Fino Payments Bank Ltd Directors Report

Dear members,

Your Board takes pleasure in presenting the Tenth (10th) Annual Report of Fino Payments Bank Limited ("Bank") covering business and operations together with the Audited Financial Statements for the financial year ended March 31, 2026.

FINANCIAL HIGHLIGHTS

The financial highlights for the year under review are presented below:

(Rs in Crore)

Particulars	2025-26	2024-25
Balance Sheet:
Savings Bank Deposits	2,342.43	1,908.01
Current Account Deposits	37.06	31.42
Total Assets/ Liabilities	5,311.90	4,205.93
Total Income	1,587.92	1,847.10
Less: Expenses	1,371.79	1,615.99
Profit /(Loss) before Interest, Depreciation and Tax	216.13	231.11
Less: Depreciation	76.15	62.15
Less: Finance Charges	72.57	60.61
Profit /(Loss) before Tax and prior period items	67.41	108.35
Profit /(Loss) before Tax	67.41	108.35
Taxes	14.95	15.82
Net Profit /(Loss) after Tax	52.46	92.53
Other Comprehensive Income	-	-
Balance of Profit /(Loss) carried forward to next year	52.46	92.53
Appropriations
Transfer to Statutory Reserve	13.11	23.13
Transfer to Investment fluctuation Reserve	17.32	12.87

BUSINESS OPERATIONS AND STATE OF AFFAIRS OF THE BANK

The brief details on business operations and state of affairs of the Bank during the financial year ended March 31, 2026 are given below:

1. The Bank became the first Payments Bank to receive in-principle approval from the Reserve Bank of India ("RBI") for conversion into a Small Finance Bank ("SFB").

2. The Bank processed 389.3 crore transactions in FY2025-26, a 15% growth compared to the previous year.

3. Digital throughput grew by 16% to Rs 2,62,009 Crore, contributing more than 56% of the overall throughput in FY2025-26.

4. The Bank has opened approx. 0.32 crore Current and savings accounts of customers in FY2025-26, of which approx 98.30% were subscription-based accounts.

5. The Bank delivered a healthy Return on Equity ("ROE") of 6.8% in FY2025-26.

6. Merchant network went up by 10%, the Banks physical outreach reached to 0.21 Crore banking points in FY2025-26.

7. Average total deposits for FY2025-26 stood at Rs 2,576 Crore, a solid 28% year-on-year growth.

8. Active FinoPay (application of the Bank) users in March 2026 increased by 25% to 8.2 lakh compared to previous year.

9. Referral loan disbursals surged exponentially by 3.5 times to Rs 1,285 Crore for FY2025-26 reinforcing SFB preparedness.

Further, the total revenue of the Bank was Rs 1,587.92 Crore for the financial year ended March 31, 2026 as compared to Rs 1,847.10 Crore in previous financial year. The Banks Profit after Tax stood at Rs 52.46 Crore for the financial year ended March 31, 2026 as compared to Rs 92.53 Crore in previous financial year.

Your Bank is a public limited company holding a license from the RBI to carry on business of Payments Bank in India. The Bank became a Scheduled Bank with effect from January 01, 2021 vide Notification dated January 01, 2021 published in the Government of India Gazette and continues to comply with all the applicable regulations and guidelines prescribed by RBI from time to time.

Your Bank is pleased to inform that it has been granted in-principle approval for conversion from a Payments Bank into a SFB from the RBI vide its letter dated December 05, 2025. This marks a significant milestone in the Banks growth journey and reflects the confidence reposed by the regulator in the Banks operational capabilities, governance standards and long-term vision. The proposed transition to a SFB is expected to strengthen the Banks ability to offer a wider range of banking products and services, deepen financial inclusion, and create sustainable value for all stakeholders. The Bank is taking required steps to comply with the conditions stipulated in the said in-principle approval and obtain the requisite approvals for the proposed transition.

The detailed operational performance of the Bank during the year has been discussed in the Management Discussion and Analysis Report which forms an integral part of this Annual Report.

CHANGE IN NATURE OF BUSINESS

During the year under review, there has been no change in the nature of business of the Bank.

The Bank believes that it has the relevant expertise, technology and team to cater to additional dimensions of the banking sector and contribute further towards the Government led initiatives of financial inclusion.

TRANSFER TO RESERVES

The Bank has appropriated Rs 13.11 Crore to Statutory Reserves and Rs 17.32 Crore to Investment Fluctuation Reserve for the financial year ended March 31, 2026.

DIVIDEND

In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time ("SEBI Listing Regulations") the Bank has formulated a Dividend Distribution Policy, which ensures a fair balance between rewarding its members and retaining enough capital for the Banks future growth and expansion plan. The Dividend Distribution Policy is available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

Your Bank is in its growing stage and with a view to conserve capital to support its future growth, your Board does not recommend any dividend for the financial year ended March 31, 2026.

CAPITAL STRUCTURE

During the year under review, there has been no change in the authorised share capital of the Bank. As on March 31, 2026, the authorised share capital of the Bank stood at 90,00,00,000/- (Rupees Ninety Crore only) divided into 9,00,00,000 (Nine Crore) Equity Shares of face value of Rs 10/- (Rupees Ten Only) each.

During the year under review, the Bank has not raised any capital, therefore the issued, subscribed and paid-up share capital of the Bank as on March 31, 2026 was Rs 83,21,84,020/- (Rupees Eighty Three Crore Twenty One Lakh Eighty Four Thousand and Twenty Only) comprising of 8,32,18,402 (Eight Crore Thirty Two Lakh Eighteen Thousand Four Hundred and Two) Equity Shares of face value of Rs 10/- (Rupees Ten Only) each.

Your Bank has not issued any Equity Shares with differential voting rights.

CAPITAL ADEQUACY RATIO

Your Bank is well capitalised and has a strong capital adequacy ratio. As on March 31, 2026, the Capital to Risk Assets Ratio ("CRAR") of your Bank was 83.95% which is well above the minimum regulatory requirement of 15% CRAR prescribed by the RBI.

Out of the above, Tier I capital adequacy ratio stood at 75.04% and Tier II capital adequacy ratio stood at 8.91%.

STRATEGIC INITIATIVES DURING THE YEAR UNDER REVIEW AND TILL THE DATE OF THIS REPORT

The Bank has successfully migrated its Core Banking System ("CBS") to the Finacle platform in January 2026, marking a massive upgrade to the banks digital backbone.

Further, to build upon its advanced foundation, the Bank has partnered with AI fintech Ezee.ai to establish a seamless digital lending ecosystem for seamless SFB transition.

