South Ind.Bank Management Discussions

GLOBAL ECONOMY

Currently, the global economy persists in its forward momentum, building upon the thrust it achieved in the previous quarters. Despite the presence of persistently high but gradually moderating inflation, constricted financial conditions, strains within the banking sector, and ongoing geopolitical conflicts, the global economy maintains its resilience. Meanwhile, sovereign bond yields remain steady, as market participants anticipate the nearing culmination of the monetary policy tightening cycle. Additionally, the US dollar has experienced an appreciation in value.

For numerous emerging market economies, the outlook for growth is threatened by factors, such as weakened external demand, elevated levels of debt and the disintegration of geo-economic relationships, all against the backdrop of tighter external financial conditions. Nonetheless, cautious capital flows are returning to these economies due to a renewed appetite for risk among investors.

Post Covid economic scenario is not at all free from its impacts in both banking and financial sector. According to the International Monetary Fund (IMF), on a per capita income basis, India ranked 139th by GDP (nominal) and 127th by GDP (Purchasing Power Parity). In parallel, the other major forces that shaped the world economy in 2022 seem set to continue into this year, but with changed intensities. Debt levels remain high, limiting the ability of fiscal policymakers to respond to new challenges. Commodity prices that rose sharply following Russias invasion of Ukraine have moderated, but the war continues, and geopolitical tensions are high. Infectious COVID-19 strains caused widespread outbreaks last year, but economies that were hit hard—most notably China— appear to be recovering, easing supply-chain disruptions.

Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.5 per cent in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 per cent in 2023-the weakest growth since the global downturn of 2001, barring the initial COVID-19 crisis in 2020 and during the global financial crisis in 2009-with advanced economy growth falling below 1 per cent.

Global headline inflation is set to fall from 8.7 per cent in 2022 to 6.8 per cent in 2023 on the back of lower commodity prices, but underlying (core) inflation is likely to decline more slowly. Inflations return to target is unlikely before 2025 in most cases. Once inflation rates are back to targets, deeper structural drivers will likely reduce interest rates toward their pre-pandemic levels. Risks to the outlook are heavily skewed to the downside, with the chances of a hard landing having risen sharply. Financial sector stress could amplify and contagion could take hold, weakening the real economy through a sharp deterioration in financing conditions and compelling central banks to reconsider their policy paths. The war in Ukraine could intensify and lead to more food and energy price spikes, pushing inflation up. Core inflation could turn out more persistent than anticipated, requiring even more monetary tightening to tame. Fragmentation into geopolitical blocs has the scope to generate large output losses, including through its effects on foreign direct investment.

Another significant development during this period was the acceleration of digital transformation and the growth of remote work. Information technology and electronic money transfer systems have become the two cornerstones of modern banking development in the area of technology- based banking. Banks now offer a variety of products that go far beyond traditional banking, and these services are now available 24x7. The pandemic forced businesses and individuals to adopt digital solutions, leading to a surge in e-commerce, online services and remote work arrangements. Technology companies and sectors related to digitalisation experienced significant growth and became major contributors to the global economy.

INDIAN ECONOMY

Domestic economic activity remains resilient in Q1 FY24, as reflected in high frequency indicators. Purchasing Managers Indices (PMI) for manufacturing and services indicated sustained expansion, with the manufacturing PMI at a 31-month high in May 2023 and services PMI at a 13-year high in April-May 2023. In the services sector, domestic air passenger traffic, e-way bills, toll collections and diesel consumption exhibited buoyancy in April-May 2023, while railway freight and port traffic registered modest growth.

On the demand side, urban spending remains robust, as reflected in indicators, such as passenger vehicle sales and domestic air passenger traffic, which recorded double digit growth in April, 2023. Rural demand is gradually improving though unevenly - motorcycle sales expanded in April, 2023, while tractor sales contracted partly owing to unseasonal rains. Investment activity is picking up as reflected in the healthy expansion in steel consumption and cement output. Merchandise exports and non-oil non-gold imports remained in contraction mode, while services exports sustained a robust expansion.

CPI inflation fell sharply to 4.7 per cent in April, 2023 from 6.4 per cent in February, 2023 on the back of large favourable base effects, with softening observed across all the three major groups. The average daily absorption under the LAF increased to 1.7 lakh crore during April- May, 2023 from 1.4 lakh crore in February-March, 2023. Money supply (M3) expanded by 10.1 per cent y-o-y and non-food Bank credit by 15.6 per cent as on May 19, 2023. Indias foreign exchange reserves were placed at US$ 595.1 billion as on June 2, 2023.

The Indian economy displayed exemplary resilience postpandemic and rebounded strongly from a contraction of 5.8 per cent in 2020-21 to a growth of 9.1 per cent in 2021-22 and 7.2 per cent in 2022-23. The Consumer Price Index (CPI) inflation for the fiscal year 2024 would be around 5.1 per cent. Additionally, the GDP growth rate for FY 2023-24 was projected to be 6.5 per cent. The Indian economy has also made rapid gains in openness and has gradually integrated with the global economy over the years. Consequently, it is getting increasingly exposed to the vagaries of global headwinds. It is, however, pertinent to note that Indias growth in the last few years is mainly driven by robust domestic demand, especially private consumption and investment, amidst the global slowdown. Looking ahead, RBI expects real GDP to grow by 6.5 per cent during FY 2023-24. In all likelihood, India will remain among the fastest growing large economies in 2023.

The credit growth to the Micro, Small, and Medium Enterprises (MSME) sector has been remarkably high, over 30.6 per cent, on average during Jan-Nov 2022, supported by the extended Emergency Credit Linked Guarantee Scheme (ECLGS) of the Union Government. It adds that the recovery of MSMEs is proceeding apace, as is evident in the amounts of Goods and Services Tax (GST) they pay, while the Emergency Credit Linked Guarantee Scheme (ECLGS) is easing their debt servicing concerns. Indian economy appears to have moved on after its encounter with the

pandemic, staging a full recovery in FY 2021-22 ahead of many nations and positioning itself to ascend to the prepandemic growth path in FY 2022-23.

Manufacturing and investment activities consequently gained traction. By the time the growth of exports moderated, the rebound in domestic consumption had sufficiently matured to take forward the growth of Indias economy. Private Consumption as a percentage of GDP stood at 58.4 per cent in Q2 of FY 2022-23, the highest among the second quarters of all the years since 2013-14, supported by a rebound in contact-intensive services such as trade, hotel and transport, which registered sequential growth of 16 per cent in real terms in Q2 of FY 2022-23 compared to the previous quarter.

Banking and Finance - Domestic

The finances of the public sector banks have seen a significant turnaround, with profits being booked at regular intervals and their Non-Performing Assets (NPAs) being fast-tracked for quicker resolution/liquidation by the Insolvency and Bankruptcy Board of India (IBBI). At the same time, the Government has been providing adequate budgetary support for keeping the PSBs well-capitalised, ensuring that their Capital to Risk-Weighted Adjusted Ratio (CRAR) remains comfortably above the threshold levels of adequacy. Nonetheless, financial strength has helped banks make up for lower debt financing provided by corporate bonds and External Commercial Borrowings (ECBs) in FY 2022-23. Rising yields on corporate bonds and higher interest/hedging costs on ECBs have made these instruments less attractive than the previous year.

Outlook for Banking Sector

A few highlights of the measures and guidelines introduced by the RBI and Central Government to cushion the Banking and financial market are:

• The Reserve Bank of India (RBI) has authorised banks to issue Rupay prepaid forex cards. Additionally, the RBI has announced plans to expand the use of e-rupee vouchers, allowing non-bank companies to issue similar instruments independently.

• The Union governments ongoing focus on capital expenditure will help to gradually crowd in private sector investment. However, in line with the slowdown in the broader economy, bank credit growth is likely to moderate in the year ahead, with the divergence between credit and deposit growth coming down.

• According to the Union Budget 2023, a national financial information registry would be established to

act as the central repository for financial and ancillary data. This will enhance the efficient flow of credit, accelerate financial inclusion, and support financial stability. In addition, authorities of the financial sector regulators will be required to conduct a full assessment of existing legislation to cut costs and simplify compliance.

• The Union Budgets 2023 has focussed on improving the credit scheme for equipping MSMEs with access to financing and continuing the reforms in terms of investor protection will provide further impetus to growth in the banking sector.

Going forward, the Reserve Bank may remain nimble in its liquidity management, while ensuring that adequate resources are available for the productive requirements of the economy.

FINANCIAL PERFORMANCE VS OPERATIONAL PERFORMANCE

During the FY 2022-23, the total gross business of the Bank increased from 1,50,957.86 crore to 1,63,743.42 crore; deposits increased from 89,142.10 crore to 91,651.35 crore and gross advances increased from 61,815.76 crore to 72,092.07 crore. Operating profit of the Bank had increased to 1,507.33 crore in FY 2022-23 from 1,247.57 crore in FY 2021-22. The Net Profit increased to 775.09 crore in FY 2022-23 as against 44.98 crore reported in 2021-22. The Provision Coverage Ratio (PCR including write-off) has improved to 76.78 per cent in FY 202223 from previous level of 69.55 per cent in FY 2021-22. The Board has recommended a dividend of 30 per cent i.e. 0.30 per equity share of face value of 1/-each, which is subject to the approval of shareholders in the ensuing Annual General Meeting.

The Gross NPA to Gross Advances stood at 5.14 per cent and the Net NPA to Net Advances stood at 1.86 per cent as on March 31, 2023. The CASA has increased by 2 per cent during current financial year to 30,227 crore from 29,602 crore in the FY 2021-22. Net Interest income of the Bank has increased from 2,240 crore in the FY 2021-22 to 3,012 crore in the FY 2022-23.

The Capital Adequacy Ratio of the Bank was 17.25 under Basel III norms as on March 31, 2023, as against the RBI mandated level of 11.50. The Book value per share has increased from 27.97 to 31.89 as on March 31, 2023. The gross revenue from Treasury Operations segment decreased from 1,499.70 crore in the FY 2021-22 to 1,088.00 crore in the FY 2022-23. During the FY 2022-23, the Corporate/Wholesale Banking segment has increased

from 2,065.04 crore to 2,323.02 crore., Retail Banking segment has increased from 3,710.05 crore to 4,083.76 crore and Other Banking Operations segment increased from 345.85 crore to 551.03 crore.

The segment results, net of allocated/apportioned cost and provisions from Treasury segment has decreased from 18.51 crore to 158.42 crore, Retail Banking segment has increased from 291.65 crore to 975.59 crore, whereas Corporate/wholesale Banking segments have increased from 656.82 crore to 101.70 crore, and other banking operations increased from 254.67 crore to 392.74 crore.

KEY BUSINESS RATIOS

Interest income as a percentage to the Working Funds for the FY 2022-23 has increased from 6.57 per cent to 6.86 per cent, which is mainly on account of change in interest rate.

Non-interest income as a percentage to the Working Funds for the FY 2022-23 has decreased from 1.03 per cent to 0.77 per cent, mainly on account of increase in the provision for depreciation on investments and lower profit on sale of investments, which was partially offset by higher recovery income from written off accounts and income received from sale of Priority Sector Lending Certificates.

On account of the above mentioned reasons, the operating profit as a percentage to Working Funds for the FY 2022-23 has increased from 1.24 per cent to 1.43 per cent, the return on Assets (based on working fund) for the FY 2022-23 was increased from 0.04 per cent to 0.73 per cent and Return on Equity for the FY 2022-23 was increased from 0.77 per cent to 11.61 per cent. Profit per employee has increased from 0.50 lakh in the FY 2021-22 to 8.18 lakhs in the FY 2022-23.

