18. Accounting for provisions, contingent liabilities and
contingent assets

In accordance with AS-29, “Provisions, Contingent
Liabilities and Contingent Assets”, the Bank recognises

provisions when it has a present obligation as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and when a reliable estimate of the amount
of the obligation can be made.

Provisions are determined based on management estimate
required to settle the obligation at the Balance Sheet date,
supplemented by experience of similar transactions.
These are reviewed at each Balance Sheet date and
adjusted to reflect the current management estimates.

A disclosure of contingent liability is made when there is:

•    a possible obligation arising from a past event,
the existence of which will be confirmed by the
occurrence or non-occurrence of one or more
uncertain future events not within the control of the
Bank; or

•    a present obligation arising from a past event which
is not recognised as it is not probable that an outflow
of resources will be required to settle the obligation
or a reliable estimate of the amount of the obligation
cannot be made.

When there is a possible obligation or a present obligation
in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.

Contingent assets, if any, are not recognised in the
financial statements since this may result in the recognition
of income that may never be realised.

19.    Cash and cash equivalents

Cash and cash equivalents include cash, gold in
hand, rupee digital currency with RBI, balances with
RBI, balances with other banks and money at call and
short notice.

20.    Share issue expenses

Share issue expenses are adjusted against Share
Premium Account in terms of Section 52 of the Companies
Act, 2013.

21.    Corporate social responsibility

Expenditure towards corporate social responsibility, in
accordance with Companies Act, 2013, is recognised in
the Profit and Loss Account.

SCHEDULE 18 - Schedules forming part of the standalone financial statements for the year ended
March 31, 2025

Amounts in notes forming part of the standalone financial statements for the year ended March 31, 2025 are denominated in
rupee crore to conform to extant RBI guidelines, except where stated otherwise.

1. Amalgamation of HDFC Limited

The Board of Directors at its meeting held on April 04, 2022, approved a composite Scheme of amalgamation (“Scheme”),
for the amalgamation of: (i) erstwhile HDFC Investments Limited (“eHDFC Investments”) and erstwhile HDFC Holdings
Limited (“eHDFC Holdings”), with and into erstwhile Housing Development Finance Corporation Limited (“eHDFC Limited”);
and thereafter (ii) eHDFC Limited into HDFC Bank Limited (“Bank”), and their respective shareholders and creditors, under
Sections 230 to 232 of the Companies Act, 2013 and other applicable laws including the rules and regulations. The Scheme
was approved by the shareholders at the National Company Law Tribunal (“NCLT”) convened meeting of the shareholders
of the Bank held on November 25, 2022. The NCLT, in accordance with Sections 230 to 232 of the Companies Act, 2013
and rules thereunder, vide its order dated March 17, 2023 sanctioned the Scheme. Upon receipt of all requisite approvals,
the Bank filed form INC 28 with Registrar of Companies on July 01, 2023 and accordingly, the Scheme became effective
on July 01, 2023. As per the Scheme, the appointed date for the amalgamation of eHDFC Limited with and into the Bank
is the same as effective date of the Scheme i.e. July 01,2023. The Profit and Loss Account for the year ended March 31,
2025 include the operations of eHDFC Limited which amalgamated with and into HDFC Bank on July 01,2023 and hence
are not comparable with the Profit and Loss Account for the year ended March 31, 2024.

The amalgamation was accounted under the ‘pooling of interest' method as prescribed in Accounting Standard-14
“Accounting for amalgamation” (“AS-14”). Outstanding balances between eHDFC Limited and the Bank were eliminated as
on July 01, 2023. All assets and liabilities of eHDFC Limited were recognised by the Bank at their carrying amounts as on
that date except for adjustments to bring about uniformity of accounting policies as required under AS-14. The share capital
of ' 311.04 crore issued by the Bank as consideration pursuant to the Scheme was adjusted against the corresponding
share capital of eHDFC Limited of ' 370.29 crore and the difference was adjusted to Amalgamation Reserve. Further,
excess of cost over face value of Investment in shares of the Bank by eHDFC Limited of ' 14,006.31 crore was adjusted
to Amalgamation Reserve. Consequently, the Bank recognised a debit balance of ' 13,947.06 crore in the Amalgamation
Reserve as a result of these adjustments.

Consequent upon amalgamation becoming effective, the authorised share capital of the Bank stood increased to ' 1,190.61
crore (11,90,61,00,000 shares of ' 1/- each) on account of transfer to and amalgamation / combination of authorised capital
of eHDFC Limited with the authorised share capital of the Bank. In terms of the Scheme, the Bank issued and allotted
3,11,03,96,492 equity shares to the shareholders of eHDFC Limited as on July 13, 2023, being the record date fixed by the
Board of Directors as per the Scheme, in accordance with the share exchange ratio i.e. 42 equity shares of face value of
' 1/- each of the Bank for every 25 equity shares of face value of ' 2/- each of eHDFC Limited. Accordingly, the paid-up
share capital of the Bank increased from ' 559.18 crore consisting of 5,59,17,98,806 equity shares of ' 1/- each to ' 753.76
crore consisting of 7,53,75,69,464 equity shares of ' 1/- each, post cancellation of 1,16,46,25,834 equity shares held by
eHDFC Limited in the Bank on that date in accordance with the provisions of the Scheme.

As part of the Scheme, certain leased out immovable properties of eHDFC Limited were transferred to the Bank on
amalgamation. The Bank has initiated necessary steps to foreclose these leases.

2.    Proposed dividend

The Board of Directors at its meeting held on April 19, 2025 proposed a dividend of ' 22.00 per equity share (previous year:
' 19.50 per equity share) aggregating to ' 16,834.89 crore subject to the approval of shareholders at the ensuing Annual
General Meeting. During the year ended March 31, 2025, the dividend paid by the Bank in respect of the previous year
ended March 31, 2024 was ' 14,826.19 crore. In terms of the AS-4 “Contingencies and events occurring after the balance
sheet date”, the Bank has not appropriated the proposed dividend from the Profit and Loss Account and the same will
be recognised in the year of actual payout post approval. However, effect of the proposed dividend has been reckoned in
determining capital funds in computation of the capital adequacy ratio.

3.    Change in accounting policy

The RBI, vide its master direction dated September 12, 2023, issued revised norms (herein after referred as ‘revised norms
on investments') for the classification, valuation and operation of investment portfolio of banks, which became applicable
from April 01, 2024. While hitherto, the investment portfolio was classified under the Held to Maturity (HTM), Available for
Sale (AFS) and Held for Trading (HFT) categories, the revised norms bring in a principle-based classification of investment
portfolio and a symmetric treatment of fair value gains and losses. In accordance with the revised norms and the Bank's
board approved policy, the Bank has classified its investment portfolio as on April 01, 2024 under the categories of Held to
Maturity (HTM), Available for Sale (AFS), subsidiaries, associates and joint ventures and Fair Value Through Profit and Loss
(FVTPL) with Held for Trading (HFT) as a sub-category of FVTPL, and from that date, measures and values the investment
portfolio under the revised framework. On transition to the framework on April 01, 2024, the Bank has recognised a net
gain of ' 482.87 crore (net of tax of ' 127.00 crore) which has been credited to general reserve, in accordance with the said
norms. The impact of the revised framework subsequent to the transition is not ascertainable and as such the income /
profit or loss from investments for the year ended March 31, 2025, is not comparable with that of the previous year.

4.    Capital adequacy

The Bank's capital to risk-weighted assets ratio (‘Capital Adequacy Ratio') is calculated in accordance with the RBI guidelines
on Basel III capital regulations (‘Basel III'). The minimum capital ratio requirement under Basel III as at March 31, 2025 and
March 31, 2024 is as follows:

As on March 31, 2025, the Bank's subordinated and perpetual debt capital instruments amounted to ' 22,000.00 crore
(previous year: ' 22,000.00 crore) and ' 12,286.50 crore (previous year: ' 12,079.50 crore) respectively.

In accordance with the RBI guidelines, banks are required to make consolidated Pillar 3 and Net Stable Funding Ratio (NSFR)
disclosures under the Basel III Framework. These disclosures would be available on the Bank's website at the following
link: https://www.hdfcbank.com/personal/resources/regulatory-disclosures. These disclosures have not been subjected
to audit by the statutory auditors of the Bank.

Capital infusion

During the year ended March 31,2025, the Bank allotted 5,53,11,012 equity shares (previous year: 4,66,21,586 equity shares)
aggregating to face value of ' 5.53 crore (previous year: ' 4.66 crore) on exercise of stock options / units. Accordingly, the
share capital increased by ' 5.53 crore (previous year: ' 4.66 crore) and the share premium increased by ' 6,340.97 crore
(previous year: ' 5,245.07 crore).

During the previous year, the Bank issued and allotted 3,11,03,96,492 equity shares to the shareholders of eHDFC Limited
in terms of the Scheme. Accordingly, the paid-up share capital of the Bank increased from ' 559.18 crore consisting of
5,59,17,98,806 equity shares of ' 1/- each to ' 753.76 crore consisting of 7,53,75,69,464 equity shares of ' 1/- each,
post cancellation of 1,16,46,25,834 equity shares held by eHDFC Limited in the Bank on that date in accordance with the
provisions of the Scheme. Further, share premium increased by ' 51,728.83 crore on amalgamation of eHDFC Limited.

During the previous year, the Bank allotted 2,47,75,632 equity shares pursuant to exercise of convertible share warrants
issued by eHDFC Limited. Accordingly, the share capital and share premium of the Bank increased by ' 2.48 crore and
' 3,455.79 crore respectively, including money received by eHDFC Limited at the time of allotment of share warrants.

The details of the movement in the paid-up equity share capital of the Bank are given below:

5. Employees Stock Options Outstanding

The cost of stock-based compensation is determined using the fair value method. For the year ended March 31, 2025, an
amount of ' 1,890.70 crore (previous year: ' 1,547.40 crore) is recognised in the profit and loss account and credited to
Employees Stock Options Outstanding account. In the previous year, upon amalgamation of eHDFC Limited with and into
the Bank, the Bank recognised ' 123.81 crore as Employees Stock Options Outstanding on account of fair valuation of
share-linked instruments.

During the year ended March 31, 2025, on exercise of share-linked instruments, an amount of ' 723.11 crore (previous
year: ' 84.18 crore) is transferred from Employees Stock Options Outstanding to share premium and on lapses of share-
linked instruments, an amount of ' 15.11 crore (previous year: ' 1.34 crore) is transferred from Employees Stock Options
Outstanding to General reserve.

Accounting for employee share based payments

The shareholders of the Bank approved the grant of equity stock options under Plan “C” in June 2005, Plan “D” in June

2007,    Plan “E” in June 2010, Plan “F” in June 2013, Plan “G” in July 2016 and Plan “H” in August 2024. The Bank also
approved the Employee Stock Incentive Master Scheme in May 2022. Under the terms of each of these plans, the Bank
may issue to its employees and Whole Time Directors, Equity Stock Options (‘ESOPs') or Restricted Stock Units (‘Units')
each of which is convertible into one equity share. Further, pursuant to the amalgamation of eHDFC Limited with and into
Bank effective from July 01, 2023, the existing ESOP Schemes of the eHDFC Limited comprising of eHDFC 2007, eHDFC

2008,    eHDFC 2014, eHDFC 2017 and eHDFC 2020 were taken over by the Bank.