During the year, the Bank has made significant progress towards its strategic transformation into a SFB. This milestone represents a key step in the Banks long-term growth strategy and reflects its commitment to expanding access to financial services and deepening financial inclusion.

The transition to a SFB will enable the Bank to offer a comprehensive range of banking products and services, strengthen its liability franchise, diversify revenue streams, and enhance value creation for customers and other stakeholders. The Board believes that this strategic initiative will position the Bank for sustainable long-term growth while creating value for all stakeholders. In preparation for this transformation, theBank continues to strengthen its governance framework, risk management practices, technology infrastructure, operational capabilities, and human capital to ensure readiness for the proposed transition.

MATERIAL CHANGES AND COMMITMENTS

Apart from the details given in this Report, there were no material changes or commitments affecting the financial position of the Bank which have occurred between the end of the financial year i.e. March 31, 2026 and up to the date of this Report.

TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND

During the year under review, the Bank was not required to transfer any funds or Equity Shares to the Investor Education and Protection Fund as per the provisions of Section 125 of the Companies Act, 2013 ("Act") read with applicable Rules framed thereunder, as amended from time to time.

EMPLOYEES STOCK OPTION SCHEMES

The Bank has formulated and implemented Fino Payments Bank Limited - Employees Stock Option Policy, 2020 ("ESOP 2020"), Fino Payments Bank Limited - Employees Stock Option Policy, 2023 ("ESOP 2023") and Fino Payments Bank Limited-Employee Stock Option Policy, 2024 ("ESOP 2024") with a view to attract, retain, incentivize and motivate employees of the Bank by way of rewarding their performance and promoting their increased participation in the overall corporate growth and profitability. The ESOP 2020 has been amended from time to time in view of regulatory changes/ business requirements. None of these amendments were prejudicial to the interest of the employees.

The Nomination and Remuneration Committee ("NRC") which also acts as a Compensation Committee of the Board is entrusted with the responsibility of implementation and administration of the ESOP policies of the Bank.

The details and disclosures as required under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB & SE Regulations") and circulars issued thereunder, have been uploaded on the Banks website at www.fino.bank.in under the Investor Relations section. The Equity Shares issued and allotted under ESOP 2020, ESOP 2023 and ESOP 2024 shall rank pari-passu with the existing Equity Shares of the Bank.

Further, disclosure as per the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India ("ICAI") are disclosed in the Notes to the Financial Statements of the Bank for the financial year ended March 31, 2026, which forms an integral part of this Annual Report.

ESOP 2020, ESOP 2023 and ESOP 2024 ("ESOP Schemes") are in compliance with the SBEB & SE Regulations. A certificate from the Secretarial Auditor of the Bank that the ESOP Schemes of the Bank have been implemented in accordance with the SBEB & SE Regulations and in accordance with the resolutions passed by the shareholders of the Bank, shall be placed before the members at the 10th Annual General Meeting ("AGM") of the Bank.

UTILIZATION OF NET PROCEEDS FROM THE INITIAL PUBLIC OFFER ("IPO")

All net proceeds raised from the IPO in November 2021, have now been fully utilized by the Bank as per the objects of the issue. The funds were successfully applied toward augmenting the Banks Tier-I capital and covering IPO-related expenses, in accordance with the objects stated in the offer documents. The Bank in compliance with SEBI Listing Regulations, affirmed to Stock Exchanges that there is no deviation in the utilization of these proceeds from the objects stated in the offer documents.

With the receipt of the in-principle approval for transition to a SFB, the Bank expects to undertake investments towards business expansion, technology infrastructure, operational capabilities, and regulatory readiness to support its present and future business requirements. Though the Bank is already well capitalised to fund these requirements, it may evaluate and raise additional capital, as and when required, through appropriate avenues, subject to applicable laws, regulatory approvals, and approval of the shareholders, wherever necessary.

HOLDING, SUBSIDIARY & ASSOCIATE COMPANIES

The Bank does not have any subsidiary, joint venture or associate Company. The details of the Holding Company are given below:

Name of the Company	Whether incorporated/ acquired/converted	Year of incorporation	Status
Fino PayTech Limited	Incorporated	2006	Public Limited Company

ANNUAL RETURN

In accordance with the provision of Section 92 (3) of the Act, the Annual Return in the prescribed form MGT-7 is uploaded on the Banks website at https://www.fino.bank.in/investor-relations#annual-reports

CREDIT RATING

The details of credit rating as on March 31, 2026 along with its outlook are given here under:

Rating	Outlook	Rating Agency	Comments
Long Term: [ICRA] BBB+	Rating Watch with Developing Implications	ICRA Limited	Instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations.
Short Term: [ICRA] A2+	Rating Watch with Developing Implications	ICRA Limited	Instruments with this rating are considered to have strong degree of safety regarding timely payment of financial obligations.

DEPOSITS

Being a banking company, the disclosures relating to deposits as required in accordance with Sections 73 and 74 of the Act read with Companies (Accounts) Rules, 2014 and other applicable provisions of the Act are not applicable to the Bank.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL(KMP)

As on March 31, 2026, the composition of the Board was in compliance with the provisions of the Act, the SEBI Listing Regulations, Guidelines for licencing of Payments Bank dated November 27, 2014 and the Reserve Bank of India (Payments Banks - Governance) Directions 2025 dated November 28, 2025 issued by the RBI and the Articles of Association of the Bank.

As on March 31, 2026, the Board of the Bank was duly constituted with an optimum combination of Executive and Non-Executive Directors including Independent Directors and Women Directors. The changes in the composition of the Board that took place during the period under review were carried out in compliance with the provisions of the Act, SEBI Listing Regulations and applicable RBI Regulations.

In terms of the requirement of the SEBI Listing Regulations and Banking Regulation Act, 1949, the Board has identified core skills, expertise and competencies of the Directors in the context of the Banks businesses for effective functioning. The list of key skills, expertise and core competencies of the Board of Directors is detailed in the Corporate Governance Report.

In the opinion of the Board, all the directors possess the requisite qualifications, experience and expertise and hold high standards of integrity.

In terms of SEBI Listing Regulations, the Bank has received Certificate from M/s. Alwyn Jay & Co., Practicing Company Secretaries, the Secretarial Auditors of the Bank, that none of the Directors on the Board of the Bank have been debarred or disqualified from being appointed or continuing as a Director of any Company by the Securities and Exchange Board of India ("SEBI"), Ministry of Corporate Affairs ("MCA") or any such other statutory authority. The said certificate is annexed to the Corporate Governance Report forming part of this Annual Report.

Appointment/re-appointment/cessation of Directors and Key Managerial Personnel made during the financial year 2025-26 and till the date of this report.

