Your Directors are pleased to present the Twenty-Nineth (29th) Annual Report of DCB Bank Limited (hereinafter referred to as the Bank/ Your Bank/ DCB Bank) together with the audited accounts for the Financial Year (FY) ended March 31, 2024 (FY 2024). In FY 2024, the Bank has posted an Operating Profit of 864.44 Crore (FY 2023 786.73 Crore) and a Net Profit of 535.97 Crore (FY 2023 465.56 Crore).
Total Assets have increased by 10,671.10 Crore and reached 63,036.97 Crore as on March 31, 2024 (52,365.87 Crore as on March 31, 2023).
Customer Deposits have increased by 7,346.92 Crore and Advances have increased by 6,546.52 Crore. Your Bank continues to make significant contribution to Priority Sector Lending (PSL) and has achieved the overall PSL target as required by the Reserve Bank of India (RBI). The Net Interest Margin (NIM) was 3.65% in FY 2024 as compared to 3.93% in FY 2023 and the Current and Savings Accounts (CASA) ratio stood at 26.02% as on March 31, 2024.
Cost to Income Ratio has increased to 64.01% in FY 2024 from 63.00% in FY 2023. Total Branch network stood at 442 as on March 31, 2024 (427 as on March 31, 2023) and Automated Teller Machines (ATMs) network was 418 as on March 31, 2024 (396 as on March 31, 2023).
Provisions Other Than Tax have decreased to 142.48 Crore in FY 2024 from 159.17 Crore in FY 2023. Your Bank has been making conservative provision for Non-Performing Assets (NPA). In addition, the Bank has also been making periodic Floating Provision and provision against Standard Assets. Gross NPAs have increased to 1,353.47 Crore as on March 31, 2024 from 1,122.84 Crore as on March 31, 2023. Consequently, Gross NPA Ratio as on March 31, 2024 was 3.23% as compared to 3.19% as on March 31, 2023. Net NPAs have increased to 454.33 Crore as on March 31, 2024 as against 356.92 Crore as on March 31, 2023. Consequently, Net NPA Ratio as on March 31, 2024 was 1.11% as compared to 1.04% as on March 31, 2023. The overall NPA Provision Coverage Ratio as on March 31, 2024 was 77.30% (79.34% as on March 31, 2023).
Return on Assets (RoA) Ratio in FY 2024 was 0.93% as compared to 0.97% in FY 2023. Corresponding Return on Equity (RoE) Ratio in FY 2024 was 12.05% as compared to 11.70% in FY 2023.
Capital Adequacy Ratio (CAR) under Basel III as on March 31, 2024 stood at 16.59% (17.55% as on March 31, 2023).
FINANCIAL SUMMARY
( in Crore)
| Balance Sheet | As on | As on | Increase / |
| March 31, | March 31, | (Decrease) | |
| 2024 | 2023 | ||
| Customer Deposits | 44,486.68 | 37,139.76 | 7,346.92 |
| Inter Bank Deposits | 4,866.35 | 4,099.15 | 767.20 |
| Total Deposits | 49,353.03 | 41,238.91 | 8,114.12 |
| [Including Total | [12,842.44] | [10,895.61] | 1,946.83 |
| CASA*] | |||
| Advances | 40,924.56 | 34,378.04 | 6,546.52 |
| Gross – NPA | 1,353.47 | 1,122.84 | 230.63 |
| Net – NPA | 454.33 | 356.92 | 97.41 |
| Total Assets | 63,036.97 | 52,365.87 | 10,671.10 |
*Current and Savings Accounts (CASA)
| Profit & Loss | For the | For the | Increase / |
| year ended | year ended | (Decrease) | |
| March 31, | March 31, | ||
| 2024 | 2023 | ||
| Interest Income | 5,362.04 | 4,200.27 | 1,161.77 |
| Interest Expense | 3,434.14 | 2,483.26 | 950.88 |
| Net Interest Income | 1,927.90 | 1,717.01 | 210.89 |
| Non-Interest | 474.24 | 409.39 | 64.85 |
| Income | |||
| Total Operating | 2,402.14 | 2,126.40 | 275.74 |
| Income | |||
| Operating Cost | 1,537.70 | 1,339.67 | 198.03 |
| Operating Profit | 864.44 | 786.73 | 77.71 |
| Provisions Other | 142.48 | 159.17 | (16.69) |
| than Tax | |||
| Net Profit Before | 721.96 | 627.56 | 94.40 |
| Tax | |||
| Tax | 185.99 | 162.00 | 23.99 |
| Net Profit After Tax | 535.97 | 465.56 | 70.41 |
DIVIDEND
Your Board is pleased to recommend a dividend of 1.25 per equity share of 10.00 each in respect of Financial Year ended March 31, 2024 (1.25 per equity share of 10.00 each for the Financial Year ended March 31, 2023).
MANAGEMENT DISCUSSION AND ANALYSIS VISION
The Banks vision is to be the most innovative and responsive neighbourhood bank in India serving entrepreneurs, individuals, and businesses by adapting "best practices" while ensuring strong governance, good working atmosphere for employees and be responsible towards society and environment.
TARGET MARKET
Keeping in view our inherent strengths, branch network and expertise, the Banks target market is mainly small business owners/ self-employed/ small business segment (traders, shopkeepers, business owners, Micro, Small & Medium Enterprises (MSMEs) and (Small and Medium-sized Enterprises (SMEs). The MSME/SME sector is a vibrant and dynamic sector of the Indian economy and plays a very important role in the growth of the Indian economy. This segment is usually resilient (once again demonstrated post Covid-19 pandemic) and displays entrepreneurial spirit. Small enterprises create millions of jobs and maintain social stability. The MSME sector plays a pivotal role in the economic and social development of the country. As per estimates the MSME sector contributes around 30% to Indias GDP. Some useful information on the MSME sector is given below:
• Number of Working Enterprises: 63.4 million
• Employment: 111 million individuals
• Urban: 49%, Rural: 51%
• Manufacturing: 32%, Trade 35%, Other Service: 33%
• Sole Proprietor: 96%
(Source: Annual Report FY 2021-22 Government of India, Ministry of Micro, Small and Medium Enterprise).
DCB BANK CUSTOMERS
Your Bank provides banking services to a varied base of business owners, self-employed/ small businesses for example – Commodity Trader, Gold Trader, Vegetable
Trader, Commission Agent, Retailer, Restaurant Owner, Caterer, Baker, Vending Machine Supplier, Consultant, Doctor, Contractor, Interior Decorator, Software Designer, Salon, Beauty Parlor, Printer, Electrical Engineer, Saw Mill, Flour Mill, Rice Mill, Grocery Store, Brick Maker, Builder, Fabricator, Artist, Writer, Auto Repair, Ship Repair, Pharmacy, Computer Specialist, Furniture Maker, Uniform Maker, Garment Shop, Fashion Tailor, Hardware Shop, Agri Processor, Pesticide Dealer, Auto Dealer, Scrap Dealer, Stationery Supplier, FMCG or Consumer Goods Dealer, Tool Maker, Agri Input Dealer, Tractor Dealer, Plastic Manufacturer, Mattress Manufacturer, Water Supplier, Computer Training Classes, Internet Caf?, Coaching Classes, Tour Operator, Hotel Owner, Transporter, Ticketing Agent, C&F Agent, amongst others. The list of Self-Employed occupations is endless. The target market is essentially Micro, Small and Medium Enterprises both in Manufacturing and Services. (Please refer to MSMED Act, 2006). Most of the lending to MSME sector qualifies for Priority Sector Lending. A major share of deposits and loans of the Bank are from the self-employed segment.
CREDIT RATING
During the FY 2024, CRISIL Ratings Limited rea_rmed the Banks rating for Tier II Bonds (under Basel III) as CRISIL AA-/Stable and rea_rmed its rating of the Banks Certificates of Deposit Programme and Short-term Fixed Deposit Programme as CRISIL A1+.
AWARDS AND RECOGNITION
Your Bank continued to be recognized for its progress and initiatives across the various business and functions. The details of various awards/recognitions received by your Bank during FY 2024 are given below:
Corporate Social Responsibility (CSR) CSR Journal of Excellence Award
The CSR project of the Bank for household biogas units in Adilabad district, Telangana was adjudged the runner-up at the CSR Journal Excellence Awards 2023 in the environment category. The household biogas units in rural household project, provides organic fertilizer, and cleaner bio-cooking fuel. It reduces methane emission which is a known cause greenhouse e_ect.
ACEF Award
The Bank was awarded Gold in the Grand Prix 2023 category in recognition of overall Excellence in Social Responsibility by focusing on projects in remote locations to contribute to society and create sustainable livelihood opportunities for tribal communities. The Banks projects for, coastal ecosystem-based livelihoods through beekeeping, livelihood improvement program through aquaculture, mangrove plantation and rainwater recharge wells were recognized in this category.
The Banks CSR partnership project Protection of Wildlife Corridor via Reforestation and Alternative Livelihood Programme - Panna Tiger Reserve. Madhya Pradesh, in collaboration with Last Wilderness Foundation won Best Corporate (non-Profit partnership category). This is aimed to incentivize local communities and protect the region by introducing initiatives and pilot schemes that would reduce animal / human conflict, protect biodiversity, and provide alternative sources of income to individuals living near animals.
Human Resources (HR)
The Bank continues to be certified as a Great Place to Work (GPTW) for 8th consecutive year while also securing a spot in the top 10 organizations in the country in the Health and Wellness Segment in this year. DCB Bank was recognized in the Ambition Box Employee Choice Awards 2024, won the title for the Most Preferred Workplace BFSI 2023-24 (2nd edition), and got recognition for Best Employee Engagement Strategy Award in the India HR Summit Awards 2023.
The Bank was recognised by Great Place to Work (GPTW) for featuring among Indias Best WorkplacesTM in BFSI 2024 : Top 50
Information Technology (IT)
DCB Bank won Best Technology Talent Award – Special mention from IBA – Retail Banking during 19th Annual Technology conference.
The Bank won Gold Award in Product Innovation Category – Infosys Finacle Innovation Awards 2023 for DCB Zippi Plus
Express BFSI Technology Awards 2023 on Enterprise Applications for new Mutual Fund Application & Analytics/ Big Data
Branch Expansion & ATM
The number of branches, as on March 31, 2024, stood at 442 [242 Retail branches and 200 branches in Agri and Inclusive Banking (AIB)]. Of these, 82 branches are in rural areas (approximately 19%) and 111 branches are in semi-urban areas (approximately 25%). The focus has been on using cost e_ective eco-friendly material for refurbishing while creating a standard uniform look and feel to provide a unique, positive, and seamless banking experience to customers.
The Bank had 418 ATMs as on March 31, 2024.