All the plans were framed in accordance with the SEBI (Employee Stock Option Scheme & Employee Stock Purchase
Scheme) Guidelines, 1999 as amended from time to time and as applicable at the time of the grant. The accounting for the
stock options has been in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 and RBI guidelines to the extent applicable.

The plans provide for the issuance of options at the recommendation of the Nomination and Remuneration Committee of
the Board (‘NRC') at the closing price on the working day immediately preceding the date when options are granted. This
closing price is the closing price of the Bank's equity share on an Indian stock exchange with the highest trading volume
as of the working day preceding the date of grant. Further, the units are issued at the face value of the equity share of ' 1/-

6. Reserves and Surplus

Statutory Reserve

During the year ended March 31,2025, the Bank has made an appropriation of ' 16,836.84 crore (previous year: ' 15,203.07
crore) out of profits for the year to the Statutory Reserve pursuant to the requirements of Section 17 of the Banking
Regulation Act, 1949 read with RBI guidelines.

General Reserve

During the year ended March 31,2025, the Bank has made an appropriation of ' 6,734.74 crore (previous year: ' 6,081.23
crore) out of profits for the year to the General Reserve. Further, the Bank has transferred ' 15.11 crore (previous year:
' 1.34 crore) from Employee Stock Options Outstanding to General Reserve on lapses of share-linked instruments.

On transition to the revised norms on investments, the Bank has recognised a net gain of ' 482.87 crore (net of tax ' 127.00
crore) which has been credited to General Reserve.

Special Reserve

During the year ended March 31,2025, the Bank has made an appropriation of ' 3,200.00 crore (previous year: ' 3,000.00
crore) to the Special Reserve as per Section 36(1) (viii) of the Income-tax Act, 1961.

Amalgamation Reserve I

The balance of ' 1,063.56 crore represents excess of net assets taken over the paid-up value of equity shares issued as
consideration with respect to amalgamation of Times Bank Limited during FY 2000 and Centurion Bank of Punjab Limited
during FY 2009 with the Bank.

Amalgamation Reserve II

During the previous year, the share capital of ' 311.04 crore issued by the Bank as consideration pursuant to the scheme
was adjusted against the corresponding share capital of eHDFC Limited of ' 370.29 crore and the difference was adjusted
to Amalgamation Reserve. Further, excess of cost over face value of Investment in shares of the Bank by eHDFC Limited
of ' 14,006.31 crore was adjusted to Amalgamation Reserve. Consequently, the Bank recognised a debit balance of
' 13,947.06 crore in the Amalgamation Reserve as a result of these adjustments.

Capital Reserve

During the year ended March 31, 2025, the Bank has made an appropriation ' 507.00 crore (previous year: ' 4,166.42
crore), being the profit on sale of investments under HTM category and profit on sale of immovable properties, net of taxes
and transfer to statutory reserve, from the Profit and Loss Account to the Capital Reserve.

Investment Reserve Account

On transition to the revised norms on investments, the Bank has transferred ' 529.42 crore from the Investment Reserve
Account (IRA) to Investment Fluctuation Reserve (IFR).

In the previous year, the Bank had transferred ' 529.42 crore (net) from the Profit and Loss Account to the IRA as per the
RBI guidelines.

Investment Fluctuation Reserve

On transition to the revised norms on investments, the Bank has transferred ' 529.42 crore from the IRA to IFR.

During the year ended March 31,2025, the Bank has made an appropriation of Nil (previous year: ' 378.00 crore) to IFR.
As per RBI guidelines, banks are required to maintain an IFR equivalent to 2.00% of their AFS and FVTPL investment
portfolios. The balance in the IFR as at March 31, 2025 is 2.55% (previous year: 3.48%^A) of the Bank's AFS and FVTPL
investment portfolios.

^A For the year ended March 31, 2024 the ratio represents closing balance in IFR as a percentage of closing balance of investments in AFS and
HFT categories.

Foreign Currency Translation Reserve

As at March 31, 2025, the Bank has recognised ' 1,073.94 crore (previous year: ' 880.11 crore) as Foreign Currency
Translation Reserve on account of translation of foreign currency assets and liabilities of non-integral foreign operations.

Cash Flow Hedge Reserve

As at March 31, 2025, the Bank has recognised debit of ' 32.73 crore (previous year: credit of ' 840.31 crore) as Cash
Flow Hedge Reserve on derivative contracts designated as cash flow hedge.

AFS Reserve

Pursuant to the revised norms on investments, the net appreciation or depreciation on all performing investments held under
AFS category is directly credited or debited to AFS Reserve. Accordingly, as at March 31, 2025 the Bank has recognised
' 616.81 crore, net of taxes as AFS Reserve.

Draw down from Reserves

The Bank has not undertaken any drawdown from reserves during the years ended March 31, 2025 and March 31,2024.

Qualitative disclosure on LCR

The Liquidity Coverage Ratio (LCR) is one of the Basel Committee's key reforms to develop a more resilient banking sector.
The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks. It does this by ensuring
that banks have an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and
immediately into cash to meet their liquidity needs for a 30 calendar day liquidity stress scenario. The LCR is expected to
improve the banking sector's ability to absorb shocks arising from financial and economic stress, whatever the source,
thus reducing the risk of spillovers from the financial sector to the real economy.

The Liquidity Risk Management of the Bank is governed by the Asset Liability Management (ALM) Policy approved by the
Board. The Asset Liability Committee (ALCO) is a decision-making unit responsible for implementing the liquidity and interest
rate risk management strategy of the Bank in line with its risk management objectives and ensures adherence to the risk
tolerance / limits set by the Board. The Bank has also set up a senior level management committee, viz., the Group Risk
Management Committee (GRMC) under the ICAAP framework of the Bank, to establish a formal and dedicated structure
to periodically assess the nature / quantum of material risks of the subsidiaries and adequacy of its risk management
processes, including providing oversight for managing liquidity risk. Liquidity for the Bank's domestic banking operations
is directly managed at the Head Office. The overseas branches and offshore unit of the Bank independently manage their
liquidity requirements with support from the Head Office. Similarly, the Bank's subsidiaries independently manage their
liquidity requirements under guidance of the GRMC, which, along with senior management of the subsidiaries, reviews
the risk assessment of material risks at the subsidiaries. Further, the Bank maintains suitable systems and processes to
monitor liquidity requirements in other currencies as appropriate.

In order to determine cash outflows, the Bank segregates its deposits into various customer segments, viz., Retail (which
include deposits from individuals), Small Business Customers (those with deposits upto ' 7.5 crore), and Wholesale (which
would cover all residual deposits). Other contractual funding, including a portion of other liabilities which are expected
to run down in a 30-day time frame are included in the cash outflows. These classifications, based on extant regulatory
guidelines, are part of the Bank's LCR framework, and are also submitted to the RBI.

The LCR is calculated by dividing a Bank's stock of HQLA by its total net cash outflows over a 30-day stress period. The
present minimum requirement, as on March 31, 2025, is 100%.

I n the Indian context, the run-off factors for the stressed scenarios are prescribed by the RBI, for various categories
of liabilities (viz., deposits, unsecured and secured wholesale borrowings), undrawn commitments, derivative-related
exposures, and offset with inflows emanating from assets maturing within the same time period. Given below is a table of
run-off factors and the average LCR maintained by the Bank quarter-wise over the past two years:

The average LCR for the quarter ended March 31, 2025, was at 118.96% as against 114.73% for the quarter ended March
31,2024, and above the present prescribed minimum requirement of 100%. The average HQLA for the quarter ended March
31, 2025, was ' 725,568.81 crore, as against ' 558,424.94 crore for the quarter ended March 31,2024. During the same
period the composition of government securities and treasury bills in the HQLA was at 96.55% as compared to 95.74% in
the previous year.

For the quarter ended March 31, 2025, derivative exposures (net of cash inflows) / collateral requirements and undrawn
commitments constituted around 0.47% and 1.28% respectively of average cash outflow as against 0.59% and 1.54%
respectively for quarter ended March 31,2024. The Bank has a significant portion of funding through deposits. As of March
31, 2025, the top 20 depositors comprised of 4.32% of total deposits indicating a healthy and stable deposit profile.

•    Unhedged foreign currency exposure

The Bank has in place a policy and process for managing currency induced credit risk. The credit appraisal
memorandum prepared at the time of origination and review of a credit facility is required to discuss the exchange
risk that the customer is exposed to from all sources, including trade related, foreign currency borrowings and external
commercial borrowings. It could cover the natural hedge available to the customer as well as other hedging methods
adopted by the customer to mitigate exchange risk. For foreign currency loans granted by the Bank beyond a defined
threshold the customer is encouraged to enter into appropriate risk hedging mechanisms with the Bank. Alternatively,
the Bank satisfies itself that the customer has the financial capacity to bear the exchange risk in the normal course of
its business and / or has other mitigants to reduce the risk. On a periodic basis, the Bank reviews information on the
unhedged portion of foreign currency exposures of customers, whose total foreign currency exposure with the Bank
exceeds a defined threshold. A Board approved credit risk rating linked limit on unhedged foreign currency position
of customers is applicable when extending credit facilities to a customer. The compliance with the limit is assessed
by estimating the extent of drop in a customer's annual Earnings Before Interest and Depreciation (‘EBID') due to
a potentially large adverse movement in exchange rate impacting the unhedged foreign currency exposure of the
customer. Where a breach is observed in such a simulation, the customer is suitably advised to review and manage
its unhedged exposure, where deemed necessary.

The Bank holds standard asset provisions of ' 318.05 crore (previous year: ' 392.13 crore) and maintains capital
(including D-SIB) of ' 1,551.56 crore (previous year: ' 1,692.53 crore) as at March 31,2025, in respect of the unhedged
foreign currency exposure of its customers.

•    Details of Single Counterparty Limit / Limit for Group of Connected Counterparties exceeded by the
Bank

The RBI has prescribed limits linked to a bank's eligible capital base in respect of exposures to single counterparty
and group of connected counterparties. During the years ended March 31, 2025 and March 31, 2024 the Bank was
within the limits prescribed by the RBI.

•    Inter-bank Participation with risk sharing

The aggregate amount of participation issued by the Bank and reduced from advances as per regulatory guidelines
as at March 31, 2025 was ' 77,703.73 crore (previous year: ' 62,920.05 crore).

• Qualitative disclosures on risk exposure in derivatives

Overview of business and processes

Derivatives are financial instruments whose characteristics are derived from underlying assets, or from interest rates,
exchange rates or indices. These include forwards, swaps, futures and options. The notional amounts of financial
instruments such as foreign exchange contracts and derivatives provide a basis for comparison with the instruments
recognised on the Balance Sheet but do not necessarily indicate the amounts of future cash flows involved or the
current fair value of the instruments and, therefore, do not indicate the Bank's exposure to credit or price risks. The
following sections outline the nature and terms of the derivative transactions generally undertaken by the Bank.