Reappointment of Independent Director & Part-time Chairperson

The NRC and Board at its meetings held on July 29, 2025 and July 30, 2025, respectively recommended the re-appointment of Mr. Rajat Kumar Jain (DIN: 00046053) as Independent Director & Part-time Chairperson ("PTC") for a second term of three years to hold office from November 02, 2025 to November 01, 2028 (both days inclusive), not liable to retire by rotation. The re-appointment of Mr. Rajat Kumar Jain as an Independent Director has been approved by the members in Annual General Meeting held on August 29, 2025. Further, the RBI approved the re-appointment of Mr. Jain as PTC vide its letter dated October 17, 2025.

Re-appointment and cessation of Managing Director & Chief Executive Officer ("MD & CEO")

The Board at its meeting held on October 17, 2025 on recommendation of NRC approved the re-appointment of Mr. Rishi Gupta (DIN:01433190) as the MD & CEO of the Bank for a period of three years from May 02, 2026 to May 01, 2029 (both days inclusive). Further, the RBI vide its letter dated January 27, 2026 approved the re-appointment of Mr. Rishi Gupta as the MD & CEO for a period of three (3) years w.e.f. May 02, 2026. The proposal was despatched to the members on February 26, 2026 through Postal Ballot to seek their approval for the said re-appointment. However, Mr. Rishi Gupta, Former MD&CEO of the Bank was arrested on February 27, 2026, by the Directorate General of GST Intelligence ("DGGI"), Hyderabad, under Sections 132(1) (a) and 132(1)(i) of the CGST and SGST Act, 2017 in relation to the investigation of the program managers associated with various banking institutions including the Bank. The said investigation relates to certain program managers associated with multiple banks including the Bank and does not relate to the Banks GST compliance. Mr. Rishi Gupta was subsequently granted bail by the Honble Special Judge for Economic Offences Nampally, Hyderabad based on the bail application filed by him on merits. The Bank has made necessary disclosures to the Stock Exchanges in this regard, from time to time. In view of the circumstances, the Board at its meeting held on March 26, 2026, in the interest of due process and sound corporate governance practices resolved to withdraw the agenda pertaining to his re-appointment through issuing an Addendum to the Postal Ballot Notice without withdrawing the candidature of Mr. Rishi Gupta.

The Board at its meeting held on May 21, 2026, based on the consideration of the documents available with the Bank including the legal opinions & reports received from legal firms/ lawyer & consultants and the facts emanated therefrom, was of the view that no prima facie case could be made out against Mr. Rishi Gupta and accordingly, was of the view that Mr. Rishi Gupta is fit and proper to continue as MD & CEO of the Bank. However, Mr. Rishi Gupta, tendered his request for voluntary early retirement from the position of MD & CEO of the Bank, effective May 21, 2026 and the Board, after due consideration, accepted his request for voluntary early retirement effective May 21, 2026 (after the end of business day). Accordingly, Mr. Rishi Gupta ceased to be the MD & CEO (KMP) and Senior Managerial Personnel ("SMP") of the Bank after the end of business day on May 21, 2026.

Further, in order to ensure compliance with the provisions of Section 152 & 196 of the Act and Regulation 17(1C) of SEBI Listing Regulations, the Bank sought approval/ratification of the members vide Postal Ballot Notice dated June 24, 2026 for re-appointment of Mr. Rishi Gupta as MD & CEO of the Bank with effect from May 02, 2026 to May 21, 2026 (both days inclusive). The said resolution was approved by the members on July 26, 2026 by passing an ordinary resolution.

Re-appointment of Director retiring by rotation

As per the current composition of the Board, the Bank has five Independent Directors ("IDs") and two Nominee Directors representing the Holding Company. Pursuant to Section 152(6) (c) of the Act, Independent Directors are not liable to retire by rotation. Further, in accordance with the provisions of the Articles of Association of the Bank, the Nominee Directors of the Holding Company are appointed by the shareholders of the Bank on a non-retiring basis. In view of the same, none of the Directors on the Board of the Bank are subject to retirement by rotation at the ensuing AGM.

Declaration of Independence

All IDs of the Bank have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act read with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as IDs of the Bank. In the opinion of the Board, the IDs possess the requisite integrity, experience, expertise and proficiency required under all applicable laws and the policies of the Bank.

All IDs of the Bank have complied and affirmed to abide by Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, with respect to enrolling their name in the online databank of IDs maintained by Indian Institute of Corporate Affairs ("IICA") and qualifying the online proficiency self-assessment test, as applicable.

KMP and changes therein

As of March 31, 2026, following were the KMP pursuant to the provisions of Section 203 of the Act:

Mr. Rishi Gupta (Cessation effective May 21, 2026) MD & CEO

Mr. Ketan Merchant (Appointed effective February 27, 2026) Interim Chief Executive Officer

Mr. Anup Agarwal (Appointed effective March 06, 2026) Interim Chief Financial Officer

Mr. Basavraj Loni (Appointed effective August 21, 2025) Company Secretary & Compliance Officer

Mr. Basavraj Loni resigned as the Company Secretary ("CS") and VP- Legal & Compliance Officer of the Bank w.e.f May 31, 2025. He rejoined the Bank and was appointed as the CS and VP-Legal (KMP and SMP) under the Act and Compliance Officer of the Bank under the SEBI Listing Regulations and SEBI (Prohibition of Insider Trading) Regulations, 2015, with effect from August 21, 2025.

Pursuant to the arrest of Mr. Rishi Gupta on February 27, 2026, to ensure administrative and operational continuity the Board at its meeting held on the same day, approved the appointment of Mr. Ketan Merchant as Head of the organisation. Based on the recommendation of NRC, the Board at its meeting held on March 06, 2026, approved the appointment of Mr. Ketan Merchant as Interim Chief Executive Officer ("Interim CEO") of the Bank for carrying out duties of MD & CEO as per provisions of Section 10B(9) of the Banking Regulation Act, 1949. The RBI vide its letter dated March 06, 2026 approved the appointment of Mr. Ketan Merchant as Interim CEO for a period of three months w.e.f. February 27, 2026 or till the NRC and Board reassesses fit and proper status of Mr. Rishi Gupta and a view is taken in this matter by the RBI, whichever is earlier.

Subsequently, basis the recommendation of NRC and approval of the Board, the RBI vide its letter dated May 25, 2026, approved the extension of tenure of Mr. Ketan Merchant as Interim CEO of the Bank, for a further period of three months w.e.f. May 27, 2026. The Board at its meeting held on August 24, 2026 further approved the extension of tenure of Mr. Ketan Merchant as Interim CEO for an additional period of three months w.e.f. August 27, 2026, subject to approval of RBI.

