5. FINANCIAL PERFORMANCE AND STATE OF THE AFFAIRS OF THE BANK

5.1 Financial performance

During the year under review, some of the significant financial highlights are listed below:

(i) The Total Business (Total Deposit + Net Advances) crossed RS. 5.79 Lakh Crore

(ii) The Total Deposit & Advances (Net) stood at RS. 3.14 Lakh Crore & RS. 2.65 Lakh Crore respectively.

(iii) CASA stood at RS. 1.03 Lakh Crore, crossing RS. 1 Lakh Crore for the first time.

(iv) Net Profit Crossed RS. 4,117 Crore

(v) Recorded decadal best Asset quality ratios, NNPA at 0.20 % & GNPA at 1.62 %.

During the year under review, CRAR of the Bank has increased to 17.25% for the FY 2025-26 as against 16.40% in the previous year, after considering dividend @ 60% of paid-up capital. Net worth has improved to RS. 38,690.54 Crore from RS. 33,121.64 Crore. Total Debts to Total Assets is at 5.46%.

As on March 31, 2026, Net Advances increased by 13% to RS. 2,64,594.37 Crore as compared to RS. 2,34,836.39 Crore as March 31, 2025. As per internal classification, Corporate & Institutional Banking grew by 8% & Commercial Banking at 26% on Year-on-Year basis. Retail Book up by 9% witRs. 1% growth in Core Retail segment, 3% growth in Agri and Allied segment, 6.5% growth in Business Banking segment, 25% growth in Commercial Vehicle/ Construction Equipment segment, 26% growth in gold loan segment & 6% growth in Micro Finance segment on a Year-on-Year basis. (Credit segments are based on internal classifications and are realigned at the beginning of every FY. Vertical wise advance figures excludes IBPC/ BRDS.)

With the expanding network of banking outlets & customers, the Total Deposits grew further from RS. 2,83,647.47 Crore as on March 31, 2025, to RS. 3,13,909.39 Crore as on March 31, 2026, registering a growth of 11%. The Current Account & Savings Account (‘CASA') deposits have recorded an increase of 21% from RS. 85,757.19 Crore as on March 31, 2025, to RS. 1,03,390.30 Crore as on March 31, 2026. Net Investments increased by 16% to RS. 76,676.21 Crore as on March 31, 2026 from RS. 66,245.61 Crore as on March 31, 2025.

During the FY under review, the Total Income of the Bank has increased by 7% to RS. 32,135.77 Crore as against the total income of RS. 30,166.50 Crore for FY 2024-25. The Net Profit of the Bank grew by 2% to RS. 4,117.32 Crore as against RS. 4,051.89 Crore in the previous year. Operating profit for the year ended increased by 18% to RS. 7,206.20 Crore from RS. 6,101.13 Crore. The Net interest margin for the year increased to 3.24% from 3.13% in the previous year. Consequently, Return on Average Equity (‘ROAE') is at 11.47% for FY 2025-26 & Return on Average Asset (‘ROAA') stood at 1.15% for FY 2025-26. Correspondingly, Basic earnings per share (‘EPS') increased from RS. 16.54 in FY 2024-25 to RS. 16.74 for FY 2025-26 whereas diluted earnings per share (‘DEPS') is up from RS. 16.37 to RS. 16.56

5.2 Asset Quality

The Gross NPA of the Bank as on March 31, 2026, stood at RS. 4,335.29 Crore and Gross NPA as a percentage to Gross Advances is at 1.62%. The Net NPA stood at RS. 529.25 Crore & Net NPA percentage is at 0.20% as on March 31, 2026. The Provision Coverage Ratio (excluding technical write offs) stood at 87.07% as on March 31, 2026.

5.3 Outreach of Bank presence & network

During the year under review, the Bank added 51 new banking outlets, taking its total network to 1,640 outlets as on March 31, 2026. Out of the total banking outlets, 310 are in metros, 234 are in rural, 780 in semiurban & 316 in urban centres. Apart from above, the Bank has 2,112 ATMs/ Recyclers as on March 31, 2026. The Bank also has its Digital Banking Unit at Kolkata, Representative Office at Abu Dhabi & Dubai & an International Financial Service Centre (IFSC) Banking unit (IBU) in Gujarat International Finance Tec-City (GIFT City).

5.4 Change in the nature of business.

There is no change in the nature of business of the Bank for the financial year under review. Further information on the business overview & outlook/state of the affairs of the Bank is disclosed in detail in the Management Discussion & Analysis Report which forms part of this Annual Report.

5.5 Material changes and commitments affecting the financial position of the Bank

There were no material changes and commitments affecting the financial position of the Bank, between the end of the financial year to which the financial statements relate and the date of this report.

6. DIVIDEND, DIVIDEND DISTRIBUTION POLICY & TRANSFER TO RESERVE

In view of the overall performance of the Bank and while retaining capital to support future growth, the Board, at its meeting held on April 29, 2026, recommended a final dividend of RS. 1.20 (60 %) per equity share of RS. 2/- each fully paid-up, subject to the approval of members at the ensuing 95th Annual General Meeting (AGM). The record date for payment of dividend is mentioned in the notice of the ensuing 95th AGM of the Bank. In terms of Accounting Standard (AS) - 4 'contingencies and events occurring after the balance sheet date' as notified by the Ministry of Corporate Affairs (MCA) under Section 133 of the Companies Act, 2013 (Act) read together with the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Rules, 2021, such proposed dividend has not been recognised as a liability as on March 31, 2026. Further, shares issued on exercise of stock options after March 31, 2026, till record date will also be eligible for such proposed dividend. In terms of the Income Tax Act, 1961, the dividend income is taxable in the hands of the members. Therefore, the dividend will be paid to the members after deduction of applicable tax, if any. For further details, shareholders are requested to refer to the Notice of the 95th Annual General Meeting of the Bank.

7. CAPITAL STRUCTURE & FUND RAISING

7.1 Share Capital

Consequent to the allotment of equity shares pursuant to the exercise of stock options under the Employee Stock Option Scheme (ESOS), the paid-up equity share capital of the Bank increased from RS. 491.16 crore as at March 31, 2025 to RS. 492.86 crore as at March 31, 2026, representing an increase of RS. 1.70 crore. The equity shares allotted pursuant to exercise of stock options under the ESOS rank pari passu in all respects with the existing equity shares of the Bank.

During the year, the Bank has issued and allotted 27,29,74,043 warrants by way of preferential allotment on a private placement basis to Asia II Topco XIII Pte. Ltd., on receipt of 25% of the warrant price of ^ 227 per warrant, aggregating to ^ 1,549.13 Crore. Each warrant carries the right to subscribe to one fully paid up equity share of the Bank having a face value of ^ 2 per share, upon exercise, by paying the remaining 75% within 18 months of allotment.