Interest rate contracts

Forward rate agreements give the buyer the ability to determine the underlying rate of interest for a specified period
commencing on a specified future date (the settlement date). The underlying rate of interest could be an interest rate curve,
interest rate index or bond yield. There is no exchange of principal and settlement is effected on the settlement date. The
settlement amount is the difference between the contracted rate and the market rate prevailing on the settlement date
discounted for the interest period of the agreement.

Interest rate swaps involve the exchange of interest obligations with the counterparty for a specified period without
exchanging the underlying (or notional) principal.

Interest rate caps and floors give the buyer the ability to fix the maximum or minimum rate of interest. The writer of the
contract pays the amount by which the market rate exceeds or is less than the cap rate or the floor rate respectively. A
combination of interest rate caps and floors can create structures such as interest rate collar, cap spreads and floor spreads.

Interest rate futures are standardised interest rate derivative contracts traded on a recognised stock exchange to buy
or sell a notional security or any other interest bearing instrument or an index of such instruments or interest rates at a
specified future date, at a price determined at the time of the contract.

Exchange rate contracts

Forward foreign exchange contracts are agreements to buy or sell fixed amounts of currency at an agreed exchange rate
on a future date. These instruments are carried at fair value, determined based on either FEDAI rates or market quotations.

Cross currency swaps are agreements to exchange principal amounts denominated in different currencies. Cross
currency swaps may also involve the exchange of interest payments on one specified currency for interest payments in
another specified currency for a specified period.

Currency options (including Exchange Traded Currency Option) give the buyer, on payment of a premium, the right
but not an obligation, to buy or sell specified amounts of currency at an agreed exchange rate on or before a specified
future date.

Currency futures contract is a standardised contract traded on an exchange, to buy or sell a certain underlying currency
on a certain date in the future, at a specified price. The contract specifies the rate of exchange between one unit of currency
with another.

The Bank's derivative transactions relate to sales and trading activities. Sale activities include the structuring and marketing
of derivatives to customers to enable them to hedge their market risks (both interest rate and exchange risks), within the
regulatory framework as applicable from time to time. The Bank deals in derivatives on its own account (trading activity)
principally for the purpose of generating a profit from short term fluctuations in price yields or implied volatility. The Bank
also deals in derivatives to hedge the risk embedded in some of its Balance Sheet assets or liabilities.

Constituents involved in derivative business

The Treasury front-office enters into derivative transactions with customers and inter-bank counterparties. The Bank
has an independent back-office and mid-office as per regulatory guidelines. The Bank has credit risk and market risk
departments, as part of the Risk Management Group, that assesses counterparty credit risk and market risk limits, within
the risk architecture and processes of the Bank.

Derivative policy

The Bank has in place a Derivative policy which covers various aspects that apply to the functioning of the derivative
business. The derivative business is administered through various market risk limits such as position limits, tenor limits,
sensitivity limits, scenario based profit and loss limit for option portfolio, stop loss trigger levels and value-at-risk limits
that are recommended by the Risk Policy and Monitoring Committee (‘RPMC') to the Board of Directors for approval. All
methodologies that are used to assess market and credit risks for derivative transactions are specified by the market risk
and credit risk units. Limits are monitored on a daily basis by the mid-office.

The Bank has a Board approved policy on Customer Suitability & Appropriateness, which forms part of the Derivative
policy, to ensure that derivative transactions entered into are appropriate and suitable to the customer's nature of
business / operations. Before entering into a derivative deal with a customer, the Bank scores the customer on various risk
parameters and based on the overall score level it determines the kind of product that best suits its risk appetite and the
customer's requirements.

Classification of derivatives book

The derivative book is classified into trading and hedging book. Classification of the derivative book is made on the basis
of the definitions of the trading and hedging specified in the RBI guidelines. The trading book is managed within the trading
limits recommended by the RPMC and approved by the Board of Directors.

Hedging policy

For derivative contracts designated as hedging instruments, the Bank documents, at inception of the hedge, the relationship
between the hedging instrument and the hedged item, the risk management objective for undertaking the hedge and the
methods used to assess the hedge effectiveness. Hedge effectiveness is ascertained at the time of inception of the hedge
and periodically thereafter. Hedge effectiveness is measured by the degree to which changes in the fair value or cash flows
of the hedged item that are attributable to a hedged risk are offset by changes in the fair value or cash flows of the hedging
instrument using various qualitative and quantitative methods.

The hedging book consists of transactions to hedge Balance Sheet assets or liabilities. The tenor of hedging instrument
may be less than or equal to the tenor of underlying hedged asset or liability. The Bank as part of its risk management
strategy, makes use of derivative instruments, including foreign exchange forward contracts, for hedging the risk embedded
in some of its financial assets or liabilities recognised on the Balance Sheet. In case of a fair value hedge, the changes in
the fair value of the hedging instruments and hedged items are recognised in the Profit and Loss Account and in case of
cash flow hedges other than for foreign exchange forward contracts and principal only swaps, the changes in fair value
of effective portion are recognised in Reserves and Surplus under ‘Cash flow hedge reserve' and ineffective portion of an
effective hedging relationship, if any, is recognised in the Profit and Loss Account. The accumulated balance in the cash
flow hedge reserve, in an effective hedging relationship, is recycled in the Profit and Loss Account at the same time that
the impact from the hedged item is recognised in the Profit and Loss Account. Foreign exchange forward contracts and
principal only swaps not intended for trading, that are entered into to establish the amount of reporting currency required
or available at the settlement date of a transaction, and are outstanding at the Balance Sheet date, are accounted in
accordance with AS-11. Accordingly, such contracts are not marked to market and only translated at spot rate. The premia
or discount arising at the inception of such forward exchange contract is amortised as expense or income over the life of
the contract. The interest income / expense on such POS transaction is accounted on accrual basis.

• Provisioning, collateral and credit risk mitigation

The Bank enters into derivative transactions with counterparties based on their business ranking and financial position.
The Bank sets up appropriate appetite / limits upon evaluating the ability of the counterparty to honour its obligations in
the event of crystallisation of the exposure. Appropriate credit covenants are stipulated where required, as trigger events to

call for collaterals or terminate a transaction and contain the risk. Further, to mitigate the current exposure in non-centrally
cleared forex and derivative transactions, Bank has entered into Credit Support Annex (‘CSA’) agreements with some of
the major international counterparty banks and few Indian financial institutions.

The Bank, at the minimum, conforms to the RBI guidelines with regard to provisioning requirements. Overdue receivables
representing crystallised positive mark to market value of a derivative contract are transferred to the account of the borrower
and treated as non-performing assets, if these remain unpaid for 90 days or more. Full provision is made for the entire
amount of overdue and future receivables relating to positive marked to market value of non-performing derivative contracts.

#    For trading derivatives including accrued interest.

*    Computed for the month end dates where hedge deals were outstanding.

"Amounts given are absolute values on a net basis, excluding currency options.

s The notional principal amounts of derivatives reflect the volume of transactions outstanding as at the Balance
Sheet date and do not represent the amounts at risk.

s For the purpose of this disclosure; currency derivatives include currency options purchased and sold and cross
currency swaps; forward contracts include foreign exchange spot, forward and swap contracts; interest rate
derivatives include interest rate swaps, forward rate agreements and interest rate caps and floors.

s The Bank has computed the maximum and minimum of PV01 for the year based on the balances as at the end
of every month.

s    I n respect of derivative contracts, the Bank has computed the exposure under the Current Exposure Method

for counterparty credit risk capital computation based on the guidelines issued by RBI on “Bilateral Netting of
Qualified Financial Contracts - Amendments to Prudential Guidelines” dated March 30, 2021 and any related
amendments thereafter. However, for the purpose of calculating product-wise derivative exposure as mentioned
in point number 3 in table above, Bank has calculated using Current Exposure Method (‘CEM') without the impact
of Bilateral Netting.

• Credit default swaps

The Bank has not transacted in credit default swaps during the year ended March 31, 2025 (previous year: Nil).

17. Penalties levied by the RBI

During the year ended March 31,2025, RBI has levied following penalties on the Bank:

• RBI vide its letter dated September 10, 2024 levied a penalty of ' 10,000,000 on the Bank for giving gifts to the
depositors at the time of accepting deposits, for opening certain savings accounts in the names of ineligible entities
and for failure to ensure that customers are not contacted after 7 pm and before 7 am, in contravention to the Reserve
Bank directions on Interest Rate on Deposits' and ‘Recovery Agents engaged by Banks'.

• RBI vide its letter dated March 26, 2025 levied a penalty of ' 7,500,000 on the Bank for not categorising certain
customers into low, medium and high-risk category based on its assessment and risk perception and for allotting
multiple customer identification code to certain customers instead of a Unique Customer ldentification Code (UCIC)
for each customer, which were in contravention to Reserve Bank directions on ‘Know Your Customer (KYC)'.

The penalties have been paid by the Bank and has initiated / taken corrective measures, as necessary, to align the
operations / procedures in line with the applicable regulations.

During the year ended March 31, 2024, RBI vide its letter dated November 30, 2023 levied a penalty of ' 10,000 on the
Bank under Section 11(3) of FEMA, 1999 towards not obtaining RBI's approval for maintaining current and fixed deposit
accounts of a foreign bank post cancellation of their license by RBI, which was in contravention to the para 13 of AP (DlR
Series) Circular no. 67 dated May 05, 2016. The penalty was paid by the Bank.

18. Disclosures on remuneration

Qualitative Disclosures

A. Information relating to the bodies that oversee remuneration
Name and composition

The Board of Directors of the Bank has constituted the Nomination and Remuneration Committee (hereinafter, the
‘NRC') for overseeing and governing the compensation policies of the Bank. The NRC is comprised of four non¬
executive directors as of March 31, 2025. Further, three members of the NRC are also members of the Risk Policy
and Monitoring Committee (hereinafter, the ‘RPMC') of the Board.

As of March 31,2025, the NRC is comprised of Dr. Harsh Kumar Bhanwala, Mr. Sandeep Parekh, Mr. M.D. Ranganath
and Mr. Atanu Chakraborty. Further, Mr. M.D. Ranganath, Mr. Sandeep Parekh and Mr. Atanu Chakraborty are also
the members of the RPMC. Dr. Harsh Kumar Bhanwala is the chairperson of the NRC.

Mandate of the NRC

The primary mandate of the NRC is to oversee and review the implementation of compensation policies of the Bank.
The NRC periodically reviews the overall Remuneration Policy of the Bank with a view to attract, retain and motivate
employees. In this capacity, it is required to review and approve the design of the total compensation framework,
including compensation strategy programs and plans, on behalf of the Board of Directors. The compensation
structure and pay revision for the Group Heads, Material Risk Takers, Senior Management, Risk and Control Staff,
Key Management Personnel and Whole Time Directors (who are also Material Risk Takers) of the Bank is approved
by the NRC and subsequently approved by the Board of Directors. The compensation of the Whole Time Directors
requires the additional approval of the Reserve Bank of India. The NRC co-ordinates with the RPMC to ensure that
compensation is aligned with prudent risk taking. Further the NRC also reviews the appointments of individuals at the
levels of Group Heads, Key Management Personnel, Senior Management and Whole Time Directors of the Bank.