UPDATE ON IND-AS IMPLEMENTATION

The Ministry of Corporate Affairs (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, the banks in India were required to comply with the IND AS for the financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ended March 31, 2018 or thereafter. Progressing towards IND AS, the Bank had prepared pro-forma financials from June 30, 2017 as per extant regulatory

guidelines and submitted the same to the RBI. 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 1, 2019 onwards. In preparation for the same, the Bank has been submitting quarterly pro-forma financials to the RBI from quarter ended June 30, 2018. On March 22, 2019, the RBI has announced deferment of the implementation of IND AS by banks till further notice. However, the Bank continues to submit to the RBI pro-forma for financials on half year basis.

Accounting Policy

The significant accounting policy of the Bank is mentioned in Schedule 17 of the financial statements. The Bank has consistently applied its significant accounting policies in the preparation of its financial results for the year ended March 31, 2023 as compared to those followed for the year ended March 31, 2022.

STRATEGIES OF THE BANK

Strategic planning is an organisational management activity used to set priorities, to focus energy and resources, to strengthen operations, and to ensure that employees and other stakeholders are working towards common goals. It helps the organisation to be more competitive in the market. The Bank is committed to achieve its goals by focusing on the major areas such as profitability, asset quality, resilient loan book, robust retail liability portfolio, appropriate organisational structure and latest digital technology. As a banking institution, the Bank should have a strong strategic plan for the way forward in order to ensure that the Bank is able to bring a sustainable growth as well as value for all stake holders.

The strategies of the Bank are framed taking into account the past performance, action plan for the ensuing years, policies of the Bank, risk appetite of the Bank, reforms in the banking sector, statutory and regulatory changes, advancement in technology, previous experiences in products/activities/geographic locations, the present socio-economic conditions in the national and global markets, the present and estimated market share, regulatory frameworks, etc.

The Bank propose to continue its focus on profitability, asset quality, resilient loan book, robust retail liability portfolio, sharpening organisational structure and digital

technology to achieve the business goals. The brief action plans and strategies initiated are as follows:

Improve the profitability through quality credit and focusing on following 6Cs:

6 Cs	Strategy
Capital	Churning of advance portfolio by increasing the share of A rated and above accounts and increase in gold loan portfolio has helped to conserve capital.
CASA	Improving CASA through focused drive on building a sustainable CASA book through Pan India presence.
Cost to Income	Optimising the cost across the organisation. Continued efforts have been made to calibrate the Cost Income ratio over a period of time.
Competency Building	Augmenting talent young resources and revamping the organisational structure to build a pool of talents to deliver continued excellence.
Customer Focus	Adoption of a "phygital" "approach at branches with personalised services for legacy loyal customers and end to end digital experience for NextGen customers with a "Fair to customer, Fair to Bank" approach. Customer experience is critical for the success of any organisation as the same is a competitive advantage for the Bank.
Compliance	Compliance continues to be the core focus for the Bank and will be the axis across all domains of banking activities by adopting the motto "compliance with conscience".

To Build strong and resilient Loan Book by focusing

on:

a) Strengthening Business Structure :

• Focus on cohesive lending with emphasis on nurturing relationship through multiple banking product offerings.

• Scale up sourcing capability through DMA/DSA.

• Assets and Liabilities team to work closely for creating value from the customers of the Bank.

b) Strengthening the Team:

• Competency building through newly launched LMS & instilling sense of ownership and sensitivity.

• Continuous training programs for senior management team.

c) Building Robust Infrastructure:

• The systems and controls are put in place and the utmost priority is given to quality over growth.

• Setting up lending platform (LOS/LMS) for retail and SME asset products.

• Various systems like Nucleus, SMILE, etc. are put in place for ensuring quality.

• Strengthening of collection system.

d) Launching of New Products:

• Adding High yielding assets like Personal loans, credit cards, etc.

To Build Robust Retail Liability franchise by focusing

on:

a) NRI Business:

• Focus on acquiring New to Bank (NTB) Customers with quality by driving Higher IP value collection and sourcing of higher Variant of CA/SB products.

• Expanding geographies by partnering with exchange houses, banks and remittance platforms.

b) Higher Share of Customer Wallet:

• Acquiring Savings account relationship of OneCard customers completely through digital journey.

• Focused drive on making South Indian Bank as a primary Bank for all the asset and liability customers.

• Use of data analytics for deeper customer penetration with multiple product offerings.

c) Customer Segments:

• Setting up of salary team for Corporate Salary Tie-ups and acquisition in major cities. Focus on segments like Trust, Co-operative Society and Govt. Banking.

• Digital mapping of customer life cycle management.

• Centralised lead sharing activity to support NTB customer acquisition.

More emphasis on collection and recovery of

stressed accounts:

• The Collection and Recovery Department was decentralised with dedicated regional collection Managers at each region thereby lowering the slippages and stringent recovery has led to a better

performance in reducing the NPAs and lower provisions for the quarter.

• Alignment of Recovery Team with asset verticals to target each customer segments.

• Implementation of new collection system with better management capabilities.

• Emphasis on one-time settlement against long drawn legal processes.

• Dedicated focus on mitigating frauds.

• Deployment of N-Collect system to enable seamless recovery and reconciliation.

Digital Technology

All financial organisations have their technology strategies to deal with a rapidly evolving environment. Technology strategy is a critical aspect of banking, and banks are leveraging cloud adoption, high availability, fraud detection, cyber security, and modernisation of infrastructure to stay competitive and provide better services to their customers. Banks need to embrace technology and innovation to remain relevant in the dynamic banking industry. By leveraging the use of digital technology, the Bank will be able to offer better experience to customers and staffs, thereby increasing the customer base, improve other income, reduce operation cost and prepare the business for the future. The Bank has initiated various digital initiatives for supporting the below mentioned areas and through further scaling up of the same, Bank is expected to reap more benefits in coming years.

DIGITAL AND INFORMATION TECHNOLOGY ENABLED SERVICES

The rapid advancement of digital technology over the past decade has sparked a profound transformation across various industries. As far as the banking industry is concerned, this wave of technological progress has revolutionised the way banks operate and conduct business. With the advent of ground-breaking technologies like Blockchain, Internet of Things (IoT), Artificial Intelligence, and driven Data Analytics, combined with the leap in automation, banks have been presented with new opportunities to innovate and improve their services.

The proliferation of mobile devices and the rise of digital platforms have also reshaped customer expectations and preferences. Customers now demand seamless and convenient banking experiences that transcend traditional brick-and-mortar boundaries. In response, banks have embraced digitisation by developing user-friendly mobile

applications, offering online banking services, and exploring alternative delivery channels such as chatbots and virtual assistants to bolster the digital channels of banking.

This technological revolution has not only improved the customer experience but also transformed internal processes within banks. Automation and artificial intelligence have enabled banks to streamline operations, enhance efficiency and reduce costs. Tasks that were previously time-consuming and resource-intensive can now be automated, allowing employees to focus on more complex and strategic initiatives while building long- term solutions for customers.

In this era of digital disruption, banks are increasingly collaborating with Fintech start-ups and tech giants to leverage their expertise and stay ahead of the curve. These partnerships foster innovation and enable banks to offer cutting-edge solutions to customers. Embracing open banking initiatives, banks are also exploring data sharing partnerships and APIs (Application Programming Interfaces) to create an interconnected financial ecosystem that benefits both customers and industry stakeholders, by providing service to the customer through all possible modes.

The Digital & Technology Department has been focusing on the innovation, improvement and implementation of projects on Banks digital platforms be it, ATM, Net Banking, Mobile Banking, etc. The Bank also ensures the highest level of service and integrity of internal applications and infrastructural support to enable a seamless growth in the Banks business operations. Digital strategy of the Bank is instituted on 4 pillars viz. INPF i.e., Indulge (customer self-service), Nudge (assistance to be nudged to go digital), Purge (remove redundant processes using automation) and Forge (impactful Fintech partnerships). Enhancing self-service capability across channels, empowering branches with technology solutions to nudge the customers to go digital, automating manual processes at branches and back-offices to improve customer TAT using AI and RPA and tie-up with Fintechs are the integral part of the Banks overall strategy. The share of digital transaction of the Bank has grown to 95 per cent in the Financial Year 2022-23. The Bank also expects a considerable increase in digital transactions with the UPI facility being enabled through feature phones and introduction of digital currency. The Bank is planning to increase the share further in the coming Financial Year. Technology strategy focuses on leveraging cloud adoption, high availability,

fraud detection, cyber security, and modernisation of infrastructure to stay competitive and provide better services to the customers.

Retail Customers

The Bank offers best in class technology services to meet the diverse requirements of retail clientele. The technology stack includes well designed customer touch points and robust back end systems providing 24x7 digital availability of the highest quality to the customers, which inter-alia, include the following:

• Internet Banking - SIBerNet.

• Mobile Banking - Mirror +.

• All variants of VISA, Mastercard & RuPay Debit Cards are offered.

• Credit Card - Tie-up with One Card.

• RuPay Prepaid Cards.

• Atudent Smart Cards for Institutions- used for Identity cum financial transactions.

• ATM, Cash Recyclers (CRM) and Call Centre Solution catering to customers 24x7.

• ATM network that spread across the country, which supports Mastercard, VISA and RuPay cards allowing customers quick access to money.

• Aobile Banking with support for other Bank money transfer through UPI, IMPS, NEFT, and Bharat QR.

• Aissed call services for retrieving balance through SMS etc.

• Anline investment in primary and secondary markets offered to customers through ASBA and e-trade modes.

• Portfolio Investment Scheme for NRIs, allowing them to invest in Indian equity market.

• IMPS Facility to Exchange Houses for Foreign Remittance - For the international client exchange houses/banks. The Bank has introduced IMPS based fund transfer on a 24x7 basis in addition to NEFT.

• Issuer of FASTag for toll fee payment.

• Piosk based Financial Inclusion Solution to enable the Bank reach nook and corner of the country, even in remote villages using technology enabled tools.

• Payment Options such as Automated Clearing House (NACH) Payment Service, Cheque Truncation System (CTS), RTGS/ NEFT etc.

• Account Opening for NRI directly through Banks website.

• Introduction of Interoperable Cash Deposit (ICD) Machines to facilitate remittance through our recyclers to other Bank accounts and vice versa.

• Artificial Intelligence based banking services such as SAM and SONA (Chatbot).

• Aentral Plan Scheme Monitoring System (CPSMS), which links to the DBT (Direct Benefit Transfer) for instant receipt of Govt. subsidies to the beneficiaries of various Govt. schemes.

• SIB SWIFTe mobile App based instant account opening for individual Savings Accounts.

• Auick account opening facility at branch level through e-KYC acceptance with reduced paper involvement, processing time and interdepartmental dependency.

• Self on-boarding by opening SIB-Insta account through mobile devices using Aadhaar and PAN card.

• AYC Update and communication address modification through SIB Mirror Plus / SIBerNet.

• Are-Approved Personal Loan /Car Loan through Channels.

• Instant Demat account opening through SIBerNet.

• Aideo KYC solution for on-boarding customers digitally.

• IPO/ASBA through SIBerNet.

• Fully digital Electronic Bank Guarantee through NeSL platform.

• Sead Management/Compliant Management through CRM Software.

Corporate Customers

• The Bank has Internet Banking facility from Infosys which provides all the workflow capabilities required for each corporate. Moreover, it offers the security of Digital certificate integration thereby balancing convenience with security.

• The Bank also offers Host to Host Integration facility ("Hi-Hi banking") which will handle fund transfer in a seamless fashion by real time interface with ERP solutions of corporates. This facility is available for 365 X 24 X 7 and the clients can securely access the system from anywhere.