7.2 Share Based Employee Benefits

The Bank has instituted Employee Stock Option Schemes, duly approved by the shareholders of the Bank to enable its employees including Whole Time Directors to participate in the future growth and financial success of the Bank. The Employee Stock Option Schemes are formulated in accordance with the SEBI guidelines, as amended from time to time. The eligibility and number of options to be granted to an employee is determined based on various parameters such as scale, designation, performance, grades, period of service, Bank's performance and such other parameters as may be decided by the Nomination, Remuneration, Ethics and Compensation Committee of the Board from time to time in its sole discretion.

The Bank's shareholders had approved The Federal Bank Limited Employee Stock Option Scheme 2010 (ESOS 2010) on December 24, 2010, The Federal Bank Limited Employee Stock Option Scheme 2017 (ESOS 2017) on July 14, 2017, The Federal Bank Limited Employee Stock Option Scheme 2023 (ESOS 2023) and The Federal Bank Limited Employee Stock Incentive Scheme 2023 (ESIS 2023) on August 18, 2023 and The Federal Bank Limited Employee Stock Option Scheme 2025 (ESOS 2025) and The Federal Bank Limited Employee Stock Incentive Scheme 2025 (ESIS 2025) on August 29, 2025.

7.2.1 The Federal Bank Limited Employee Stock Option Scheme 2010 (ESOS 2010)

Under ESOS 2010, the Nomination, Remuneration, Ethics and Compensation Committee granted 3,47,20,200 options during the year 2011-12, 2,44,84,750 options during the year 2012-13, 2,60,94,250 options during the year 201314, 1,11,56,450 options during 2014-15, 10,25,000 options during the year 2015-16, 9,65,000 options during the year 2016-17, 1,00,000 options during the year 201718, 55,29,550 options during the year 2023-24, 23,14,750 options during the year 2024-25 and 6,95,000 options during the year 2025-26. The options granted which are non-transferable, with vesting period of 1 to 5 years

subject to standard vesting conditions, must be exercised within five years from the date of vesting. During FY 2026, 3,32,965 options had been exercised and as on March 31, 2026, 79,28,535 options were in force

7.2.2 The Federal Bank Limited Employee Stock Option Scheme 2017 (ESOS 2017)

Under ESOS 2017, the Nomination, Remuneration, Ethics and Compensation Committee granted 2,23,18,348 options during the year 2017-18, 3,72,31,307 options during the year 2018-19, 3,05,24,986 options during the year 201920, 1,68,84,159 options during the year 2020-21, 37,33,250 options during the year 2021-22, 45,03,375 options during the year 2022-23, 1,05,000 options during the year 202324, 49,9800 options during the year 2024-25 and 6,80,000 options during the year 2025-26. The options granted which are non-transferable, with vesting period of 1 to 4.25 years subject to standard vesting conditions, must be exercised within five years from the date of vesting. During FY 2026, 81,20,326 options had been exercised and as on March 31, 2026, 3,03,33,669 options were in force.

7.2.3 The Federal Bank Limited Employee Stock Incentive Scheme 2023 (ESIS 2023)

Under ESIS 2023, the Nomination, Remuneration, Ethics and Compensation Committee granted 25,000 options during the year 2023-24 and 14,82,000 options during the year 2025-26. The options granted which are non-transferable, with vesting period of 1 to 3 years subject to standard vesting conditions, must be exercised within four years from the date of vesting. As on March 31, 2026, no option had been exercised, and 15,03,500 options were in force.

7.2.4 The Federal Bank Limited Employee Stock Option Scheme 2023 (ESOS 2023)

Under ESOS 2023, the Nomination, Remuneration, Ethics and Compensation Committee granted 12,00,000 options during the year 2024-25 and 29,72,800 options during the year 2025-26. The options granted which are non-transferable, with vesting period of 1 to 4 years subject to standard vesting conditions, must be exercised within five years from the date of vesting. As on March 31, 2026, no option had been exercised, and 41,61,800 options were in force.

7.3 Debt capital

As on March 31, 2026, the Bank has an outstanding of 1,51,695 units rated, unsecured, redeemable, nonconvertible, Basel III compliant tier II subordinated bonds aggregating to RS. 3,195 Crore.

7.4 Capital Adequacy Ratio

The Bank's overall Capital Adequacy Ratio (CAR) under Basel III stood at 17.25 % at the end of fiscal 2026, well above the benchmark requirement stipulated by the RBI. Of this, the common equity tier I (CET I) CAR was 15.93% and tier II CAR under Basel III stood at 1.32%.

8. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

8.1 Transfer of Unpaid/ Unclaimed Dividend to IEPF

Pursuant to Sections 124 and 125 of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), all unpaid or unclaimed dividends are required to be transferred by the Bank to the Investor Education and Protection Fund ("IEPF" or "Fund") established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/unclaimed account.

In compliance with the aforesaid statutory requirements, the unclaimed/unpaid dividend pertaining to the financial year 2017-18, amounting to RS. 60,15,055/-, which remained unclaimed for a continuous period of seven years, has been duly transferred by the Bank to the IEPF. Further, the unpaid/unclaimed dividend relating to the financial year 2018-19 is due for transfer to the IEPF during the financial year 2026-27, within the prescribed timelines.

The Bank, with a view to safeguarding the interests of its shareholders and ensuring awareness of their rights, periodically sends reminders to shareholders to claim their unclaimed dividend amounts and corresponding shares prior to their transfer to IEPF. Shareholders may note that any unclaimed dividends and the corresponding shares transferred to the IEPF, together with all benefits accruing thereon, if any, can be reclaimed by following the procedure prescribed under the applicable rules. Members are, therefore, advised to lodge their claims with the Bank in respect of such dividends well before the due date, failing which the same shall be transferred to the IEPF in accordance with the provisions of the Companies Act, 2013 and the rules framed thereunder. The detailed schedule of due dates for such transfers is set out in the Corporate Governance Report.

8.2 Transfer of Shares to IEPF

Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the equity shares of the Bank in

respect of which dividend amounts have not been paid or claimed by the shareholders for 7 consecutive years or more are required to be transferred to demat account of IEPF Authority. The said requirement does not apply to shares in respect of which there is a specific Order of Court, Tribunal or Statutory Authority, restraining transfer of the shares.

Upon such transfer, all corresponding benefits accruing on such shares, including but not limited to dividends, bonus shares, stock splits, and consolidations, if any, shall stand credited to the account of the IEPF. Further, the voting rights attached to such shares shall remain frozen until the rightful claimant reclaims the shares in accordance with the procedure prescribed under the IEPF Rules.

Accordingly, 3,60,270 number of equity shares were transferred to demat account of IEPF Authority. The Bank had sent individual notice to all the members concerned and has also published the notice in the leading English and Malayalam newspapers. Additionally, the Bank has not transferred or hold any Equity shares in the Demat suspense account or unclaimed suspense account.