External Consultants:

The Bank engaged with the following consultants during the year ended March 31, 2025:

1.    AON Consulting Private Limited - in respect of the Bank's annual salary market benchmarking exercise.

2.    Deloitte Touche Tohmatsu India LLP - in respect of the Bank's benchmarking exercise pertaining to executive
compensation and compensation philosophy.

3.    Mercer Consulting (India) Private Limited - in the area of job evaluation.

4.    ESOP Direct- in respect of Bank's benchmarking exercise pertaining to ESOP Pool Calculation.

Scope of the Bank’s Remuneration Policy:

The Remuneration Policy of the Bank includes within its scope all business lines and functions, and all permanent
staff in the Bank's domestic as well as international offices. The principles articulated in the compensation policy are
applicable uniformly across the Bank. However, any statutory / regulatory provisions applicable in overseas locations
take precedence over the Remuneration Policy of the Bank.

All permanent employees of the Bank except those covered under the long term wage agreement are covered by
the said Remuneration Policy. The number of employees covered under the compensation policy was 2,14,308 as on
March 31,2025 (previous year: 2,13,309).

B. I nformation relating to the design and structure of remuneration processes and the key features and
objectives of remuneration policy

I.    Key Features and Objectives of Remuneration Policy

The Bank's Remuneration Policy (the ‘Policy') is aligned to business strategy, market dynamics, internal characteristics
and complexities within the Bank. The ultimate objective of the Policy is to provide a fair and transparent structure that
helps in acquiring and retaining the talent pool critical to build competitive advantage and brand equity. The Policy has
been designed basis the principles for sound compensation practices in accordance with regulatory requirements
and provides a framework to create, modify and maintain appropriate compensation programs and processes with
adequate supervision and control.

The Bank's performance management system provides a sound basis for assessing employee performance holistically.
The Bank's compensation framework is aligned with the performance management system and differentiates pay
appropriately amongst its employees based on degree of contribution, performance, skill, experience, grade and
availability of talent owing to competitive market forces. Further, the Bank also considers compliance to processes,
regulatory compliance and risk management as an integral part of its performance appraisal process. These factors
are given due weightage for the purposes of the final performance rating of employees for a given performance year.

The NRC considers the aforementioned principles enunciated in the Bank's compensation policy and ensures that:

(a)    the compensation is adjusted for all types of prudent risk taking;

(b)    compensation outcomes are symmetric with risk outcomes;

(c)    compensation payouts are sensitive to the time horizon of risk; and

(d)    the mix of cash, equity and other forms of compensation are aligned with risk.

Review of Remuneration Policy of the Bank

In Line with Annual Review of the Compensation Policy for the Bank, the same was proposed by the Bank to the NRC
with the proposal of changes basis observations of Audit on specific inclusions.

This was reviewed and approved by the NRC during the year ended March 31, 2025, vide NRC meeting dated 26^th
March, 2025

II.    Design and Structure of Remuneration

The design and structure of remuneration in accordance with the RBI guidelines dated November 04, 2019, for the
financial year ended March 31, 2025, is as follows:

a)    Fixed Pay

The Remuneration Policy ensures that the fixed component of the compensation is reasonable, taking into account
all relevant factors including industry practice.

Elements of Fixed Pay:

The fixed pay component of the Bank's compensation structure typically consists of elements such as base salary,
allowances, perquisites and retirement benefits. Perquisites extended are in the nature of company car, company
leased accommodation, club membership and such other benefits or allowances in lieu of such perquisites / benefits.
Retirement benefits include contributions to Provident Fund, Superannuation Fund (for employees above certain job
bands), National Pension Scheme and Gratuity. The Bank also provides pension to certain employees of the erstwhile
Lord Krishna Bank (eLKB) under the Indian Banks' Association (‘IBA') structure.

Determinants of Fixed Pay:

The fixed pay is primarily determined by taking into account factors such as the job size, performance, experience,
location, market competitiveness of pay and is designed to meet the following key objectives of:

(a)    fair compensation given the role complexity and size;

(b)    fair compensation given the individual's skill, competence, experience and market pay position;

(c)    contribution to post retirement benefits; and

(d)    compliance with all statutory obligations.

The quantum of fixed pay for the Senior Management i.e. Employees in Executive Vice President and above grades,
Material Risk Takers other than Whole time Directors, Risk and Control Staff and Key Management Personnel are
approved by the NRC and the Board.

The quantum of fixed pay for Whole Time Directors is approved by the NRC and the Board, and is subject to the
approval of the RBI.

b)    Variable Pay - For Senior Management and Material Risk Takers

The performance management system forms the basis for variable pay allocation of the Bank. The Remuneration Policy
of the Bank ensures that the performance management system is comprehensive and considers both, quantitative
and qualitative performance measures.

(i) Composition of Variable pay

The variable pay will be in the form of share linked instruments or a mix of cash and share linked instruments.
The share linked instrument used in the financial year 2024-25 was the Employee Stock Options. All plans for
grant of options are framed in accordance with the SEBI guidelines, 1999 as amended from time to time and
are approved by the shareholders of the Bank. These plans provide for the grant of options post approval by the
NRC. For Whole time Directors the variable pay is approved by the NRC, Board and the Reserve Bank of India.

The Bank will ensure that there is a proper balance between Fixed Pay and Variable Pay. In cases where
compensation by way of share-linked instruments is not permitted by law / regulations, the entire variable pay
will be in cash.

(ii)    Limits on Variable pay

A substantial portion of compensation i.e. at least 50% will be variable and paid on the basis of individual, business-
unit and organization performance. This will be in line with the principle that, at higher levels of responsibility,
the proportion of variable pay will be higher. The total variable pay shall be limited to a maximum of 300% of the
fixed pay (for the relative performance period).

I n case the variable pay is upto 200% of the fixed pay, a minimum of 50% of the variable pay; and in case the
variable pay is above 200%, a minimum of 67% of the variable pay shall be via non-cash instruments. The non¬
cash component in 2024-25 comprised of Employee Stock Options.

In the event that the employee is barred by statute or regulation from grant of share-linked instruments, his / her
variable pay will be capped at 150% of fixed pay but shall not be less than 50% of the fixed pay.

(iii)    Deferral of Variable pay

For senior management including Whole time Directors (WTDs) and Material Risk Takers (MRTs), deferral
arrangements exists for the variable pay. A minimum of 60% of total variable pay is under deferral arrangements.
If cash component is a part of the variable pay, at least 50% of the cash bonus is deferred. In cases where cash
component of the bonus is under Rs 25 lakh, deferral arrangements is not necessary.

The deferral period is a minimum of three years and is applicable to both cash and non-cash components of
variable pay. The deferral period for share linked instruments / ESOPs is governed by the ESOP Scheme Rules
which is approved by the NRC and the Board. In 2024-25, the deferment of cash variable pay, where applicable,
was 3 years in the case of cash variable pay and 4 years (vesting period) in the case of Employee Stock Options.

(iv)    Vesting of Variable pay

The deferred portion of the remuneration vests at the end of deferral period and is spread out over the course
of the deferral period. The first vesting is not before one year from the commencement of the deferral period.
The vesting is no faster than on a pro rata basis and the frequency of the vesting is more than a year in order to
ensure appropriate assessment of risk.

(v)    Malus / Clawback Arrangement

The Bank believes in sustained business performance in tandem with prudent risk taking. The Bank, therefore,
has devised appropriate deterrents in order to institutionalize the aforementioned commitment.

Malus Arrangement: The provision of a Malus arrangement would entail cancellation of payout for the deferred
portion of reward (cash variable pay / long term incentive (LTI) i.e. any Share Linked Instrument). The RBI guidelines
define malus thus “A malus arrangement permits the bank to prevent vesting of all or part of the amount of a
deferred remuneration. Malus arrangement does not reverse vesting after it has already occurred.”

Clawback Arrangement: The provision of Clawback arrangement would entail return of payout of reward (cash
variable pay / long term incentive (LTI) i.e. any Share Linked Instrument) made in the previous years attributable
to a given reference year wherein the incident has occurred. The return would be in terms of net amount. The
RBI guidelines define clawback thus “A clawback is a contractual agreement between the employee and the
bank in which the employee agrees to return previously paid or vested remuneration to the bank under certain
circumstances.”

The malus and clawback clause will be actioned when the employee demonstrates behaviour involving fraudulent
behaviour, moral turpitude, lack of integrity, flagrant breach of company policies and statutory norms resulting in

financial or non-financial losses. Manifestation of behaviour listed above is presumed to have a malafide intent.
Illustrative list of conditions are enumerated below. The occurrence of any / some / all of the following conditions /
events shall trigger a review by the NRC for the application of the Malus or the Clawback arrangement:

a)    Substantial Financial Deterioration in profitability or risk parameters

b)    Reckless, negligent or willful actions or exhibited inappropriate values and behavior

c)    Fraud that requires a financial restatement

d)    Reputational harm

e)    Exposing the bank to substantial risk

f)    Such other conditions or events, of similar nature as above, as determined by NRC for triggering review by
NRC for the purpose of application of the Malus or the Clawback arrangement

In determining the causes for deterioration in financial performance under (a), the NRC may take into consideration
and have due regard to the fact whether the deterioration was for factors within control or whether it was
on account of conditions like global market headwinds, industry performance, changes in legal / regulatory
regime, force majeure events like occurrence of natural disasters, pandemic, other socio-economic conditions
etc.

While undertaking the review for the concerned person for the application of the Malus or the Clawback
arrangement based on any trigger events, when determining accountability of the concerned person, the NRC
shall be guided by the principles of proportionality, culpability or proximity or nexus to the event or misconduct.

I n accordance with the RBI guidelines, wherever the assessed divergence in bank's provisioning for Non¬
Performing Assets (NPAs) or asset classification exceeds the prescribed threshold for public disclosure, the
bank shall not pay the unvested portion of the variable compensation for the assessment year under ‘malus'
arrangement. Further, in such situations, no proposal for increase in variable pay (for the assessment year) shall be
entertained. In case the bank's post assessment Gross NPAs are less than 2.0%, these restrictions will apply only
if criteria for public disclosure are triggered either on account of divergence in provisioning or both provisioning
and asset classification.

The NRC may decide to apply malus on part, or all of the variable pay. The time horizon for the application of
malus / clawback clause shall be four years from the date of reward.

The NRC shall review the act of misconduct / incident to ascertain the degree of accountability attributable to a
Whole time Director / Material Risk Taker / Senior Management (Job Bands C 1 and above) prior to applying the
Malus or Clawback arrangement.

The criteria for Malus / Clawback will be reviewed by the Nomination and Remuneration Committee annually.