• Supply Chain Management Solution caters to the dealer/ vendor financing requirement of corporates.

• SIB PAYGATE provides the platform for the business entity to accept online payment through UPI, All Major Debit Card and Credit Cards, Internet Banking against the services provided Online.

• She Bank is offering business debit cards to the business customers.

• SIB FeeBook is an online event-based fund management/collection portal which enables organisations to create a payment portal as per their needs.

• On the business acquiring capabilities, the Bank has full suite of payment acquiring including POS terminals, Bharat QR, UPI QR, Payment Gateway etc. which gives the merchants a whole host of accepting payments instantly from their customers.

• !ntegration through APIs for full-fledged automation done with several corporate and Govt. agencies.

• Trade Finance Portal for Customers.

• VAN based NEFT/RTGS collection API.

• Somplete end to end NACH integration through API model for mandate creation, transaction processing etc.

Technology Infrastructure

• Core Banking Solution (CBS) from Infosys, viz. Finacle 10.

• Enhanced Security Operation Centre.

• ISO 9001:2015 Certified Bank owned Data Centre (DC).

• ISO Certified Disaster Recovery and BCP Setup.

• Zero Data Loss high availability setup with DC, DR and Near line DR Setup.

• Automation of procurement and payments.

• Process Automation using RPA.

• Full Fledged API banking system capable of quick integration.

• Fraud Risk Management (FRM) Solution for channel transactions.

• CRM solution providing 360 degree view of customers.

• Business Process Management (BPM) to enable centralisation.

• Technology backed Branch Infrastructure.

• Enterprise Risk Management Solution.

Digital/Technology Initiatives/Solutions embarked

during the FY 2022-23

The services/solutions that the Bank has launched during

the year inter-alia includes the following:

• SIB-IIFL Gold Loan Co-lending.

• Micro finance LOS.

• Online in-principle approval of GST Business Loan through Actyv.ai.

• System level integration with CBIC for Customs Duty payment.

• System level integration with CBDT for Direct tax payment.

• Whatsapp Banking.

• New Retail LOS System-Nucleus with Mobile App facility for Sales team/DSA/DST.

• Digital Banking Unit Launched.

• Document digitisation of Banks documents for retails loan.

• Centralisation of Banks payment of Expenses (CPMS).

• Centralisation of Outward Clearing Process.

• E-NACH facility with PAYCORP.

• Integration with Vaahan for Hypothecation cancellation.

• SIB SWIFTe - Mobile App for savings account opening.

• SIB Insta Business Current Account for opening Individual Current Account.

• Periodic KYC Update for customers with Unexpired KYC through SIBerNet/ Mirror+/Website.

• PAN, Driving License, Aadhaar and Voters Id update made available in SIBerNet /Mirror+.

• Loan Repayment and FD Opening for Corporates - SIBerNet.

• Telangana Treasury Integration with SIBerNet.

• Trade MIS Dashboard for corporates SIBerNet users.

• Deposit E-receipt in SIBerNet.

• Outward Remittance through Mirror+.

• Demat account opening through Mirror+ (NSDL).

• Credit Card bill payment through SIB Mirror+ - BBPS.

• NFC in Mastercard Debit Cards.

• New Bulk Mail Solution.

• Voice Guidance facility in CRMs.

• Voice Notification for UPI POS transaction.

• On boarding of exchange houses via API integration.

• Fund transfer facility for Kerala Forest Dept. Eco Tourism.

• VAN system for the electricity bill payment collections of KSEB.

• UPI facility to make payments to International Merchants.

• Virtual Account Integration for Unimoni Financial Services Ltd.

• Robotic Process Automation-15 processes has been automated.

• Application Program Interface (API) banking-190 APIs has been made live during FY 2022-23.

Awards and Certifications Received on Technology Front

The Bank has won various awards and accolades in the FY 2022-23 also. These awards are a testimony of the Banks strategy, commitment and execution of various digital/IT initiatives and has brought in acclaim from both customers and stakeholders.

18th IBA Banking Technology Awards	Best IT Risk Management - Winner Best Technology Bank of the Year- Runner Up Best Use of AI/ML Adoption- Runner Up Digital Sales & Engagement- Runner Up Technology Talent and Organisation- Runner Up Best Fintech Collaboration- Special Mention
11th UBS Forums Data Center Summit and Awards	Physical Security (Security Design)- Winner Risk Management (Availability)- Recognition Innovation - New Initiatives (Infrastructure) - Recognition Design Management (Infrastructure) - Recognition
Banking Frontiers Finnoviti Award - Best Innovation in Banking Technology Awards	Robotic Automation of Merchant Credit Processing
Krypton Groups BFSI Leadership Awards	Best App Modernisation Project of the Year: SIB Mirror+
Quantic Indias Technology Excellence Awards	Best Tech of the Year (Robotics & AI): RPA
IBS Intelligence Global FinTech Innovation Awards	Best Trade Finance Implementation
elets BFSI Tech Innovation Awards		Excellent Use of AI/ML - Jury Choice Award
CXO Tech Innovation Awards		Digital Innovation in Banking Systems
Data and AI ICON Awards		Best Use of Analytics in Lending
India CISO Summit and Awards		Innovation Security Leader of Year
Bharath FinTech and Digital Excellence Awards		Best CDO/CTO/CIO Award
Financial Express Power List		FE Visionary Leader CIO
12th edition TRESCON Big CIO Show		CIO Leader

IT Training

During the year, many training programmes had been arranged for the Banks officers in premier institutions such as IDRBT, Reserve Bank Innovation Hub, College of Agriculture Banking, etc. to keep themselves abreast with the advancements in Cyber Security, Security in Cloud Computing, Mobile App Security, FinTech, etc. The Bank has also tied-up with leading online technology training platforms to offer all year-free technology training and certification programmes for its technology team.

Business Continuity Planning

As per BCP Policy, the Bank has a full-fledged BCP and DR setup at Bangalore which is ISO 27001:2003 certified. Planned BCP drills are being conducted on a regular basis from BCP location to ensure preparedness of critical applications at DR, to face any emergency. The necessary infrastructure and technology are in place which is adequate and people are trained enough to respond and act quickly to a BCP or disaster recovery situation. BCP location is manned with adequate staff members who can handle the IT operations during disasters. Considering the pandemic situation like Covid-19, various measures were implemented including usage of laptops with Work From Home (WFH) or Work from anywhere for critical personnel with necessary security policies. Facilities for conducting meetings and conferences in online mode is also in place. Thus, ensuring uninterrupted customer services round the clock. As per recommendations from BCP Committee, zero data loss replication methods are implemented for primary to DR synchronisation. The Bank has implemented 3 way replication also for most critical applications, to achieve minimum data loss. A testimony of Banks robust BCP programme and preparation is that, during the forecasted

flood situation in 2020 and 2021, the BCP operations were invoked, and all critical systems were switched to DR in a time bound manner without any hindrance to customers and in pandemic period also customer services were not impacted by ensuring access from anywhere. The Bank also implemented necessary measures for cyber recovery and ransomware protection and its enhancement is performing on a continuous basis. Systems of the Bank worked at full potential capability without any disturbance to the customers during the period. The BCP policy for information systems is also periodically reviewed and updated with latest industry standards.

NEW PRODUCTS

During the FY 2022-23, the Bank has introduced new loan products to provide focused thrust on advances to Housing Loan, Gold, MSME and Agricultural Sectors. With increased environmental awareness among our shareholders and stakeholders, the Bank realised the importance of adopting Environmental and Social Management Practices for long-term business continuity and ensured more focus on funding the borrowers whose projects are sustainable and environment friendly.

During the FY 2023-24, the Bank is focussing on Commercial Vehicle/Commercial Equipment Division to finance small operators, fleet operators and strategic clients for their purchase of new and used Commercial Vehicles and Construction Equipment. A new fast track credit Product targeted at borrowers with high credit bureau ranking is also proposed to launch during the FY 2023-24.

Information Security and Risk Management

As banks adopt sophisticated technology to roll-out the most effective banking solutions to customers, they are increasingly exposed to technology risks. It is therefore imperative for each Bank to work out appropriate IT risk management strategies to secure its most vital information assets and to ensure that related Information Security, risk management systems and processes are strengthened and made secure for smooth and continuous banking operations.

• IT Departments including Data Centre, DR Site & BCP site and CISO Office are ISO 27001 certified for the implementation of Information Security Management System (ISMS). As a part of ISMS implementation, the Bank has prepared IS Security Policy and related IT risk management procedures.

• The Bank also ensures that all cyber security requirements as per statutory/regulatory guidelines

and best industrial practices are implemented on priority basis.

• The Bank has a full time CISO Office for surveillance of the security architecture/infrastructure and for coordinating security incident-response activities. The Bank has formulated Cyber Security Policy and Cyber Crisis Management Plan to provide guidance in addressing various cyber threat scenarios. The Bank has also identified various types of IT risks and the required preventive, detective and corrective cyber security controls are implemented/updated.

• The Bank has also ensured that Security Operation Centre (SOC) does 24/7 surveillance and keeps itself regularly updated on the latest nature of cyber threats. The Bank is using several monitoring tools for identifying, monitoring, recording and analysing security events or incidents within the real-time IT environment.

• The Bank has put in place a number of security solutions to manage cyber-attacks. The Bank has implemented multiple advanced security solutions to protect IT infrastructure, employees, customers, partners etc. from malware, advanced persistent threats, denial of service type of attacks and variety of other threats and malicious attacks.

• The employees are updated with the latest security threats and the best security practices. In order to ensure continuous awareness on best cyber security practices and cyber security risks, a dedicated internal web portal to disseminate relevant security information has been set up and it is accessible to all the employees.

• The Bank provides cyber security awareness to its customers on a continuous basis through various channels like SMS/Email/Website/Social media, etc. Cyber Jagrookta (Awareness) Diwas is observed on the first Wednesday of every Month as advised by the Ministry of Home Affairs, Govt. of India to create awareness for prevention of cyber crimes.

• The Bank is also committed to Data Privacy of customers, employees, stakeholders, etc. and is undertaking initiatives to further enhance and improve its Data Privacy posture.

Measures for the effective implementation of Cyber

Security Framework and management philosophy

Effective measures have been taken to address the gaps,

if any, identified, in each area such as IT Governance,

Information Security, IT Service outsourcing, IS Audit, IT

Operations, Cyber Frauds, Business Continuity Plan (BCP), Customer Education and Legal issues. Information Security policy is periodically revamped incorporating various guidelines and stipulations mentioned in regulatory framework/guidelines/other best practices. In addition, other relevant IT Policies such as IT Operations Policy, IT Governance Policy etc. are also enforced.

Various management level and Board level committees are in place to oversee the related activities. Cyber security preparedness of the Bank is reviewed by Information Security Committee, IT Strategy Committee of Board and Board of Directors on a quarterly basis.

Gopalakrishna Committee recommendations, management philosophy & measures for the effective implementation of Cyber Security Framework

Effective measures have been taken to address the identified gaps in each area such as IT Governance, Information Security, IT Service outsourcing, IS Audit, IT Operations, Cyber Frauds, Business Continuity Plan (BCP), Customer Education and Legal issues. Information Security policy is revamped incorporating various guidelines and stipulations mentioned in regulatory framework/ guidelines/other best practices. In addition, other IT Policies such as IT Operation Policy and IT Governance Policy are also enforced.

IT Strategy Committee of the Board, IT Steering Committee and Information Security Committee are in place. Cyber security preparedness of the Bank is reviewed by Information Security Committee and IT Strategy Committee.