Consequent to Mr. Ketan Merchant stepping into the Interim CEO role, Mr. Anup Agarwal, Head of Finance, Investor Relations, and Analytics was appointed as the Interim Chief Financial Officer ("Interim CFO") and KMP & SMP for a period of four months w.e.f. March 06, 2026. The Board had further extended his tenure as Interim CFO for a period of up to three months w.e.f. July 06, 2026.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KMP

The appointment of Directors and KMPs is in accordance with the provisions of the Act, SEBI Listing Regulations, Banking Regulation Act, 1949 and RBI guidelines on appointment/re-appointment of Directors.

In accordance with the provisions of Section 178(3) of the Act read with Rules made thereunder, SEBI Listing Regulations and Reserve Bank of India (Payments Banks - Governance) Directions 2025 dated November 28, 2025, the Board of Directors has formulated and adopted a comprehensive Compensation Policy which inter-alia covers criteria for remuneration of its Directors, KMP, Material Risk Takers ("MRTs") and SMP of the Bank.

The proposals for appointment/re-appointment of Directors are submitted to the NRC along with requisite documents/disclosures received in the prescribed format from proposed candidates as Director. The NRC carries out the fit and proper assessment after ascertaining the veracity of documents submitted, experience and qualifications required for the post and if deems fit, recommends the profile of proposed candidate for appointment to the Board for its approval.

The terms of reference of the NRC are available on the website of the Bank at https://www.fino.bank.in/investor-relations#code-policies.

The NRC and the Board ensures that the remuneration to be paid to the proposed appointee is in accordance with the Compensation Policy of the Bank and applicable RBI guidelines issued in this regard. During financial year 2025-26, the Board reviewed the Compensation Policy, which regulates the appointment and remuneration of Directors, KMP, MRTs and SMP of the Bank.

Remuneration of Directors, KMP, MRTs and SMP are recommended by the NRC and approved by the Board in accordance with the applicable laws. The Compensation Policy of the Bank is available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

MEETINGS OF THE BOARD AND COMMITTEES

As on March 31, 2026, in compliance with the statutory requirements, the Board has eight mandatory Committees viz. Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility and Environmental, Social, and Governance Committee, Risk & Asset Liability Management Committee, Stakeholders Relationship Committee, IT Strategy Committee, Customer Service Committee and Special Committee of Board on Monitoring and Follow-up of cases of frauds. The Bank also has three operating/ special purpose Committees for better administration viz. Committee of Directors (Operations), Strategic Investment Committee and Small Finance Bank Execution Committee.

Pursuant to the circumstances leading to the arrest of Mr. Rishi Gupta, the Bank constituted a special Committee of the Board and the senior management team with the nomenclature of Crisis Management Committee to monitor the situation and the business operations of the Bank.

The Board met 11 (Eleven) times during the year and the details of meeting date, attendance etc. forms part of the Corporate Governance Report.

All the recommendations made by all Board Committees, were accepted by the Board. A detailed update on the composition, governance and terms of reference of Board Committees, attendance of Directors at Board and Committee meetings held during financial year 2025-26 is provided in the Corporate Governance Report and forms part of this Annual Report.

BOARD PERFORMANCE EVALUATION

In accordance with the provisions of the Act and SEBI Listing Regulations, the annual performance evaluation of the Board, its Committees, PTC, MD & CEO and individual Directors has been carried out for the year under review. The Bank engaged an independent professional services firm for issuing a report on the performance evaluation & the evaluation was conducted through a structured evaluation process comprising questionnaires covering various aspects, including Board composition, effectiveness, roles and responsibilities, quality of deliberations, decision-making processes, and the adequacy and timeliness of flow of information etc. The aforesaid questionnaire was circulated to all the Directors of the Bank for the annual performance evaluation. The effectiveness of the Boards functioning and that of its Committees, Part-time Chairperson and individual Directors was evaluated through the annual Board Evaluation process.

The IDs too, reviewed the performance of Non-Independent Directors, the Board and the Chairman of the Bank, taking into account the views of the Executive and other Non-Executive Directors. The evaluation report was discussed and reviewed at the ID meeting, NRC and Board meetings. The performance of Board as a whole including its Committees and Individual Directors (including PTC and MD & CEO) was found to be satisfactory. The suggestions and areas identified for further improvement have been discussed and would be addressed to further strengthen the Board effectiveness.

The Policy on the Boards Evaluation framework is made available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

SUCCESSION PLANNING

Pursuant to the recommendation of NRC, the Board has framed a Policy on Succession Planning at the Board and Senior Management levels. The Policy is periodically reviewed by the NRC and the Board. The Board composition and the desired skill sets/ areas of expertise at the Board level are continuously reviewed and vacancies, if any, are reviewed in advance through a systematic due diligence process.

Succession planning at Senior Management levels, including business and assurance functions, is continuously reviewed to ensure continuity and depth of leadership at one level below the MD & CEO. Successors are identified prior to the position being vacant to ensure a smooth and seamless transition. In the event of any unexpected occurrence in respect of any member in the senior management team, the next person as per the organization chart and hierarchy shall take interim charge of the position subject to the approval of the NRC and Board as may be applicable, pending a regular appointment in terms of the succession plan. The Policy on Succession Planning is made available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

FAMILIARIZATION PROGRAMME

In accordance with Regulation 25(7) of the SEBI Listing Regulations and RBI guidelines, various training programmes were organized for the Board Members, which inter-alia covered topics related to the Corporate Social Responsibility, Corporate Governance, Generative Artificial Intelligence, Cyber Security, Risk Management, Information Technology, Regulatory & Sustainability trends and overview of the fintech functions.

The details of familiarization programmes for Independent Directors are available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Act, it is hereby confirmed that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as on March 31, 2026 and of the profit of the Bank for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the annual accounts on a going concern basis;

e. the Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL CONTROLS AND THEIR ADEQUACY

The Bank has in place three lines of defence for ensuring adherence to Internal Controls: 1) Business – Business functions as per the laid down policies and processes approved at the appropriate level of authority. 2) Risk and Compliance – Monitors compliance with the laid down policies and processes as per the regulatory framework and the Banks risk appetite. 3) Internal Audit – Overviews quality and effectiveness of the internal controls and their adherence by the first line of defence & their monitoring by the second line of defence. All the internal control functions work independently as per regulatory guidelines and report to the Audit Committee of the Board ("ACB") or the Risk & Asset Liability Management Committee of the Board as applicable. In compliance with the RBIs Guidelines on Risk Based Internal Audit ("RBIA"), the Bank has adopted a robust Internal Audit Policy and undertakes a comprehensive Risk Based Audit of operating units duly approved by the ACB. The Internal Audit Department works under the guidance of ACB which reviews the efficacy of the Internal Audit Department, the effectiveness of controls laid down by the Bank and compliance with internal and regulatory guidelines, thus ensuring the alignment with the best practices on Corporate Governance and directs necessary steps to further improve the Internal Control System.