RETAIL BANKING
Retail Banking o_ers unique products for meeting financial needs of individuals and businesses. The Bank follows a multi-product approach which results in "all products being o_ered in all branches" subject to customer demand in the branch catchment area. To remain competitive, the Bank is particular about the quality and timeliness of service delivery. The Bank has a wide range of products that caters to the various needs of the customers.
Deposits
Your Bank continues to be amongst the top banks in India in terms of o_ering attractive interest rates in both Savings Accounts and Fixed Deposits. In FY 2024, the Bank continued to build its granular deposits by o_ering attractive benefits and interest rates in Savings Accounts and longer tenor Fixed Deposits. In Fixed Deposits, the Bank has two unique propositions - DCB Suraksha Fixed Deposit and DCB Health Plus Fixed Deposit. DCB Suraksha Fixed Deposit provides free life insurance coverage up to 10 lakh and DCB Health Plus Fixed Deposit provides a basket of health benefits like free consultation with doctors, reimbursement of pharmacy expenses and ambulance services. In FY 2024, the Bank launched DCB Happy Savings Account with cashback for UPI transactions (both incoming and outgoing). Customers can receive cashback (subject to conditions) up to 7,500 per year on eligible UPI transactions. UPI transactions are ubiquitous, therefore the more transactions an individual does via DCB Happy Savings Account, the more one stands to earn as cashback. DCB Happy Savings Account has received a very encouraging response from both customers and prospects. The Banks Savings Account and Fixed Deposit book recorded a growth of 19% and 20 % respectively over the FY 2023. The top 20 deposits ratio was at 6.57% at the end of FY 2024 as compared to 6.96% at the start of the year.
Mortgage and Micro Mortgage Loans
Mortgage is the prime lending product for the Bank and contributes more than 50% of the Banks Advances book. As part of the Mortgage business, the Bank o_ers both Home Loan and Business Loans to self-employed and salaried segments in the neighborhood areas of the Banks branches. The purpose of these loans, inter alia, are property purchase, home improvement, home repairs, business requirements (purchase of plant and machinery, purchase of stocks, purchase of shops, working capital) and personal expenses such as education, marriage or medical. Micro or small ticket Mortgages are most suitable in Tier 2 to Tier 6 locations. Many people in the rural and semi-urban areas derive cash income from informal sectors or trades. At times, many customers do not have su_cient documents to prove their income/ repayment capacity for obtaining loans. The Bank has demonstrated the ability to assess the household income for such customers by adopting a method of in-depth personal discussions with the borrowers and co-borrowers. Apart from creating a robust portfolio, the Bank has been able to achieve financial inclusion goals. Most of these micro loans qualify under the Priority Sector Loan (PSL) norms of the RBI. A part of the Banks portfolio qualifies for long term refinance from National Housing Bank (NHB).
The Mortgages business continued to expand very well during FY 2024 with increased sourcing from the targeted segments. The Bank increased its distribution in the Mortgage business by adding frontline headcount and expanding its geographic presence.
Construction Finance (CF)
The construction sector is an important contributor to the growth of the economy. A_ordable housing in both rural and urban areas is one of the key thrust areas for the Government of India. The implementation of Real Estate Regulation & Development Act, 2016 in most states, has brought in much needed transparency in this sector, creating favorable conditions for home buying and financing. The Banks approach is to focus on reputed builders with a strong track record of delivery who are primarily concentrating in the a_ordable and mid-segment housing segment. At the same time, the strategy is to be cautious and limit exposure per builder/ project. The Bank has established processes to monitor sales, collections, and utilisation of funds towards project completion. In FY 2024, the country witnessed many new projects launches resulting in strong buying in the a_ordable and mid-segment housing units across most of the geographies. The Bank expects sizable opportunity in lending to a_ordable and mid-segment housing projects. The business has around 200 quality customers spread across Ahmedabad, Baroda, Bengaluru, Chandigarh, Delhi, Hyderabad, Mumbai, Pune, Surat, and Vishakhapatnam.
Commercial Vehicle (CV) Loan
CV Loan is selectively and mostly o_ered to existing customers or in a few promising locations.
Loan against Gold
Loan against Gold is o_ered in most of the branches of the Bank. The Bank has focused on improving customer experience and service by continuously investing in process improvements through in-housing of valuation process and significant overhaul of the front-end system used for loan processing. Most of the verification and validation processes have been automated leading to faster turnaround and improved customer experience. The Bank has invested in improving controls to avoid operating errors and fraud losses.
Insurance and Mutual Funds Distribution
The Bank has corporate agency tie-ups for distribution of life insurance, health insurance and general insurance. The Bank also has referral tie ups for mutual fund distribution. This enables the Bank to deepen customer relationships in addition to increasing fee income.
Traditional Community Banking
In FY 2010, with a vision of strengthening neighbourhood banking, the Bank set up a separate vertical to focus on Traditional Community Banking. The aim was to address the specific needs of the vintage neighbourhood community customers and to provide personalized solutions wherever possible. This perhaps is the purest form of neighbourhood banking and is directed towards addressing small credit needs such as education, personal, business and working capital.
Non-Resident Indian (NRI) business
The Bank has a dedicated NRI unit. Depending upon the opportunity, the Bank has specialized Relationship Managers in select branches across India. In FY 2024, NRI Savings Account balances grew by 8% and FCNR (B) deposits grew by more than 60%. NRI customers contributes to 7.36% of total deposits. We have opened 1134 new NR accounts in FY 2023-24 and have a team of 30 dedicated NR RMs catering to a base of 11,342 clients.
Government business (Collection of Direct and Indirect Taxes)
The Bank has integrated with Government of India Income tax portal [TIN 2.0] and Goods and Service Tax [GST] portal. This enables the taxpayer to make all types of Direct Taxes and GST payments using online and at branches. Further, it provides a convenient way for individuals and businesses to pay their tax seamlessly.
COLLECTIONS AND RECOVERIES
The Banks Collections & Recoveries is fully managed by in-house sta_ dedicated to delivering exceptional service while strictly adhering to RBI guidelines to prevent financial leakages. This unified scalable team manages all the Banks products and operates across 475 locations pan India. In response to the challenges posed by the Covid-19 pandemic, the Bank has expedited system improvements to o_er maximum self-service options to customers and strengthen monitoring systems. Further, the Banks e_orts to improve the customer experience have been substantial for example the Bank has leveraged digital channels to provide coaching and education on payment habits, payment options, understanding of financial products, etc. to customers. This proactive approach not only reduces cash handling and reconciliation challenges but also enables customers to make timely repayments through multiple online channels.
STRATEGIC ALLIANCES
One of the key strategies of the Bank is to enter alliances with entities whose products and services enables the
Bank to improve customer acquisition and retention. Apart from new and enhanced products, the alliances help in speed to market. The various strategic alliances and business association of your Bank are given below
Bancassurances
| Name of the Partner | Type of Arrangement |
| Aditya Birla Health | Corporate Agency for |
| Insurance Company Ltd. | insurance sales |
| Aditya Birla Sun Life | Corporate Agency for |
| Insurance Company Ltd. | insurance sales |
| HDFC Life Insurance | Corporate Agency for |
| Company Ltd. | insurance sales |
| ICICI Lombard General | Corporate Agency for |
| Insurance Company Ltd. | insurance sales |
| Royal Sundaram General | Corporate Agency for |
| Insurance Company Ltd. | insurance sales |
| Service Partners | |
| Name of the Partner | Type of Arrangement |
| Euronet Services India Ltd. | ATM and Switch |
| Management | |
| Aditya Birla Finance Ltd. | Lending Business |
| Fintech Alliances | |
| Name of the Partner | Type of Arrangement |
| Finnew Solutions Private | Global Niyo Card |
| Ltd. (Niyo) | Management |
| Greenizon Agritech | Agri Supply Chain |
| Consultancy Private Ltd. | Financing Business |
| Dvara E Registry P Ltd. | Agri Farmer Loans |
| Business | |
| Ninjacart P Ltd. | Agri Supply Chain |
| Financing Business | |
| Trade Receivables | Discounting System (TReDS) |
| Alliances | |
| Name of the Partner | Type of Arrangement |
| Mynd Solution Private Ltd. | Lending on TReDS |
| (M1xchange) | Platform |
| Receivables Exchange of | Lending on TReDS |
| India Ltd. (RXIL) | Platform |
| A. TReDS Ltd. | Lending on TReDS |
| (Invoicemart) | Platform |
CORPORATE BANKING (CB)
The Banks intention is to have a niche presence in Corporate Banking. This business operates across India with regional o_ces in Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai. The objective is to provide a complete range of commercial banking solutions including Foreign Exchange, Trade Finance and Cash Management. The Bank has a robust underwriting and credit system to address the inherent risks in Corporate Banking. The emphasis is on building a secured loans portfolio and creating long term relationships with high quality large and mid-corporates. Corporate Bank during the year maintained a diversified loan book while continuing to build on the short-term products. This unit is also responsible for cross-selling other products of the Bank including raising wholesale deposits thereby being self-reliant and enabling to maintain a healthy mix of retail to wholesale deposits across diverse industries. The momentum is likely to carry on in the coming years with the unit leveraging on existing customers as well as focusing on adding new customers to the Bank. The unit added 43 new to Bank customers across di_erent products in FY 2024.
The intensity and frequency of regular review of exposures continued enabling identification of emerging risks in a timely manner. The focus is to continuously improve understanding of the borrowers business/ prospects, ensuring the right mix of products, enhance analytics, ensure strong promoter connect, cash flow understanding and tracking.
MSME & SME
The Banks core target segment is MSMEs/ SMEs. It is a large and vibrant sector. It is the backbone of our economy. This segment has positive signs of growth and rebound. The Bank strives to be the business partner of MSMEs/ SMEs by o_ering custom made solutions to meet the credit demand of the segment. The Bank o_ers a range of products and personalised services including Working Capital, Foreign Exchange, Cash Management, Trade Finance and Internet Banking. Given the inherent risks associated with this segment the Bank aims to have large portfolio of small ticket secured exposures.
AGRI AND INCLUSIVE BANKING (AIB)
AIB is a separate unit with the primary objective of achieving financial inclusion, PSL and enhancing the
Banks footprint in the rural and semi urban areas. At the end of March 31, 2024, AIB had 200 branches in 13 states of India. There are many opportunities to o_er simple innovative products backed by superior technology in the rural and semi urban areas of India. Many of the new branches are in Tier 2 to Tier 6 locations. There is a constant endeavour to cater to underbanked and unbanked population of the country through a wide range of products, for example, zero balance savings account, small recurring deposit account, small loans to match the income and cash flow cycle. AIB also coordinates the entire PSL e_orts for the Bank and is primarily responsible for achieving the financial inclusion targets.