BANKING OPERATIONS GROUP (BOG)

The Banking Operations Group (BOG) has been set up to centralise and to streamline various operations which were happening at branches/sales/product, making them free from those operational activities. This helps to empower the sales teams/branches to focus and garner more business, improving the top line as well as bottom line of the Bank.

BOG operates at different geography Pan India. To ensure business continuity, BOG is present at 6 states in India, operational from different locations - Ernakulam, Kottayam, Chennai, Coimbatore, Hyderabad, Bangalore, Pune & Delhi.

Delhi and Pune centres has been functional since March 2023, to provide extensive support to business verticals

covering Delhi, Kolkata, Mumbai and Ahmedabad Regions for specified operations.

BOG operations are of hybrid in nature - in house and outsourced.

Outsourced personnel are predominantly employed from Banks wholly-owned subsidiary M/s. SIB Operations and Services Limited.

BOG covers the following functional operations in a centralised environment with a view to bring standardisation of processes and procedures, scalability in line with business expansion, compliance with regulatory and statutory requirements, enforcement of internal controls, besides expeditious service to the customers.

A) Asset Operations

Banking Operations Group (BOG) - Asset Operations covers the following functional operations which centrally carried out and managed:

1. Detailed Data Entry of Retail and Agri Loans.

2. Loan document preparation and verification of executed documents.

3. Loan Opening and Disbursement of Retail and Non-Retail Loans.

4. Capturing Collateral details and facilitate CERSAI registration in all the applicable cases.

5. Central Subsidy Schemes - Education, MSME, Export.

6. Storage of Loan Documents.

7. OTS (One Time Settlement) Validation and Vetting.

B) Liability Operations

Liability Operations include relationship and servicing, covering the following:

1. Retail & Corporate Account Opening

2. Accounts/Customer Modifications

3. Re-KYC/Periodic KYC Updation/C-KYC

4. Digital Account Openings (Diya, Insta, SIB SWIFTe and Video KYC)

C) Reconciliation and Digital Channel Support Operations

Reconciliation operations covers the following areas:

1. Dispute management and reconciliation process of:

i. Debit Cards (NFS,MASTERCARD/MAESTRO, VISA, RUPAY)

ii. RUPAY PREPAID CARDS

iii. ONECARD Credit Card

iv. NFS,IMPS,UPI, ONUS POS, AEPS, BBPS, ICD, NETC Fastag

2. Managing issues pertaining to unauthorised Electronic Transactions and ATM cash shortage.

D) Retail Product Support

As part of the transformation, the Bank is in the process of bringing the operational activities under a single entity - Banking Operations Group (BOG), which shall facilitate business verticals to drive sales and marketing activities with a focused approach. Retail product support currently includes the following:

1. PFMS/WPS

2. NPS/APY

3. Internet Banking/Hi-Hi Banking

4. Debit Card

5. Aadhaar Centre Operations

6. POS/UPI POS

7. Travel Card

8. Payment Gateway/SIB Fee /E Academia /Fee Book

9. DEMAT

E) Payment & Settlement Operations

Payment & settlement operations covers:

1. RTGS/NEFT

2. CTS Operations

3. NACH Operations

F) Trade Finance Central Processing Center (TFCPC)

TFCPC undertakes the Trade Finance Operations of the Bank centrally. During the FY 2022-23, the entire supply chain operations were migrated to Vayanas full-stack platform which works as a bridge, connecting with the Banks back end while communicating with the ERP of each individual corporate and MSME. The project won the award for Best Project Implementation of the fourth edition

of the IBS Intelligence Global FinTech Innovation Awards 2022.

e-BG (Electronic Bank Guarantee) facility in partnership with National E-Governance Service Limited (NeSL) was also introduced by TFCPC during the year under review.

The following operational activities are centralised at TFCPC:

1) Inward and Outward Remittances

2) Export Bill Operations and Post Shipment Finance

3) Import Bill Operations

4) SWIFT Operations

5) Issuance of LC and BG (Foreign and Domestic)

6) Other Forex Operations (Foreign Cheques, Vostro, Money Transfer Services, FCNR Deposits etc.)

7) Supply Chain Finance

G) Cash Management Cell

Cash Management Cell at BOG covers the following:

1) Cash replenishment and monitoring of outsourced ATMs.

2) Cash Management of the Branches and Currency Chests.

During the FY 2022-23, BOG-Cash Management Cell has implemented Cash Movement Services, which is carried out by the outsourced vendors in Chennai City.

Way Forward

BOG proposes to commence/expand the following operational activities during the FY 2023-24 as part of the vision of the Bank.

1. Expansion of new Retail LOS platform-Nucleus Pan India

2. MSME New LOS Platform

3. Treasury New Application

4. Customer Modification through V KYC

5. Automation and Outsourcing of more operational activities to reduce cost of operations

6. GST Dispute Management system of NPCI

7. Completion of ATM Cassette Swapping in line with RBI directives

8. ASBA and Sovereign Gold Bond (SGB) Operational activities

9. Currency Chest Operations at Kannur and Ernakulam

10. Completion of Outward clearing centralisation

11. eNACH for Corporates

12. PPS for 5 lakhs and above in CTS mandatory

13. RTGS/NEFT centralisation

14. SWIFT ISO 20022 migration

15. TFCPC BCP at Coimbatore location

Asset and Liability operations of BOG has been awarded with the ISO 9001:2015 Quality Management Certification during the year.

SLA based delivery, FTR based TAT, Productivity based optimal operation, feedback based refinement and enrichment are the key parameters, BOG reckons to function as a Centre of Excellence in operations.

COMPLIANCE DEPARTMENT

The Bank has institutionalised a strong compliance culture and mechanism across the organisation, in pursuit of its strategic goals of transparency and trust, among all its stakeholders. The Bank has a dedicated independent Compliance Department headed by a Joint General Manager which operates as per a well- documented compliance policy for ensuring regulatory compliance, across all businesses and operations. The key functions of the department include tracking of regulatory updates affecting various business verticals of the Bank, dissemination of regulatory updates to functional units, monitoring of timely implementation of regulatory instructions, review of processes from a regulatory compliance perspective, providing guidance on compliance-related matters, vetting of Banks policies and internal guidelines, imparting training to employees on compliance aspects among others. The Bank has a well-defined and structured mechanism to assess the compliance risk and monitor its mitigation measures, thereby ensuring the effectiveness of the compliance function in managing the compliance risk. Compliance officials have been designated in all business units and departments for monitoring and mitigation of compliance risk. All the circulars of the Bank are made available in electronic form. Banks policies, guidelines and forms are also uploaded in software platform so as to empower the branches with readily accessible pool of information/ guidelines.

DATA SCIENCE DEPARTMENT

The Bank has a full-fledged Data Science department, with the primary objective of accelerating and improving decisionmaking with valuable insights, optimising internal business processes, enhancing operational efficiencies, driving new revenues and gaining competitive advantage over business rivals and thereby achieving the pre-determined corporate goals in an engineered manner. This Department has already rolled out several Business Intelligent reports and descriptive analytical reports which gives meaningful insights to the top management for quicker and right decisions and thereby assisting in the total Business growth of the Bank. The Data Science Department has also built an in-house regulatory reporting solution as per the specifications of the Reserve Bank of India so as to automate Banks regulatory reports and its online submission.

On the data analytics, the department has built and implemented several Descriptive analytical models for providing valuable insights to the top management and operations staff. The Bank has also deployed a few Predictive analytical models for identifying the right customers to extend various asset products like Digital Pre-Approved Personal loan, Digital EMI loans, targeted marketing, Optimising cash at ATMs, etc. Data Science Department has also put in place a single centralised data repository after collating data from CBS, other internal surround source systems and also from the external sources. This centralised data repository serves act as the data warehouse for the Bank with separate data marts for the specific requirements.

RISK MANAGEMENT

Risk is an integral part of banking business. In the recent past, the Bank has exerted focused efforts in building a robust, and sustainable risk governance framework and to create risk awareness culture across all tiers of the organisations hierarchy and continuing to do so. Various initiatives such as comprehensive review of Credit Risk Policy and other Risk Management Policies has been conducted along with other process improvement. Liquidity is also actively being managed through the ALCO forum, where the Bank is pursuing actively into increasing the sticky and retail deposits along with operationalising majority of the wholesale banking financing relationships. As part of the Business Continuity Management, the Banks Operational Risk team is working in close coordination with various stakeholders to ensure smooth conduct of operations.

Risk Management underscores the fact that the survival of an organisation depends heavily on its capabilities to anticipate and prepare for the change rather than just

52

waiting for the change and react to it. The objective of risk management is not to prohibit or prevent risk taking activity, but to ensure that the risks are consciously taken with full knowledge, purpose and clear understanding so that it can be measured and mitigated. The essential functions of risk management are to identify, measure and more importantly monitor the risk profile of the Bank. Managing risk is fundamental to banking and is the key to sustained profitability and stability. Management of risk aims to achieve best trade-off between risk and return and to maximise Risk Adjusted Return on Capital (RAROC). Sound risk management is critical to a Banks success. Business and revenue growth have therefore to be aligned with Risk appetite in the context of the risks embedded in the Banks business strategy and balance sheet. Of the various types of risks the Bank is exposed to, the most important are credit risk, market risk and operational risk. The identification, measurement, monitoring and mitigation of risks continue to be key focus areas for the Bank. The risk management function attempts to anticipate vulnerabilities at the transaction level or at the portfolio level through qualitative and quantitative examinations of the embedded risks. The risk management strategy of the Bank is based on a clear understanding of various risks, disciplined risk assessment, risk measurement procedures and continuous monitoring for mitigation. The policies and procedures established for this purpose are continuously evaluated and benchmarked against the best practices followed in the industry. Through continuous refinement/improvement of the risk measurement/ management systems, including automation of feasible processes, the Bank aims to ensure regulatory compliance as well as better return on and utilisation of capital in line with the business objectives. The Risk Management Department received Certificate of Approval under ISO 9001:2015 Standard during the FY 2022-23. There are no elements of Risk identified, which may, in the Opinion of the Board, threaten the existence of the Bank.

With an objective to be socially and environmentally sustainable, the Bank has established an Environmental and Social Management System (ESMS) Policy which defines guiding principles for mitigating the Environmental & Social (E&S) risks arising out of Banks lending activities. This approach integrates Environmental & Social factors in addition to the various credit, operational & financial risk factors, while undertaking high value lending and investment decisions. The policy also prescribes an exclusion list consisting of activities prohibited for lending operations considering their negative impact on the environment and the society.

RISK APPETITE

Risk appetite of the Bank refers to the level of risk that the banking organisation is prepared to accept in pursuit of its financial and strategic objectives, before action is deemed necessary to reduce the risk. It is determined through the assessment of risk taking capabilities of the Bank in the form of sound risk mitigation techniques and capital base. Risk Appetite forms a key input to the business and capital planning process by linking business strategy to risk appetite. Risk appetite of the Bank is defined by the Board of Directors through the Risk Appetite Framework which encompasses the general risk appetite of the Bank as well as risk appetite with respect to specific categories of risks. Qualitative and quantitative measures, risk tolerances as well as targeted limits for various categories of risks are included within the risk appetite and are monitored on a quarterly basis. The framework ensures that aggregate risk exposure of the Bank is always within the desired risk bearing capacity. Further, constant monitoring of such limit is done by Risk Management Department to ensure that activity of the stakeholders is well within the Board approved limits.