AUDITORS

Statutory Auditors and their Report

M/s. Bilimoria Mehta & Co, Chartered Accountants (ICAI Firm Registration Number: 101490W) the Statutory Auditors of the Bank have conducted Statutory Audit of the financial statements of the Bank for the financial year ended March 31, 2026. The Notes referred in the Auditors Report are self-explanatory. The Auditors Report forms an integral part of this Annual Report. There are no qualifications or reservations or adverse remark or disclaimers given by the Statutory Auditors.

The total fees paid to the Statutory Auditors of the Bank for the financial year ended March 31, 2026 is disclosed in the Note No. 56 to financial statements for the financial year ended March 31, 2026 forming part of this Annual Report.

M/s. Bilimoria Mehta & Co., Chartered Accountants were appointed as the Statutory Auditors in the 9th AGM for a period of Three (3) years until the conclusion of the 12th AGM of the Bank to be held in the year 2028, subject to the approval of the RBI on annual basis. Accordingly, RBI vide its letter dated July 23, 2026 has approved the said appointment of M/s. Bilimoria Mehta & Co., Chartered Accountants as the Statutory Auditors of the Bank for FY2026-27.

The Statutory Auditors have confirmed that they satisfy the independence criteria and other eligibility norms required under the applicable laws and the Code of Ethics issued by the ICAI.

Secretarial Auditors and their Report

In compliance with the provisions of Section 204 of the Act and the Rules framed thereunder, M/s. Alwyn Jay & Co., the Secretarial Auditors of the Bank undertook the Secretarial Audit for the financial year ended March 31, 2026. There were no qualifications or reservations or adverse remark or disclaimers given by the Secretarial Auditors in their Report. The Secretarial Audit Report for financial year 2025-26 is annexed as Annexure-I to this Report.

Pursuant to Regulation 24A of the SEBI Listing Regulations read with Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Alwyn Jay & Co., Company Secretaries, (Firm Registration No.: P2010MH021500) were appointed as the Secretarial Auditors of the Bank for a term of five (5) consecutive years, commencing from financial year 2025-26 till financial year 2029-30 by the shareholders in the 9th AGM of the Bank.

The Secretarial Auditors have confirmed their eligibility under Section 204 of the Act and the Rules framed thereunder and Regulation 24A of the SEBI Listing Regulations for appointment as Secretarial Auditors of the Bank. As required under the SEBI Listing Regulations, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of The Institute of Company Secretaries of India ("ICSI").

Cost Auditor

The provisions for maintenance of cost records as specified by the Central Government under Section 148(1) of the Act are not applicable to the Bank and the Bank was not required to appoint Cost Auditor during the year under review.

Internal Auditor

As per the provisions of Section 138 of the Act read with Rule 13 of the Companies (Accounts) Rules, 2014, the Internal Auditors report was presented to the ACB on a quarterly basis. The scope, functioning, periodicity and methodology for conducting the Internal Audit have been formulated under the applicable RBI guidelines and in consultation with the ACB.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the ACB and / or Board under Section 143(12) of the Act and Rules framed thereunder.

Further, during the year under review, the Statutory Auditors of the Bank has not reported any instance of fraud committed in the Bank by its officers or its employees.

LOANS, GUARANTEES AND INVESTMENTS

The particulars of investments made by the Bank are disclosed in Note No. 2 of notes forming part of financial statements.

During the year under review, no loans or guarantees under Section 186 of the Act, were given or security provided on any loans or guarantees and hence, no disclosure is required to be made thereon.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions ("RPTs") that were entered into during the financial year were on arms length basis and were in the ordinary course of business. Prior omnibus/specific approval for transactions were also obtained from the ACB for the RPTs which are repetitive in nature as well as for the normal banking transactions which cannot be foreseen. A statement giving details of all RPTs, entered pursuant to the omnibus approval granted is placed before the ACB for their review on a quarterly basis.

The Bank has not entered into any material financial or commercial transactions with any related parties as per AS-18 and the SEBI Listing Regulations that may have potential conflict with the interest of the Bank at large.

In terms of Regulation 23(9) of the SEBI Listing Regulations, the Bank submits the disclosure of RPTs in the prescribed format, on a half yearly basis to the Stock Exchanges and updates its website accordingly.

There were no material transactions with related parties, which were not in the ordinary course of the business nor were there any transactions which were not on arms length basis. Hence, pursuant to Section 134(3)(h) of the Act, read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no RPTs to be reported under Section 188(1) of the Act. Therefore, Form AOC-2 is not applicable to the Bank.

Pursuant to the provisions of the Act and the Rules made thereunder and SEBI Listing Regulations, the Bank has in place a Board approved Policy on related party transactions. The said Policy is also uploaded on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Bank remains steadfast in its commitment to sustainable growth, energy efficiency, and technological innovation. By integrating cutting-edge digital solutions with eco-conscious practices, the Bank continues to enhance operational efficiency, reduce environmental impact, and deliver superior customer experiences.

A. Energy Conservation & Environmental Initiatives

Consistent with its commitment to environmental stewardship, the Bank has undertaken a range of strategic initiatives to optimize energy consumption and resource efficiency across its operations:

- Green Infrastructure: The Bank has successfully migrated to energy efficient, cloud enabled server infrastructure. This has significantly reduced dependency on an on-premise data centers, effectively lowering the Banks overall carbon footprint.

- Paperless Banking: The Banks Digital onboarding via e-KYC and Video KYC, coupled with end-to-end electronic documentation, forms the core of the Banks operating model. Beyond materially reducing paper consumption across the network, this transition has significantly enhanced the customer experience, accelerated onboarding turnaround time, and provided a seamless, frictionless digital journey for our users.

- Smart Office Operations: The Banks robust electricity and water consumption monitoring mechanism has been deployed across our Banks offices to actively track and analyze to keep this under check.

- Phygital Distribution Model: The Banks unique merchant-led model enables neighbourhood banking through local entrepreneurs and shop owners. Providing extensive coverage across approximately 98% of Indias PIN codes, this model dramatically enhances customer convenience by reducing travel time to access essential financial services, thereby lowering the broader communitys associated energy consumption and carbon emissions.

