The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31^st March, 2023.

Global Business Performance

The global economy remained volatile in FY 2022-23. It has been a challenging year for the global economy in general and the banking industry in specific. In addition to COVID-19's lingering impact, the world witnessed multi-decade high level of inflation rates across countries due to supply chain disruptions and elevated energy prices following Russia's invasion of Ukraine.

To combat this situation, Central Banks across the world continued to withdraw their accommodative stance in a calibrated manner which led to tightening of liquidity across global markets and an increase in interest rates. This posed a downside risk to global economic growth prospects due to contraction in consumption and output. More recently, the turmoil of a few banks in US and Europe has resulted vulnerabilities in the banking sector and concerns about global financial stability and systemic risk.

The International Monetary Fund (IMF) predicts the global economy will grow by 2.8% this year and 3% in 2024. Emerging and developing economies to grow 3.9% in 2023 from 4% in 2022, with major contributions from India and China.

Indian economy remained resilient amidst these uncertainties on account of strong economic fundamentals and robust balance sheets of the corporate sector and banks enabled a rebound in credit demand, which was also facilitated by a large increase in capex by the centre.

India's GDP growth accelerated to 6.1% in the January to March 2023 quarter from an upwardly revised 4.5% growth in previous quarter. For the full financial year, the economy growth was reported at 7.2% higher than the earlier Second Advance Estimate of 7%. In the previous financial year, India had seen 9.1% GDP growth. The surge is primarily driven by improved performance in agriculture, manufacturing, mining, and construction sectors. There was a broad-based improvement in growth across sectors. The strength in domestic demand supported the growth amid the global slowdown

The Reserve Bank of India has projected real GDP growth of India for 2023-24 at 6.5 % with Q1:2023-24 at 7.8%; Q2 at 6.2 %; Q3 at 6.1 %; and Q4 at 5.9 %; with risks evenly balanced.

Financial Performance

Banks global Business stood at Rs.4,49,892 Crores as of 31^st March 2023 as compared to Rs.4,17,960 Crores as of 31^st March 2022. Deposits and Advances stood at Rs.2,60,883

Crores and Rs.1,89,009 Crores as of 31^st March 2023 as compared to Rs.2,62,159 Crores and Rs.1,55,801 Crores as of 31^st March 2022 respectively.

CASA deposits stood at Rs.1,14,113 Crores as on 31^st March 2023 as compared to Rs.1,13,877 Crores as on 31^st March 2022 a landmark achievement in the history of the Bank. CASA ratio improved from 43.44% to 43.74% during the financial year 2022-2023.

The credit growth of the bank has increased by 21.31% (Y-o-Y) to Rs 1,89,009 Crores as on March 31^st 2023. The efforts during the current year were aimed at sustaining the higher operational efficiency levels as the operating environment remained firm. Bank continued to expand RAM segment advances and accelerated the growth under Capital light advances such as Housing and Jewel loan. As a result, operating profit for the Bank has increased to Rs.5942 Crores as on 31^st March 2023 as compared to Rs. 5763 Crores as on 31^st March 2022.

On the asset quality side, the Bank has seen decrease in both gross NPA & Net NPA. The Gross NPA of the Bank has deceased to Rs 14,072 Crores (7.44%) as on 31.03.2023 from Rs 15,299 Crores (9.82%) reported in the financial year ended 31.03.2022. Similarly, the Net NPA of the bank has decreased to Rs 3,266 Crores (1.83 %) from Rs 3,825 Crores (2.65 %) for the above said period.

As a result of this approach, The Net profit of the Bank has increased by 22.76 % to Rs 2,099 Crores in the financial year ended 2022-23 from Rs 1,710 Crores as on 31.03.2022 on the back of strong growth in Net Interest Income and Improvement in asset quality.

Income and Expenditure Analysis

The Interest received on advances increased by 23.31 % (YoY) to Rs.13151 Crores as on 31^st March 2023 on compared to Rs.10665 Crores received over previous year . Interest on investments has increased to Rs. 5899 Crores in FY 2022-23 as against Rs. 5675 Crores in FY 2021-22. Overall interest income has improved substantially to Rs. 19401 Crores in FY 2022-23 as against 16730 Crores in FY 2021-22.