RISK MANAGEMENT POLICY FRAMEWORK

The Bank has a comprehensive policy framework which contains separate policies for identification, measurement and management of all material risks including but not limited to credit, market, operational, liquidity and other Pillar-II risks. The Bank has put in place an integrated risk management policy which ensures independence of the risk governance structure. The required standard operating procedures also follows the Policies to ensure that all the parameters are well covered while implementing the approved polices.

RISK MANAGEMENT PRACTICES

It is imperative to have robust and effective risk management practices not only to manage risks inherent in the banking business but also the risks emanating from financial markets as a whole. The Bank has in place a robust risk management structure which proactively identifies the risks faced by the Bank and helps in mitigating the same, while maintaining proper trade-off between risk and return thereby maximising shareholder value.

The Bank has put in place independent risk management architecture and practices that are overseen by Risk Management Committee of the Board (RMCB). Appropriate policies to manage various types of risks are approved by the Board of Directors after review by Risk Management Committee of the Board (RMCB), which provides strategic

guidance while reviewing portfolio behaviour. The senior level executive committees like Credit Risk Management Committee (CRMC), Market Risk Management Committee (MRMC), Operational Risk Management Committee (ORMC) and Asset Liability Management Committee (ALCO) develop the risk management policies and vet the risk limits to ensure better control.

a) Credit Risk Management:

Credit risk management policy defines credit risk as the possibility of losses associated with the diminution in the credit worthiness of the borrower or the counterparty or the failure on the part of the borrower to meet its obligations in accordance with the agreed terms. The Bank has a comprehensive credit risk management framework, which deals with identification, assessment, measurement and mitigation of credit risk. The Bank has devised two-dimensional rating system and retail scoring system in line with RBIs guideline on Internal Rating Based (IRB) approach. Further, the Banks Board has approved the methodology for estimation of risk components namely Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD) for its Corporate and Retail exposures. The Credit risk of the Bank is overseen by RMCB at Board level and Credit Risk Management Committee (CRMC) at executive level. Of the strategic measures employed in managing credit risk, risk rating occupies a position of prominence, as it involves the rating of borrowers from a risk perspective for the purpose of credit decision, pricing and supervision. RMCB/CRMC approves the launch/modification of new rating models/scorecards, exposure ceilings, oversees the monitoring of size, rating distribution and concentration of credit exposures, and timely amendments/review of Credit Risk Management Framework. Credit Risk Management cell, which functions under their guidance executes the directions of RMCB/CRMC and it ensures that appropriate system level changes (including IT) are also implemented. For the purpose of credit risk assessment, the Banks exposure is broadly classified into retail and non-retail. All corporate loans are rated using dual rating models/specialised lending rating models and retail exposures are scored using scorecards. Ratings and scorings are performed in proprietary automated platforms which ensure integrity, objectivity and consistency of ratings. Further, rating/scoring data is captured in core IT systems of the Bank to facilitate seamless reporting

and timely validation of rating models/scorecards. The Bank has deployed system level validations/ checks to ensure timely review of borrower ratings and capture of scoring information of all retail loans at granular level. Bank has eight non-default rating grades and one default rating grade. The customers are assessed based on their financial performance, industry characteristics, business positioning, project risks, operating performance and other non-financial parameters, such as quality of management and conduct of account. The Bank validates its rating models and scorecards on an annual basis. Corporate/Retail loan applications sourced at different Business units are processed at Centralised Processing Centres.

The corporate loan proposals are independently reviewed by Risk Management Department during the risk rating process. Committee system of loan approvals have been implemented in the Bank for exposures that fall beyond the powers of individual functionaries. A well-defined approval matrix is in place for approving exceptions. Credit Mid Office Group (CMOG) has been set up to ensure compliance of pre-disbursement conditions before issuing clearance certificate for non-retail loan account opening. Post disbursement, CMOG will ensure compliance with critical post-disbursement/special conditions specified in the sanction order and also track activities that happen at regular intervals like stock statement submission. A dedicated Market Intelligence Unit (MIU) attached to Risk Management Department comes out with detailed reports every quarter on the outlook pertaining to different industry sectors. Early Warning System has been put in place to enable the Bank to take proactive measures for addressing the possibility of credit quality deterioration of specific borrowers. The pricing system is suitably aligned to the cost of funds and to the perceived risk that a borrower poses. Appropriate credit underwriting and approval processes, risk mitigation, post-disbursement monitoring and timely remedial actions are part of the credit risk management. Segment-wise and borrower category-wise exposure limits are fixed and monitored by the Bank to address the risk of concentration. Rating migration studies and default rate analysis, based on the credit risk rating of the borrowers, are undertaken on a periodic basis to analyse the changes in credit risk profile of the borrowers and to provide input for policy and

strategic decisions. The portfolio analysis of various products/industries, covering various credit quality indicators are being carried out on a periodic basis for identifying portfolio trends, and generating portfolio level MIS. PD Term structure and LGD estimates are used as inputs for ECL computation under Ind-AS, for proforma reporting purpose.

b) Market Risk Management:

The Bank has laid down comprehensive policies, framework and procedures to manage market risk in a holistic manner. The Investment Management Policy lays down broad guidelines to proactively manage market risk. The Board, supported by the Market Risk Management Committee (MRMC), frames the Market risk management policy, which details the methods to identify, measure, monitor and control market risks. The Bank has dedicated independent mid-offices for forex and domestic treasury at Treasury Department, reporting directly to the head of the Risk Management Department. The mid-offices closely monitor market risk inherent in treasury dealings. The market risk at an overall level is measured by applying techniques, such as VaR and Modified Duration. The stop loss levels for individual securities and limit framework for different categories of investments play a pivotal role in controlling market risk associated with different securities at micro level.

c) Operational Risk Management:

The Bank has developed and implemented an operational risk management framework that is fully integrated into the Banks overall risk management system. The Bank has put in place processes, systems and procedures to actively manage and mitigate operational risks and to optimise resources not only to protect the interests of the Bank but also to ensure return commensurate with the risk profile adopted. Identification and assessment of risk together with the assessment of control effectiveness are key to Operational risk management process. The Bank has put in place risk management tools like Risk and Control Self-Assessment (RCSA) and Key Risk Indicator (KRI) frameworks to ensure continuous monitoring, evaluation and trend analysis of various risk elements. All new products and processes are reviewed and approved by the Risk Management Department and thus, it is ensured that all risks involved in new products and

processes are clearly documented and adequate procedures and controls are implemented well before the launch /implementation of product/ process. Further, organisational wide awareness programme on importance of operational risk, timely and adequate reporting of incidents in any nature is also initiated. In order to ensure adequate and timely identification, measurement, monitoring, control and mitigation of reputation risk posed by the business, a Board approved reputation risk management policy is put in place. With a view to monitor reputation risk emanating from various forms of media, a Media monitoring mechanism is put in place to ensure timely and proactive identification and mitigation of risk. Risk drivers for reputation risk is identified and monitored on a quarterly basis. Quantification of reputation risk is accomplished through Reputation risk scorecard and is undertaken on a quarterly basis along with the ICAAP process. Further, a reputation risk matrix is prepared to identify the magnitude and direction of various risk drivers. The Bank is also evaluating the criticality of outsourced activities based on the foreseen inherent risk and the risk score/level of the respective activity. The Operational Risk Management Committee is monitoring and reviewing the overall outsourcing risk management.

d) Liquidity Risk:

Liquidity risk refers to the risk that the Bank is unable to meet its obligations as and when they fall due. The Asset Liability Management Policy of the Bank stipulates broad framework for liquidity risk management to ensure that the Bank is in a position to manage its daily liquidity requirements and to withstand stress situations stemming from, Bank-specific factors, market-specific factors or a combination of both. Asset Liability Management Committee (ALCO) of the Bank, comprising of senior executives of the Bank oversees Asset Liability Management (ALM) functions within the framework prescribed under the ALM Policy and other relevant policies and guidelines. The core objective of the ALM policy adopted by ALCO is to ensure planned and profitable growth in business through appropriate management of the liquidity risk and interest rate risk. The ALCO is responsible for (i) recommending pricing of deposits and advances, (ii) preparing forecasts showing the effects of various possible changes in market

conditions, (iii) recommending appropriate actions in anticipation of such forecasts, (iv) deciding on the desired maturity profile and mix of assets and liabilities, and (v) conducting funding, capital planning, profit planning and growth projection.

The liquidity profile of the Bank is analyzed on a static as well as on a dynamic basis by using the gap analysis technique supplemented by monitoring of key liquidity ratios and periodic liquidity stress tests. The Bank has put in place a liquidity risk management framework adhering to the guidelines issued by RBI on liquidity risk management and the best practices. These include the intraday liquidity management and monitoring of the Liquidity Coverage Ratio (LCR)and Net Stable Funding Ratio (NSFR).

e) Information Security and Cyber Risk Management:

I n order to provide guidelines for cyber security related initiatives, a Board approved Cyber Security policy is in place. Also, Cyber Crisis Management Plan (CCMP) is in place to provide the requisite strategy, direction and roadmap towards cyber threat mitigation. Digital and Technology Department and CISO Office are ISO 27001 certified for the implementation of Information Security Management System (ISMS). As a part of ISMS implementation, the Bank has prepared IS Security Policy and related IT risk management procedures. The Cyber Security governance is a part of Banks Information Security framework. In order to consider cyber security from the Bank-wide perspective, a steering committee of executives known as Information Security Committee is formed with formal terms of reference. The Chief Information Security Officer (CISO) is the member secretary of the committee. The committee serves as an effective communication channel for managements cyber security aims and directions. The Committee also guides and monitors development, facilitation and implementation of Cyber Security Policies, standards and procedures to ensure that all identified risks are managed within the Banks risk appetite. Also, the Bank has a comprehensive Incident Management procedure which proactively address potential threats/risks arising out of cyber security incidents. The incident management procedure specifies the requirements for establishing, implementing, maintaining and

continually improving incident management process as applicable to IT in the Bank. Key Risk Indicators are used to track various security parameters and their progress/ changes. Regular IS audits and VA/PT is carried out to assess the vulnerabilities, if any, in the IT systems.

The Bank has a fully operational Security Operation Centre (SOC) and network & end point security devices to monitor any security incident and to take appropriate actions. SOC is operational on a 24x7 basis. The Bank is using several monitoring tools for identifying, monitoring, recording and analysing security events or incidents within the real-time IT environment.

Employees are updated with the latest security threats and the best security practices. In order to ensure continuous awareness on best cyber security practices and cyber security risks, a dedicated internal web portal to disseminate relevant security information has been set up and it is accessible to all employees.

The Bank provides cyber security awareness to its customers on a continuous basis through various channels like SMS, Email, Website, Social media etc. Cyber Jagrookta (Awareness) Diwas is observed on the first Wednesday of every Month as advised by the Ministry of Home Affairs, Govt. of India to create awareness for prevention of cybercrimes. The Bank is also committed to data privacy of customers, employees, stakeholders etc. and is undertaking initiatives to further enhance and improve its data privacy posture.

f) Business Continuity Plan:

The Bank has a comprehensive Business Continuity Plan (BCP) to ensure continuity of critical business operations of the Bank identified through criticality assessment using Business Impact Analysis (BIA), at times of disruptions. In line with the Business Continuity Plan, the Bank has constituted a BCP Committee incorporating the heads of all major departments, to exercise, maintain and invoke business continuity plan as needed and to ensure that the business functions are back to normalcy with minimum delay. As a measure to enhance the Banks operational resilience and to effectively manage adverse situations, a Crisis Management Group (CMG) is instituted with objectives to ensure safety of stakeholders and to ensure that critical business

processes continue to function during the crisis, to the extent possible Disaster Recovery drill for the Core Banking System (CBS) and critical IT systems of the Bank is conducted at regular intervals to ensure the continuance of the same during emergency situations. The Bank undertakes periodical testing of recovery speed of critical applications from alternate location. The Bank has taken multiple steps including enabling alternate locations, work from home facilities, etc. to ensure Business continuity.