B. Technology Absorption & Innovation

The Bank continues to execute its technology transformation roadmap with a focus on adopting modern, scalable, and resilient technologies that improve customer experience, operational efficiency, regulatory compliance, and business agility. During the reporting period, significant progress has been achieved through the successful migration to the Finacle Core Banking Platform, implementation of the "Hollow the Core" architecture, advancement of Artificial Intelligence and Machine Learning ("AI/ML") initiatives, and continued modernization of the Banks technology infrastructure.

These initiatives represent not only technology upgrades but also the absorption of new architectural principles and operational capabilities that position the Bank for sustainable growth and future innovation.

Key Technology Innovation Initiatives

1. Core Banking Modernization - Finacle

The successful migration to the Finacle Core Banking Platform marks a major technology transformation milestone for the Bank.

The new platform provides:

o A modern API-enabled banking architecture.

o Enhanced scalability to support business growth.

o Improved processing performance and operational resilience.

o Faster product and service configuration.

o Better integration with digital channels and partner ecosystems.

o A future-ready technology foundation supporting the Banks transition towards SFB operations.

The migration has enabled the Bank to move from a monolithic legacy environment to a modern, configurable, and integration-driven banking platform capable of supporting continuous innovation.

2. Hollow the Core Architecture

The Bank continues to operationalize its strategic "Hollow the Core" architecture, designed to decouple high-volume transaction processing from the Core Banking System and establish independent processing capabilities.

Major initiatives include:

Merchant Transaction Aggregation (MTA)

o Dedicated merchant transaction orchestration platform.

o Reduced dependency on the Core Banking System.

o Faster merchant onboarding.

o Improved scalability for merchant transaction growth.

Partner Transaction Aggregation (PTA)

o Centralised transaction processing platform for Banking-as-a-Service (BaaS) and ecosystem partners.

o API-driven partner integration.

o Simplified onboarding of new business partners.

o Improved operational flexibility and transaction visibility.

These platforms create a modular technology ecosystem that enables faster innovation, supports increasing transaction volumes, and reduces technology constraints associated with traditional core-centric architectures.

3. Artificial Intelligence and Machine Learning

The Bank continues to expand the adoption of AI and ML across business and operational functions to improve decision-making, customer engagement, operational efficiency, and risk management.

Current innovation initiatives include:

o AI-assisted Fraud Risk Management for intelligent fraud detection.

o ML-based Anti-Money Laundering analytics.

o AI-enabled customer support capabilities to improve service quality and response time.

o Intelligent operational dashboards providing predictive insights and enhanced decision support.

o Automation of routine operational activities to improve productivity and reduce manual effort.

These initiatives are laying the foundation for a data-driven enterprise while supporting improved governance, operational resilience, and customer experience.

4. Infrastructure Modernisation

The Bank continues to modernise its technology infrastructure to support the increasing demands of digital banking and enterprise scale operations.

Key modernization initiatives include:

o Upgraded compute, storage, and network infrastructure.

o Middleware modernization to strengthen enterprise integration.

o Enhanced cyber security capabilities and security monitoring.

o Improved resilience through strengthened disaster recovery and business continuity capabilities.

o Infrastructure automation to improve operational efficiency and service reliability.

o Capacity enhancements supporting future transaction growth and digital services.

These investments provide a secure, scalable, and resilient technology foundation for future innovation.

Business Impact

The Banks technology absorption and innovation initiatives continue to generate tangible business benefits, including:

Technology Initiative	Strategic Business Outcome
Finacle Core Banking Platform	Modern banking capabilities, faster product rollout, improved operational resilience
Hollow the Core Architecture	Greater scalability, reduced core dependency, accelerated partner integration
AI/ML Adoption	Enhanced fraud detection, operational automation, improved customer experience, data-driven decision-making
Infrastructure Modernization	Improved system availability, scalability, security, and operational efficiency
API-led Architecture	Faster innovation, ecosystem integration, and support for future digital business models

C. Future Road-map

1. ESG Strategy:

Environmental, Social and Governance ("ESG") considerations are integral to the Banks vision of driving financial inclusion in a responsible and sustainable manner. The Banks ESG philosophy is to embed sustainable business practices across its operations, products and services, and to empower communities to be financially secure balancing profitability with long-term environmental and social impact.

The Banks ESG strategy is anchored on the SCALE framework - Secure data systems, Champion climate action, Advance governance, Lead financial inclusion, and Empower people. Implementation is supported by a formal materiality assessment covering ten material topics aligned with Sustainable Development Goals (SDGs), sixteen strategic goals and 42 key performance indicators, monitored through a cross-functional ESG dashboard.

ESG oversight is exercised through a three-tier governance structure, comprising the Board-level Corporate Social Responsibility & Environmental, Social and Governance Committee ("CSR & ESG Committee") the Executive level ESG Steering Committee and the Operational level Core Sustainability Committee. This structure ensures Board oversight, executive accountability and consistent execution of the ESG agenda across the organisation.

The Bank remains committed to advancing its ESG agenda through ethical governance, measurable targets and active stakeholder engagement, with financial inclusion, responsible growth and long-term value creation at the core of its strategy.

2. Technology Innovation Outlook

The Banks technology roadmap continues to focus on building a modular, intelligent, API-driven, and scalable technology ecosystem that supports sustainable business growth, operational resilience, and continuous innovation. The investments made during the current transformation phase are establishing foundational capabilities that will accelerate the Banks transition to a SFB while enabling future digital business models.

Key focus areas include:

o SFB Readiness: Leveraging the capabilities established through the Finacle Core Banking Platform to support the expanded product portfolio, enhanced lending capabilities, regulatory requirements, treasury operations, and higher transaction volumes expected under the SFB operating model.

o Building on Core Technology Capabilities: Extending the modernized banking architecture through modular platforms, reusable enterprise services, API-first integration, and standardized technology components, enabling faster implementation of new products and business capabilities while reducing technology complexity.

o Accelerating Time-to-Market: Capitalizing on the Finacle platform and the "Hollow the Core" architecture to significantly reduce product development and deployment cycles through configurable product capabilities, reusable APIs, and decoupled transaction processing platforms. This will enable faster introduction of new products, services, and ecosystem partnerships in response to evolving market opportunities.

o Expansion of API-led Digital Ecosystem: Strengthening open integration capabilities to support Banking-as-a-Service (BaaS), fintech partnerships, merchant ecosystems, and third-party digital channels, thereby creating new revenue opportunities and expanding customer reach.

o Scaling AI and Machine Learning: Broadening AI/ML adoption across customer engagement, fraud prevention, anti-money laundering, credit risk assessment, operational intelligence, and enterprise decision support to improve productivity, customer experience, and risk management.

o Intelligent Automation: Increasing automation across technology and business operations to improve service delivery, reduce manual intervention, enhance operational resilience, and improve cost efficiency.

o Continued Infrastructure Modernization: Advancing infrastructure modernization through enhanced compute, storage, middleware, cybersecurity, observability, and automation capabilities to support future business growth, increased transaction volumes, and evolving regulatory expectations.