Pradhan Mantri Jan-Dhan Yojana (PMJDY)
In FY 2024, the Bank actively participated in PMJDY programme. The Bank had 46,908 PMJDY accounts as on March 31, 2024. The Bank has enabled Rupay Debit Cards for PMJDY account holders
Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Atal Pension Yojana (APY)
The Bank successfully reached out to unbanked and economically weaker population through PMSBY, PMJJBY and APY programs that are designed to bring social security. Your Bank had 5,124 customers under PMSBY, 2,362 customers under PMJJBY and 7,768 customers in APY as on March 31, 2024.
Basic Savings Bank Deposit Account (BSBDA)
BSBDA has replaced "No frills account". This is a wonderful product for achieving financial inclusion especially for those who have limited transaction needs in the low-income group. The Bank had 29,464 BSBDA accounts as on March 31, 2024.
Kisan Mitra
"Kisan Mitra" as the name suggests, is a deposit product, which fulfils the requirement and enhances the savings habit in rural areas. It is a product specially designed for farmers. It is a modified Savings Account with zero account opening amount and no maintenance charges.
Retail Agriculture Loan and Kisan Credit Card (KCC)
To meet the credit needs of the farmers, the Bank has retail agriculture products like Kisan Credit Card that aims at providing adequate and timely credit support to the farmers for crop cultivation and allied activities. Under the KCC program, the Bank o_ers Cash Credit_/ Overdraft to farmers for purchasing seeds, fertilizers, pesticide for crops cultivation and Term Loan facilities for land levelling, irrigation and purchasing farm equipment.
Tractor Loan
Tractor Loan is an integral part of the total agricultural equipment and is a direct indicator of growth in the agricultural sector. The Bank has steadily built its business across Tier 2 to Tier 6 locations. Tractor loans help the Bank to partly meet PSL targets for agriculture and small and marginal farmers set by the RBI. The Bank has benefited small and marginal farmers in farm mechanization improving their yield and allied income.
Microfinance Institutions (MFIs) and Business Correspondents (BCs)
The Bank lends to MFIs who in turn lend directly to end borrowers. Over time, the Bank has created a network of MFI relationships across India. In a few states of India, the Bank has provided Joint Liability Groups (JLGs) unsecured loans through BCs to promote economic activities. Group loans from the Bank has enabled unprivileged customers to avail small loans from the banking sector instead of high-cost borrowing from money lenders. These loans are usually provided to small farmers and weaker sections mainly in rural areas. To support the growth, the Bank has an e_cient software system for managing BC Loans. This software helps maintain adequate information about the borrowers under JLGs. It provides a common platform for both, the Bank, and the BCs for seamless processing of loans and has added immense value by reducing the loan disbursal cycle time.
Educational Institute Loan
The Bank has a lending program for the education segment by providing loans to schools for infrastructure development which helps to impart quality education to students. The Bank provides loans based on the requirement of the institution conducting inter alia detailed study of the school, number of students, curriculum, financials, cash flows and promoter reputation. This product helps the Bank to cater to the education segment and boost the social infrastructure development of the country.
CO-LENDING PARTNERSHIPS
Co-lending is a unique concept enabled by the RBI. The Banks intention is to partner with Non-Banking Financial Sector Companies (NBFCs) that may be o_ering products not currently o_ered by the Bank or segments not served by the Bank. As at the end of FY 2024, the Bank has active Co-Lending Partnerships with Nine (9) NBFCs. The Bank has a well diversified Co-Lending product portfolio with multiple products such as Gold Loans, School Finance, Business Loans, Micro enterprise Loans, Housing Loans etc. Co-Lending continues to be an integral part of Banks business growth plans.
ALTERNATE CHANNELS AND DIGITAL BANKING Phone Banking
In FY 2024, the Banks Customer Care Associates attended to approximately 67,000 calls per month and 19,000 calls per month are self-serviced on Intelligent Interactive Voice Response (IVR). The Bank has invested in technology and infrastructure to take customer service to new heights. It has further enhanced its self-service options by adding loan products and Re-KYC for deposit products through "IVR" which allows customers to access their account much easier than before. Further, the Bank has also implemented a range of new customer-centric policies, designed to ensure that the customers receive the best-in-class service from the Bank. To provide uninterrupted service and load balancing, the Bank has trained its branch sta_ to take phone banking calls that are routed to the branches using a unique technology solution. This has in some ways redefined call center and customer service in the industry. Keeping our focus to ensure minimum time is spent by customer on the call, the Bank has invested in knowledge management tool, to ensure the associates get information in the shortest possible time without making the customer wait. The Bank has ensured that its Customer Care Associates can interact with the customers in 8 languages (English, Hindi, Gujarati, Kannada, Marathi, Odiya, Tamil and Telugu). Adoption inter alia of new technology, load balancing, multi skilled o_cers, regular intervention by the training team has enabled the contact center team to provide timely and quality service to customers.
ATMs
The Bank has 418 ATMs as on March 31, 2024, all of which are Braille Keypads enabled. The Bank ensured that ATM uptime was maintained at above 95% in the FY 2024.
DCB Mobile and Internet Banking
Approximately 131,000 of the Banks customers are actively using the new and improved Mobile Banking Application that is o_ered in 9 languages. Your Bank continues to get encouraging feedback on Google Play Store with a rating of 4.5. During FY 2024, your Bank has added non-financial features like PAN card updating, Interest Certificate extraction etc. DCB Internet Banking has around 30,000 retail users and the platform is rich with a plethora of digitally managed services that has reduced the need for customers to visit branches for their transactions.
DCB Unified Payment Interface (UPI) and Bharat Bill Payment System (BBPS)
UPI continues to be the dominant channel for digital payments and our UPI platform has shown substantial growth in FY 2024, with a remarkable increase in transaction volume and value, strengthening the Banks position in the digital payments space. The Bank has successfully processed over 48 million transactions in FY 2024 with 96% success rate, a testament to our robust infrastructure and widespread consumer acceptance. In line with the Banks commitment to innovation, the Bank has launched new features such as UPI Autopay for recurring payments and in the process of introducing UPI International to facilitate seamless cross-border transactions. The Bank has launched the UPI Lite on March 29, 2024 to boost up low value o_ine retail payments. These enhancements have not only improved user experience but also expanded the "use case" for UPI, driving greater financial inclusion.
The BBPS platform has seen unprecedented growth this fiscal year, and the Bank has made about 22,000 billers available on the Banks front channels like Mobile Banking and Internet banking. The number of active billers on the Banks platform led to a significant uptick in consumer convenience and usage, as more users are now able to pay a wider array of bills, ranging from utilities to school fees, through a single interface.
The Bank has also successfully integrated innovative solutions to the BBPS platform, reminders for bill payments and a unified online dispute redressal mechanism.
DCB Debit Cards
The Bank focuses on constantly improving o_erings, features, and security on Debit Cards. It o_ers a wide range of Debit Card products like Platinum and Classic cards, as well as specialised cards like DCB Travel Smart, which is beneficial for international travellers as it o_ers a competitive foreign exchange mark up, as well as complimentary travel insurance. The Banks cards also have much sought after features like contactless payment (Tap and Pay) and e-mandate for ease of recurring payments. From security and control perspective, the Bank has enabled instant response to customers for failed transactions.
DCB Niyo Global Card
DCB Niyo Global Card is a Debit Card powered by Visa and issued with DCB Niyo Savings Account. This program is segmented especially for customers travelling abroad which provides competitive exchange rates making the product a very compelling proposition. The Card holders are o_ered a Mobile Application which supports security features such as switching on or o_ card usage, changing transaction limits and block or unblock the Card. Customers are on-boarded using a complete end to end digital on-boarding journey.
Trade Receivables Discounting System (TReDS)
In FY 2021, the Bank commenced participation on Trade Receivables Discounting System (TReDS), a unique digital capability that provides assured and faster financing to MSMEs/ SMEs who are providing goods and services to larger companies. TReDS is improving the flow of finance to MSMEs/ SMEs. During FY 2024, the Bank has financed more than 2,100 number of MSMEs through 5,500 Invoices in TReDS platform.
TRANSACTION BANKING Cash Management Services (CMS)
The Bank provides Corporates, MSMEs/ SMEs and Retail customers sophisticated and cost-e_ective CMS. This helps customers manage their collection and payment logistics with ease. The Bank has 8 vendors for CMS cheque collections across India. At the end of FY 2024, the Bank had 3,600 active customers using CMS facilities.
Business Internet Banking (BIB)
The Bank o_ers state-of-the-art BIB especially designed for MSME/ SME customers. The adaptive and responsive feature of the application makes it user friendly for customers across devices. At the end of FY 2024, BIB facility had 33,356 users.
TREASURY, MONEY MARKET AND FOREIGN EXCHANGE
Treasury
Treasury actively manages liquidity, compliance with Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), trading in fixed income securities & currencies, and participating in Initial Public O_ers (IPOs) (Equity). It also shares the responsibility of interest rate risk management of the Bank. In FY 2024, the Bank strengthened the Treasury function by adding more expertise and improving system functionality. As a result, the Bank expects to have stronger controls and more products in the future. The Bank was cautious in managing fixed income securities as central banks across the globe remained hawkish. Yields on bonds across the world remained volatile with mixed signals of growth and sticky inflation. The Bank selectively invested in equity IPOs and booked profits by way of listing gains.
Money Market
Banking sector system liquidity remained tight and the RBI pro-actively injected liquidity through both the main and the fine-tuning repo operations to ease the situation. Short-term interest rates remained elevated, while long term interest rates were stable probably reflecting better anchoring of inflation expectations as indicated in the narrow term spread in the G-sec market. RBI, in its Monetary Policy statements, reiterated to remain nimble and flexible in its liquidity management through repo as well as reverse repo operations.
Foreign Exchange (FX)
The Banks actively participated in the FX market and conducted proprietary trading, market making and managing flows for merchant transactions. The Indian Rupee remained stable and displayed low volatility, compared to currencies of emerging market, and select advanced economies. This is despite a stronger US dollar and elevated US treasury yields. In our opinion, it reflects the strength and stability of the Indian economy, particularly the moderation in the Current Account Deficit, comfortable FX reserves and return of capital inflows. World Bank estimate indicates US$ 135 billion in inward remittances for India during FY 2024. Hence, India would remain the largest recipient of remittances globally. Foreign Portfolio Investments witnessed a sharp turnaround during FY 2024. Net accretions to NRI deposits and net inflows under External Commercial Borrowings were also higher during FY 2024. Indias FX reserves stood well above US$ 600 billion, and it is expected to rise further on account of expected large inflows in equity and bond instruments.
RISK MANAGEMENT
Risk is an integral part of the banking business and the Banks aim is to maintain portfolio quality by making appropriate risk/ reward trade-o_s. The Bank inter alia is exposed to credit, concentration, market, country and counterparty bank exposure, liquidity, operational, fraud and reputation risk. The Board of Directors of the Bank has oversight of risks assumed by the Bank and has delegated its power to manage risks to Risk Management Committee (RMC) of the Board.