INTERNAL CONTROL AND AUDIT/INSPECTION Internal Control and their Adequacy

The Bank has put in place extensive internal controls and processes to mitigate operational risks, which includes maker checker authentication of CBS transactions, centralised processing of opening and modifications of CASA accounts and loan accounts, centralised sanctioning of loan facilities etc.

Various Preventive controls viz., Dual custody for cash, gold and other security items, maintenance of daily control registers for security items, finger-scan-authentication for processing of transactions in CBS in addition to login passwords, stringent guidelines on password usage, STP processes between CBS and payment interface systems for transmission of messages etc. are in place.

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

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

Audit/Inspection

The Bank has an Inspection & Vigilance Department which is responsible for independently evaluating the adequacy and effectiveness of all internal controls, risk management systems, governance systems and processes. The Department is manned by appropriately qualified personnel to handle the Risk Based Internal Audit,

Management Audits, Information Systems Audit and Special Audits including Investigations. All the internal audits are conducted based on the RBI direction in relation to conducting risk based internal audit and concurrent audit of branches and identified critical processes of the branches.

Head of Internal Audit & Vigilance is directly reporting to MD & CEO.

Internal inspectors conduct inspection at regular intervals and the inspection reports are placed to Audit Committee at Executive level (Sub Committee of Audit Committee of Executives (SACE)/Audit Committee of Executives - ACE) for review, which is overseen and controlled by Board Level committee (Audit Committee of Board - ACB).

All activities (including outsourced activities) of the Bank and the Subsidiary Company fall within the ambit of Internal Audit.

Audit of Branches

All the branches are subjected to Risk Based Internal Audit (RBIA). This audit is conducted at periodic intervals based on the risk perception. All the audits are conducted based on predefined check points and all the operational areas are covered under this audit. Credit audit is also conducted as part of Risk Based Internal Audit where aggregate credit exposure of a borrower is 5 crore and above.

In addition to RBIA of branches, the Bank has concurrent audit system, which covers selected Branches, conducted by qualified Chartered Accountants/retired officers. The selection of branches for concurrent audit is done in such a way that it covers branches having substantial advance or deposit, entire specialised Branches such as B Category Branches, Corporate Branches etc., and all poorly rated branches as per the latest rating awarded.

In addition to the concurrent and risk based internal audits, the branches are subjected to Surprise Inspection, Flash Inspection, IS Audit, Revenue Inspection, SelfAudit, Gold Loan Inspection/ Asset Verification and compliance inspection during the financial year. Separate monitoring team - Inspection Monitoring Group (IMG) closely monitors various inspections/audits at the Branches. There are six IMGs who are reporting to Head of IMG. These Monitoring Groups are assigned the task of ensuring the compliance and closure of the inspection report of the branches. During the course of inspections, serious issues if any, concerning regulatory

guidelines, legal requirements and operational processes are found, these are escalated to the Management for timely action.

All the branch related audits are presently automated through system where reporting, risk rating, compliance and closure of the reports are done through software application which provides the Bank with an overall control on various audits conducted in the branches. Continuous improvements are made to the application to automate several activities at HO and digitise the records in single application.

Audit of Departments and critical process

Management Audit of Regional Offices (RO) and Departments are conducted to review the managerial aspects like organisational objective, policies, procedures, structure, control and systems in order to assess their efficiency and performance.

As part of the transformation process, new exclusive asset verticals and specialised operational groups were formed by Bank and these verticals are also covered under Management Audit. The scope of audit in each vertical are based on nature/function/services/business achievement carried out by them in line with the Regulator as well as internal guidelines.

The Management Audit is conducted at periodical intervals based on the risk perception of respective office.

In addition to the management audit conducted by inspection department, all the critical operations such as International Banking Division, Treasury Department, Credit Department and Centralised Processing Centres, etc., are subjected to concurrent audit by independent Chartered Accountant firms. All these reports are reviewed by Audit Committee of Executives (ACE/SACE) and corrective steps are taken to rectify the lapses/ irregularities, if any, pointed out in such inspection reports as recommended by vetting department.

Information System Audit of CBS and major applications are conducted by internal audit/ external audit firm. The IS audit team also undertakes a general scrutiny of the efficiency of the information system at branch level and its rating so as to enhance the internal controls.

New product/process whenever introduced in the Bank is reviewed by Inspection Department and recommendations are made for necessary controls/improvements for deficiencies/gaps observed in existing internal controls.

Inspection Department also carries out independent evaluation of Banks internal financial controls in terms of Companies Act, 2013 and also the adequacy of internal financial controls with reference to the Financial Statements.

INTERNATIONAL BANKING

The total forex business turnover for the year ended March 31, 2023 was 5,90,086.85 crore (comprising Merchant Turnover of 21,736.64 crore and Interbank Turnover of 5,68,350.21 crore). The Bank has earned an exchange profit of 51.54 crore for the FY 2022-23.

At present the Bank is having rupee inward remittance arrangement with 3 banks and 45 Exchange Houses and the turnover for the year ended March 31, 2023 was 14,466.41 crore. The Bank has concluded speed remittance arrangement during the FY 2022-23 with the following Exchange Houses:

• Doha Exchange Co WLL, Qatar

• Bahrain India International Exchange Co. BSC (c), Kingdom of Bahrain

• U Remit International Corporation, Canada

• KMB International Money Transfer Ltd, United Kingdom

• ZamZam Exchange LLC, Jordan

• Wasel Exchange SAOC, Oman

The Bank has continued providing managerial support to M/s Hadi Express Exchange, UAE. The Bank has presently deputed 10 officers of the Bank to manage the operations of Hadi Express Exchange. Considering the scope in improving the remittance business through arrangements with exchange houses, the Bank has deputed 11 officers to UAE, 3 officers to Qatar with City Exchange, Doha, Qatar, Al Dar for Exchange Works and M/s AlFardan Exchange LLC, Doha Qatar and 2 officers to Oman with Joy Alukkas Exchange and Purushottam Kanji Exchange Co LLC and 1 officer to Kuwait with UAE Exchange Kuwait WLL.

The Bank has opened three new nostro accounts in USD, EURO and GBP with J P Morgan Chase N A during the FY 2022-23. Following are the digital initiatives launched by the Bank in Forex and Trade Finance segment which enable customers to initiate Cross Border Transactions online with convenience, secure, fast and paperless.

• The Bank has rolled out the new product "Online Foreign Outward remittance" in the Internet Banking platform (SIBERNET) for Resident SB & NRE SB clients. The same facility is also available

in SIB Mirror+ mobile App under the module "Remit Money Abroad". This will enable the customers to initiate outward remittances in 100+ currencies via online without visiting the branches. Customers can also initiate outward remittance request in online 24x7 including Holidays in US Dollar Currency and other currencies during the daily market timings.

• "SIB TF ONLINE-" new portal for Trade Finance customers has been made live for initiating import related payments during FY2022-23. This facility will reduce the cost, manpower and TAT of clients as well as Bank. The advantage is that clients can initiate Forex transactions 24 X 7 through online mode. Currently, in the Phase I of SIB TF ONLINE, import transaction modules are available for clients. Other forex transactions in SIB TF ONLINE portal will also be made available in the next phases.

• Trade MIS dashboard was implemented during FY 2022-23, wherein outstanding Letter of Credit (Foreign/Inland), Foreign Bank Guarantee, Forward Contracts, Export/Import Bills and outstanding shipping bills is made available in the corporate internet banking under TF online- Trade MIS module.

NRI PORTFOLIO

The NRI business has crossed the significant milestones of 4.50 lakhs NRI customers and 28,000 crore book size in FY 2022-23 and the NRI deposits constitute almost 30 per cent of the Banks total deposits. As a part of the strategy for the next phase of business growth, the business vertical has implemented some key initiatives and these will be enhanced over the next FY too to consolidate our business growth. Some of the key initiatives and focus areas for the business were:

a) Foreign Exchange Advisory Cell

The Bank has launched Foreign Exchange Advisory Cell to provide advisory services by subject experts on FEMA rules and trade finance related issues to the general public. The complimentary service is available to all Foreign Exchange Trade Fraternity.

b) Business growth initiatives

• The business acquired over 53000 NTB customers during the year which has been the highest ever in any financial year.

• The business team and Banks representative office enhanced tie-up with exchange houses in Kuwait and Oman to tap new markets with a large Indian diaspora.

• Digital presence and non-Face-to-Face sourcing was given a new focus and this initiative will be further ramped up to acquire customers through new markets.

• Micro marketing activities and sponsorship of NRI events was also focused upon during the year and supported various events in UAE, featured advertisements in FM radio channel in Hindi, Tamil along with Malayalam in Dubai and also organised an NRI meet in Thiruvalla, India.

• Visibility and presence inside and in the exteriors of the branches were also focused upon and NRI welcome arches, posters, displays and brochures etc. were placed in potential branches.

c) Product innovation

• Keeping in line with the business growth initiatives, the Bank has launched Seafarer and Pulse accounts to cater to Mariners and Health Care professionals who are NRIs. The business team is also planning to launch new products for students going abroad and IT professionals. The Bank would continue to focus on creating customer centric products.

• Existing products have been redesigned to enhance customer convenience. Now customers can maintain deposits as an alternative to minimum balance criteria.

d) Enhancing sourcing quality

The NRI business has also focused on enhancing the customer relationship value through sourcing higher value variants like gold and platinum, higher value initial payment, cross selling PIS & recurring deposits to NTB customers, deepening on priority program to ensure family accounts of the customers etc.

• Updation of email and phone numbers to maintain customer connect.

e) Customer service

• The Bank had set up the NRI Service Centre (NSC) to provide a dedicated service point to the NRI customers. The same has been operational for the full year and has resulted in enhancement of customer service levels. This has enabled sourcing of additional business through NSC. NSC has also been successful in converting leads from the calling activity and sourcing New to Bank customers for the Bank.

• Monthly newsletter, "NRI Connect" provides relevant information and update on the Banks initiatives is being sent every month to NRI customers.

• The Bank has also provided a dedicated & trained team to process newly sourced accounts resulting in quicker account opening and ensuring that all

accounts are compliant with current regulatory norms & requirements.

The NRI Business will continue to focus on new initiatives like product innovation, enhancing sourcing quality etc. which will enable a sustained business growth in future.

TRAINING

The Bank accords utmost importance to Capability Building of its employees. Regular up-skilling of the staff members is the stated goal of the Human Resources L & D unit. To meet this objective, the Bank has divided the competency building activity in 2 mutually collaborative units:

Learning and Development:

The HR - L&D, Ernakulam focuses primarily on developing e-learning and other digital learning modules for the benefit of all staff members. The Team has successfully created and published content to address most of the functional and behavioural skill needs of the staff members of the Bank across grades. These are self-service learning units that have been rolled out to the employees via the Learning Management System (LMS) named, SIB iLearn. In the 2022-23, the unit has published 64 courses, which translates to 180 credit hours of learning. The LMS is regularly accessed by the entire workforce of the Bank as part of their asynchronous learning plan, earning them the required credit points in the employee appraisal process. It is noteworthy to mention that the learning content published through iLearn in the FY 2022-23 was entirely made in-house.