The NRC and Board of Directors has also approved an addendum (Addendum-B) to the compensation policy on
Clawback of Incentive Compensation in view of the final rules on listing standards for the recovery of erroneously
awarded compensation adopted by the Securities and Exchange Commission on October 26, 2022, applicable
to companies listed on the New York Stock Exchange and NASDAQ.

This Addendum-B shall be read with, and is in addition to, the Compensation Policy formulated and approved by
the Board of Directors of the Bank. The same has been formulated to comply with the requirements of Section
10D promulgated under the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”), and Section
303A.14 of the NYSE so as to recover certain compensation in the event of an accounting restatement due to
any material non-compliance relating to any financial reporting requirements under the applicable U.S. securities
laws, and shall be interpreted and applied consistent therewith.

(vi) Approval Process

The Variable Pay for Senior Management, Material Risk Takers other than Whole time Directors, Risk and control
staff is approved by the NRC and the Board. For Whole time Directors the variable pay is approved by the NRC,
Board and the Reserve Bank of India.

Employees other than Senior Management, Material Risk Takers, Whole Time Directors

The Bank has formulated the following variable pay plans:

(i)    Annual Bonus Plan

The quantum of variable payout is a function of the performance of the Bank, performance of the business unit,
performance of the individual employee, job band of the employee and the functional category. Basis these key
determinants and due adjustment for risk alignment, a payout matrix for variable pay is developed. Market trends
for specific businesses / functions along with inputs from compensation surveys may also be used in finalising
the payout.

Bonus pools are designed to meet specific business needs therefore resulting in differentiation in both the
quantum and the method of payout across functions.

(ii)    Performance-linked Plans (PLPs)

PLPs are formulated for employees in sales, collections, customer service and relationship roles who are given
business / service targets but have limited impact on risk since credit decisions are exercised independent
of these functions. All PLP payouts are based on a balanced scorecard framework which factors not just
quantitative, but also qualitative measures, and are subject to achievement of individual targets enumerated in
the respective scorecards of the employees. A portion of the PLP payouts is deferred till the end of the financial
year to provide for any unforeseen performance risks. Employees who are on the PLPs are excluded from the
Annual Bonus Plan.

(iii)    Employee Stock Option Plan (ESOPs)

Employees in Job Bands D4 and above also receive ESOPs as a vehicle to create a balance between short
term rewards and long term sustainable value creation. ESOPs play a key role in the attraction and retention of
key talent.

The NRC grants options after considering parameters such as the incumbent's grade and performance rating,
and such other factors as may be deemed appropriate by the NRC.

All plans for grant of options are framed in accordance with the SEBI guidelines, 1999 as amended from time
to time and are approved by the shareholders of the Bank. These plans provide for the grant of options post
approval by the NRC.

The Bank grants ESOPs to eligible employees. Such ESOPs vest over four tranches spread over a period of
48 months.

In accordance with the RBI guidelines, Employee Stock Options is included as part of Variable Pay.

(iv) Restricted Stock Units (Units)

The Bank granted units to employees at E3 - D3 bands (upto 10 levels below the MD). The same was approved
by the NRC after considering parameters such as the employee's grade, performance rating and any other factors
as may be deemed appropriate by the NRC.

All plans for grant of units are framed in accordance with the SEBI guidelines, 1999 as amended from time to
time and are approved by the shareholders of the Bank. These plans provide for the grant of units post approval
by the NRC.

Such units vest over four tranches spread over a period of 48 months.

Risk, Control and Compliance Staff

The Bank has separated the Risk, Control and Compliance functions from the Business functions in order to
create a strong culture of checks and balances and to eliminate any possible conflict of interest between revenue
generation and risk management and control. Accordingly, the overall variable pay as well as the annual salary
increment of the employees in the Risk, Control and Compliance functions is based on their performance,
functional objectives and goals. The Bank ensures that the mix of fixed to variable compensation for these
functions is weighted in favour of fixed compensation.

Guaranteed Bonus

Guaranteed bonuses are not consistent with sound risk management or pay for performance principles of the
Bank and therefore do not form an integral part of the general compensation practice.

For critical hiring for some select strategic roles, the Bank may consider granting of bonus, based on the
performance rating upon confirmation, as a prudent way to avoid loading the entire cost of attraction into the fixed
component of the compensation which could have a long term cost implication for the Bank. For such hiring, the
said bonus is generally decided by taking into account appropriate risk factors and market conditions.

For hiring at levels of Whole Time Directors / Managing Director / Material Risk Takers and certain employees in
select strategic roles, a sign-on bonus, if any, is limited to the first year only and would be in the form of Employee
Stock Options or Units (All units grants are subject to individual / Business Unit / organizational performance
criteria).

Severance Pay

The Bank does not grant severance pay other than accrued benefits (such as gratuity, pension) except in cases
where it is mandated by any statute.

Hedging

The Bank does not provide any facility or fund or permit its Whole Time Directors and employees to insure or hedge
their compensation structure to offset the risk alignment effects embedded in their compensation arrangement.

Statutory Bonus

Some employees are also paid statutory bonus as per the Payment of Bonus Act, 1965 as amended from time
to time.

III. Remuneration Processes
Fitment at the time of Hire

Pay scales at the Bank are set basis the job size, experience, location and the academic and professional
credentials of the incumbent.

The compensation of new hires is in line with the existing pay ranges and consistent with the compensation levels
of the existing employees of the Bank at similar profiles. The pay ranges are subject to change basis market trends
and the Bank's talent management priorities. While the Bank believes in the internal equity and parity as a key
determinant of pay, it does acknowledge the external competitive pressures of the talent market. Accordingly,
there could be certain key profiles with critical competencies which may be hired at a premium and treated as an
exception to the overall pay philosophy. Any deviation from the defined pay ranges is treated as a hiring exception
requiring approval with appropriate justification.

Pay Increment / Pay Revision

The Bank strives to ensure external competitiveness as well as internal equity without diluting the overall focus
on optimising cost. In order to enhance the Bank's external competitiveness, it participates in an annual salary
survey of the banking sector to understand key market trends as well as get insights on relative market pay
position compared to peers. The Bank endeavors to ensure that most employees progress to the median of the
market in terms of fixed pay over time. This coupled with key internal data indicators like performance score, job
family, experience, job grade and salary budget form the basis of decision making on revisions in fixed pay.

I ncrements in fixed pay for majority of the employee population are generally undertaken once every financial
year. However, promotions, confirmations and change in job dimensions could also lead to a change in the fixed
pay during other times of the financial year.

The Bank also makes salary corrections and adjustments during the financial year for competitive pay positioning
for the purpose of retention of critical skills and critical talent in the domain of Information Technology, Digital,
Information Security, Data Science as well as business segments that are strategic focus areas of the Bank.
However, such pay revisions are done on an exception basis.

The Fixed Pay for the Material Risk Takers (other than Whole time Directors), Senior Management, Key Management
Personnel is approved by the NRC and the Board. The Fixed Pay for the Whole time Directors is approved by the
NRC, Board and the Reserve Bank of India.

C. Description of the ways in which current and future risks are taken into account in the remuneration
processes, including the nature and type of the key measures used to take account of these risks

The Bank takes into account various types of risks in its remuneration processes. The Bank follows a comprehensive
framework that includes within its ambit the key dimensions of remuneration such as fixed pay, variable pay and long
term incentives (i.e. Employee Stock Options).

Fixed pay: The Bank conducts a comprehensive market benchmarking study to ensure that employees are
competitively positioned in terms of fixed pay. The Bank follows a robust salary review process wherein revisions in
fixed compensation are based on performance. The Bank also makes salary adjustments taking into consideration
pay positioning of employees vis-a-vis market reference points. Through this approach the Bank endeavors to ensure
that the talent risk due to attrition is mitigated. Fixed pay could be revised downwards as well, in the event of certain
proven cases of misconduct by an employee.

Variable pay: The Bank has distinct types of variable pay plans as given below:

(a)    Quarterly / monthly performance-linked pay (PLP) plans:

All quarterly / monthly PLP plans are based on the principle of balanced scorecard framework that includes within
its ambit both quantitative and qualitative factors including key strategic objectives that ensure future competitive
advantage for the Bank. PLP plans, by design, have deterrents that play a role of moderating payouts based on
the non-fulfillment of established quantitative / qualitative risk factors. Deterrents also include risks arising out of
non-compliance, mis-sell etc. Further, a portion of all payouts under the PLP plans is deferred till the end of the
financial year to provide for any unforeseen performance risks. Employees who are part of the PLP plans are
excluded from the Annual Bonus Plan.

(b)    Variable Pay:

The Bank takes into consideration the fact that a portion of the Bank's profits are directly attributable to various
types of risks the Bank is exposed to such as credit risk and market risk.

The framework developed by the Bank in order to arrive at the quantum of bonus pool is based on the
performance of the Bank and profitability. The annual variable pay is distributed based on business unit and
individual performance and job band and role of the individual for non-business functions. The business unit
performance is based on factors such as growth in revenue, growth in profit, cost to income ratio and achievement
vis-a-vis plans and key objectives. Bonus pay out for an individual employee in a particular grade is linked to the
performance rating of the employee and subject to meeting the Bank's standards of ethical conduct.

The Bank has devised appropriate malus and claw back clauses as a risk mitigant for Whole Time Directors,
Material Risk Takers, Senior Management (i.e. Employees in the job Bands of Executive Vice President and
above). Under the malus clause the incumbent could forego the vesting of the deferred variable pay in full or in
part. Under the claw back clause the incumbent is obligated to return all the tranches of variable pay payout
pertaining to the reference performance year. The deferred variable pay is paid out post review and approval by
the NRC and the Board.

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

The Bank has a robust performance management system for evaluating the performance of its Whole Time Directors.
The performance appraisal system is based on a Balanced Scorecard Framework and considers qualitative as well as
quantitative factors of performance which includes the parameters at overall organization level and at Target Business
Level. Following is the list of few parameters which are covered in the Balanced Scorecards of Whole Time Directors.

1.    Business Performance - This includes business growth, profitability, asset quality and shareholder value.

2.    Stakeholder Relationship - This includes net promoter score and corporate social responsibility.

3.    Audit and Compliance - This includes internal audit reports and compliance with the regulations and
inspection reports.

4.    Digital Transformation - This includes performance on initiatives required to run the Bank and grow the Bank.

5.    People Excellence - This includes succession planning and employee attrition.

6.    Strategic Initiatives - This includes various strategic initiatives of the Bank.

The above list is not exhaustive.

While the above parameters form the core evaluation parameters for the Bank and the remuneration of its Whole Time
Directors, each of the business units are measured on the following from a remuneration standpoint:

a)    Growth in net revenue (%) over previous year;

b)    Growth in profit before tax (%) over previous year;

c)    Improvement in cost to income over the previous year;

d)    Improvement in Gross NPA over the previous year and

e)    Achievement of key strategic objectives.