Credit Risk
The Credit Risk unit ensures alignment with the objectives of achieving growth while maintaining portfolio quality by making appropriate risk/ reward trade-o_s. The idea is to ensure long-term sustainable performance across business cycles. On-going e_orts are made to improve risk assessment and controls. Credit Risk over time has developed capabilities to assess the risks associated with various products and business segments. As far as possible, e_orts are made to standardize the entire process pan India while considering geographic nuances. The Bank has implemented a rating model that considers both quantitative and qualitative factors and produces a rating that becomes one of the key inputs to credit decisions. To continuously improve the quality of the portfolio, the Credit Risk unit uses SAS analytics and has created several insightful models that helped in refining the product o_ering, choosing the target segment of customers, collections, and recoveries. Key processes in credit underwriting were examined and duplication was reduced to improve speed of processing. Periodic portfolio reviews were conducted with the business units that helped improve portfolio quality.
Concentration Risk
Concentration risk is monitored and managed both at the customer level and at the aggregate level. The Bank, inter alia, monitors portfolio concentrations by segment, product, business, ratings, borrower, group, sensitive sectors, unsecured exposures, industry, and geography. The Bank adopts a conservative approach within the regulatory prudential exposure norms.
Market Risk
The Bank has an established process to measure, monitor and manage Interest Rate, Exchange Rate and Equity Risk as part of Market Risk Management. Besides the usual monitoring of Structural Liquidity, Interest Rate Sensitive Gap limits and Absolute Holding limits, the Bank also monitors interest rate risks using Value at Risk limits. Exposures to Foreign Exchange and Capital Markets are monitored within pre-set exposure limits, margin requirements and stop-loss limits.
Country Exposure Risk and Counterparty Bank Risk
The Bank has established specific country exposure limits which is capped at 15% of its Capital Funds. The limit also depends upon rating of individual countries. The Bank mitigates risks using insurance cover available through the Export Credit and Guarantee Corporation (ECGC), where appropriate.
The Bank has established framework for setting up of limits for counterparty banks, basis their rating and monitors counterparty bank exposures against the approved limits.
Liquidity Risk
As part of the liquidity management and contingency planning, the Bank assesses potential trends, demands, events and uncertainties that could result in adverse liquidity conditions. The Banks Asset Liability Management (ALM) policy defines the gap limits for the structural liquidity and the liquidity profile is analysed on both static and dynamic basis by tracking cash inflow and outflow in the maturity ladder based on the expected occurrence of cash flow. The Bank undertakes behavioural analysis of the non-maturity products, namely CASA, Cash Credit and Overdraft accounts on a periodic basis to ascertain the volatility of balances. The renewal pattern and premature withdrawals of Fixed Deposits and drawdowns of un-availed credit limits are also captured through behavioural studies. Liquidity Coverage Ratio (LCR), a global standard to assess an organisations ability to meet its payment obligations, is used as a measure to assess Banks liquidity position. LCR level ensures that the Bank has an adequate stock of unencumbered High-Quality Liquid Assets (HQLA) that can be converted into cash easily and immediately to meet its liquidity needs under a 30-calendar day liquidity stress scenario. RBI has also mandated a minimum Net Stable Funding Ratio (NSFR) of 100% with e_ect from October 01, 2021. NSFR indicates that the Bank maintains a stable funding profile in relation to the composition of its assets and o_-balance sheet activities. The Bank maintains LCR and NSFR above 100% on an ongoing basis. The liquidity profile is estimated on an active basis by considering the growth in Deposits, Advances, and investment obligations. The concentration of large deposits is monitored on a periodic basis. Emphasis has been placed on growing Retail Deposits and avoid as far as possible Bulk Deposits. The Bank periodically conducts liquidity stress testing.
Operational Risk
Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or external events. The Banks operational risk management framework is defined in the Operational Risk Management Policy approved by the Board of Directors. While the policy provides a broad framework, Operational Risk Management Committee (ORCO) oversees the operational risk management in the Bank. The policy specifies the composition, roles, and responsibilities of the ORCO. The framework comprises identification, assessment, management, and mitigation of risks through advanced tools and analysis.
Reputational Risk
The Bank pays attention to issues that may create reputational risks. Events that can negatively a_ect the Banks reputation are handled cautiously ensuring utmost compliance and in line with the values of the Bank.
Information/ Cyber Security Risk
The Bank operates in a highly automated environment and makes use of the latest technologies to support the business and functions. The Bank has put in place a robust governance framework, information security practices and a business continuity plan to mitigate IT and cyber security related risks. The Bank ensures that its information and cyber security policies are updated periodically to ensure protection of customer sensitive information, transaction integrity, availability of banking services and be resilient to emerging cyber security risks. The Bank has a 24x7 Security Operations Centre to monitor security alerts and take timely appropriate actions.
Business Continuity Management
The Bank has put in place a comprehensive Bank-wide Business Continuity Management (BCM) plan and procedure to ensure the continuity of critical operations of the Bank in the event of any disaster/ incident a_ecting business continuity. The Banks Business Continuity Program is developed considering the criticality of the functions performed and the systems used. Periodic drills and tests are conducted to evaluate the e_ectiveness of the business continuity arrangements and necessary steps are taken wherever needed.
Process Review
The Bank strives to continuously improve process controls and customer satisfaction. The Bank has a separate cross functional committee – Management Committee for Approval of Processes (MCAP) which is assisted by a Sub-Committee (MCAP-SuCo). In general, new processes are subjected to review by MCAP. The Committee is tasked with identifying operational and compliance risks in new processes and ensuring that steps are taken to mitigate risks. Also, MCAP regularly reviews and approves existing processes for further improvement. In the FY 2023-24, 65 processes were reviewed and approved by the MCAP.
IMPLEMENTATION OF BASEL III GUIDELINES
In accordance with the RBI guidelines, the Bank has migrated to Basel III capital adequacy disclosures with e_ect from Q1 FY 2014. The Bank continues to review and improve its risk management systems and practices to align with industry best practices. The Bank has implemented Standardized Approach for Credit Risk, Standardized Duration Approach for Market Risk and Basic Indicator Approach for Operational Risk.
INFORMATION TECHNOLOGY
In FY 2024, understandably and expectedly, there was an increased dependence on digital technologies for banking needs. The Bank is looking forward to further adopting / embracing emerging technologies like AI /ML, Blockchain, IoT, Edge Computing, Robotic Process Automation, API Banking, Metaverse, conversational banking, Big Data to meet the ever-increasing expectations of the customers, improve operational excellence, customer interactions, security, and automation.
Following were some of the key achievements of Bank during FY 2024:
New Products / Features
• Major upgrade of FinnOne application to version 6.5 from 2.0, to cater to instalment loan products.
• Integration with the Government of India Income Tax Portal (TIN 2.0). The Bank is now designated Agency Bank to collect Direct and Indirect Taxes.
• Substantial upgrade of Treasury Investment Management (IM) and Money Market (MM) Module
• Digital acquisition of New To Bank customers in partnership with Niyo. This product o_ers unique feature rich DCB Niyo Global Debit Card, a world travel companion.
• The Bank has implemented Banca Edge insurance solution - Integrated end-to-end lead - based insurance sourcing model through use of fintech solution.
• IMPS enablement for NRI Customers
• UPI Autopay that will help UPI users set up standard instructions through UPI for recurring payments.
• E-signing and E-stamping Integration will help in shifting from o_ine to online mode of loan journey for customer, by simplifying process of signing and stamping of loan documentation.
• Upgrade of Anti Money Laundering (AML) solution with additional benefits like ETL (Extract, Transform & Load) and AI features.
• Internet Banking has evolved with additional of features such as Form 15G/15H Interest autofill and acknowledgement copy, Fixed Deposit Nominee Registration, NEFT/ RTGS payment mode.
• DCB Mobile Banking has been enhanced with the addition of features like Gold Loan, FATCA declaration, Fixed Deposit nominee registration, PAN update, Interest Certificate, Positive Pay, NEFT/ RTGS payment mode.
• Gradatim (front end Gold Loan) upgrade revamping Gold Loan application with the number of screens reduction for faster processing
• The Bank has enabled eBRC (Electronic Bank Realization Certificate) functionality. Exporters will now be able to self-generate the eBRC from the DGFT (Directorate General of Foreign Trade) system which is an API based solution. The Bank system will transmit the IRM (Inward Remittance Messages) and ORM (Outward Remittance Messages) details in DGFT system.
• The Bank has automated transactions with the TReDS (Trade Receivables and Invoice Discounting) platform. This is expected to reduce operational errors and improve productivity.
• Aadhaar based KYC refresh option is now available via Interactive Voice Response (IVR)
• As per RBI Payments Vision 2025, the current Cheque Truncation System (CTS) must be migrated from the architecture of three Regional Grids to a single National Grid. The Bank has successfully migrated CTS Northern grid and Southern Grid to the National Grid.
• In its endeavor to continuously improve IT infrastructure and capabilities, the Bank has started the cloud journey. This will enable the Bank to host cloud based digital business solutions and help leveraging in implementing scalable platforms.
• The Bank has implemented Application Centric Infrastructure (ACI) namely software defined network infrastructure. This is further strengthening the data center network infrastructure.
BUSINESS INTELLIGENCE UNIT (BIU)
The core objective of BIU is to leverage data analytics to drive decision-making and improve business outcomes. Bank has invested in building modern, scalable data and technology stack in areas of Big Data, Machine Learning and Deep Learning comprising of an Enterprise Data Lake and GPU servers enabling capability to deploy multiple use cases. The Banks stack includes Cloudera, Hadoop, Kafka, SAS Viya, R, Python and Spark etc. Bank has launched a focused BIU transformation project D2V which encompasses BI and analytics use cases in self-service MIS, cross-sell, revenue and cost e_ciency. These business cases cover decision enablement across customer journeys for both Asset as well as Liability products from units across business lines. These projects are being initiated across work streams (but not limited to) to scale up underwriting, personalisation, productivity optimisation and data driven collection. In the past year, BIU has completed about 225 projects ,developed over 100 models, launched 70 AI & ML enabled projects & deployed over 300 dashboards.
OPERATIONS
Operations units continuous endeavour to improve e_ciency and o_er best in class services to customers continues to remain as the primary objective. During the year, there has been unprecedented growth in volumes across every unit and some of the units like Centralised Payments Centre and clearing units operate 24x7 to cater to the customer needs. With focus on automation and improvements in productivity, the Bank is yielding desired results as the growth in volumes and 24x7 operational shifts are managed without any significant increase in headcount and/ or costs. The new state of the art customer onboarding platform CUBE that was implemented over two years ago to support operations at National Processing Centre (NPC), was further enhanced during the year to make it more robust, faster, resilient and o_er more functionalities. During FY 2024, the Bank processed on CUBE over 200,000 applications. About 90% plus of the account opening forms submitted on CUBE application by branches, are processed and customers accounts opened by NPC within the same day against an average of about 5 days prior to implementation of CUBE thus providing superior and faster customer experience. KYC refresh through CUBE biometric can be done within seconds, which is a huge delight for our customers. A new Delivery Management System was implemented during FY 2024. The system provides end to end digitisation from print to dispatch, eliminating the entire manual activity, improving the turnaround time, and reducing operational errors. The Delivery Management System provides an online deliverable status to branches / contact centre for handling customer queries.