SIB Staff Training College (SIBSTC), Thrissur conducts internal training programmes for development of professional skills of all staff members. The training programmes are designed to develop competency of operating personnel while imbibing the SIBians spirit and culture through an effective learning process. The success of these programmes reflects on the enhanced organisational productivity. Efforts are taken to identify skill gaps in the personnel and provide support for quality improvement.

The Staff members are also nominated to external training centres for being trained in specialised areas as well as to have higher exposure. During the FY 2022-23, the Bank has imparted training to a total of 5,905 staff members across grades, including new joiners induction for 1,050 persons.

Besides, both these units also contain professional soft- skills trainers who conduct sessions for the staff on a variety of topics related to Personality Development, Team Working, Leadership, Selling skills and Customer Servicing.

RETAIL BANKING DEPARTMENT

The Retail Banking Department focuses primarily on increasing retail business for the Bank through customer acquisition and retention. The Retail Banking Department has two verticals - Retail Liabilities and Retail Assets. The Liability vertical constitutes the entire retail liability portfolio of the Bank including Core Deposits, CASA, NRI Business, Marketing of Third Party and Digital Products. Apart from above, the Department also plays a vital role in ensuring continuous product development and promotion by creating awareness on products through customercentric campaigns.

Technology Products & services of the Bank

With more customers on boarding to the digital channels every day, Digital Technology is revolutionising traditional banking. Introduction of UPI has boosted the payment ecosystem by simplifying contactless and real time payments. The Bank is a frontrunner in adapting the changes in the technology, by strengthening the digital banking space. The Bank has effectively leveraged technology and introduced several variants of traditional products and new e-based services, tailor-made to suit the diversified needs of the customers. Technology services like Contactless Debit cards, Internet banking, Mobile banking with UPI, QR based payment acceptance, API Banking and WhatsApp banking have transformed the customers digital banking experience from branch banking to anytime, anywhere banking. The Bank has a separate Digital Marketing Division under Retail Banking Department to enhance the Digital outreach and a separate Digital Banking Department that facilitates technological developments.

SIB Mirror+

SIB Mirror+ offers Next Generation Digital Banking Experience from South Indian Bank- A comprehensive and secure Mobile Banking platform, offering 100+ banking and utility services to take care of daily banking needs conveniently from the smartphone.

• Single App for Domestic & NRI customers available in 8 Regional Languages apart from English

• KYC update

• APY, Secure Credit Card apply

• DEMAT account opening

• Invest in Sovereign Gold Bond, Contribute towards NPS

• BHIM UPI

• Digital e-Lock with e- Limit facility

• Self-Account opening (SIB Video KYC/ SIB INSTA)

• Link Multiple Profiles for Personal & Business Use

• Grievance Module

• Investment Module & Apply for Loans Module

• Deposit & Debit Card Management

• Utility Bill Payment & Mobile/ DTH Recharge

• Stop Cheque Payment, Cheque status enquiry and much more.

SIBerNet

The Internet Banking service under the brand name "SIBerNet" positioned the Bank as a technology-driven Bank offering superior banking services to both Retail and Corporate customers. The Customers can avail banking services and e-commerce transactions 24 x 7 from home, office or anywhere.

Types of SIBerNet

Internet Banking (SIBerNet) is available in two modes:

1. SIBerNet Personal: All retail including proprietorship can apply for SIBerNet Personal.

2. SIBerNet Corporate: All Partnerships, Trust, Institutions, Society, Companies etc. can apply for SIBerNet Corporate.

Services/Features of SIBerNet

• Instant Payee Activation

• KYC Update

• Foreign Outward Remittance

• Online Demat Account Opening

• Gold Loan Renewal

• Password on Email for Corporates

• Personalised Transaction Limit

• Loan Account Credit Facility

• Debit Card Module

• Cheque Book Request

• SPOT Credit - Pre-Approved Loan

• School/College Fee Payments

• KSFE-NRE Chit Enrolment

• Sovereign Gold Bond Application

• Positive Pay System Module

• Deposit Management Module

Debit Cards

The South Indian Bank offers Debit card for domestic as well as international transactions. The card comes to you with features of Global acceptance, Online Shopping, Utility bill payments and Cash withdrawal from ATMs in India and millions of ATMs across the world.

For domestic as well as International transactions, as per RBI mandate, SIB offers Debit card to the customers in DI and PIN enabled platform. This card can be used for cash withdrawals from ATMs displaying the VISA/MASTERCARD/ RUPAY/DINERS/DISCOVER logo across the World in addition to South Indian Bank ATMs. The customers can also use this card for making purchases from all merchant outlets globally, accepting VISA/MASTERCARD/RUPAY/ DINERS/DISCOVER debit cards and earn points with the SIB Rewardz program. The accumulated points can be redeemed at more than thousands of retail outlets and online shopping websites or for exciting gifts. SIBs DI and PIN enabled debit cards are offered in VISA/MasterCard/ RuPay platforms with enhanced transaction limits at ATM/ Online/POS.

SIB REWARDZ

The South Indian Bank presents SIB Rewardz, a loyalty program for all the valued customers. Now customers earn SIB Reward Points every time they use their South Indian Bank Debit Card at Point of Sale terminals or online for purchases, payments and bookings. As a South Indian Bank customer, they are auto-enrolled in this program and as a special gesture, will be rewarded with SIB Reward Points for making payments by using their South Indian Bank Debit Card.

SIB TRAVEL CARD

The South Indian Bank, in association with M/s Thomas Cook (India) Ltd., offers Travel Card, a perfect travel partner for all foreign trips. Hassle-free, secure and supports multiple currencies which ensures that you are always ready for a getaway.

Features of the Travel Card

• Tie-up with All Point Network-the largest surcharge- free ATM network in the world

• Enhanced security with chip and PIN protection and real-time fraud monitoring with instant card block

• Zero chargeback fee

• Inbuilt Tap & Pay technology enables contactless payment

• Online PIN change facility

• E-commerce access

• Insurance cover of up to $10,000 in case of fraud transactions

• Pre authorisation release and instant encashment

• Global usage offers better value by avoiding any currency fluctuation risks

• Free card statements

• Free card replacement

• Enhanced health and safety protocols while packaging your card to ensure minimal human contact

South Indian Bank Prepaid Gift cards

Prepaid cards or pre-loaded cards are those which can be used similar to Debit cards for Online/POS transactions. SIB Gift Cards are one-time cards issued in value as per the choice of the customer for a finite period. These cards can be gifted to a third party and can be used for multiple purchases as long as value remains on the card and before the card expires. However, cash withdrawals from ATMs are not possible using SIB Gift Cards and these cards cannot be reloaded.

South Indian Bank Reloadable Prepaid Cards

South Indian Bank presents Reloadable Prepaid Cards in RuPay platform. Reloadable Prepaid Cards can be used for POS/Ecommerce as well as for ATM transactions. Prepaid Cards can be reloaded umpteen number of times as per the choice of the customer. Two categories of Reloadable Prepaid cards are available:

• CashCard, which is offered to retail customers can be loaded to a maximum amount up to 1,00,000/-

• DigiCash is offered to corporate customers for onward issuance to their employees, customers, etc. These cards can be loaded to a maximum amount upto 50,000/-

SIB NETC FASTAG

NETC FASTag is a project from National Highways Authority of India (NHAI) and the Indian Highways Management Company Ltd. (IHMCL) in association with National Payments Corporation of India (NPCI). Through this system, any vehicle with a FASTag (RFID) tag can easily to cruise through the Toll gates without making any cash payments. NETC FASTags are Preloaded RFID Tags for making the Toll Payments electronically. When the vehicle passes through the Toll gate, the RFID reader at the Toll plaza receives information about the vehicle and the Toll amount is deducted automatically from the FASTag, thus saving time and fuel.

Benefits of SIB NETC FASTag

• Avoid Long queue at the Toll plaza

• Forget carrying cash for Toll payments

• Saves time and Fuel

• SMS alerts for each toll transaction

• Online portal for Tag holders

• Easy recharge options

• Easy to track toll transactions

• Quick Dispute Resolution Point of Sale (POS)

Point of Sale terminals provide convenience, speed, security and choice of payment methods for Merchants and its customers. It also helps in reducing cash handling, increasing customer satisfaction and boosting sales. Point of sales offerings are the services and solutions that the Bank provides its merchants to facilitate POS transactions. These includes:

POS terminals: These are electronic devices that accept and process payment cards (credit cards, debit cards, prepaid cards etc.) at the merchant outlets. They can be of different types such as Android, GPRS, PSTN etc. They can also have feature such as Tap and Pay, EMI acceptance, QR code scanning and billing integration etc.

POS Merchant Support: These are the services that the Bank provides to its merchants to ensure smooth and hassle-free POS transactions, which includes installation and training, customer service desk, online portal access, SMS alerts, transaction statements, transaction settlement and competitive pricing etc.

The Bank is associated with M/s. Worldline India Pvt. Ltd. in this segment and M/s Skilworth Technologies (Bijlipay) for POS sourcing under referral model.

On October 2022, Bank has tied-up with M/s Pine Labs Pvt Ltd. to offer the bouquet of products to its merchants and to become competitive in the market. With an intend to achieve higher merchant satisfaction and to create a high brand recognition, Bank has also started deployment of South Indian Bank Branded Colour Customised POS Terminals procured from December 2022 onwards.

Payment Gateway: Internet Payment Gateway (IPG) service provides a platform for the online transaction between a shopper/client and a merchant/institution. The infrastructure allows institution/merchant to accept payment through Debit card, Credit card, Internet Banking, UPI, Wallets etc. against the goods/services provided online.

The facility is provided basically as a link in the website of the merchant /Institution. There are value added services like SMS invoicing, email invoicing, Payment links etc bundled along with Payment Gateway. At present the Bank is having tie up with 2 vendors to provide the Payment Gateway services. M/s Worldline India Pvt. Ltd. (Banks own PG Cards acquiring in hosted model) and M/s Razorpay Software Pvt. Ltd. (In referral Model)

Fee Book: FeeBook is an event based fund management/ collection portal, which can be customised by the organisation/merchant according to the collection requirements. FeeBook comes with the tagline, YOU DECIDE, YOU COLLECT. In Fee Book, the organisation has the flexibility of deciding & customising the entire collection cycle. This can be integrated to the existing Website of the Client or can be provided as a separate payment link with branding of the institution. Fee Book is backed by Banks payment gateway services and can be offered to different merchant categories to handle the online collection requirements.

e-Academia: e-Academia is a customised fee collection portal which can be offered to educational institutions. The portal is customised so as to handle the complex Fee collection requirements of educational institutions and will act as a total fee collection solution to the institution. e-Academia is backed by Banks payment gateway solution.

Hi-Hi Banking: South Indian Bank is offering a Host-to- Host channel for seamless and secure bulk payment facility to the corporate, institutions, enterprises. It is aimed at providing a highly secure platform for paying employee salary, vendor/supplier payments or any payments from their system without depending on Bank branches. Hi-Hi Banking is a corporate bulk payment solution that enables corporates to process Bulk fund transfer through their system. The payment can be processed and report can be obtained at their convenience.

WhatsApp Banking: SIB WhatsApp Banking service was launched to address various banking related requests and queries of the customers in a simple and effective manner. Through this platform customer can send direct messages to Bank through the WhatsApp messenger. The service offers quick response to customer, conveniently from a Smart phone. The WhatsApp banking service can be availed on the number 9895900555. The service can be availed by sending "Hi" to this number in WhatsApp messenger. Various services related to accounts, cards, FASTag, loans, Investments, Bill payments/Recharges are available so far in the WhatsApp banking platform.

