 102, for the purpose of accounting grant date is considered as the date when performance parameters are
approved and notified to the employees by NRC. Fair value of the equity instruments is estimated (i.e., by reference to the
fair value of the equity instruments at the end of the reporting period) for the purpose of recognising the services received
during the period between the date of commencement of service (i.e. October 18, 2023) and the grant date as per Ind AS
102. On occurrence of the grant date, the company revises the earlier estimate of fair value to ultimately recognize the
expense in relation to such grant, based on the grant date fair value.
42 LEASESI. Short Term lease payments
For the operating lease agreements entered into by the Company which are considered as short team leases (lease term
of less than 12 months period) under IND AS 116, right of use asset and lease liability has not been recognized during the
year. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as
an expense in profit or loss. Low-value assets comprise IT-equipment and small items of office furniture.
II. Variable lease payments
Under certain contracts, payments are variable in nature as it depends on number of man hours worked by non-full-time
employee in a particular month and depends on actual usage of storage consumed. Variable lease payments are recognised
in profit or loss in the period in which the condition that triggers those payments occurs.
The current service cost and the net interest expense for the year are included in the ‘Employee benefits expense’ line item in
the statement of profit and loss.
The remeasurement of the net defined benefit liability is included in other comprehensive income.
The Government of India, on November 21, 2025, has notified the Code on Wages, 2019, the Code on Social Security, 2020, the
Industrial Relations Code, 2020 and the Occupational Safety, Health and Working Conditions Code 2020, collectively referred to
as 'New Labour Codes' consolidating 29 existing labour laws into a unified framework. The Ministry of Labour & Employment has
published the draft Central Rules and FAQs on December 30, 2025, to facilitate assessment of the financial impact arising from
these regulatory changes. As per Ind AS 19, changes to employee benefit plans arising from legislative amendments constitute a
plan amendment which requires recognition of past service costs in the Statement of Profit and Loss. The Company has assessed
the financial implications of these changes and recognized the estimated increase in provision for employee benefits for past
services amounting to '12 Crores under Employee Benefit Expenses for the year ended March 31,2026. The Company continues
to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects of the Labour Code
and would provide appropriate accounting treatment on the basis of such developments as needed.
i. Certain show cause notices relating to indirect taxes matters amounting to ' 2.56 Crores (previous period ' 3.47 Crores)
and interest as applicable, have neither been acknowledged as claims nor acknowledged as contingent liabilities. Based
on internal assessment and discussion with tax advisors, the Company is of the view that the possibility of any of these
tax demands materializing is remote.
ii. Capital Commitments: Estimated amount of contracts remaining to be executed on capital account and not provided
for (net of advances) amounted to ' 7.24 Crores as at March 31, 2026 (' 2.81 Crores as at March 31, 2025)
45 As per the best available information on records, Company does not have any transactions with the companies struck off
under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act,1956 during the financial year 2025-26
46 SEGMENT INFORMATION
There is only reportable segment (“Credit cards") an envisaged by Ind AS 108 Segment reporting, specified under section 133
of the Companies act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014. Further, the economic environment
is which the Company operates is significantly similar and not subject to materially different risk and rewards.
Accordingly, as the Company operates in a single business and geographical segment, the reporting requirement for primary
and secondary disclosures prescribed by Ind AS 108 are not required to be given.
47 In respect of accounts receivables, the Company is regularly generating and dispatching customer statements on periodic
interval wherever transactions or outstanding are there. In case of disputes with regard to billing, there is a process of
resolution and adjustments are carried out on regular basis. Moreover, in respect of accounts payable, the Company has a
process of receiving regular balance confirmation from its vendors.
For the year end balances of account receivables and account payables, the management is of the opinion that adjustments,
if any required through the above-mentioned process, will not have any material impact on the financials of the Company.
48 The Company deposited Goods and Service Tax [GST] on Interchange received by it in respect of VISA International
transactions. However, in February 2019, Company has received a declaration from VISA that Settlement of International
Interchange is being done in INR as per approval of RBI obtained by VISA in 1995. On the basis of said declaration, the
Company has obtained opinion from legal firm confirming that the same can be treated as receipt of consideration in
convertible foreign exchange and consequently as export of service and therefore not chargeable to GST. The Company has
accordingly decided to stop paying GST on International Interchange henceforth and decided to file a refund application for
' 4.51 Crores for the GST paid from July 2017 to March 2018 with GST authorities.