Centralised Payments Centre (CPC) which caters to all customer payments processing such as RTGS/ NEFT, CMS payments, and electronic banking transactions on 24x7 basis, handled about 218 lakh transactions with zero operational loss during the year. A new and innovative state-of-the-art NEFT / RTGS technology solution was implemented during the year to support 24x7 services and cater to increased volumes. Internet Payment Gateway Reconciliation and auto posting of refund and settlement were implemented in FY 2024. Cash Management Services (CMS) collection application was upgraded, and Debit Card Reconciliation System (DCRS) was enabled for auto posting in core banking. Clearing services continue to operate on 24x7 basis and during FY 2024 processed 60.55 lakh transactions with zero operational loss.
CMS which provides cash to branches and ATMs ensured that the average cash holding throughout the year was maintained at 13% of the approved limit through proactive management of cash logistics thus ensuring that idle cash levels were maintained at barest minimum levels. Central Payment O_ce that caters to the Banks vendor bill payment and employees re-imbursements developed a complete digital service for vendors which is paperless and reduced the turnaround time by more than 50%. Trade Finance Operations streamlined the process by integrating SFMS with core banking for both LC and BG issuance and automated the eBRC system as per DGFT requirements to ensure that Trade Business is further strengthened. Several initiatives taken during the recent few years with respect to implementation of newer technology solutions, strengthening of quality checks, process revamp, continuous training of sta_ including newly recruited sta_ and ensuring the sta_ remain motivated and focussed have helped various operations units to provide faster services to customers with zero operational losses and handle increased volumes seamlessly. Grooming next generation leaders and creating second line leaders across various unit continues to be a key focus area along with e_orts for further automation and improvements in productivity.
INTERNAL AUDIT (IA)
IA function reports into the Audit Committee of the Board (ACB) which constitutes members with strong domain and audit knowledge. IA function comprises of Chartered Accountants, Bankers, post-graduates, and Information Technology professionals. The team has a healthy mix of experienced sta_ across the Banking domain and freshers. ACB oversees the IA function, monitors performance, and provides regular guidance for improving risk control and compliance across the Bank. During FY 2024, IA adopted di_erent models for various audits and continued to enhance extensive use of data analytics, document verification, testing of Design and e_ectiveness along with walkthrough. The function has also initiated project to automate the audit workflow across several types of audits. The IA team makes use of various tools for analysis in the audits like SQL and SAS. In FY 2024, IA conducted 181 branch audits, 26 periodic audits, 2 Special Audits, 4 Thematic audits and 12 IT audits. IA team members continued to attend multiple online and in person training programmes conducted by IBA, RBI and other professional Institutes in various domain areas, including audit framework/ methodology, soft skills, risk management and Banking, for continuous enhancement of knowledge and skills.
VIGILANCE
In line with previous years, the Fraud Risk Monitoring (FRM) unit has enhanced the fraud detection and monitoring capabilities even this year, including fraud prevention. Some of the key initiatives include further enrichment of data points embedded into the monitoring tools, implementation of preventive mode across channels (Debit card, UPI, Internet Banking, Mobile Banking), implementation of monitor mode scenarios based on non-financial transactions like transaction remarks, UPI VPAs, merchants, declined transactions history, incorrect card details, incorrect login password attempts, media/ open Source/ ROC strike of lists monitoring etc to enhance fraud detection and comply with regulatory guidelines. It has also enhanced the capabilities to identify the risks through their risk assessment methods and investigation like periodical review of transactions on volume and value in accounts where there is static data change like mobile number. Unit has enhanced the capabilities in reviewing and responding to the cybercrime complaints received from various Law Enforcement Agencies and take appropriate action including additional due diligence, name screening and transaction review. The unit identifies learnings from fraud incidents and industry practices to enhance its capability on a continuous basis including training on technical aspects of vigilance. The unit continues to have 24x7 monitoring to enable fraud detection across various channels and transactions.
COMPLIANCE
The Banks Compliance function is independent of business and operation functions. The Compliance function has created procedures and checks to ensure compliance with applicable regulations. In addition to ensuring timely submission of various returns to regulatory authorities, the Compliance function ensures that the Banks internal procedures and processes are in adherence with the applicable regulatory and statutory provisions. The Compliance function is also responsible for AML/ KYC monitoring, the Bank relies on advanced software and analytics. Within the Compliance function, a separate unit for Compliance Monitoring and Testing has been created to carry out compliance testing on an ongoing basis. This unit also provides compliance risk assessment to various units/ functions.
HUMAN RESOURCES (HR)
Creating a good working atmosphere for employees and be responsible towards society and environment is integral part of the Banks vision. Accordingly, the HR function strives to create and sustain a high-trust, high-performance culture, where the employees experience the our brands tagline, "We Value You". The HR practices and policies are directed towards strengthening the Bank on the cornerstones of our people philosophy – Build, Develop, Care, and Engage.
Build
• The Banks headcount has crossed 11,000 during FY 2024.
• Aimed at boosting employer brand, the Banks primary talent attraction platform, the o_cial DCB Bank page on LinkedIn currently boasts over 4.33 Lakh followers. The Banks Facebook has over 28,000 followers and Twitter has over 5,600 followers.
• The Bank enables employees with opportunities to traverse across business, functions and roles, meeting unique professional aspirations, and fostering a culture of learning.
• DCB Bank prioritizes engaging with the future workforce of the nation through its flagship B-school competition, Top Talent Recruit which has been recognized as an industry best practice. In its latest edition, the program covered more than 10,000 participants from 205 B-schools across the country. The higher participation bolsters the brand value the Bank is generating among the future job seekers.
Develop
The Bank is focused on talent development needs to support the business, promote cross functional learning, empower employees, and continuously raise the bar on performance / excellence. To deliver the same, the Bank uses a multitude of channels in the form of classroom and online training, e-learnings, external certifications, surveys, learning events, etc.
• The Bank continuously believes in creating and sustaining a robust and deeply embedded compliance culture through modules like Ethics, Prevention of Sexual Harassment (POSH), Gender Sensitization, Code of Conduct, Anti Money Laundering (AML)/ Know Your Customer (KYC) delivered through classroom and online channels. It is further supplemented through audio bridges across the country, where senior leaders set the tone right from the top on sensitive and critical subjects.
• The Bank follows a well-crafted Learning and Development cycle right from identification of training needs, designing, organizing, and delivering training, gathering feedback for continued improvement in the modules and capturing e_ectiveness.
• In FY 2024, employees have attended 1.5 hours of classroom training. Through the e-learning mediums, about 2.5 Lakh learning hours were recorded.
• The Banks signature programs such as ASPIRE and RISE substantiate the Banks endorsement of learning beyond ones own function.
• DCB Banks determination to enrich all aspects of an employees lifecycle has resulted in curated supervisory capability programs. Supervisors can potentially influence their teams sentiment towards their work, hence in addition to the Appreciate, Build Ownership, Communicate and Develop (ABCD) Program, we launched Lead to Win to groom the first-time supervisors.
• On the technology front, the Bank launched the new and enhanced version of our Learning Management System, LUMOS 2.0 with improved user experience and accessibility in six additional languages.
• The Bank keeps adding avenues to promote learning. One such initiative is DCB Talks, a platform for employees to learn, interact and network with top leaders of the Bank on a wide range of topics such as Artificial Intelligence, Growth Mindset, Mentoring and Selling Mantra. A unique learning opportunity is also presented through Knowfest, our annual fair where teams from di_erent departments set up stalls and engage with the visitors helping them understand their business through some truly creative means such as games, virtual shows, dramas, quiz, posters etc.
• The Banks service philosophy, Empathy, Speed, and Quality (ESQ) and teamwork philosophy, CREW (Collaborate, Respect, Encourage, and Win) are integral to the Banks culture reflecting its commitment to create delight, and foster long term, trust-based relationships.
• The Bank has developed situational leadership program across the units, this training speaks about how a leader will be successful when they adapt leadership style as per his team members competencies and strengths. More than 50 leaders have been certified under this program.
Care
It is the Banks pursuit, responsibility, and sheer honor to have the opportunity to facilitate the sense of being taken care of for all 11,000+ of its employees, society at large, and nature. The Bank is focused on holistic wellbeing of the employees and hence keep organising events and create o_erings that help the employees become mindful of their health.
• The simple act of taking a 30-minute walk is found to have preventive value in several medical conditions. To promote walking as a habit, the Bank organizes annual ‘Walkathons, where employees step count is monitored over a period of 21 days across the country.
• Doctor on Call service facilitates instant access to qualified doctors, both general physicians and specialists, 24x7 for video consultations.
• The Bank facilitates emotional well-being in the workplace through its Employee Assistance Program, enabling the employees to seek completely confidential counselling from qualified experts not just for themselves but also for up to three family members.
• The Bank continued to support employees in meeting their financial requirements towards housing, automobile, education, etc.
• During the Chennai floods in 2023, the Bank went the extra mile and o_ered emergency loans to employees in less than 24 hours.
• At the Bank, care is not limited to the employees alone, it also includes society and nature. Through CSR unit, the Bank supports various initiatives in the area of Water, Waste Management, Renewable Energy, Supporting Tech Incubators, Preserving Archeological and Historical sites and Disaster Relief.
• Aside from meaningful contributions to society, the Bank encourages employees to actively volunteer for various CSR drives organized for tree plantation, habitat restoration, clean-up drives for parks, lakes, beaches, etc. Over 2,828 volunteers participated in various CSR activities in FY 2023-24 and customer participation was observed in over 45 locations, binding us strongly to the value ‘contribute. The Bank planted 1,02,816 trees in FY 2023-24.
Engage
The Bank strives towards o_ering a continuous building of experiences right from the beginning and at various strings of the employees lifecycle that helps create an engaged workforce and fosters a sense of belonging.
• Our onboarding philosophy expressed through the ICE (Include, Connect & Enable) framework captures various touchpoints such as welcome calls, careful focus on onboarding hygiene in areas such as infrastructure, system accesses, introduction to the onboarding team, etc. The Bank has seen a 7% improvement in the onboarding delight score from the new joiners.
• Once the employee is brought on board, they continue to have multiple opportunities to tune in through di_erent channels for example Hour HR is hosted monthly as a live radio show where senior HR team members interact with the employees on topics such as policy changes, mental wellness, HR processes, benefits, supervisory guidelines, etc.