Collectively, these initiatives position the Bank with a future-ready technology platform that is scalable, resilient, and innovation driven. By establishing strong foundational capabilities today, the Bank is well placed to accelerate its SFB transformation, reduce go-to-market timelines, enhance operational agility, and respond rapidly to changing customer expectations and emerging business opportunities.

D. Foreign Exchange Earnings and Outgo

During the year under review, there were no foreign exchange earnings, however, there was foreign exchange outgo of Rs 1.06 Crore.

RISK MANAGEMENT

The Bank being a Payments Bank is required to largely follow/ implement directives issued by RBI for scheduled commercial banks in addition to those forming part of the guidelines for Payments Banks. Accordingly, the Bank has adopted risk management process to identify, assess, monitor, manage and mitigate risks in its day-to-day activities/functions through the effective use of processes, information and technology.

The risk management process is monitored under the various Risk Management Policies as approved by the Board. The Board is supported by Board Committees, the management team, and Board delegated executive level Committees as part of the risk governance framework. The Board has an oversight of the managements efforts to balance growth and prudent risk management, while creating value for stakeholders.

Pursuant to RBI Regulations, the Bank has constituted a Risk & Asset Liability Management ("RALM") Committee of the Board and as mandated by the regulatory provisions, the Bank has appointed Chief Risk Officer, who administers the risk associated key verticals through dedicated divisions i.e., Market Risk, Operational Risk, Fraud Risk and other Risks under the aegis of the Board approved risk management policies.

The details of the RALM Committee are disclosed in the Corporate Governance Report forming part of this Annual Report and the terms of reference are available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

The risk management framework within the Bank is a layered structure and broadly consists of the following aspects for effective risk management across the Bank:

(a) Operational Risk Management

The Bank is exposed to significant operational risk viz. risks arising due to use of technology, introduction of new products/services, processes, channels like mobile, internet banking, cash handling, etc. The Banks operational risk management policies provide guidance on operational risk management issues and serves as a one-point reference and creates awareness amongst all employees within the Bank. The policies set out the broad parameters for identification of various operational risks that the Bank is exposed to, on an ongoing basis and to put in place systems and procedures to mitigate such risks.

For the effective management of operational risk, the Bank has constituted an Operational Risk Management Committee ("ORMC"), an Executive Committee that supports the RALM Committee. The main functions of the ORMC are to monitor and ensure appropriateness of operational risk management and recommend suitable control measures for mitigating the same besides monitoring thereof.

For the effective management of fraud risk, the Bank has constituted a Fraud Risk Management Committee ("FRMC"), an Executive Committee that supports the Special Committee of the Board for Monitoring and Follow-up of cases of frauds and the ACB. The main functions of the FRMC are to monitor and ensure appropriateness of fraud risk management and recommend suitable control measures for mitigating the same besides monitoring thereof.

The Bank also outsources certain functions/activities to third parties subject to compliance with RBI guidelines. These functions/activities and associated issues are being overseen by the Outsourcing Committee, an Executive Committee that supports the RALM Committee.

(b) Market Risk, Liquidity and Asset Liability Management

The Bank is exposed to Market risk, i.e. possibility of loss caused by changes in the market variables in addition to liquidity and mismatches in asset liability. The Bank has put in place a Board approved Market Risk Management, Asset Liability Management & Investment policies aligned with RBI regulations and operating guidelines governing Payments Banks and two Executive level Committees, viz. Investment and Market Risk Committee and Asset Liability Committee that support the RALM Committee in dealing with the day-to-day risk matters, associated issues/concerns, if any, in a comprehensive manner.

(c) IT Risk Management

The Bank has put in place adequate perimeter level security protection devices, internal data protection solutions and a 24x7 monitored Security Operations Centre ("SOC"). Various security solutions such as threat monitoring and subscription to other global solutions are put in place to monitor and act on any critical alerts. However, cyber threats are evolving and various types of attacks are executed such as Zero Day and many new variants of malware attacks. Any of the new variant attacks may impact the network or data protection. To mitigate such risks on the technology stack, adequate security crisis management processes are in place as per regulatory requirements and internal processes. Further, the Bank has a pool of technical resources, which faces the risk of attrition. To mitigate this risk, the Bank has a set of hiring and training process with multiple technology streams.

The Bank has put industry standard perimeter technologies, end point protection mechanism and forensic tools to strengthen the security posture and monitoring mechanism.

For the effective management of IT Risk, the Bank has constituted Information System and Risk Committee ("ISRC") as an Executive Committee that supports the IT Strategy Committee dealing with the day-to-day affairs, associated issues/concerns, if any, in a comprehensive manner.

(d) Reputation Risk Management

The Bank has identified Reputation Risk as one of the material risks which is periodically monitored in terms of its sources and risk level.

During the period under review, the Bank prioritized transparent and proactive communication with its stakeholders, customer, business correspondents, alliance partners, and regulatory authorities and made appropriate disclosures to the stock exchanges from time to time in accordance with applicable laws and regulatory requirements.

(e) Compliance Risk Management

Compliance risk is the risk of failure (or perceived failure) by the Bank to comply with applicable laws, regulations, guidelines and standards, leading to damage to the reputation of the Bank, legal or regulatory sanctions, or financial loss. The Bank has a Compliance Policy to ensure the highest standards of compliance. A dedicated team of subject matter experts work to ensure active compliance risk management and monitoring. The team also advises on regulatory matters. The focus is on identifying and reducing risk by rigorously testing products and putting in place robust internal policies. Internal policies are reviewed and updated periodically as per agreed frequency or based on market actions or regulatory guidelines/actions.

For the effective management of Compliance Risk, the Bank has constituted Committee of Executives ("COE"), an Executive Committee that supports the ACB dealing with the day-to-day compliance risks, associated issues/concerns, if any, in a comprehensive manner.

CORPORATE SOCIAL RESPONSIBILITY

The Bank has in place a Corporate Social Responsibility ("CSR") Policy and constituted CSR & ESG Committee in accordance with the provisions of Section 135 of the Act read with Rules framed thereunder and Schedule VII to the Act. The CSR Policy outlines the Banks philosophy to play a positive role in the community at large and consider the environmental and social impact of business decisions in which it operates. The CSR Policy is available on Banks website at https://www.fino.bank.in/investor-relations#code-policies.