The Interest on Deposits stood at to Rs.10536 Crores in FY 2022-23 as compared to Rs.10220 Crores paid in previous year. Interest on Borrowings has increased to Rs.609 Crores in FY 2022-23 as against Rs.199 Crores in FY 2021-22. Overall Interest Expenses has increased to Rs. 11145 Crores in FY 2022-23 as against Rs.10419 Crores in FY 2021-22.

CASA has improved from Rs.113877 Crores as of 31^st March-2022 to Rs.114113 Crores as of 31^st March-2023 with a growth of 0.21%. CASA% has moved up from 43.44% as of 31^st March-2022 to 43.74% as of 31^st March-2023.

Net interest income has improved from Rs. 6311 Crores in FY 2021-22 to Rs. 8255 Crores in FY 2022-23. Operating expenses has increased to Rs. 6422 Crores in FY 2022-23 as against Rs.5451 Crores in FY 2021-22.

Yield on Advances has improved from the level of 7.24 % in FY 2021-22 to 8.52 % in FY 2022-23. Cost of deposits has been increased from 4.12 % in FY 2021-22 to 4.27 % in FY 2022-23. As a result, Net Interest Margin (NIM) stood higher by 79 bps at 3.20 percent in FY 2022-23 as against 2.41 percent in FY 2021-22.

Capital Raised during 2022-23 Raising of Tier II Bonds

Bank has raised Basel III compliant Tier II Bonds (Series V) aggregating to Rs.1000 crore on private placement basis at a coupon rate of 9.00% with a tenor of 10 years from the date of allotment with a call option at the end of 5^th year & on subsequent coupon payment date. The instrument was rated by M/s ICRA Ratings and M/s CARE Ratings, and they had assigned ratings of AA-/Stable.

Corporate Governance

Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders which also facilitate effective monitoring.

SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015 (LODR)

As per SEBI (LODR),

• The Bank is providing remote e-voting facility to its shareholders, in Annual General Meetings/ Extraordinary General Meetings.

• The Code of Conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).

• The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to BSE & NSE, where the shares of the Bank are listed.

The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.

Investor Education & Protection Fund (IEPF)

As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank has transferred Unpaid Dividend amount up to the year 2013-14 to IEPF.

Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholders grievances without any delay.

Capital Adequacy Ratio

The Bank's capital adequacy ratio as on 31^st March 2023 stood at 16.10 % as per Basel III norms.

Branch Network

The Bank has 3,220 domestic Branches as on 31^st March 2023 as against 3,214 Branches as on 31^st March 2022, comprising of 906 Rural Branches (28.13%), 961 Semi Urban Branches (29.84%), 655 Urban Branches (20.34%) and 698 Metropolitan Branches (21.68%). The Bank also has 49 Regional Offices, 2 Extension Counters, 1 Satellite Office, 3 City Back Offices and 6 Nodal Audit Offices. During the year under review (FY 2022-23), the Bank has opened 4 Rural Branches, 2 Digital Banking Units & One Regional Office.

Board of Directors

The business of the Bank is vested with the Board of Directors. The MD & CEO and EDs function under the superintendence, direction and control of the Board. The strength as on date is nine directors comprising three whole time Directors, one GOI Nominee Director, one RBI nominee director, one director elected from amongst the shareholders to duly represent their interest and three part time non-official directors. The MD & CEO presides over the meetings of the Board as Chairman.

# Shri Navin Prakash Sinha has been re-elected as Share Holder Director for the second term from 29.01.2021 till 28.01.2024. However, Shri Navin Prakash Sinha has resigned on 07.10.2022.

Acknowledgement

The Board of Directors are grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, State Governments, Financial Institutions and all Overseas Regulators. The Board of Directors acknowledge with thanks the valued Customers, Employees Union, Officers Association, Domestic and International Banking group, the shareholders & other stake holders for their valued support and continued patronage with the Bank.

The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bank's Staff at all levels and looks forward to their continued involvement with commitment towards achieving the future goals

For and on behalf of the Board of Directors

Place : Chennai Ajay Kumar Srivastava

Date : 13^th June 2023 Managing Director & Chief Executive Officer