9. CAPITAL EXPENDITURE

As on March 31, 2026, the Gross Fixed Assets at cost stood at Rs 3,412.43 Crore and net fixed assets (cost less accumulated depreciation) at Rs 1,472.52 Crore. Fixed assets additions during the year amounted to RS. 243.01 Crore.

10. FUTURE PROSPECTS

Building on an eventful initial year of Breakthrough, the Bank aims to continue rebalancing its balance sheet to enhance operational efficiency while navigating an environment of uncertainty. The success of various breakthrough initiatives has established a strong foundation, enabling the Bank to shape and transition confidently into a new phase of growth and transformation. This transformation will be underpinned by the Bank's core ethos of responsible growth, while steadfastly upholding its commitment to the environment and the interests of all stakeholders, alongside the continued enhancement of shareholder value.

11 AWARDS AND ACCOLADES

12. LISTING

The Equity Shares of the Bank continue to remain listed on BSE Limited and the National Stock Exchange of India Limited (NSE). The Global Depository Receipts (GDR's) of the Bank are listed on the London Stock Exchange (LSE).

13. DEPOSITS

Being a Banking Company, the disclosures relating to deposits as required under Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Act, are not applicable to the Bank.

14. CREDIT RATING

The details of Credit Ratings of the Bank as on March 31, 2026, are as follows:

15. ANNUAL RETURN

16. SECRETARIAL STANDARDS

The Bank is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government under Section 118(10) of the Act for FY 2025-26.

17. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Pursuant to the provisions of Section 186(11) of the Act, the provisions of Section 186 of the Act except sub-section (1), do not apply to a loan made, guarantee given, or security provided by a banking company in the ordinary course of its business and are exempted from the disclosure requirement under Section 134 (3)(g) of the Act.

The particulars of investments made by the Bank are disclosed in Schedule 8 of the Financial Statements.

18. BOARD OF DIRECTORS

18.1 Appointments/Re-appointment & Cessation of Directors & Key Managerial Personnel (KMP):

The appointment/re-appointment of Directors during the financial year under review and till the date of approval of this Directors Report is as follows:

• Mr Venkatraman Venkateswaran (DIN: 09227554) was appointed as Executive Director (KMP) on the Board of the Bank for a period of three (3) years with effect from July 10, 2025 which was subsequently approved by the members of the Bank at the 94th Annual General Meeting held on August 29, 2025.

• The members of the Bank at its 94th Annual General Meeting held on August 29, 2025 approved the Re-appointment of Ms. Varsha Purandare (DIN: 05288076) for second term for a period of 3 years from September 08, 2025.

• Mr. A P Hota (DIN:02593219) retired from the office of the Part Time Chairman & Independent Director of the Bank with effect from January 14, 2026, on completion of his tenure of eight years on the Board of the Bank.

• Mr. Harsh Dugar (DIN: 00832748) was re-appointed as the Executive Director (KMP) of the Bank for a period of 3 years from June 23, 2026 pursuant to RBI approval letter no. DoR.GOV.No.9538/08.38.001/2025- 26 dated March 30, 2026 and the members of the Bank through postal ballot had also approved the re-appointment.

• The RBI, vide its letter DoR.GOV.No.1607/08.38.001/ 2026-27 dated May 22, 2026 accorded its approval for the appointment of Mr. Elias George (DIN:00204510), Independent Director, as Part Time Chairman of the Bank for a period of three years with effect from the date of taking charge. Accordingly, Mr. Elias George (DIN:00204510) took charge as the Part time Chairman of the Bank with effect from May 23, 2026.

• In accordance with the provisions of the Act and the Articles of Association of the Bank, Mr. Krishnan Venkat Subramanian (DIN: 00031794) Managing Director & Chief Executive Director of the Bank, is liable to retire by rotation at the ensuing 95th Annual General Meeting and being eligible, has offered himself for re-appointment.

The Board is of the opinion that the Independent Directors appointed on the Board of the Bank, possesses necessary integrity, expertise and experience (including the proficiency).

Necessary information pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of directors to be appointed and re-appointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the 95th Annual General Meeting.

None of the Directors of the Bank are disqualified for being appointed as directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

18.2 Key Managerial Personnel

The details of the Key Managerial Personnel (KMP) of the Bank as on March 31, 2026, is as follows:

• Mr. Krishnan Venkat Subramanian - Managing Director & Chief Executive Officer

• Mr. Venkatraman Venkateswaran* - Executive Director & Chief Financial Officer

• Mr. Harsh Dugar** - Executive Director

• Mr. Samir P Rajdev - Company Secretary

**The RBI vide its letter DoR.GOV.No.9538/08.38.001/ 2025-26 dated March 30, 2026 has given its approval for the re-appointment of Mr. Harsh Dugar (DIN: 00832748) as the Executive Director on the Board of the Bank for a period of three (3) years from June 23, 2026 and the members of the Bank through postal ballot had also approved the re-appointment.

The changes in KMP during the financial year under review and till the date of approval of this Directors' Report is as follows:

• Mr. Venkatraman Venkateswaran* - Executive Director

• Mr. Manikandan M**- Chief Financial Officer (CFO)

**The Board approved the appointment of Mr Manikandan M (FCA No: 234412) as Chief Financial Officer (Key Managerial Personnel) and Senior Management Personnel of the Bank pursuant to the provisions of Section 203 of the Companies Act, 2013 and regulation 16(1)(d) of SEBI(LODR) Regulations, with effect from May 01, 2026.

18.3 Declaration by Independent Directors

The Bank has received declaration from all the Independent Directors that they continue to meet the criteria of independence as provided under the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and comply with the Code for Independent Directors as specified under Schedule IV of the Act. In terms of the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 read with the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, the Independent Directors of the Bank have enrolled his/ her name in the online databank of Independent Directors maintained by the Government.

The Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

In the opinion of the Board, the Independent Directors are persons of high repute, integrity and possess the relevant expertise and experience in their respective fields. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the Management.

19. BOARD COMMITTEES

Detailed composition of the mandatory Board committees namely Audit Committee, Credit, Investment & Raising Capital Committee, Risk Management Committee, Nomination, Remuneration, Ethics & Compensation Committee, Stakeholders Relationship Committee, Customer Service Committee, Special Committee of the Board for monitoring and follow up of cases of frauds, Information Technology & Operations Committee, Human Resource Committee, Corporate Social Responsibility Committee and the Review Committee of the Board on Identification of Wilful Defaulters and the number of meetings of the Board and its committees held during the

year under review and other related details are set out in the Corporate Governance Report which forms part of this Integrated Annual Report.

20. AUDIT COMMITTEE OF THE BOARD (ACB)

The composition, role and functions of the ACB is provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report. During financial year 202526, the Board has accepted all the recommendations made by the ACB and hence, no further explanation towards this is required to be provided, in this Report.

21. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Bank has formulated and adopted a comprehensive 'Compensation Policy' for its Directors, Key Managerial Personnel and Employees, in terms of relevant provisions of the Companies Act, 2013 read with the rules made thereunder, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the guidelines/ circulars issued by the RBI, in this regard, from time to time. The Compensation Policy is reviewed annually. In line with this practice, the Policy was reviewed by the Board based on the recommendation of the Nomination, Remuneration, Ethics, and Compensation Committee to ensure alignment with applicable regulatory requirements.

The Bank affirms that the remuneration paid to its directors is in accordance with the provisions of the aforementioned Policy and is fully compliant with the relevant regulatory guidelines.

22. BOARD EVALUATION

In accordance with relevant provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and SEBI Guidance Note on Board Evaluation, the Board has carried out an annual performance evaluation of its own performance and of the directors individually, as well as the evaluation of the various Committees of the Board for the year under consideration.

The Bank had engaged Egon Zehnder, an external agency, to conduct a comprehensive performance evaluation of individual Directors, Committees and the Board as a whole.

23. FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS

24. ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) PRACTICES

The Bank's ESG framework is given in the Corporate Governance Report which forms part of this Integrated Annual Report. Details of the ESG initiatives undertaken by the Bank during the Financial Year is included in the Integrated Annual Report as part of the ESG section/ Business Responsibility and Sustainability Report.

25. CORPORATE SOCIAL RESPONSIBILITY

The Bank has constituted and adopted a CSR policy which provides the focus areas (in accordance with Schedule VII of the Act) under which various developmental initiatives are undertaken.

The details of the CSR initiatives undertaken during the financial year ended March 31, 2026, and other details required to be given under section 135 of the Companies Act, 2013 read with rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure A forming part of this Report.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, a separate Section on Management Discussion and Analysis, as approved by the Board, which includes details on the state of affairs of the Bank, forms part of this Integrated Annual Report.

27. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility and Sustainability Report (BRSR) is mandatory for the top 1000 listed companies, based on market capitalization. The disclosure requirement in BRSR is based on the 9 principles of the National Guidelines on Responsible Business Conduct, which is divided into 2 (two) parts i.e. Essential Indicators (to be reported on a mandatory basis) and Leadership Indicators (to be reported on a voluntary basis).

The Bank has provided BRSR, which indicates the Bank's performance against the principles of the 'National Guidelines on Responsible Business Conduct'. This would enable the Members to have an insight into environmental, social and governance initiatives of the Bank.

28. CORPORATE GOVERNANCE

The Bank believes that Corporate Governance derives from value system, best management practices, adherence of ethical standard, encompassing its culture, its policies, and its relationships with the stakeholders. The Bank is committed to achieving and adhering to the highest Corporate Governance standards and has been an integral part of its business. Integrity, transparency, and accountability are the important ingredients of Corporate Governance. The Bank gives importance to uphold the integrity of every transaction which it enters into and the honesty in its internal conduct would be evaluated by stakeholders.

Pursuant to Regulation 34 of the SEBI Listing Regulations, a separate section i.e., 'Report on Corporate Governance' has been annexed to this Integrated Annual Report along with the certificate issued by the Secretarial Auditor of the Bank confirming compliance with the mandatory requirements relating to Corporate Governance under the SEBI Listing Regulations. The corporate governance framework of the Bank incorporates all the mandatory requirements as prescribed in the SEBI Listing Regulations.

In line with Companies Act 2013, sharholders approval is required for altering the Bank's MOA & AOA.

In line with Companies Act 2013, a Director can be held personally liable without any limitation of liability as may be prescribed by law.

29. RELATED PARTY TRANSACTIONS

All related party transactions entered into during the financial year were at arm's length basis and in the ordinary course of business except the transaction mentioned in AOC -2 which is annexed as Annexure -B. During the year under review, the Bank has not entered into any materially

significant transaction with its related parties, which could lead to a potential conflict of interest between the Bank and these parties.

All Related Party Transactions were placed before the Audit Committee of the Board for approval/ratification. Prior omnibus approval for transactions which are of repetitive nature is obtained from the Audit Committee and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee.

The details of related party transactions are provided in the notes forming part of the standalone and the consolidated financial statements.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Bank has through the years developed and stabilized an effective internal control system calibrated to the risk appetite of the Bank and aligned to the scale, size, and complexity of its operations. The scope and authority of the internal audit function is defined in the Internal Audit Policy of the Bank, duly approved by the Board of Directors. In order to help Bank in achieving its mission of adopting the best professional practices prevailing in the industry, while framing the policy, substantial inputs are taken from - RBI guidance note on Risk Based Internal Audit, 'The internal audit function in banks' published by Basel Committee on Banking Supervision and RBI Circular on 'Concurrent Audit System.' Internal Audit Policy is reviewed annually. Policy is reviewed considering various guidelines of RBI, Basel Committee recommendations, ICAI guidelines, other statutory / regulatory guidelines, directions of Board / Audit Committee of the Board issued from time to time and periodic internal guidelines / instructions issued by the Bank. Risk based Audit framework is reviewed in line with the present business model and industry best practices. At the enterprise level, the Internal Audit Department, on a continuous basis, assesses and monitors the effectiveness of the control systems and its adequacy to meet the growing complexities. The audit function essentially validates the compliance of Bank's processes and operations with regulatory guidelines, accounting procedures and Bank's own internal rules and guidelines. A department level group meets on periodical intervals to discuss latest internal / RBI / regulatory guidelines for ensuring that the required changes are implemented for making the audit function updated and dynamic.

The Bank has a robust system towards escalating the audit findings to appropriate levels in the hierarchy of Management and discussions in various committees towards suggesting corrective action and its follow up. Chief Internal Auditor of the Bank directly reports to the MD & CEO of the Bank.

Audit Committee of the Board reviews the adequacy and effectiveness of the Internal Audit Function.

The Bank has various types of audits which inter-alia include Risk Based Internal Audit, Information System Audit, Vendor Audit, Offsite Audit (audit through use of technology and data analysis), Concurrent Audit, Credit Audit, Gold Loan Audit and Management Audit. Branches / Departments are risk rated and the frequency of Risk Based Internal Audit / Management Audit is decided based on the Risk Rating of the unit. Significant Audit findings and observations are presented to Internal Audit Review Committee of Executives (IARCE) and a report on the meetings of IARCE along with significant audit findings, directions /suggestions of the Committee and action taken in such cases are placed to the Audit Committee of the Board for review periodically. Other findings are placed before a department level committee called the 'Internal Audit Department Review Committee' (IADRC) for review and its observations are placed before IARCE. A team of executives at Internal Audit Department called the "Special Surveillance Cell" meet at least once in a month to examine significant irregularities reported in audits for indications of fraud and for further scrutiny or any other action as deemed necessary, to study frauds / malpractices/ penalties imposed by RBI reported in the Bank or in the banking Industry as a whole for bringing necessary changes in the Audit Function based on the learning. The progress in implementation of the recommendations shall be tracked periodically by the Cell.