• The Bank o_ers a host of benefits for the employees and has institutionalized processes / policies. DCB Buzzz is the latest endeavor to maximize awareness and enhance adoption by releasing frequent, bank-wide mailers highlighting salient benefits and policies through employee stories and visuals.
• Bank-wide audio bridges are conducted for employees to develop a deep understanding of the benefits through an elaborate explanation supplemented with success stories on aspects such as job movements, employee referrals, policies, etc.
• Employees are also made available with an opportunity to interact with the regional level leadership through the ‘Regional Forum sessions conducted by the regional HR partners. These have proven to be of value for communication of important messages, gathering feedback, and delivering resolutions with mutual collaboration.
• Celebration, Rewards and Recognition are crucial elements of engagement, and the Bank has brought them all together at regional as well as at a country level. The regional recognition event feeds into the final gala signature event at the end of the year - Movers and Shakers where cr?me de la cr?me of the performers receive awards for their extraordinary contributions and the talented employees shortlisted from the regional talent shows perform and compete for the top spot.
• High Decibel, our quarterly newsletter highlights moments from such events and other initiatives happening throughout the year. It supplements as a platform to call out and celebrate important employee achievements.
• Listening is a key element of engagement. It provides feedback on what the employees needs are, what matters to them, and whether the initiatives are being received well. The Banks unique program Each One Reach One (EORO) helps view employees perspective regarding their job, supervisor, work environment, and career aspirations. The collective voice of the employees becomes the input into the intervention design, policy changes, and focus group discussions. The Bank conducts a separate EORO Survey submitted by the direct reports of a first-time supervisor in reference to his/her approachability, helpfulness, care, development, and alignment with the team. The Bank o_ers counselling to low scoring supervisors and supports transition gracefully from an individual contributor mindset to a team leader mindset.
• The Bank has tapped into the collective group strength through its ESG initiative named ‘YOUnity" by engaging over 1,200 employees in Foodies, Adventure Seekers, Wellness, Wings for Women, and Bookworms Clubs!
CORPORATE SOCIAL RESPONSIBILITY (CSR) and ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)
The Banks CSR thrust areas are Water, Waste Management, Renewable Energy, Recycling, Support Technology incubators related with the Banks thrust areas, Preserve Archaeological and Historic sites, and
Disaster relief. The CSR and HR team work together to engage employees in tree plantation, biodiversity and natural habitat restoration, clean-up of parks, lakes, beaches, and water bodies. In FY 2023-24, a total of 40 CSR projects in the various thrust areas were executed by the Bank. DCB Bank social volunteers pan India participated in various cleanup, habitat restoration and tree plantation programs. Across India, 2,828 CSR employee volunteered, of which 1,522 were DCB Bank employees and another 1,306 citizen volunteers were students, teachers, members of National Cadet Core (NCC), members of National Service Scheme (NSS), residents, members of resident welfare associations and well-wishers participated in CSR programs of the Bank. The citizen engagement projects, and the Banks outreach via social and print media provides information and generates awareness about the importance of sustainability, environment, and social impact. It has generated awareness in communities on saving water, protecting wetlands as well as trees, and the serious impact of unclean and polluted air on the health and longevity of life on this planet. The motive for meaningful citizen engagement is to discourage the use of single use plastic, encourage communities to segregate recyclable and organic waste, and enhance green cover in rural and urban locations.
The ESG working group adheres to the established framework of the ESG Principles. The Banks Business Reporting and Sustainability Report (BRSR) is an outcome of the deliberations and application of the framework to the activities of the Bank.
CUSTOMER SERVICE
Delighting customer in every interaction is the core aim of the Bank. On a regular basis, customer complaints and satisfaction levels are monitored by the Managing Director & Chief Executive O_cer along with the Senior Management team. The Bank has constituted an independent "Service Excellence" team to analyse customer complaints, identify root cause for service issues, make process improvements and work with the various businesses and functions to continuously enhance service levels. The Bank has an "Integrated Centralised Complaint Management" system and service standards to ensure that customer queries and complaints addressed in a timely and quality manner. The Bank continues to make steady progress on the service concept of ESQ. In FY2024, the Bank has introduced for its customers a digital repository of communications namely "My Documents", Almost all customer communication/ documents can now be accessed by visiting the Banks website. This has helped in reducing delays or non-receipt of communications that may arise due to a physical dispatch through mail. The Bank continues to take numerous process improvement and automation measures. As a result, in comparison to FY 2023, there has been a reduction of complaints by 20% across categories and 35% in the top 10 categories. The Bank intends to continue to improve its processes and communications to provide faster resolutions and e_ciently. The Bank continuously works on the six pillars of Service Excellence – Voice of Customer, Service Recovery, Attrition Calling, Process Simplification, Service Culture and Measures and Metrics. To bring in a culture of collaboration and customer-centricity across the Branch Banking network, the Bank has introduced a new measurement technique - "Branch Service Health Index". This index will serve as an indicator of the quality of service delivery and focuses on key customer service parameters including resolution time and usage of digital medium. The Service Excellence team continuously interacts with the frontline sta_ and key stakeholders to obtain customer feedback. Branch surprise visits and "mystery shopping" activities are undertaken by the Service Excellence team and instant feedback is provided to the branch sta_ and supervisors. The Bank has constituted three committees at di_erent levels to monitor customer service - Branch Level Customer Service Committees (BLCSCs), Standing Committee on Customer Service (SCCS), and Customer Service Committee of the Board (CSCB). The Bank on a regular basis, through various means educates its customers to be vigilant on the rising incidents of cyber-crimes.
MARKETING & BRAND AWARENESS
In FY 2024, the Bank took numerous initiatives to create brand awareness and improve visibility for the Bank and its products and services. This was helpful in generating quality new business for the Bank. A few examples of the activities during the year are given below:
• Nearly 15,000 micro marketing activities in the nature of customer engagement programs were conducted in the branch neighbourhood across regions by branch banking and business acquisition channel.
• Residential activation programs were organised at over 250 societies pan India to engage with the prospects to promote Banks products and services.
• The Banks signature customer event "Ek Mulaqat Kuuch Baatein" was organised in Ahmedabad, Bhubaneshwar, Jodhpur, Ludhiana, Mumbai and Siliguri. Senior o_cers of the Bank interacted with customers who appreciated the Banks service, products, and CSR activities.
• Mobile van activation campaigns were executed in the states of Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu, Telangana and Uttar Pradesh to promote DCB Savings Account, DCB Fixed Deposit and DCB Gold Loan.
• DCB Savings Account and Fixed Deposit print campaign in mainline publications and local publications across regions.
• Digital campaigns were done consistently on Google and Meta platforms to promote DCB Fixed Deposit, DCB Savings Account, DCB Gold Loan and DCB Remit.
• Several outdoor visibility initiatives such as hoardings, bus shelters, poles, auto rickshaw, bus backs, tra_c booths, road barricades, no parking boards, society boards, store boards, wall paintings were done round the year pan India.
• Airport passenger area brand promotion were undertakenatBelagavi,Bhubaneshwar,Coimbatore, Delhi, Hubballi, Kolkata, and Tuticorin. DCB Fixed Deposit, DCB Savings Account, DCB Remit and DCB Non-Resident Indian communication were prominently displayed at these airports.
• The tie-up with CESC Limited (Calcutta Electric Supply Corporation) for DCB Bank product communication on their bills helped reach nearly 6.5 Lakh prospects.
• DCB Gold Loan, DCB Fixed Deposit and DCB Savings Account product videos were widely circulated in WhatsApp and YouTube.
• New product communication created for DCB Happy Savings Account, DCB Pragati, DCB Shiksha, DCB Savings & Fixed Deposit festive themes, DCB Gold Loan, DCB Niyo Savings Account, DCB Tax Payments Services and DCB Payless Card.
• DCB Bank 2024 calendar with product communication theme crafted for customers and prospects.
IND AS IMPLEMENTATION
The Ministry of Corporate A_airs (MCA), Government of India has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015. Further, a press release was issued by the MCA on January 18, 2016 outlining the roadmap for implementation of Indian Accounting Standards (IND AS) converged with International Financial Reporting Standards (IFRS) for banks. As per earlier instructions, banks in India were required to comply with the IND AS for financial statements for accounting periods beginning from April 01, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. On April 05, 2018, the RBI had announced deferment of implementation date by one year with IND AS being applicable to banks for accounting periods beginning April 01, 2019 onwards. On March 22, 2019, the RBI has announced deferment of the implementation of IND AS by banks till further notice.
DISCLOSURES
NUMBER OF MEETINGS OF THE BOARD, ATTENDANCE, MEETINGS AND CONSTITUTION OF VARIOUS COMMITTEES
During the FY 2023-24, Fourteen (14) meetings of the Board were held. The details of Board meetings held during the year, attendance of Directors at the meetings and constitution of various Committees of the Board are included separately in the Corporate Governance Report.
DIRECTORS
The Bank had Ten (10) Directors on the Board as on March 31, 2024. Out of the Ten (10) directors, Eight (8) directors are Independent Directors. During the year under review, Ms. Lakshmy Chandrasekaran was appointed as an Independent Director of the Bank with e_ect from April 14, 2023. During the year there was no other change in the directors of the Bank. The Reserve Bank of India vide its letter dated January 16, 2024 had conveyed its approval for appointment of Mr. Praveen Achuthan Kutty as Managing Director & CEO of the Bank with e_ect from April 29, 2024 for a period of three years (3) in place of Mr. Murali M. Natrajan whose tenure of fifteen (15) years as the Managing Director & CEO of the Bank has completed on April 28, 2024 as per extant norms of the RBI. The Board of Directors of the Bank at its meeting held on March 21, 2024, on the recommendation of the Nomination and Remuneration Committee, has also approved the appointment of Mr. Praveen Achuthan Kutty as an Additional Director with e_ect from April 29, 2024 till the ensuing Annual General Meeting of the Bank or till the date of obtaining shareholders approval whichever is earlier and also appointed as the Managing Director & CEO of the Bank for a period of three (3) years with e_ect from April 29, 2024 on such remuneration as approved by RBI, subject to the shareholders approval. The approval of the shareholders of the Bank is being taken at ensuing Annual General Meeting. Mr. Kutty by virtue of his appointment as the Managing Director & CEO of the Bank with e_ect from April 29, 2024, shall be considered as a Key Managerial Personnel (KMP) of the Bank in accordance with the Companies Act, 2013 & rules made thereunder and SEBI Listing Regulations and Material Risk Taker (MRT) in accordance with the Compensation Policy of the Bank & relevant RBI guidelines.