The process by which levels of remuneration in the Bank are aligned to the performance of the Bank, business unit
and individual employees is articulated below:

Fixed Pay

The Bank reviews the fixed pay portion of the compensation structure basis merit-based increments and market
corrections. These are based on a combination of performance rating, job band and the functional category of the
individual employee. For a given job band, the merit increment is directly related to the performance rating. The Bank
strives to ensure that most employees progress to the median of the market in terms of fixed pay over time. All other
things remaining equal, the correction percentage is directly related to the performance rating of the individual.

Variable Pay

Basis the performance of the business unit, individual performance and role, the Bank has formulated the following
variable pay plans:

• Variable Pay Plans:

For Employees in Job Bands of Sr Vice President I and above (includes employees in Senior Management, Material
Risk Takers, Whole time Directors) the variable pay intends to reward short term as well as long term sustained
performance of the Bank and shareholder value creation.

Short term Performance: Short term performance is realised in the form of cash variable pay. The cash variable
pay is based on performance rating and the job band of the individual and is further enhanced or moderated by
the business performance multiplier and role. The cash variable pay is computed on the gross salary.

Long term Performance: Employee Stock Options are granted to employees based on their performance rating
and job band and the value of the same is realised vide long term performance of the Bank and creation of
shareholder value.

For Employees in job bands Vice President and below:

At these levels the variable pay is primarily in the form of cash variable pay and is based on the annual performance.
In FY 2024-25, the Bank granted units at E3-D3 bands based on their performance rating, grade and any other
such parameter as approved by the NRC.

The Bank's annual bonus is computed as a percentage of the gross salary for every job band. The bonus multiple
is based on performance of the business unit (based on the parameters above), performance rating, job band

and the functional category of the individual employee. The business performance category determines the
multiplier for the bonus. All other things remaining equal, for a given job band, the bonus is directly related to the
performance rating. Employees who are part of the annual cash Variable Pay plan are not part of the Performance
Linked Plans mentioned below.

• Performance-linked Plans (PLPs)

The Bank has formulated PLPs for its sales, collections, customer service and relationship roles who are given
sales, collections and service targets basis a balanced scorecard methodology. All PLP payouts are subject to
the achievement of individual targets enumerated in the respective scorecards of the employees and moderated
by qualitative parameters. A portion of the PLP payouts is deferred till the end of the financial year to provide for
any unforeseen performance risks. All PLPs are based on a balanced scorecard framework and, depending on
the plan, could be paid out monthly or quarterly.

E. Description of the ways in which the Bank seeks to adjust remuneration to take account of the longer
term performance

For employees in Senior Management, Material Risk Takers and Whole Time Directors the Bank seeks to adjust
remuneration to take account of the longer term performance in the following way.

(i)    Limits on variable pay

A substantial portion of compensation i.e. at least 50% will be variable and paid on the basis of individual, business-
unit and organization performance. This will be in line with the principle that, at higher levels of responsibility,
the proportion of variable pay will be higher. The total variable pay shall be limited to a maximum of 300% of the
fixed pay.

I n case the variable pay is upto 200% of the fixed pay, a minimum of 50% of the variable pay; and in case the
variable pay is above 200%, a minimum of 67% of the variable pay shall be via non-cash instruments. The non¬
cash component in 2024-25 comprised of Employee Stock Options.

In the event that the employee is barred by statute or regulation from grant of share-linked instruments, his / her
variable pay will be capped at 150% of fixed pay but shall not be less than 50% of the fixed pay.

(ii)    Deferral of variable pay

For senior management including Whole Time Directors (WTDs) and Material Risk Takers (MRTs), deferral
arrangements will exist for the variable pay. A minimum of 60% of total variable pay will be under deferral
arrangements. If cash component is a part of the variable pay, at least 50% of the cash bonus shall be deferred.
In cases where cash component of the bonus is under Rs 25 lakh, deferral arrangements would not be necessary.

The deferral period would be a minimum of three years and will be applicable to both cash and non-cash
components of variable pay. The deferral period for share linked instruments / ESOPs will be governed by the
ESOP Scheme Rules which will be approved by the NRC and the Board. In 2023-24, the deferment of cash
variable pay, where applicable, was 3 years in the case of cash variable pay and 4 years (vesting period) in the
case of Employee Stock Options.

(iii)    Vesting of Variable Pay

The deferred portion of the remuneration will vest at the end of deferral period and will be spread out over the
course of the deferral period. The first vesting would not be before one year from the commencement of the

deferral period. The vesting would be no faster than on a pro rata basis and the frequency of the vesting would
be more than a year in order to ensure appropriate assessment of risk.

(iv) Malus / Clawback Arrangement:

The Bank believes in sustained business performance in tandem with prudent risk taking. The Bank, therefore,
has devised appropriate deterrents in order to institutionalize the aforementioned commitment.

Malus Arrangement: The provision of a Malus arrangement would entail cancellation of payout for the deferred
portion of reward (cash variable pay / long term incentive (LTI) i.e. any Share Linked Instrument). The RBI guidelines
define malus thus “A malus arrangement permits the bank to prevent vesting of all or part of the amount of a deferred
remuneration. Malus arrangement does not reverse vesting after it has already occurred.”

Clawback Arrangement: The provision of Clawback arrangement would entail return of payout of reward (cash
variable pay / long term incentive (LTI) i.e. any Share Linked Instrument) made in the previous years attributable to a
given reference year wherein the incident has occurred. The return would be in terms of net amount. The RBI guidelines
define clawback thus “A clawback is a contractual agreement between the employee and the bank in which the
employee agrees to return previously paid or vested remuneration to the bank under certain circumstances.”

The malus and clawback clause will be actioned when the employee demonstrates behaviour involving fraudulent
behaviour, moral turpitude, lack of integrity, flagrant breach of company policies and statutory norms resulting in
financial or non-financial losses. Manifestation of behaviour listed above is presumed to have a malafide intent.
Illustrative list of conditions are enumerated below. The occurrence of any / some / all of the following conditions/
events shall trigger a review by the NRC for the application of the Malus or the Clawback arrangement:

a)    Substantial financial deterioration in profitability or risk parameters

b)    Reckless, negligent or willful actions or exhibited inappropriate values and behavior

c)    Fraud that requires a financial restatement

d)    Reputational harm

e)    Exposing the bank to substantial risk

f)    Such other conditions or events, of similar nature as above, as determined by NRC for triggering review by NRC
for the purpose of application of the Malus or the Clawback arrangement

I n determining the causes for deterioration in financial performance under (a), the NRC may take into consideration
and have due regard to the fact whether the deterioration was for factors within control or whether it was on account
of conditions like global market headwinds, industry performance, changes in legal / regulatory regime, force majeure
events like occurrence of natural disasters, pandemic, other socio-economic conditions etc.

While undertaking the review for the concerned person for the application of the Malus or the Clawback arrangement
based on any trigger events, when determining accountability of the concerned person, the NRC shall be guided by
the principles of proportionality, culpability or proximity or nexus to the event or misconduct.

In accordance with the RBI guidelines, wherever the assessed divergence in bank's provisioning for Non-Performing
Assets (NPAs) or asset classification exceeds the prescribed threshold for public disclosure, the bank shall not pay the
unvested portion of the variable compensation for the assessment year under ‘malus' arrangement. Further, in such
situations, no proposal for increase in variable pay (for the assessment year) shall be entertained. In case the bank's
post assessment Gross NPAs are less than 2.0%, these restrictions will apply only if criteria for public disclosure are
triggered either on account of divergence in provisioning or both provisioning and asset classification.

The NRC may decide to apply malus on part, or all of the unvested deferred Variable pay. The time horizon for the
application of malus / clawback clause shall be four years from the date of reward.

The NRC shall review the act of misconduct / incident to ascertain the degree of accountability attributable to a
Whole Time Director / Material Risk Taker / Senior Management (C1 and above) prior to applying the Malus or
Clawback arrangement.

The criteria for Malus / Clawback will be reviewed by the NRC annually.

The NRC and Board of Directors has also approved an addendum (Addendum-B) to the compensation policy on
Clawback of Incentive Compensation in view of the final rules on listing standards for the recovery of erroneously
awarded compensation adopted by the Securities and Exchange Commission on October 26, 2022, applicable to
companies listed on the New York Stock Exchange and NASDAQ.

This Addendum-B shall be read with, and is in addition to, the Compensation Policy formulated and approved by
the Board of Directors of the Bank. The same has been formulated to comply with the requirements of Section 10D
promulgated under the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”), and Section 303A.14
of the NYSE so as to recover certain compensation in the event of an accounting restatement due to any material
non-compliance relating to any financial reporting requirements under the applicable U.S. securities laws, and shall
be interpreted and applied consistent therewith.

Employees other than Whole Time Directors, Material Risk Takers and Senior Management

The Bank has formulated the following variable pay plans:

• Annual Cash Variable Pay plan:

The quantum of variable payout is a function of the performance of the Bank, performance of the individual
employee, job band of the employee and the functional category. Basis these key determinants and due
adjustment for risk alignment, a payout matrix for variable pay is developed. Market trends for specific
businesses / functions along with inputs from compensation surveys may also be used in finalising the payout.

Bonus pools are designed to meet specific business needs therefore resulting in differentiation in both the
quantum and the method of payout across functions. Typically, higher levels of responsibility receive a higher
proportion of variable pay vis-a-vis fixed pay.

For Employees in Job Bands of Sr Vice President 1 and above Variable Pay intends to reward short term as well
as long term sustained performance of the Bank and shareholder value creation.

Short term Performance: Short term performance is realised in the form of cash variable pay. The cash variable
pay is based on performance rating and the job band of the individual and is further enhanced or moderated by
the business performance multiplier and role. The cash variable pay is computed on the gross salary.

Long term Performance: Employee Stock Options are granted to employees based on their performance rating
and Job band and the value of the same is realised vide long term performance of the Bank and creation of
shareholder value. The vesting period for Employee Stock Option is 4 years.

The Bank has also granted Restricted Stock Units (Units) to employees at E3-D3 bands. The units would vest
over 4 years.

•    Performance-linked Plans (PLPs)

The Bank has formulated PLPs for its sales, collections, customer service and relationship roles who are given
sales, collections and service targets basis a balanced scorecard methodology. All PLP payouts are subject to
the achievement of individual targets enumerated in the respective scorecards of the employees and moderated
by qualitative parameters. A portion of the PLP payouts is deferred till the end of the financial year to provide for
any unforeseen performance risks. All PLPs are based on a balanced scorecard framework and, depending on
the plan, could be paid out monthly or quarterly.

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

The Bank recognises the importance of variable pay in reinforcing a pay for performance culture. Variable pay stimulates
employees to stretch their abilities to exceed expectations.

•    Annual Cash Variable Pay

These are paid to reward performance for a given financial year. This covers all employees (excluding employees
under PLPs). This is based on performance of the business unit, performance rating, job band and functional
category of the individual. For higher job bands the proportion of variable pay to total compensation tends to be
higher. For Material Risk Takers, Senior Management and Whole Time Directors 50% of the cash variable pay is
deferred over 3 years in the event the cash variable pay exceeds 25 lakhs.