Internal Audit Department conducts structured meetings at minimum quarterly intervals with the Zonal Heads, Heads of Zonal Credit Administration Department, Regional Business Heads of Corporate and Institutional Banking Department and Regional Business Heads of Commercial Banking Department to discuss the audit comments that have arisen during the quarter, actions to minimise such audit comments and the progress in rectification of audit comments. MD & CEO, EDs and Heads of relevant Departments / Head of Branch Banking /Business Heads shall be permanent invitees to such meetings.

As per the requirement of Companies Act, 2013, Bank has formulated Internal Financial Controls framework. Risk and Controls associated with each process in the Bank are documented under the Internal Financial Controls Framework. Internal Audit Department plays a significant role in testing the control effectiveness for each process under the framework.

The Internal Audit function provides independent assurance to the Board of Directors and Senior Management on the quality and effectiveness of the bank's internal control, risk management and governance systems and processes, thereby helping the Board and Senior Management protect the bank and its reputation.

31. PLAN AND STATUS OF IND AS IMPLEMENTATION

The Ministry of Corporate Affairs (MCA), Government of India notified the Companies (Indian Accounting Standards)

Rules, 2015 on February 16, 2015. Further, a press release dated January 18, 2016, was issued by the MCA outlining the roadmap for implementation of IFRS converged Ind AS for banks. This roadmap required banks to prepare Ind AS based standalone & consolidated financial statements for the accounting periods beginning April 01, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. RBI, through its notification dated February 11, 2016, required all scheduled commercial banks to comply with Ind AS for financial statements from the stated periods and also stated that early adoption of Ind AS is not permitted.

The implementation of Ind AS by banks requires certain legislative amendments to make the format of financial statements, prescribed in the Third Schedule to Banking Regulation Act, 1949, compatible with accounts under Ind AS. Considering the amendments needed to the Banking Regulation Act, 1949, as well as the level of preparedness of several banks, RBI, through its Statement on Developmental and Regulatory Policies dated April 05, 2018, had deferred the implementation of Ind AS by a year.

The legislative amendments recommended by the Reserve Bank are under consideration of the Government of India. Accordingly, RBI through its notification dated March 22, 2019 deferred the implementation of Ind AS till further notice.

Even though RBI has deferred the implementation, the Bank is gearing itself to bring the necessary systems and processes in place to facilitate the Proforma submission to RBI and seamless transition to Ind AS. With respect to the various instructions from the Ministry of Corporate Affairs and Reserve Bank of India (RBI), the actions taken by the Bank are summarized as follows:

• A steering committee was formed by MD & CEO with ED as its Chairman with members from all crossfunctional departments. The Committee oversees the progress of Ind AS implementation in the Bank and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management.

• The implementation of IT solution procured to automate the computation of Expected Credit Losses (ECL), Effective Interest Rate, Fair valuation and other accounting changes required under Ind AS is completed and Bank is generating extracts from the system on a half yearly basis.

• The Bank is now in the process of implementing the other assessed changes required in existing IT architecture and other processes to enable smooth transition to Ind AS.

• The Bank is continuing to submit the quarterly progress report on the status of Ind AS implementation to the Audit Committee of the Board.

• The Bank is submitting half yearly Proforma Ind

AS financial statements to the RBI within the

stipulated timeline.

• Training to the employees is imparted in

a phased manner.

The key impact areas during the implementation of Ind AS for the Bank include effective interest rate accounting, fair valuation inputs, methodologies and assumptions, specific valuation considerations in many instruments, expected credit losses, employee stock options and implementation of technology systems.

32. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy and technology absorption pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is mentioned below.

32.1 Conservation of Energy:

The Bank has undertaken various initiatives for the conservation of energy and have taken efforts to contribute to low carbon economy which includes the following:

Steps taken / impact on conservation of energy:

• Electric vehicle (EV) charging infrastructure has been established at key office locations, including Federal Towers (Head Office, Aluva), Ashokapuram Currency Chest, Federal Towers - New Delhi Zonal Office, Bengaluru Zonal Office, and Akshaya Shanti - Chennai Zonal Office.

• The Bank has implemented energy-efficient, inverter- based air conditioning systems using eco-friendly refrigerants such as R32 and R410A for all new installations as well as replacements.

• All Bank offices have been fully upgraded to 100% LED lighting, thereby improving overall energy efficiency.

• Rainwater harvesting systems have been installed across multiple locations, with a combined capacity of approximately 1.39 lakh litres.

• Sewage Treatment Plants (STPs) with a total water recycling capacity of 40 kilolitres per day is operational at two office locations in Aluva.

• IoT-enabled energy management devices have been deployed in air conditioning units across 350 ATM sites to enable monitoring and optimization of energy consumption.

• The Bank has achieved IGBC Green Interior certification for 5.5% of its total occupied area, enhancing resource efficiency and ensuring optimal utilization of energy and materials.

Steps taken by the Bank for utilizing alternate sources of energy:

• Bank has developed an in-house solar power generation capacity of 570 KW.

The capital investment on energy conservation equipment:

• Bank has invested a total of Rs 12.32 Crore/-+ GST as capital investment on energy conservation equipment's this year.

32.2 Technology Absorption:

Leveraging Banking Technologies and AI Adoption

The Bank is placing AI and advanced analytics at the core of its transformation—shifting from reactive servicing to predictive, proactive engagement. A unified enterprise data platform will deliver a real-time, single customer view, enabling faster, smarter decision-making at scale. On this foundation, AI-driven models will anticipate customer needs and drive next-best actions—personalised offers, financial insights, and risk interventions. A key differentiator is the Hyper-Personalisation Engine, acting as a central decision layer to enable real-time, one-to-one engagement across channels. This is further strengthened by omnichannel orchestration, ensuring seamless, consistent, and contextual customer experiences.

CRISIL ICON enables end-to-end digital credit rating through unified model hosting, configurable workflows, and enhanced risk parameters—strengthening credit decisioning and risk management. The API Gateway, aligned with the Bank's API-first strategy, delivers secure, standardized, and reusable integrations across internal systems and partners— reducing complexity, accelerating time to market, and supporting scalable transaction growth.

Together, these initiatives enhance system resilience, scalability, and governance, enabling faster product launches, optimized resource utilization, and advancing the Bank's long-term digital-first vision.

Security Across Digital Channels

• Instant Threat Containment: Real-time monitoring systems enable immediate alerts and automated blocking of suspicious transactions.

• Multi-Channel Analysis: Advanced analytics, including Graph Neural Networks, detect complex fraud patterns across accounts, devices, and channels.

• Adaptive Intelligence: AI/ML-driven systems

continuously learn and adapt to emerging fraud typologies without manual rule updates.

• Behavioural Profiling: Silent biometrics (e.g., typing patterns, navigation behavior) identify unauthorized access even with valid credentials.