The said refund is subject to interpretation of law for which there is no precedence in the form of judgements/ departmental
clarifications. In view of the above, the Company has provided for 100% provision against the refund claim to mitigate the
uncertainty risk.
Further, on February 21, 2023, the refund claim filed by the Company has been rejected by the GST authorities. Company
has filed a Writ Petition before the Hon’ble High Court of Punjab & Haryana challenging the said rejection.The Department
has filed the reply and also Company has filed the rejoinder. Next date of hearing is scheduled on 24 Aug 2026.
49 The Company is a registered Corporate Insurance agent having license from Insurance Regulatory & Development Authority
of India (IRDAI). The Company is engaged in the sale of Life Insurance and Non-Life/General insurance products to its credit
card customers. Commission income arising from selling of insurance product is recognised as Insurance commission income.
Commission from sale are as under:
i) Life Insurance is Nil in each FY 2025-26 and FY 2024-25.
ii) Non-life/General Insurance is ' 2.60 Crores in FY 2025-26 and ' 3.22 Crores in FY 2024-25.
50 The Board of Directors have declared interim dividend of ' 2.50 per equity share (25%) of the face value of ' 10/- each for
the financial year 2025-26 in accordance with Section 123(3) of the Companies Act, 2013, as amended.
51 During the period ended March 31,2025, the Company did not have any exceptional items or extraordinary items as defined
under Ind AS 1, Presentation of Financial Statements.
vi) Institutional set-up for liquidity risk management
Refer Note No 37.1.3 for details
53.1.2 Disclosure on Liquidity Coverage Ratio
Reserve Bank of India, through the Liquidity Risk Management Framework for Non-Banking Financial Companies, introduced
Liquidity Coverage Ratio (LCR) with the objective that NBFC shall maintain a liquidity buffer in terms of LCR which will
promote resilience of NBFCs to potential liquidity disruptions by ensuring that they have sufficient High Quality Liquid Asset
(HQLA) to survive any acute liquidity stress scenario lasting for 30 days. HQLA means liquid assets that can be readily sold or
immediately converted into cash at little or no loss of value or used as collateral to obtain funds in a range of stress scenarios.
Liquidity management in the Company is driven by the Board approved Asset Liability Management (ALM) Policy. The Asset
Liability Committee (ALCO) is a decision-making unit responsible for implementing the liquidity risk management strategy
of the Company, formulating the Company’s funding strategies to ensure that the funding sources are well diversified and
is consistent with the operational requirements of the Company and it ensures adherence to the risk tolerance/limits set by
the Board.
Inflows:
a. Inflows from fully performing exposures comprise of Minimum Amount Due (contractual obligation) billed to the cardholders.
b. Other cash inflows consist of funds in transit and trade receivable from network partners/other partners which the Company
expects to receive in the next 30 days.
The average LCR of the Company for the quarter ended March 31, 2026 was 132.80% as against 146.29% for the quarter
ended March 31, 2025. The LCR remains well above the regulatory minimum requirement for each reporting period.
The average HQLA for the quarter ended March 31, 2026 was ' 6,997.15 crores as against ' 5,421.01 crores for the
quarter ended March 31, 2025. The net cash outflow position has gone up by ' 1,563.21 crores due to increase in next 30
days outflows and HQLA level has up by ' 1,576.14 crores. Of the total HQLA balance, 64.62% comprise of Investment in
Government Securities (68.13% in quarter ended March'25), 33.11% comprise of Investments in Treasury Bills (30.63% in
quarter ended March'25) and 2.27% comprise of balances in current account with Scheduled Commercial Banks (1.24% in
quarter ended March'25).
The main drivers of the LCR calculation in outflow over 30 days period are contractual borrowing obligations of the Company
in the form of Bank lines, Term Loans, Debentures, Commercial Papers. Other contractual funding obligations consist of
liabilities towards network partners, vendor payments, other liabilities. Further, the Company also uses the behavioral study
to take the impact of unused credit and liquidity facilities provided to its cardholders. Main driver of inflows is the repayments
from the cardholders which are taken basis the past behavioral pattern observed. Other cash inflows consist of incomes
accruals which the Company expects to receive in next 30 days.