•    Performance-linked Plans (PLPs)

The Bank has formulated PLPs for its sales, collections, customer service and relationship roles who are given
sales, collections and service targets basis a balanced scorecard methodology. All PLP payouts are subject to
the achievement of individual targets enumerated in the respective scorecards of the employees and moderated
by qualitative parameters. A portion of the PLP payouts is deferred till the end of the financial year to provide for
any unforeseen performance risks. All PLPs are based on a balanced scorecard framework and, depending on
the plan, could be paid out monthly or quarterly.

•    Employee Stock Option Plan (ESOP)

This is to reward for contribution of employees in creating a long term, sustainable earnings and enhancing
shareholder value. Only employees in a certain job band and with a specific performance rating are eligible for
stock options. Performance is the key criteria for granting stock options.

•    Restricted Stock Units (Units)

The Bank granted Restricted Stock Units (Units) to employees at E3-D3 bands in FY24-25. The units would vest
over 4 years.

Quantitative disclosures

The quantitative disclosures for the financial year ended March 31, 2025 cover the Bank's Whole Time Directors and
Material Risk Takers. The material risk takers are identified in accordance with the revised guidelines on remuneration
issued by the RBI on November 04, 2019. Hitherto, the quantitative disclosures would cover the Bank's Whole Time
Directors and Key Risk Takers as per the erstwhile guidelines on remuneration dated January 13, 2012.

19.2    Bancassurance business

Commission income for the year ended March 31, 2025 includes fees of ' 5,026.97 crore (previous year: ' 3,059.31
crore) in respect of life insurance business and ' 1,281.30 crore (previous year: ' 914.68 crore) in respect of general
insurance and health insurance business.

19.3    Marketing and distribution

Commission income for the year ended March 31,2025 includes income from marketing and distribution of ' 1,629.86
crore (previous year: ' 2,492.82 crore), which comprises of income for displaying publicity materials at the Bank's
branches / ATMs, commission on mutual funds, pension and other investment / saving products and sourcing and
referral income.

19.4    Details of Priority Sector Lending Certificates (PSLCs)

The Bank enters into transactions for the sale or purchase of Priority Sector Lending Certificates (PSLCs). In the case
of a sale transaction, the Bank sells the fulfilment of priority sector obligation and in the case of a purchase transaction
the Bank buys the fulfilment of priority sector obligation through RBI trading platform. There is no transfer of risks or
loan assets in such transactions. The details of purchase / sale of PSLCs during the year are as under:

1.    Provision for income tax is net of write back of provision no longer required of Nil (previous year: ' 6,325.04 crore), pursuant to
favourable orders received.

2.    Includes loss on sale of NPAs / stressed assets.

3.    Includes provisions / (write-back) for tax, legal and other contingencies ' (518.03) crore (previous year: ' (336.39) crore, (provisions /
(write-back) for securitised-out assets Nil (previous year:' (26.81) crore) and provision / (write-back) towards investments in Alternate
Investment Funds ' (746.24) crore (previous year: ' 1,034.49 crore).

19.6 Implementation of IFRS converged Indian Accounting Standards

The Ministry of Corporate Affairs, in its press release dated January 18, 2016, had issued a roadmap for implementation
of Indian Accounting Standards (Ind AS) for scheduled commercial banks, insurers / insurance companies and non¬
banking financial companies, which was subsequently confirmed by the RBI through its circular dated February 11,
2016. This roadmap required these institutions to prepare Ind AS based financial statements for the accounting periods
beginning April 01, 2018 with comparatives for the periods beginning April 01, 2017. The implementation of Ind AS by
banks requires certain legislative changes in the format of financial statements to comply with the disclosures required
under Ind AS. In April 2018, the RBI deferred the implementation of Ind AS by a year by when the necessary legislative
amendments were expected. The legislative amendments recommended by the RBI are under consideration by the
Government of India. Accordingly, the RBI, through its circular dated March 22, 2019, deferred the implementation of
Ind AS until further notice.

Presently, the Bank prepares and submits its Ind AS Proforma information to the RBI on a half yearly basis. The Bank
is well prepared for Ind AS implementation as and when it becomes applicable, with due consideration to updated
regulations, accounting standards / guidance and business strategy at the date of actual transition.

The RBI, vide its circular dated September 12, 2023 revised the norms on classification, measurement and valuation
of investments, in view of the significant development in the global standards. These norms are closer to Ind AS. The
Bank has implemented the revised norms with effect from April 01,2024.

20. Other liabilities

• The Bank held provisions towards standard assets amounting to ' 10,862.90 crore as at March 31,2025 (previous
year: ' 10,663.71 crore). These are included under other liabilities.

s Provision for standard assets is made @ 0.25% for direct advances to agriculture, individual housing loans and
Small and Micro Enterprises (SMEs) sectors, @ 1% for advances to commercial real estate sector, @ 0.75% for
advances to commercial real estate - residential housing sector, @ 5% on restructured standard advances, @
2% until after one year from the date on which the rates are reset at higher rates for housing loans offered at a
comparatively lower rate of interest in the first few years and @ 2% on all exposures to the wholly owned step
down subsidiaries of the overseas subsidiaries of Indian companies, sanctioned / renewed after December
31, 2015.

s Provision is maintained at rates higher than the regulatory minimum, on standard advances based on evaluation
of the risk and stress in various sectors as per the policy approved by the Board of the Bank.

s | n accordance with regulatory guidelines and based on the information made available by its customers to the
Bank, for exposures to customers who have not hedged their foreign currency exposures, provision for standard
assets is made at levels ranging from 0.10% to 0.80% depending on the likely loss the entities could incur on
account of exchange rate movements.

s Provision for standard assets of overseas branches is made at higher of rates prescribed by the overseas regulator
or RBI.

s For all other loans and advances including credit exposures computed as per the current marked to market values
of interest rate and foreign exchange derivative contracts, provision for standard assets is made @ 0.40%.

s I n accordance with RBI guidelines, an additional provision is made @ 3% on the incremental exposure to the
“Specified Borrowers” (except NBFCs / HFCs) beyond normally permitted lending limit (NPLL) as defined by RBI.

•    Other liabilities include contingent provisions of ' 14,219.29 crore as at March 31,2025 (previous year: ' 15,513.35
crore) in respect of advances and investments.

•    The Bank has presented gross unrealised gain on foreign exchange and derivative contracts under other assets
and gross unrealised loss on foreign exchange and derivative contracts under other liabilities. Accordingly, other
liabilities as at March 31,2025 include unrealised loss on foreign exchange and derivative contracts of ' 14,079.86
crore (previous year: ' 10,491.46 crore).

•    There is no item under Other Liabilities and Provisions “Others (including provisions)” exceeding 1 % of total assets
as at March 31,2025 and March 31, 2024.

25.    Other income

•    Commission, exchange and brokerage income

Commission, exchange and brokerage income is presented net of related commission expenses.

•    Miscellaneous income

Miscellaneous income includes recoveries from written-off accounts amounting to ' 3,785.01 crore (previous year:
' 3,441.30 crore) exceeding 1% of the total income of the Bank.

26.    Other expenditure

Other expenditure includes commission to sales agents amounting to ' 5,128.86 crore (previous year: ' 5,284.53 crore),
exceeding 1% of the total income of the Bank.

Provident fund

The guidance note on AS-15, Employee Benefits, states that employer established provident funds, where interest is
guaranteed are to be considered as defined benefit plans and the liability has to be valued. The Institute of Actuaries of
India (IAI) has issued a guidance note on valuation of interest rate guarantees on exempt provident funds. The actuary
has accordingly valued the same and the Bank held a provision of Nil as at March 31, 2025 (previous year: Nil), towards
the present value of the guaranteed interest benefit obligation. The actuary has followed the deterministic approach as
prescribed by the guidance note.

The Bank does not have any unfunded defined benefit plan. The Bank contributed ' 750.43 crore (previous year: ' 677.64
crore) to the provident fund, ' 21.00 crore (previous year: ' 10.65 crore) to the National Pension Scheme (for employees
who opted) and ' 95.95 crore (previous year: ' 92.05 crore) to the superannuation plan.

The Code on Social Security 2020 (‘the Code') relating to employee benefits, during the employment and post-employment,
has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further,
the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. The effective date
from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are not yet issued.
The Bank will assess the impact of the Code and will give appropriate impact in the financial statements in the period in
which, the Code becomes effective and the related rules to determine the financial impact are published.

28. Segment reporting

Business segments

Business segments have been identified and reported taking into account, the target customer profile, the nature of products
and services, the differing risks and returns, the organisation structure, the internal business reporting system and the
guidelines prescribed by RBI. The Bank operates in the following segments:

a)    Treasury

The treasury segment primarily consists of net interest earnings from the Bank's investment portfolio, money market
borrowing and lending, gains or losses on investment operations and on account of trading in foreign exchange and
derivative contracts.

b)    Retail banking

i. Digital banking

The digital banking segment represents business by Digital Banking Units (DBUs) of the Bank. The said DBUs
serves retail customers through the Bank's digital network and other online channels. This segment raises
deposits from customers and provides loans and other services to customers.

Revenues of the DBUs are derived from interest earned on retail loans, fees from services rendered, etc. Expenses
of this segment primarily comprise of interest expense on deposits, infrastructure and premises expenses for
operating the DBUs, other direct overheads and allocated expenses of specialist product groups.

ii. Non-Digital Banking

The retail banking segment serves retail customers through the Bank's branch network and other channels.
This segment raises deposits from customers and provides loans and other services to customers with the help
of specialist product groups. Exposures are classified under retail banking taking into account the status of the
borrower (orientation criterion), the nature of product, granularity of the exposure and the quantum thereof.

Revenues of the retail banking segment are derived from interest earned on retail loans, interest earned from other
segments for surplus funds placed with those segments, subvention received from dealers and manufacturers,
fees from services rendered, foreign exchange earnings on retail products etc. Expenses of this segment primarily
comprise interest expense on deposits, commission paid to retail assets sales agents, infrastructure and premises
expenses for operating the branch network and other delivery channels, personnel costs, other direct overheads
and allocated expenses of specialist product groups, processing units and support groups.

c)    Wholesale banking

The wholesale banking segment provides loans, non-fund facilities and transaction services to large corporates,
emerging corporates, public sector units, government bodies, financial institutions and medium scale enterprises.
Revenues of the wholesale banking segment consist of interest earned on loans made to customers, interest / fees
earned on the cash float arising from transaction services, earnings from trade services and other non-fund facilities
and also earnings from foreign exchange and derivative transactions on behalf of customers. The principal expenses
of the segment consist of interest expense on funds borrowed from external sources and other internal segments,
premises expenses, personnel costs, other direct overheads and allocated expenses of delivery channels, specialist
product groups, processing units and support groups.

d)    Other banking Operations

This segment includes income from parabanking activities such as credit cards, debit cards, third party product
distribution, primary dealership business and the associated costs.

e)    Unallocated

All items which are reckoned at an enterprise level are classified under this segment. This includes capital and reserves,
debt classified as Tier 1 or Tier 2 capital and other unallocable assets and liabilities such as deferred tax, etc.