The Bank has implemented a multi-layered fraud risk management framework, leveraging advanced FRM solutions to monitor financial and non-financial transactions across all channels, including CBS, cards, UPI, internet, mobile, and corporate banking.

The Bank is also integrating cloud infrastructure, automation and AI-driven solutions to improve customer experience, analytics capabilities and decision-making

Strengthening Digital Capabilities through Cloud, AI, and Automation

• Cloud Infrastructure: Adoption of modern cloud technologies enables scalable, secure, and resilient operations, supporting faster deployments, seamless integrations, and rapid digital innovation.

• Automation for Efficiency: Intelligent automation, including RPA and workflow tools, streamlines processes, reduces turnaround time, minimizes errors, and enhances operational productivity.

• AI-Driven Solutions: AI-powered tools, including chatbots and generative AI, deliver personalized customer experiences, automate insights, and improve decision-making across credit and lending.

• Advanced Analytics: Integrated data platforms enable real-time insights, predictive analytics, and targeted engagement through a unified view of customer and operational data.

32.3 Foreign Exchange Earnings and Outgo:

Foreign Exchange earnings and outgo are part of the normal banking business of the Bank.

33. TECHNOLOGY AND DIGITAL UPDATES AND MEASURES TAKEN IN IT GOVERNANCE, INFORMATION SECURITY, IT AUDIT, IT OPERATIONS, IT SERVICES OUTSOURCING

Technology and Digital updates

IT provides the strong foundation that enables the Bank to grow extensively and gain market share. In the following paragraphs, we provide more details of the entire governance structure over IT, with focus on information security.

IT governance comprise processes that ensure the effective and efficient use of IT in enabling our organization to achieve its goals. It is an integral part of corporate governance and consists of the organizational structures, leadership and process that ensure IT sustains and extends the organization's strategy and objectives.

The governance of IT is effectively supervised by the Board of Directors through the IT & Operations Sub-Committee consisting of minimum three Directors with at least one

Independent Director. All members of the Committee have extensive experience in IT & Operations and are able to provide effective guidance and direction to the management team.

Executive Level Committee which oversees the IT governance function include the Operations Risk Management Committee (ORMC), the Information Security Committee (ISC), the IT Steering Committee (ITSC) and the Project Steering Committee (PSC).

The Bank has a well-defined Information System Security Policy and a Cyber Security Policy. The effective implementation of these policies is supervised by the Information Security Committee and by the IT & Operations Committee of the Board.

The Bank keeps updating the technology infrastructure and software to stay current in the market. These upgrades are done after proper testing and trials. Increasingly, Artificial Intelligence (AI) and Machine Learning(ML) are being integrated to personalize customer experience, detect fraud, automate routine processes and provide predictive insights for better decision making.

In recognition of the need for enhanced systems security, the Bank conducts a wide range of system audits, using internal and external auditors. These range from the quarterly Vulnerability Assessments (VA) and Penetration Testing (PT) to concurrent audits to an annual end to end audit of IT infrastructure. All the applications, both web based, and mobile based apps exposed to internet are subjected to external penetration testing (PT) before releasing to use.

Bank has deployed best in the class infrastructure to provide availability of service to users and customers without fail. The installed infrastructure is tested for its reliability and robustness by periodic audits. In addition, periodic Disaster Recovery Tests are conducted to ensure the ability to move to the Disaster Recovery infrastructure in the event of downtime in the main production capability.

With the increasing adoption of Artificial Intelligence (AI) across banking operations, Bank is in the process of establishing a comprehensive AI Governance Framework and Policy.

This initiative aims to ensure that the implementation and use of AI technologies are responsible, secure, transparent, and compliant with regulatory requirements. The framework will define guidelines for data usage, model governance, risk management, ethical considerations, and auditability, thereby enabling controlled and sustainable AI adoption across the enterprise.

More details on digital initiatives of the Bank are available in the Management Discussion and Analysis Report, forming part of this Integrated Annual Report.

34. BUSINESS RISK MANAGEMENT

The Bank's Risk Management framework is based on a clear understanding of various risks, robust risk assessment and measurement procedures and constant monitoring. The Board of Directors oversees all the risks assumed by the Bank. Specific Committees are constituted to facilitate focused oversight of various functions. The Risk Management Committee (RMC) of the Board sets the standards and governs the risk management functions, thereby bringing in a top to down focus on risk management. The RMC and the Information Technology and Operations Committee of the Board reviews all risk management policies of the Bank. The Committee reviews the Risk Appetite framework, Internal Capital Adequacy Assessment Process (ICAAP) and Stress testing. The Committee reviews setting up of risk limits and exposure ceilings, implementation of Basel III guidelines and the activities of the executive level risk management committees. The Committee assesses the level and direction of major risks pertaining to credit, market, liquidity, operational, reputation, technology, information security, compliance and capital adequacy position. In addition, the Committee oversees risks of Bank's subsidiaries covered under the Group Risk Management Framework.

The Risk Management Policies approved by the Board of Directors and reviewed from time to time with updated regulatory and internal guidelines form the governing framework for each type of risk.

The Integrated Risk Management Department (IRMD) of the Bank co-ordinates and administers the risk management functions in the Bank. The Department has four divisions for managing the main risk streams, Credit risk, Market risk, Operational risk and Information Security Division. Dedicated teams within the divisions are responsible for assessment, monitoring and reporting of various material risks. Default risk and asset quality of loan portfolio are monitored and managed by the Credit Risk Division. Market Intelligence Unit (MIU) formed for the purpose of monitoring large value accounts is linked to Credit Risk Division. The Bank has established an independent Mid Office as part of Market Risk Division for monitoring and management of risks in Bank's Treasury portfolios. A dedicated ALM team manages the liquidity risk and interest rate risk. A dedicated E&S/ESG team is also established as part of the IRMD. Operational Risk Management, Business Continuity Management, Third Party Risk Management are taken care by Operational Risk Division. Governance, Risk and Compliance related to Information and Cyber Security is handled by Information Security Division. All the divisions are independent of business operations and coordinate with representatives of the business units to implement the Bank's risk management Policies and frameworks. Executive level risk management Committees namely, Credit Risk Management Committee, Asset Liability Management Committee, E&S Committee, Operational Risk Management Committee and Information

Security Committee and Information Security Steering Committee (ISSC) regularly assess the respective risks and direct corrective actions wherever required. The risk management functions are coordinated by a Senior Executive designated as Chief Risk Officer who reports directly to the Managing Director & CEO. All material risks of the Bank emerging in the course of its business are identified, assessed and monitored in the Internal Capital Adequacy Assessment Process (ICAAP). In our view, all the material risks of the Bank are identified, assessed and managed adequately.

35. AUDITORS

35.1 Statutory Auditors

As mandated by RBI guidelines for Entities with asset size of RS. 15,000 crore and above as at the end of the previous year, the Statutory Audit of the Bank shall be conducted under joint audit of a minimum of two audit firms (Partnership firms / Limited Liability Partnerships (LLPs)).