The key areas identified by the Bank include eradicating hunger, promoting health care, promoting primary education, skill development, protection of environment and children welfare.

In terms of the provisions of the Act, for financial year 2025-26, the Bank has spent Rs 1.73 Crore (including the set off of the excess amount spent by the Bank in the previous financial year) based on its commitment to the CSR programmes.

The Annual Report on CSR activities as prescribed under the Act and Rules framed thereunder is annexed as Annexure - II to this Report.

The details of the CSR & ESG Committee are disclosed in the Corporate Governance Report forming part of this Annual Report and its terms of reference are available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Bank has formulated and adopted a Policy on Prevention of Sexual Harassment of Women at workplace. The Bank has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were pending with the Internal Complaints Committee for more than ninety days period.

The information as required pursuant to Rule 8 of Companies (Accounts) Rules, 2014 relating to complaints received, redressed and pending during financial year 2025-26 forms part of the Corporate Governance Report.

COMPLIANCE WITH THE MATERNITY BENEFIT ACT

The Bank is in compliance with the provisions of the Maternity Benefit Act, 1961.

VIGIL MECHANISM / WHISTLE BLOWER

The Bank has implemented a Whistle Blower Policy in compliance with the provisions of the Act and SEBI Listing Regulations. Pursuant to this Policy, the Whistle Blowers can raise concerns relating to reportable matters (as defined in the Policy) such as breach of Fino Payments Banks Code of Conduct, employee misconduct, fraud, illegal unethical imprudent behaviour, leakage of Unpublished Price Sensitive Information, corruption, safety and misappropriation or misuse of Banks funds/ assets etc. The Whistle Blower Policy is available on the Banks website at https://www.fino.bank.in/investor-relations#code-policies.

Further, the mechanism adopted by the Bank encourages the Whistle Blower to report genuine concerns or grievances and provides for adequate safeguards against victimisation of Whistle Blower to those who avail such mechanism and also provides for direct access to the Chairperson of the ACB.

The ACB reviews the functioning of the Vigil Mechanism from time to time. The report on Whistle Blower complaints is placed before the ACB on a quarterly basis. None of the Whistle Blowers has been denied access to the ACB.

The Bank was in receipt of 5 (Five) Whistle Blower complaints during the year under review and the same was investigated thoroughly. The cases were closed after taking appropriate action. There was no complaint pending as on March 31, 2026.

CORPORATE GOVERNANCE

The Banks activities are carried out in accordance with the virtuous Corporate governance practices and the Bank is constantly striving to make them better with time. The Bank believes that Governance framework and good practices helps in creating right culture and in turn enhances long-term sustainable value for all its stakeholders. The Bank adheres to the Corporate Governance requirements set out by the SEBI/MCA/RBI. The Corporate Governance Report for financial year 2025-26 along with a certificate issued by M/s. Alwyn Jay & Co., Secretarial Auditors of the Bank confirming the compliance to applicable requirements related to Corporate Governance as stipulated under the SEBI Listing Regulations is annexed to the Corporate Governance Report which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report describing the initiatives taken by the Bank from an ESG perspective is presented in a separate section which forms a part of this Annual Report.

DISCLOSURE OF AGREEMENTS BINDING THE BANK

In terms of Regulation 30A(2) of the SEBI Listing Regulations, agreements specified in clause 5A of paragraph A of Part A of Schedule III of SEBI Listing Regulations, along with its salient features, are available on the website of the Bank at www.fino.bank.in.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Bank has complied with the applicable Secretarial Standards on meetings of the Board of Directors ("SS-1") and Secretarial Standard on General Meetings ("SS-2") issued by the ICSI.

STATUS OF IND AS IMPLEMENTATION

As per RBI circular RBI/2015-16/315 DBR.BP.BC No.76/21.07.001/2015-16 dated February 11, 2016, Implementation of Indian Accounting Standards ("Ind AS"), banks are advised that scheduled commercial banks (excluding RRBs) shall follow the Indian Accounting Standards as notified under the Companies (Indian Accounting Standards) Rules, 2015, subject to any guidelines or directions issued by the RBI in this regard. Banks in India currently prepare their financial statements as per the guidelines issued by RBI, the Accounting Standards notified under Section 133 of the Act and generally accepted accounting principles in India ("Indian GAAP"). In January 2016, the MCA issued the roadmap for implementation of new Ind AS, which was based on convergence with the International Financial Reporting Standards ("IFRS"), for scheduled commercial banks, insurance companies and non-banking financial companies ("NBFCs"). In March 2019, RBI deferred the implementation of Ind AS for banks till further notice as the recommended legislative amendments were under consideration of the Government of India.

Further, Fino PayTech Limited, the holding company, prepares its financial statements in accordance with Ind AS and such statements include our financial statements prepared in accordance with Ind AS for the limited purpose of inclusion in the holding companys consolidated financial statements. In view of the same, the Bank is in an advanced stage of preparedness for implementation of Ind AS, as and when these are made applicable to banks.

PARTICULARS OF EMPLOYEES

The information in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - III to the Boards Report.

Further, the statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, forms part of this Annual Report. However, in terms of section 136(1) of the Act, the Annual Report is being sent without this Annexure. This Annexure is available for inspection and any member interested in obtaining a copy of the statement may write to the Secretarial Department of the Bank at cs@fino.bank.in.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI Listing Regulations is presented in a separate section and forms part of this Annual Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS

During the year under review, no material orders have been passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Bank and its future operations.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

The Bank has not made any application under the Insolvency and Bankruptcy Code, 2016 and no proceeding is pending under the said Code.

DETAILS OF ONE TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM BANKS OR FINANCIAL INSTITUTIONS

No one time settlement was done with any Bank/ Financial Institution with respect to loans taken by the Bank, hence disclosure on the difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking such loans is not applicable.

ACKNOWLEDGEMENT AND APPRECIATION

The Board of Directors of your Bank would like to place on record its gratitude for the guidance and co-operation received from the RBI and other regulatory bodies and thank all the stakeholders of the Bank including its investors, customers, merchants, bankers, shareholders, vendors, registrars and all other valued partners for their continued support. We also express gratitude to our business associates and business correspondent (merchant) network for their continued support.

The Board would like to express its appreciation for the sincere and dedicated efforts put in by all the employees of the Bank, exhibiting strong professionalism, teamwork and initiative and look forward to their continued contribution in building this Bank into a great institution.

For and on behalf of the Board of Directors

Rajat Kumar Jain

Part - time Chairperson & Independent Director

DIN: 00046053

Deena Asit Mehta

Independent Director

DIN: 00168992

Date : August 24, 2026

Place : Navi Mumbai