Segment revenue includes earnings from external customers plus earnings from funds transferred to other segments.
Segment result includes revenue less interest expense less operating expense and provisions, if any, for that segment.
Segment-wise income and expenses include certain allocations. Interest income is charged by a segment that provides
funding to another segment, based on yields benchmarked to an internally approved yield curve or at a certain agreed
transfer price rate. Transaction charges are levied by the retail banking segment to the wholesale banking segment for
the use by its customers of the retail banking segment's branch network or other delivery channels. Segment capital
employed represents the net assets in that segment.

Geographic segments

The geographic segments of the Bank are categorised as domestic operations and foreign operations. Domestic
operations comprise branches in India and foreign operations comprise branches outside India.

Mr. Darius Bharucha, Ms. Dilnaaz D Bharucha, Ms. Mala B. Zaveri, Ms. Bhakti Zaveri, Mr. Akash Metawala, Ms. Niharika
Zaveri, Mr. Dev Metawala, Mr. Paresh Zaveri, Ms. Kavita Zaveri, Mr. Hitesh Zaveri, Mr. Tushar Pandey (with effect from
February 23, 2025), Aurionpro Solutions Limited, Trejhara Solutions Limited, Ms. S. Anuradha, Ms. V. Jayam, Ms. S.
Abinaya Rangan.

The significant transactions between the Bank and related parties for year ended March 31, 2025 are given below. A
specific related party transaction is a significant transaction wherever it exceeds 10% of all related party transactions in
that category:

•    Interest paid: HDFC Life Insurance Company Limited ' 382.33 crore; HDFC ERGO General Insurance Company Limited
' 87.90 crore

•    Interest received: HDB Financial Services Limited ' 690.51 crore

•    Rendering of services: HDFC Life Insurance Company Limited ' 3,789.23 crore; HDFC ERGO General Insurance
Company Limited ' 699.66 crore

•    Receiving of services: HDB Financial Services Limited ' 1,216.66 crore; HDFC Sales Private Limited ' 964.36 crore

•    Dividend paid: Mr. Kaizad Bharucha ' 4.12 crore; Mr. Sashidhar Jagdishan ' 3.00 crore; Mr. V. Srinivasa Rangan ' 2.86
crore

•    Dividend received: HDFC Securities Limited ' 851.92 crore; HDFC Asset Management Company Limited ' 785.26
crore; HDB Financial Services Limited ' 225.18 crore

•    Fixed Assets purchased from: Trejhara Solutions Limited ' 9.98 crore; Aurionpro Solutions Limited ' 9.55 crore
The Bank's related party balances and transactions for the year ended March 31, 2025 are summarised as follows:

•    Denotes amount less than ' 1 lakh.

•    Figures in bracket indicate maximum balance outstanding during the year based on comparison of the total outstanding balances at each
quarter-end.

•    Remuneration paid is ' 11.23 crore to Mr. Sashidhar Jagdishan, ' 8.02 crore to Mr. Kaizad Bharucha, ' 6.52 crore to Mr. Bhavesh Zaveri
and ' 8.85 crore to Mr. V. Srinivasa Rangan.

(above excludes value of employee stock options exercised during the year).

•    Bonus and retiral benefits for key managerial personnel are accrued as a part of an overall pool and are not allocated against the key
managerial personnel. These will be paid based on approval from RBI. As of March 31, 2025, approved unpaid deferred bonus in respect
of earlier years was ' 14.51 crore.

During the year ended March 31, 2025, the Bank sold SLR securities of ' 125.15 crore to HDFC ERGO General Insurance
Company Limited.

During the year ended March 31, 2025, the Bank bought back Non SLR securities of ' 174.63 crore from HDFC Life
Insurance Company Limited.

During the year ended March 31, 2025, the Bank sold Non SLR securities of ' 2,052.09 crore to HDFC Life Insurance
Company Limited, ' 888.02 crore to HDFC ERGO General Insurance Company Limited and ' 5.01 crore to HDFC Pension
Fund Management Limited.

The deposit outstanding from HDB Employees Welfare Trust as at March 31,2025 was ' 0.94 crore and interest on deposit
aggregating to ' 0.10 crore.

The Bank’s related party balances and transactions for the year ended March 31, 2024 are summarised as
follows:

Promoter

Erstwhile Housing Development Finance Corporation Limited (amalgamated with and into the Bank with effect from July
01, 2023)

Subsidiaries

HDFC Securities Limited
HDB Financial Services Limited

Pursuant to the amalgamation of eHDFC Limited with and into the Bank, following entities became
subsidiaries of the Bank with effect from July 01, 2023

HDFC Life Insurance Company Limited

HDFC Pension Management Company Limited (Subsidiary of HDFC Life Insurance Company Limited)

HDFC International Life and Re Company Limited (Subsidiary of HDFC Life Insurance Company Limited)

HDFC Asset Management Company Limited

HDFC AMC International (IFSC) Limited (Subsidiary of HDFC Asset Management Company Limited)

HDFC ERGO General Insurance Company Limited

HDFC Credila Financial Services Limited (ceased to be a related party with effect from March 19, 2024)

HDFC Capital Advisors Limited
HDFC Trustee Company Limited
HDFC Sales Private Limited

HDFC Education and Development Services Private Limited
Griha Investments
Griha Pte Limited

Welfare Trust of the Bank

HDB Employees Welfare Trust

Key management personnel

Mr. Sashidhar Jagdishan, Managing Director and Chief Executive Officer
Mr. Kaizad Bharucha, Deputy Managing Director

Mr. Bhavesh Zaveri, Executive Director (appointed with effect from April 19, 2023)

Mr. V. Srinivasa Rangan, Executive Director (appointed with effect from November 23, 2023)

Relatives of key management personnel and their interested entities

Ms. Nagsri Sashidhar, Mr. Dhruv Sashidhar, Mr. Jagdishan Chandrasekharan, Ms. Mythra Mahesh, Mr. Mahesh Babu
Ramamurthy, Nagsri - Creating Special Memories, Ms. Havovi Bharucha, Mr. Huzaan Bharucha, Mr. Danesh Bharucha,
Mr. Darius Bharucha, Ms. Dilnaaz D Bharucha

With effect from April 19, 2023 - Ms. Mala B. Zaveri, Ms. Bhakti Zaveri, Mr. Akash Metawala, Ms. Niharika Zaveri, Mr. Dev
Metawala, Mr. Paresh Zaveri, Ms. Kavita Zaveri, Mr. Hitesh Zaveri, Aurionpro Solutions Limited, Trejhara Solutions Limited

With effect from November 23, 2023 - Ms. S. Anuradha, Ms. V. Jayam, Ms. S. Abinaya Rangan

The significant transactions between the Bank and related parties are given below. A specific related party transaction is
a significant transaction wherever it exceeds 10% of all related party transactions in that category:

•    Interest paid: HDFC Life Insurance Company Limited ' 298.78 crore; HDFC ERGO General Insurance Company Limited
' 53.55 crore

•    Interest received: HDB Financial Services Limited ' 773.69 crore; HDFC Credila Financial Services Limited ' 197.69 crore

•    Rendering of services: HDFC Life Insurance Company Limited ' 2,626.48 crore; HDFC ERGO General Insurance
Company Limited ' 346.20 crore

•    Receiving of services: HDB Financial Services Limited ' 2,250.82 crore; HDFC Sales Private Limited ' 936.27 crore

•    Dividend paid: Mr. Kaizad Bharucha ' 4.25 crore; Mr. Sashidhar Jagdishan ' 2.90 crore; Ms. Mala B. Zaveri ' 1.09 crore

•    Dividend received: HDFC Securities Limited ' 774.69 crore; HDB Financial Services Limited ' 232.68 crore; HDFC
Life Insurance Company Limited ' 198.69 crore

•    Fixed Assets purchased from: Aurionpro Solutions Limited ' 12.53 crore

*Also refer Schedule 12 - Contingent liabilities

33.    Small and micro industries

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 02, 2006,
certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported
cases of delays in payments to micro and small enterprises or of interest payments due to delays in such payments during
the years ended March 31,2025 and March 31,2024. The above is based on the information available with the Bank which
has been relied upon by the auditors.

34.    Corporate social responsibility

The details of Corporate Social Responsibility (CSR) activities carried out in line with the CSR Policy of the Bank are
given below:

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

The Bank, as part of its normal banking business, grants loans and advances to its constituents including foreign entities
with permission to lend / invest / provide guarantee or security or the like in other entities identified by such constituents.
Similarly, the Bank accepts deposits from its constituents, who may instruct the Bank to lend/invest/provide guarantee or
security or the like against such deposit in other entities identified by such constituents.

These transactions are part of Bank's normal banking business, which is conducted after exercising proper due diligence
including adherence to “Know Your Customer” guidelines as applicable in respective jurisdiction.

Other than the nature of transactions described above, the Bank has not advanced / lent / invested / provided guarantee
or security to or in any other person with an understanding to lend / invest / provide guarantee or security or the like to or
in any other person. Similarly, other than the nature of transactions described above, the Bank has not received any funds
from any other person with an understanding that the Bank shall lend / invest / provide guarantee or security or the like to
or in any other person.

37.    Audit trail

As per the requirements of rule 3(1) of the Companies (Accounts) Rules 2014 the Bank uses only such accounting software
for maintaining its books of account that have a feature of recording audit trail (edit log). This feature of recording audit trail
has operated throughout the year and was not tampered with, except that the audit trail feature was not enabled for part of
the year for certain masters in two accounting software and two databases, and throughout the year for other databases.
Further, the Bank has preserved the audit trail for the prior financial year in compliance with statutory record retention
requirements, except in relation to certain software and databases for which audit trail feature was not enabled. The Bank
has established and maintained an adequate internal control framework and based on its assessment, believes that this
was effective as of March 31, 2025.

38.    Comparative figures

Figures for the previous year have been regrouped and reclassified wherever necessary to conform to the current year's
presentation. The previous year comparative numbers were jointly audited by M M Nissim & Co LLP, Chartered Accountants
and Price Waterhouse LLP, Chartered Accountants.

As per our report of even date.    For and on behalf of the Board

For Price Waterhouse LLP    For Batliboi    & Purohit    Atanu Chakraborty    Sashidhar Jagdishan

Chartered Accountants    Chartered Accountants    Part-time Chairman of the Board    Managing Director & CEO

ICAI Firm Registration No.:    ICAI Firm Registration No.:

301112E/E300264    101048W    M. D. Ranganath    Sunita Maheshwari

Independent Director    Independent Director

Sharad Vasant    Janak Mehta

Partner    Partner    Lily Vadera    Harsh Kumar Bhanwala

Membership No.: 101119    Membership    No.: 116976    Independent Director    Independent Director

Bhavesh Zaveri    V. S. Rangan

Executive Director    Executive Director

Renu Karnad    Keki Mistry

Non-Executive Director    Non-Executive Director

Srinivasan Vaidyanathan    Ajay Agarwal

Mumbai, April 19, 2025    Chief Financial Officer    Company Secretary