The Shareholders in the 92nd Annual General Meeting held on August 18, 2023, approved the appointment M/s. Suri & Co, Chartered Accountants (Registration No. 004283S), Chennai, together with M/s. M S K A & Associates, Chartered Accountants (Registration No. 105047W), Mumbai for a period of three (3) years as Joint Statutory Auditors of the Bank from the conclusion of 92nd AGM till the conclusion of 95th AGM respectively.

As per the requirement of the Companies Act, 2013, M/s. Suri & Co, Chartered Accountants and M/s. M S K A & Associates, Chartered Accountants have confirmed that their appointment if made would be within the limits specified under Section 141(3) (g) of the Act and they are not disqualified to be appointed as statutory auditor/s in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

RBI vide letter Ref CO. DOS. RPD. No.

S3601/08.09.005/2025-26 dated August 05, 2025, had granted approval for appointment of M/s. Suri & Co, Chartered Accountants (FRN 004283S) and M/s. M S K A & Associates, Chartered Accountants (FRN 105047W) as the Joint Statutory Auditors of the Bank for FY 2025-26.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Suri & Co, Chartered Accountants (Registration No. 004283S), Chennai, and M/s. M S K A & Associates, Chartered Accountants (Registration No. 105047W), Mumbai have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

There is no qualification or adverse remark in Auditors' Report. There were some incidents of fraud requiring reporting by the Auditors under Section 143(12) of the Act.

The present Statutory Auditors of the Bank, M/s. Suri & Co, Chartered Accountants (Registration No. 004283S), Chennai, and M/s. M S K A & Associates, Chartered Accountants (Registration No. 105047W), Mumbai are retiring at the conclusion of this 95th Annual General Meeting after completion of their term for three years.

Based on the recommendations of the Audit Committee at its meeting dated March 20, 2026, the Board of Directors of the Bank at its meeting dated March 27, 2026, recommended the appointment of 1) M/s. Price Waterhouse LLP, Kolkata (ICAI Firm Reg. No. 301112E/E300264) and 2) M/s. K

5 Aiyar & Co, Mumbai, (ICAI Firm Reg. No 100186W) as Joint statutory auditors of the bank. RBI vide its letter dated May 13, 2026, has granted approval for the appointment of M/s Price Waterhouse LLP (FRN 301112E/E300264) and M/s K S Aiyar & Co (FRN 100186W) as the Joint Statutory Auditors of the Bank for the FY 2026-27, for their first year.

Based on the RBI approval, the Audit Committee through Circular Resolution approved on June 22, 2026 recommended to the Board and the Board at its meeting dated June 25, 2026 approved the appointment of M/s. Price Waterhouse LLP Kolkata, and M/s K S Aiyar & Co, Mumbai, as the Joint Statutory Auditors of the Bank for a period of three years commencing from financial year 2026-27.

As per the requirement of the Companies Act, 2013, M/s. Price Waterhouse LLP, Kolkata, and M/s K S Aiyar & Co, Mumbai have confirmed that their appointment if made would be within the limits specified under Section 141(3) (g) of the Act and they are not disqualified to be appointed as statutory auditor/s in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

Accordingly, approval of the members is requested for appointment of 1) M/s. Price Waterhouse LLP, Kolkata (ICAI Firm Reg. No. 301112E/E300264) and 2) M/s. K S Aiyar

6 Co, Mumbai, (ICAI Firm Reg. No 100186W) for a period of 3 years as Joint Statutory Auditors of the Bank from the conclusion of 95th AGM till the conclusion of 98th AGM, subject to the approval of the RBI every year. The aggregate audit fee payable to the proposed Joint Statutory Auditors for the first year of their appointment shall be ^400 Lakh (Rupees Four Hundred Lakh only), exclusive of applicable taxes and reimbursement of out-of-pocket expenses. The Members are further requested to authorize the Board of Directors of the Bank, including any Committee of the Board thereof, to consider and approve any revision or enhancement in the audit fees for the second and third years of their tenure, as well as to determine and approve the fees payable for any additional certificates, reports, attestations or other services required to be issued or rendered by the Joint Statutory Auditors which are not covered under the terms of the engagement and to do all such acts, deeds, matters and things as may be necessary or expedient in this regard, without being required to seek any further consent or approval of the Members of the Bank. The remuneration paid to the Statutory Auditors will be disclosed in the Corporate Governance Report as well as the Annual Financial Statements of the Bank on an annual basis.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Price Waterhouse LLP, Kolkata, and M/s K S Aiyar & Co, Mumbai, have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

Price Waterhouse LLP, established in 1949 and converted into a limited liability partnership in 2020, is a firm of Chartered Accountants registered with the Institute of Chartered Accountants of India (ICAI) (Firm Registration No. 301112E/E300264). The firm is headquartered in Kolkata and has a presence across 16 cities in India. It is a member firm of Price Waterhouse & Affiliates, a network of independent Indian CA firms registered with ICAI (Network Registration No. NRN/E/14). It has a total of 113 Partners, as at March 31,2026. The firm primarily provides audit and assurance services and holds a valid peer review certificate, with extensive experience in auditing companies listed on Indian stock exchanges, including those in the Financial Services sector. The firm is having 22 years of experience as Statutory Central Auditors for Banks as at March 31,2026.

K S Aiyar & Co., established in 1897, is a partnership firm registered with the Institute of Chartered Accountants of India (ICAI) (Firm Registration No. 100186W). The firm is headquartered in Mumbai and has a presence across key cities including Hyderabad, Chennai, Bengaluru, Kolkata, and Coimbatore. It has a total of 21 partners, K S Aiyar & Co. provides a wide range of professional services including assurance, direct and indirect taxation, and consultancy, and is empanelled with regulatory authorities such as RBI, SEBI, and IRDAI. The firm is having 15 years of experience as Statutory Central auditors for Banks.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Price Waterhouse LLP (ICAI Firm Reg. No. 301112E/E300264), and K S Aiyar & Co (ICAI Firm Reg. No 100186W) have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

35.2 Secretarial Auditors

Pursuant to the provisions of Section 204 of The Companies Act, 2013, the Bank has appointed SEP & Associates LLP, Company Secretaries, Kochi as Secretarial Auditors to conduct Secretarial Audit of the Bank for the FY 2025-26. Accordingly, the Secretarial Audit Report for FY 2025-26 is annexed to this report as Annexure C. The Audit Report issued by the Secretarial Auditors for the said Financial Year forms part of this Report which is self-explanatory.

No offence of fraud was reported by the Secretarial Auditor of the Bank under Section 143(12) of the Act.