Mr. Iqbal Khan, Non-Executive Non-Independent Director of the Bank is liable to retire by rotation and being eligible, has o_ered him for re-appointment. A brief resume relating to the persons who are to be appointed/ re-appointed as Directors and recommended for approval of Shareholders, are furnished in the notice of the 29th Annual General Meeting and Corporate Governance Report, based on the disclosures provided by them. None of the above mentioned persons is disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013. The Certificate dated April 24, 2024 issued by M/s. Ananthasubramanian & Co., Practicing Company
Secretaries in this regard is attached to and forming part of this report.
In the opinion of the Board of Directors, all the above mentioned Directors being appointed/ re-appointed, possess the required integrity, expertise and experience. None of the Directors of the Bank is related to each other per se.
SENIOR MANAGEMENT (SMP) AND KEY MANAGERIAL PERSONNEL (KMP)
The Board of Directors of the Bank in its meeting held on July 28, 2023 approved the changes in the Senior Management of the Bank by adding Mr. Murali Mohan Rao Manduva, Chief Technology O_cer, Mr. Pankaj Sood, Head Retail & Emerging Branch Banking and Ms. Ashu Sawhney, Head Human Resources. Mr. R. Venkattesh, Head Information Technology, Human Resources, Operations & Chief Information O_cer had resigned from the services of the Bank on February 7, 2024. Mr. Satish Gundewar ceased to be Chief Financial O_cer and KMP of the Bank with e_ect from close of business on June 3, 2023 due to his resignation and Mr. Ravi Kumar was appointed as Chief Financial O_cer and KMP of the Bank e_ective June 8, 2023.
A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS
As per the Board Evaluation Policy of the Bank, evaluation exercise of all Directors, Board as a whole and its various Committees was conducted during the year.
The Board review focused on governance, board structure and composition, relationship and dynamics of the Board, frequency of meetings, information flow and agenda etc.
The Committee review focused on the composition, adequacy of terms of reference of various committees, frequency of meetings etc.
The individual Board members review focused on relevant qualification/ skill sets, understanding of the Bank and banking industry, contribution in meetings, attendance etc.
The findings of the exercise were discussed in the meetings of Independent Directors and the Board. The appropriate feedback was conveyed to each Director. The Board was satisfied with the performance of each Member, the Board and various Committees. The details of familiarization program arranged for independent directors have been disclosed on website of the bank and are available at the following link: https://www.dcbbank.com/upload/pdf/Familarisation-Programme-for-Independent-Directors-March-2024.pdf
STATUTORY AUDITORS
M/s. Sundaram & Srinivasan, Chartered Accountants, (Registration No. 004207S), who were appointed as Joint Statutory Auditors of the Bank at the 26th AGM held on August 13, 2021 for three years, will be completing their term as a Joint Statutory Auditors after conclusion of the 29th Annual General Meeting of the Bank. Further, M/s. B S R & Co LLP, Chartered Accountants (Registration No. 101248W/W100022), will be continuing as Joint Statutory Auditors, for their 2nd financial year, i.e. for FY 2024-25, who were appointed as Joint Statutory Auditors of the Bank, at the 28th AGM of the Bank held on June 22, 2023. As the term of M/s Sundaram & Srinivasan, Chartered Accountants was till the FY 2023-24, the Board of Directors of the Bank vide its Resolution dated March 21, 2024 had recommended M/s. Varma & Varma, Chartered Accountants (Registration No. 004532S) as the first preferred firm to the RBI for appointment as Joint Statutory Auditors of the Bank, for a period commencing from the conclusion of this 29th Annual General Meeting until the conclusion of the 32nd Annual General Meeting of the Bank for a continuous period of three (3) years (from FY 2024-25 to FY 2026-27) subject to the RBI approval for each year and firm satisfying the eligibility norms each year in this regard. Also, the Board of Directors of the Bank had recommended for approval of the RBI, the re-appointment of M/s. B S R & Co LLP, Chartered Accountants (Registration No. 101248W/ W100022) for their 2nd year for FY 2024-25.
The RBI has vide its letter Ref CO.DOS.RPD.No. S943/08.37.005/2024-25 dated May 07, 2024, has approved the appointment of M/s. B S R & Co LLP, Chartered Accountants (Registration No. 101248W/ W100022) and M/s. Varma & Varma, Chartered Accountants (Registration No. 004532S) as the Joint
Statutory Auditors of the Bank for the FY 2024-25, being their second year and first year respectively. M/s. B S R & Co LLP, Chartered Accountants, will now act as Joint Statutory Auditor of the Bank with M/s. Varma & Varma, Chartered Accountants, subject to the approval of the Members of the Bank in the ensuing 29th AGM of the Bank.
MATERIAL SUBSIDIARY
The Bank does not have any Subsidiary.
MAINTENANCE OF COST RECORDS
Being a Banking company, your Bank is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, no instances of fraud committed in the Bank by its o_cers or employees were reported by the Statutory Auditors and Secretarial Auditor under Section 143(12) of the Act, to the Audit Committee or the Board of Directors of the Bank.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Bank, the work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee of the Board, the Board is of the opinion that the Banks internal financial controls were adequate and e_ective during the year ended March 31, 2024. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, based on the above and the representation received from the Operating Management, the Board of Directors, to the best of their knowledge and ability confirms that-(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departure there from; (ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent as to give a true and fair view of the state of a_airs of the Bank as at March 31, 2024 and of the profit of the Bank for the year ended on that date; (iii) they have taken proper and su_cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; (iv) they have prepared the annual accounts on a going concern basis; (v) they have laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating e_ectively during the year ended March 31, 2024; and (vi) proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating e_ectively during the year ended March 31, 2024.
ANNUAL RETURN
A copy of the Annual Return as of March 31, 2024 pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 11(1) of the Companies (Management and Administration) Rules, 2014 and forming part of this Report is placed on the website of the Bank as per provisions of Section134(3)(a) and is available at the following link: https://www.dcbbank.com/upload/pdf/Form_MGT_7_31-03-2024.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE BANK
Pursuant to Section 186(11) of the Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided by a banking company in the ordinary course of business. The particulars of investments made by the Bank are disclosed in Schedule 8 of the financial statements as per the applicable provisions of the Banking Regulation Act, 1949.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions with related parties are in the ordinary course of business and on arms length basis and there are no ‘material contracts or arrangement or transactions with related parties and thus disclosure in Form no. AOC-2 is not required.
POLICY ON RELATED PARTY TRANSACTIONS OF THE BANK
The Bank has a policy on Related Party Transactions and the same has been hosted on the Banks website at the following link: https://www.dcbbank.com/upload/pdf/Policy-on-Related-Party-Transactions-June-2022.pdf
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
In terms of Regulation 34(2)(f) of the SEBI (Listing ObligationsandDisclosureRequirements)Regulations2015 (Listing Regulations), the Banks Business Responsibility and Sustainability Report describing the initiatives taken by the Bank from an environmental, social and governance perspective forms part of this Report and has been hosted on the website of the Bank at the following Link: https://www.dcbbank.com/upload/pdf/DCB-Bank-BRSR-FY-2023-24.pdf
CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR
• The Board shall have minimum 6 and maximum 15 Directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a Director on the Board.
• The Bank shall have such person on the Board who complies with the requirements of the Companies Act, 2013, the Banking Regulation (BR) Act, 1949, Provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the ‘Fit & Proper criteria prescribed by the Reserve Bank of India (RBI), Memorandum of Association and Articles of Association of the Bank and all other statutory provisions and guidelines as may be applicable from time to time.
• Composition of the Board shall be in compliance with the requirements of Regulation 17(1) of the Listing Regulations.
• Majority of the Directors as required under BR Act shall have specialized knowledge/experience in the areas like Agriculture, Banking, Small Scale Industry, Legal, Risk Management, Accountancy, Economy, Accountancy and Audit, Finance etc.
• All Directors shall abide by the Code of Conduct.
• Directors shall not attract any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields
POLICY RELATING TO THE REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
• Managing Director & CEO, Whole Time Directors, Company Secretary and Chief Financial O_cer shall be the Key Managerial Personnel (KMPs) of the Bank.
• Except for the Chairman and the Managing Director
& CEO, no other Directors are paid remuneration. The Chairman and the Managing Director & CEO are paid remuneration as approved by the RBI and other applicable authorities. All Directors except the Managing Director & CEO are entitled to sitting fees for attending various Board and its Committee meetings.
• Independent Directors are not entitled for Employee Stock Options.
• Policy for Selection and Appointment/ Reappointment of Non-Executive Directors including Part-Time Chairperson and their Remuneration is available at: https://www.dcbbank.com/upload/pdf/Policy-for-appointment-re-appointment-and-Remuneration-of-Directors_18032023.pdf
• Policy For Appointment, Re-appointment and Remuneration for Whole Time Directors including Managing Director & CEO is available at: https://www.dcbbank.com/upload/pdf/Policy-for-appointment-and-re-appointment-of-MD-CEO-and-Whole-Time-Director.pdf
• Remuneration of all employees including Senior Management and KMPs are decided as per the Compensation Policy of the Bank. The details are given on website at the following Link: https:// www.dcbbank.com/upload/pdf/Policy-on-Compensation.pdf
PARTICULARS OF EMPLOYEES
The Bank had 11325 employees as on March 31, 2024. 14 employees were employed throughout the year and one employee was employed for a part of the year, who were in receipt of remuneration at the rate of not less than 1.02 Crore per annum. The details of top 10 employees and the name of every employee, who employed throughout or part of the year and were in receipt of remuneration at the rate of not less than 1.02 Crore per annum in terms of remuneration drawn pursuant to provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended separately in an Annexure and form part of this Report. The Report and Accounts are being sent to the Shareholders excluding these particulars and any Shareholder interested in obtaining the said details may write to the Company Secretary at investorgrievance@dcbbank.com.
PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES a) The ratio of the remuneration of each Director to the median employees remuneration for the financial year ended March 31, 2024 and such other details as prescribed are as given below:
| Name | Ratio |
| Mr. Farokh N. Subedar | 5:1 |
| (Chairman) | |
| Mr. Murali M. Natrajan | 110:1 |
| (Managing Director & CEO) | |
| b) The percentage increase in remuneration of each | |
| Director, Chief Financial O_cer, Chief Executive | |
| O_cer, Company Secretary or Manager, if any, in | |
| the financial year: | |
| Name | Ratio |
| Mr. Farokh N. Subedar | 0% |
| (Chairman) | |
| Mr. Murali M Natrajan | 5% |
| (Managing Director& CEO) | |
| Mr. Satish Gundewar | 0% |
| (Chief Financial O_cer) | |
| Till June 3, 2023 | |
| Mr. Ravi Kumar | 30% |
| (Chief Financial O_cer) | |
| W,e.f. June 8, 2023 | |
| Ms. Rubi Chaturvedi | 9% |
| (Company Secretary) | |
c) The percentage increase in the median remuneration of employees in the financial year: 4.7% d) The number of permanent employees on the rolls of Bank: 11268 e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year ended March 31, 2024 and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration: Average increase in remuneration is 7.86% for employees other than Managerial Personnel 8.83% for Managerial Personnel (KMP and Senior Management). There are no exceptional circumstances for increase in the managerial remuneration. f) If remuneration is as per the Compensation Policy of the Bank: Yes EMPLOYEE STOCK OPTION PLAN (ESOP) AND CASH SETTLED STOCK APPRECIATION RIGHTS (CSAR) i. DCB Bank Limited - Employees Stock Option Plan 2005 ("ESOP Scheme") ii. DCB Bank Limited -Cash Settled Stock Appreciation Rights Scheme 2022 ("CSARs Scheme"). The Bank has formulated and adopted the DCB Bank Limited –Employee Stock Option Plan in 2005 approved by shareholders on December 15, 2006 and amended from time to time in order to: • provide means to enable the Bank to attract and retain appropriate human talent in the employment of the Bank; • motivate the employees of the Bank with incentives and reward opportunities; • achieve sustained growth of the Bank and to create shareholder value by aligning the interests of the employees with the long-term interests of the Bank; and • create a sense of ownership and participation amongst the employees of the Bank. The Employee Stock Options ("ESOPs") and the Cash Settled Stock Appreciation Rights ("CSARs") granted to the employees of the Bank currently operate under the following Schemes: i. DCB Bank Limited - Employees Stock Option Plan 2005 ("ESOP Scheme") ii. DCB Bank Limited - Cash Settled Stock Appreciation Rights Scheme 2022 ("CSARs Scheme"). During the year, the Bank has not granted any ESOPs. However, 9,29,668 CSARs were granted on June 2, 2023 at the exercise price of 119.45 per unit of CSAR to the eligible employees of the Bank in accordance with the CSARs Scheme and as approved by the Nomination and Remuneration Committee ("NRC"). The provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB&SE) Regulations, 2021"), do not apply to cash settled SARs Scheme. As the Banks CSARs Scheme provides only for cash settlement on stock appreciation, the provisions of SEBI (SBEB & SE) Regulations, 2021, are no longer applicable. The aforesaid Schemes complied SEBI (SBEB&SE) Regulations, 2021, to the extent applicable. During the year under review, no material changes were made to the Schemes. The relevant details of the aforesaid Schemes, as required under the SEBI (SBEB&SE) Regulations 2021, are available on the Banks website viz., URL: https://www.dcbbank.com/upload/pdf/ESOP-Disclosure-%2031-03-2024.pdf. These details, along with the certificates from the Secretarial Auditor, as required under the SEBI (SBEB&SE) Regulations 2021, stating that the ESOP Scheme and the SARs Scheme have been implemented in accordance with the SEBI (SBEB & SE) Regulations, 2021 and the resolution passed by the members, would be placed and available for inspection by the members during the AGM.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions of Section 134(3)(m) of the Companies Act, 2013 relating to conservation of energy and technology absorption do not apply to the Bank. However, as mentioned in earlier part of the Report, the Bank has been continuously and extensively using technology in its operations. Foreign Exchange earnings and outgo are part of the normal banking business of the Bank.
ESTABLISHMENT OF VIGIL MECHANISM
The Bank has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue for the last several years. The policy was last reviewed in FY2023-24. This Policy, inter alia, provides a direct access to a Whistle Blower to the Chief Compliance O_cer (CCO) on his dedicated e-mail whistleblower@dcbbank.com and Chairman of the Audit Committee of the Board (ACB) on his dedicated e-mail-ID cacb@dcbbank.com. The Whistle Blower Policy covering all employees and Directors is hosted on the Banks website https://www.dcbbank.com/ cms/showpage/page/whistle-blower-policy None of the Banks personnel have been denied access to the Audit Committee
THE DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Bank has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134 (5)(e) of the Companies Act, 2013. For the year ended March 31, 2024, the Board is of the opinion that the Bank has sound IFC commensurate with the nature and size of its business operations wherein controls are in place and operating e_ectively and no material weaknesses exist. The Bank has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and/ or improved controls wherever the e_ect of such gaps would have a material e_ect on the Banks operation.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Bank had appointed M/s. S. N. ANANTHASUBRAMANIAN & Co., Company Secretaries, Thane, to act as the Secretarial Auditor of the Bank for FY 2023-24. The Secretarial Audit Report for the financial year ended March 31, 2024, as required under Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations, is annexed to this Report. Your Bank is in compliance with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act for FY 2023-24. The Secretarial Auditors Report does not contain any qualifications, reservations, adverse remarks or disclaimers.
In terms of the SEBI Circular dated February 8, 2019, your Bank has submitted the Annual Secretarial Compliance Report for FY 2023-24 to the Stock Exchanges within the prescribed time and the same is available on websites of the Stock Exchanges i.e. BSE Limited (www.bseindia. com), National Stock Exchange of India Limited (www. nseindia.com) and on the Banks website viz., URL: https://www.dcbbank.com/pdfs/ BSENSEAnnualSecretarialComplianceReportFY202324.pdf
SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act,2013, the Bank has appointed M/s. Ananthasubramanian & Co., Practicing Company Secretaries (COP 1774) as the Secretarial Auditor for FY 2023-24 and their report is attached separately to this Report.
CORPORATE GOVERNANCE
The Bank has been continuously observing the best corporate governance practices and benchmarks itself against each such practice. A separate section on Corporate Governance and a Certificate from M/s S. N. Ananthasubramanian & Co, Practicing Company Secretaries, regarding compliance with the conditions of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
Corporate Social Responsibility:
1. Brief outline of the CSR Policy of the Company
CSR Activities shall mean all the Corporate Social Responsibility activities / programs / initiatives of the Bank, either ongoing or new, dealing with the activities mentioned in CSR thrust areas. The activities shall conform to those specified in Schedule VII to the Act (as amended from time to time) and as recommended by the CSR & ESG Committee and approved by the Board.
Thrust areas or activities ascribed to them are defined in the Policy, as amended by the Board, from time to time.
Projects/ programmes to be undertaken that are related with CSR thrust areas of the Bank.
Thrust areas shall mean and include any one or more of the following CSR activities: a) Conservation of water/ water storage/ water usage/ protecting water bodies b) Waste management c) Recycling d) Promote waste to energy and renewal energy e) Support technology incubators attached to academic institutions f) Preservation and promotion of archaeological, cultural, artistic, historical heritage and national treasures with focus on protection of water sources, promotion of harvesting of water, propagation of waste management, promoting recycling and adoption of renewable energy g) Disaster Relief
2. Composition of CSR Committee:
| Sl. | Name of Director | Designation / Nature of | Number of | Number of meetings |
| No. | Directorship | meetings of CSR | of CSR Committee | |
| Committee held | attended during the | |||
| during the year | year | |||
| 1 | Mr. Farokh N. Subedar | Chairman & Independent Director | 5 | 5 |
| 2 | Mr. Murali M Natrajan | Managing Director & CEO | 5 | 5 |
| 3 | Mr. Rafiq Somani | Independent Director | 5 | 5 |
| 4 | Mr. Thiyagarajan Kumar | Independent Director | 5 | 5 |
3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company. https://www.dcbbank.com/corporate-social-responsibility
4. Provide the executive summary along with the web link(s) of Impact Assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8, if applicable: NA
5. a) Average net profit of the company as per sub-section (5) of Section 135: 488.70 Crore
(b) Two percent of average net profit of the company as per sub-section (5) of Section 135: 9.77 Crore (c) Surplus arising out of the CSR Projects or programmes or activities of the previous Financial Years: 0.20 Crore (d) Amount required to be set-o_ for the Financial Year, if any: NIL
(e) Total CSR obligation for the Financial Year [(b)+(c)-(d)]: 9.77 Crore
6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project): 9.86 Crore (b) Amount spent in Administrative Overheads: 0.11 Crore (c) Amount spent on Impact Assessment, if applicable: NA
(d) Total amount spent for the Financial Year [(a)+(b)+(c)]: 9.97 Crore
(e) CSR amount spent or unspent for the Financial Year:
| Total Amount | Amount Unspent (in ) | ||
| Spent for the | Total Amount transferred | Amount transferred to any fund specified under |
|
| Financial Year. | to Unspent CSR Account | Schedule VII as per second proviso to sub-section |
|
| ( in Crore) | as per sub- section (6) of | (5) of section 135 | |
| section 135. | |||
| Amount Date of transfer | Name of the Fund Amount | Date of transfer | |
| 9.97 | NIL - | - NIL | - |
(f) Excess amount for set-o_, if any:
| Sl. | Particular | Amount (in ) |
| No. | ||
| (i) | Two percent of average net profit of the company as per Section 135(5) | 9.77 Crore |
| (ii) | Total amount spent for the Financial Year | 9.97 Crore |
| (iii) | Excess amount spent for the Financial Year [(ii)-(i)] | 0.20 Crore |
| (iv) | Surplus arising out of the CSR projects or programmes or activities of the | 0.12 Crore |
| previous financial years, if any | ||
| (v) | Amount available for set o_ in succeeding financial years [(iii)-(iv)] | 0.32 Crore |
7. Details of unspent Corporate Social Responsibility amount for the preceding three Financial Years: NA
8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: NA
9. Specify the reason(s) if the company has failed to spend two per cent of the average net profit as per subsection (5) of Section 135: NA
| Murali Natrajan | Farokh N. Subedar |
| Managing Director & CEO | Chairman – Corporate Social |
| DIN: 00028428 | Responsibility & Environmental |
| Social & Governance Committee | |
| DIN: 00061194 |
ACKNOWLEDGEMENTS
Your Board wishes to thank the principal Shareholder and Promoters, the Aga Khan Fund for Economic Development S.A. (AKFED) and all the other Shareholders for the confidence and trust they have reposed in the Bank. Your Board also acknowledges with appreciation the Reserve Bank of India (RBI) for its valuable guidance and support to the Bank. Your Board similarly expresses gratitude for the assistance and co-operation extended by SEBI, BSE, NSE, NSDL, CDSL, NPCIL, Central Government and the Governments of various States, Union Territories and the National Capital Region of Delhi where the Bank has its branches.
Your Board acknowledges with appreciation, the invaluable support provided by the Banks auditors, lawyers, business partners and investors. Your Board is also thankful for the continued co-operation of various financial institutions and correspondents in India and abroad.
Your Board wishes to sincerely thank all its customers for their patronage. Your Board records with sincere appreciation the valuable contribution made by employees at all levels and looks forward to their continued commitment to achieve further growth and take up more challenges that the Bank has set for the future.
On behalf of the Board of Directors
| Sd/- | |
| Farokh N. Subedar | |
| Chairman | |
| Place: Mumbai | |
| Date: May 15, 2024 |
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