The average LCR of the Company for the quarter ended March 31, 2025 was 146.29% as against 105.24% for the quarter
ended March 31, 2024. The LCR remains well above the regulatory minimum requirement for each reporting period.
The average HQLA for the quarter ended March 31, 2025 was ' 5,421.01 crores as against ' 3,464.94 crores for the
quarter ended March 31, 2024. The net cash outflow position has gone up by ' 413.34 crores due to increase in next 30
days outflows and HQLA level has up by ' 1,956.07 crores. Of the total HQLA balance, 68.13% comprise of Investment in
Government Securities (71.06% in quarter ended March'24), 30.63% comprise of Investments in Treasury Bills (26.57% in
quarter ended March'24) and 1.24% comprise of balances in current account with Scheduled Commercial Banks (2.37% in
quarter ended March'24).
Management is of the view that the Company has sufficient liquidity cover to meet its likely future short-term requirements.
54 Schedule to Balance Sheet of a Non-Banking Financial Company as required in terms of Reserve Bank of India (Non-Banking
Financial Companies - Financial Statements: Presentation and Disclosures) Directions, 2025:
56.6 Disclosures relating to Securitisation
There has been no securitisation transactions during the reporting period.(previous year: Nil)
56.7 Details of Financial Assets sold to Securitisation/Reconstruction Company for Asset Reconstruction
During the reporting period the Company has not sold any financial asset to securitisation/restructuring companies (previous
year: Nil).
56.8 Details of Assignment transactions undertaken by NBFCs
There has been no assignment transactions undertaken by the Company during the reporting period (previous year: Nil).
The Company has reported certain instances of customer frauds, primarily relating to fraudulent usage of credit cards issued by
the Company. The amount involved in these frauds was ' 0.73 crores (March 31, 2025 : ' 0.48 crores). The cumulative recovery
against the frauds, pertaining to current and prior years, was ' 0.66 crores (March 31, 2025 : ' 1.14 crores).
56.19.3 Disclosure of Penalties imposed by RBI and other regulators
No penalties have been imposed by any regulators during financial year 2025-26
56.19.4 Ratings assigned by credit rating agencies and migration of ratings during the year
The short-term debt rating of the Company is A1 by CRISIL and ICRA. Long-term debt rating is AAA / Stable by CRISIL and ICRA.
There is no change in the rating during financial year 2025-26.
56.19.5
The Company has reversed GST liability amounting to '76.57 Crores (including '54.41 Crores pertaining to FY 2024-25) on
late payment fees billed but not collected from the customers, pursuant to change in practice for payment of GST on Late
Payment Fees which is in line with GST laws.
56.19.6
The RBI vide its circular RBI/2023-24/101CO.DPSS.POLC.No.S940/02-29-005/2023-24 dated 29th December 2023 has
mandated contribution towards PIDF fund till December 31, 2025. Based on regulatory confirmation on non-collectability of
the PIDF contribution, the corresponding liability amounting to '114.79 Crores have been reversed during the year ended
March 31, 2026.
56.19.7 Revenue Recognition
There is no circumstance in which revenue recognition has been postponed pending the resolution of significant uncertainties.
56.19.8 Remuneration to Directors
During the year the Company has paid ' 0.90 Crores towards Directors fees, allowances and expenses.
Refer note 31
56.19.9 Net Profit or loss for the period, prior period items and change in accounting policies
There are no adjustment of prior period items during the financial year 2025-26.
56.19.10 Participation in Currency futures & currency options
The Company has not undertaken any transaction during the current year and previous year for currency futures and
currency options.
56.19.11 Undisclosed income
There is no surrender or disclosure of income separately on account of search or survey under Income tax since all transactions
are recorded in the books.
56.19.12Crypto Currency or Virtual Currency
Company has neither traded nor invested in Crypto currency or virtual currency during the year.
56.19.13Registration of Charges or statisfaction
There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.
57.7 Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)
The Company does not have joint ventures and subsidiaries abroad thusthere is no overseas asset of the Company as at March
31, 2026.
57.8 Off-balance Sheet SPVs sponsored
There is no off-balance sheet SPVs sponsored either domestic or overseas by the Company during the year ended March 31,2026.
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