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Master Circular No. SEBI/HO/CFD/CFD-PoD-2/ CIR/P/2024/185 dated December 31, 2024, the Bank has obtained Secretarial Compliance Report, certified by CS Puzhankara Sivakumar, SEP & Associates LLP for Financial Year ended March 31, 2026, on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder and the copy of the same was submitted with the Stock Exchanges.

36. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Bank has established a robust Fraud Risk Management Framework that provides comprehensive guidance on identifying, assessing, and mitigating fraud risks. All reported or detected cases are thoroughly investigated,

including root cause analysis and appropriate process improvements and systemic controls are implemented to prevent recurrence.

A combination of preventive, detective, and surveillance measures are deployed to address both internal and external fraud risks. Continuous sensitization initiatives for employees and customers play a critical role in fostering a culture of vigilance and risk awareness.

Vigilance Department conducts Preventive Vigilance Workshops aimed at highlighting vulnerabilities commonly exploited by fraudsters and equipping employees with practical strategies to mitigate such risks. In addition, Fraud Prevention Committee meetings are held regularly at the branch level to enhance awareness of emerging fraud trends, their modus operandi, and appropriate preventive measures. Annual Preventive Vigilance Assessments are undertaken in selected branches based on risk profiling to strengthen internal controls.

The Bank remains committed to spreading awareness on financial/ cyber frauds among the public through multiple communication channels, including SMS alerts, emails, branch displays, website messages, and internet banking platforms. Particular emphasis is placed on cyber fraud awareness. The "Twice is Wise" cybersecurity campaign, launched in 2020, continues to serve as a key initiative in promoting safe banking practices. Through this campaign, as well as the dissemination of alerts, posters, and educational videos via social media, television, and digital platforms, the Bank actively educates customers on emerging cyber threats and preventive measures.

The Bank has implemented a robust Whistle Blower Policy, known as the Protected Disclosure Scheme (PDS). This policy underscores our commitment to maintaining the highest standards of ethics and integrity in all our operations and aims to establish an effective vigil mechanism within the Bank to identify and address aberrations at the earliest.

It serves as a robust mechanism through which directors, employees, employee representative bodies, customers, other stakeholders, Non-Govermental Organizations (NGOs), and members of the public can report any unethical practices or concerns. PDS ensures strict confidentiality and offers protection to whistleblowers against any form of retaliation, discrimination, or victimization. A dedicated email ID is available for submitting disclosures under this scheme. All complaints received are examined thoroughly, and appropriate action is taken in accordance with established procedures. The functioning of the whistleblower mechanism, along with details of complaints received and actions taken, is periodically reviewed by the Audit Committee of the Board. No one has been denied access to the Audit Committee to express concerns or report grievances under the Whistle Blower Policy and / or vigil mechanism.

37. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the financial year under review, the Bank has not received any significant and/or material orders passed by any Regulatory Authority, Court or Tribunal which could impact the going concern status and Bank's operations in future.

38. PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each Director to the median remuneration of the employees of the Bank and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure D.

39. INTERNAL COMMITTEE [INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013]

The Bank had constituted Internal Committee, as per letter and spirit contained in the provisions of "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013", at 10 Zones and Head Office to prevent and redress the complaints relating to sexual harassment and to organize workshops/ awareness programs to empower women employees while handling cases relating to sexual harassment. Workshops/ awareness programs regarding women empowerment were conducted at various locations pan India. The data with regard to the redressal of complaints by the Internal Committee are as follows:

40. COMPLIANCE WITH RESPECT TO THE PROVISIONS OF MATERNITY BENEFIT ACT, 1961

41. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

As per section 3(7) of The Insolvency and Bankruptcy Code, 2016, Corporate person does not include any financial service provider, thereby the Bank is excluded from the purview of the Code. There have been several applications made or are pending in the name of the Bank as a Financial creditor against any default occurred as part of the course of business. The particulars of the corporate debtor and claim value is annexed to this report as Annexure E.

42. POLICY ON BOARD DIVERSITY

The Bank has adopted Policy on Board Diversity and emphasis is given to maintain diversity of thoughts, experience, knowledge, education, skills, perspective, culture, age and gender, while scrutinising a candidature for appointment as a Director on the Bank's Board.

The Policy on Board Diversity of the Bank mainly depends on the qualifications for appointment of Directors of the Bank as contained in the Banking Regulation Act, 1949 and satisfying the Fit and Proper Criteria for directors as per the regulatory requirement of RBI.

The Bank continuously seeks to enhance the effectiveness of its Board and to maintain the highest standards of corporate governance and recognizes and embraces the benefits of diversity in the boardroom. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities. In forming its perspective on diversity, the Bank also takes into account factors based on its own business model and specific needs from time to time.

Board Diversity enhances the quality of performance of the Board; ushers in independence in the performance of the Board; eradicates the gender bias in the Board; achieves sustainable and balanced performance and development; supports the attainment of strategic objectives & also ensures compliance of applicable law/s and good corporate practices.

The Nomination, Remuneration, Ethics and Compensation Committee has the responsibility for leading the process for Board appointments and for identifying and nominating, for approval by the Board, candidates for appointment to the Board. The benefits of diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of directors to the Board. Board appointments will be based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender. While making Board appointments, the regulatory requirements for appointment of at least one- Woman Independent Director on the Board of the Bank is also considered.

43. DIRECTOR'S RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained to us, the Directors make the following statements in terms of Section 134 (3) (c) and 134(5) of the Companies Act, 2013:

i. that in the preparation of the annual financial statements for the year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so

as to give a true and fair view of the state of affairs of the Bank as at March 31, 2026, and of the profit of the Bank for the year ended on that date;

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

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

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

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

44. GENERAL

Your directors state that no disclosure or reporting is

required in respect of the following items as there were no

transactions on these items during the year under review:

• Neither the Managing Director nor the Whole-time Directors of the Bank received any remuneration or commission from any of its subsidiaries.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• There were no revisions in the financial statements.

• Issue of share (including sweat equity shares) to employees of the Company under any scheme as permitted under any provision of Companies Act, 2013 except Employee Stock Option Scheme (ESOS) as mentioned elsewhere in the Directors' Report.

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

• The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

45. ACKNOWLEDGEMENT

The Board of Directors places on record its heartfelt appreciation and gratitude to every member of the Federal family for their unwavering dedication, hard work, and commitment. The Bank's accomplishments this year underscore the collective dedication and high standards consistently demonstrated by its people.

The Board also takes this opportunity to express its sincere gratitude to the Government of India, the Reserve Bank of India, MCA, SEBI and other statutory and regulatory authorities, financial institutions, registrar and share transfer agent, debenture trustees, depositories and various State Governments, both in India and abroad for their continued guidance, support, and cooperation. We are equally thankful to Investment Banks, Rating Agencies, and Stock Exchanges for their steadfast support.

We remain deeply grateful to our esteemed customers and all well-wishers for their continued trust and patronage.

Above all, to you—our valued shareholders—we express our profound gratitude for the enduring confidence and faith you have placed in us.