API Banking: South Indian Bank offers a host of banking API services spread across Accounts & Deposits, Payments Gateways, Trade services & Business Banking. It is a tool by which corporates can customise their business needs and gain easy access ensuring complete safety & enhanced efficiency. It involves access to core system of the Bank and customise their financial needs.

Credit Card: South Indian Bank - OneCard is a premium metal based Visa Credit Card with a 100% digital, app based onboarding experience. A truly Next Generation Banking product which offers instant virtual card issuance, attractive reward points and zero joining fees or annual fees. Product also has many attractive merchant offers to make customers shopping experience better. SIB-OneCard can be fully controlled through the OneCard app which serves an irresistible blend of convenience & security. SIB-OneCard is offered as both Unsecured & Secured Card. Unsecured cards are offered to both ETB customers as Pre Qualified offer and NTB customers. AddOn card facility is also available.

Third Party Products

Insurance: The Bank has tied-up with the following partners for soliciting insurance under the corporate agency model.

Life Insurance

• HDFC Life Insurance Co. Ltd.

• SBI Life Insurance Co. Ltd.

• Kotak Mahindra Life Insurance Co. Ltd.

• Max Life Insurance Company Ltd.

Health Insurance

• NivaBupa Health Insurance Co. Ltd.

• Manipal Cigna Health Insurance Co. Ltd.

• Star Health & Allied Insurance Co. Ltd.

General Insurance

• Bajaj Allianz General Insurance Co. Ltd.

• New India Assurance Co. Ltd.

• ICICI Lombard General Insurance Co. Ltd.

• Chola MS General Insurance Co. Ltd.

It was a highly successful year with regard to the performance in insurance sector. The Bank has got a significant increase in income from Life, Health, and General insurance by adding 52 crore for the financial year with a growth rate of an impressive 57% over the previous FY. The combined premium generated from life

and non-life saw a remarkable growth of 45% y-o-y. The Bank delivered 104% of achievement against the allotted target of Life Insurance.

Bank has also processed the application to procure ISNP licence from IRDA in order to digitalise the insurance subscription mode through our Mirror Plus app and SiberNet. The Bank has also processed an application for Tele and Distance marketing.

The insurance cell is collaborating with a fintech company, to acquire a business management platform that will enable seamless online and offline end-to-end insurance sales. The platform will also have the ability to generate business management information systems, manage complaints, and ensure regulatory compliance by adhering to the guidelines set by IRDAI for both sales and operations.

Mutual Funds: Mutual Fund is a popular form of investment since it provides the advantages of professional portfolio management and dividend reinvestment. The Bank has tied up with 19 leading Mutual Fund companies, thereby offering a variety of mutual fund products to the customers. Asset Under Management (AUM) of the Bank is 435 crore and income generated from mutual fund business is 2.97 crore as on March 31, 2023. With the aim of increasing the mutual fund business and thereby increasing third party income, the Bank has launched an online mutual fund platform SIB E-Invest to facilitate online purchase and sale of mutual funds. SIB E invest Platform is currently live in SIB Mirror+ and in SIBerNet, which made Mutual Fund investments of the customers very easy. The platform is also live in Branches, where a branch can initiate mutual fund investment online after getting customers authorisation. Now this online channel contributes about 85% of the Banks mutual fund business.

Bonds: The Bank has been enrolled as a Channel Partner for the distribution of bonds issued by different companies through Banks tie up with IFIN - a subsidiary of IFCI (Industrial Financial Corporation of India) Financial services Limited. Through this tie up the Bank has been enrolled as a channel partner of IFCI for the distribution of capital gain bonds and tax free bonds.

Depository services: The Bank offers Depository services for the benefit of its customers. Through this facility, customers can hold their securities in electronic form in Demat account with M/s Central Depository Services (India) Ltd. (CDSL) and National Securities Depository Limited (NSDL). Our Customers can open their Demat account in Physical mode through Branches and Digital mode through SIBerNet & Mirror+. For trading, the Bank

offers SIBerTrade - the online trading facility to buy /sell stocks for its domestic customers from stock exchanges in India through tie-up with M/s. Geojit Financial Services Ltd., M/s. Religare Broking Ltd., M/s IIFL Securities Ltd. & M/s Motilal Oswal Financial Services Ltd. Customers are also having the option of trading through mobile application at their comfort zone where the Demat Account and Bank account will be with our Bank and the trading account will be with one of our Broking partners.

ASBA: SEBI has also registered the Bank as Self Certified Syndicate Bank (SCSB) for accepting application under Application Supported by Blocked Amount (ASBA) through all the branches of the Bank. ASBA enables the Banks customers to apply for IPO/FPO, Rights issue etc. by marking a lien on the account instead of actual debit at the time of applying, which is more beneficial for the customers. The Bank has participated in 209 issues (including IPO/FPO/NCD/ Rights Issue) in the FY 2022-23.

SGB: Sovereign Gold Bond is expected to provide an alternative and attractive investment option to retail individuals. Investors can apply Sovereign Gold Bond sponsored by Govt. of India through SIB Digital and Offline platform. Digital platform for applying SGB is introduced in the year 2020. The Bank has participated in all the 4 Tranches of SGB 2022-23 series and collected 1819 applications with a total investment of 21.90 crore.

PIS: An extensive share trading facility for the NRI customers through tie-up with M/s. Geojit Financial Services Ltd & M/s Motilal Oswal Financial Services Ltd. Under PIS, NRI customers can directly invest in the Indian securities market through recognised stock exchanges under repatriable/non-repatriable basis.

Achievement (Nos.)as on 31.03.2023

Cumulative PIS accounts No: 2,763

PIS opened during the FY 2022-23: 420

Income generated as on March 31, 2023: 63.57 Lakh

The National Pension System (NPS): The Government of India has introduced the National Pension System (NPS) on January 1, 2004 (except for armed forces). NPS was made available to all citizens of India from May 1, 2009. The Bank is appointed as a Point of Presence (POP) since then and all the branches are authorised to extend the product and services of NPS. The Government of India has announced the increase of tax exemption limit for NPS to 60%. This has effectively made NPS tax free at maturity and an effective EEE status is attained, i.e. Tax Exempt at Entry, Earning and Exit stages. NPS is a very appealing

product for NRIs and in fact, the Bank is the topper among the peer-banks and Kerala based banks for both resident and NRI NPS. Only NPS offers the additional tax benefits up to 50,000/- under I.T act 80 CCD(1B) and it is over and above 1.50 lakh of 80C investments. APY was introduced by Govt. of India in place of NPS Lite providing minimum assured pension from 1,000/- to 5,000/- to subscribers is also available to Banks customers.

Cumulative Achievement (Nos.) as on 31.03.2023

NPS - All Citizen Model	14,783
NPS Corporate (Including Staff)	10,241
APY	68,657
Total	93,681

SIB E-Pay: In association with BSNL, the Bank is facilitating the payment of BSNL Landline bill of its customers through their accounts maintained with the branches. A customer can avail this facility by submitting a mandate form at the branch where the account is being maintained. Once registered, the BSNL landline bill of the customer will be automatically debited from the customers account every month. The key feature of this facility is that it is totally hassle free and is offered free of cost to the customers.

CENTRALISED DIRECT DEBIT SERVICE

Centralised direct debit facility is a service offered by the Bank to the customers, through which monthly/quarterly/ half yearly payments of Mutual Fund SIP investments/Loan EMIs (Vehicle/Equipment Loans)/insurance premium can be made directly by debiting their account and thereby making payments to various billers/ institutions. At present the Bank has tie up with 5 vendors for the Centralised Direct Debit facility which includes M/s India Ideas.com Ltd., M/s TVS Credit Services Ltd., M/s Sundaram Finance Ltd., M/s Shriram City Union Finance Ltd. and M/s Bajaj Finance Ltd.

Customer Experience Group (CEG)

CEG was set up to improve customer service relationships and ensure maximum customer satisfaction by offering them Banking services 24x7.

Customer Experience Group has three sections namely Inbound, Outbound call centre and Digital Quick Support Team (DQST).

CEG inbound team is the touch point for all Banking needs of customers and the same is available on a call 24x7. Customer dials the Toll free number and narrates the requirement and the front line analyst after analysing

the nature of the requirement does the necessary to give the fastest resolution to the requirement. There are also various escalation levels of handling the requirement as per nature of each case and all working towards the ultimate goal of providing maximum customer satisfaction in the shortest possible time. There are standard procedures set and experienced back office teams to help serve the goal.

CEG Outbound Team engages customer for various types of activities like doing welcome calls on account opening, creating leads on asset, liability products and digital products like Mirror+, Internet banking, Debit card activations, dormant account activations etc. The team is also involved in sales conversion of pre-approved products. The leads are managed in CRM and all prospective leads are directed to respective Sales verticals for fulfilment.

DQST team is the touch point for customers via mail, Chat and Social Media. There are dedicated resources to handle requests in digital services like internet banking and Mirror+ including complaints. DQST team also manages CEGs Complaint handling processes received from various sources like Email, Mirror +, IVR, internet banking etc.

Highlights

• Debit card activations of new accounts is 70% for FY 2022-23.

• 28,777 Leads generated through CEG in FY 2022-23.

• Pre-approved Personal Loan conversion for FY 2022-23 is 57.44 crore with 3,463 accounts.

Liability CASA Initiatives

• CASA Enablers: As part of improving customer engagement and for deepening the existing base, different enablers have been shared to branches at periodic intervals. Bank provide 2 set of Enablers - Business Enablers & Event Based Enablers.

• Channel Migration for Customer On boarding:

Account opening through VKYC has been launched to ease the on boarding experience and has opened around 68.7% (eligible base) SB accounts through this mode. Account opening through digital channels like DIYA, TAB, INSTA and VKYC has contributed to 59% which the Bank propose to take it to 100%. SIB SWIFTe is introduced which is a paperless account opening process to boost digital account opening process.

• Focus on Quality Acquisition: This will help to increase the sourcing of high value accounts with focus on higher NAV. Accounts maintaining required product balance only are considered for number achievement and point targets are achieved only with a higher

product mix. More focus on sourcing Prime & Prime Platinum category accounts.

• Corporate Salary: As an initiative to attract more Group Salary Savings the corporate salary brochures where revamped and salary on-boarding process has been simplified for Bulk Salary Account opening and for INSTA through VKYC. More comprehensive Data capture of the employer has been enabled by migrating the UEID code management to BPM module. Generation and follow up of leads from existing CBG data base with nil salary account relationship has resulted in a conversion of around 28 per cent.

• Staff Mapped Portfolio: All high value & high transacting CASA accounts are mapped to branch staff for improving customer connect, multiproduct penetration and for enhanced customer experience. The end to end process of portfolio creation, transfer and maintenance has been automated.

• Introduction of Customer Life Cycle Management (CLCM): Dedicated Central Team to monitor the quality of accounts/Retention/Transactions/Depletion & Activation of existing and new customers.

• One Million IP value drive: Campaign on One Million IP value drive (IPL) has been initiated to bring focus in potential CASA acquisition and has opened 2,217 accounts as part of this initiative. This drive focus on accounts opened with 10 lakh initial funding.

Government Business Division

Government Business Division (GBD) is institutionalised to cater to the Banking requirements of Central Government/State Governments/PSUs/Boards/other Government affiliates, with a focus on canvassing & liaising with various Government institutions pan India. South Indian Bank is an Agency Bank of Reserve Bank of India since 2021. GBD aims at driving the Government Business portfolio of the Bank, with special emphasis to boost up CASA. Branches, ROs, Cluster Heads & Regional Sales Managers are the major acquisition channels to augment Government Business segment. South Indian Bank offers state of the art customised Collection and Payment arrangements to cater to the specific needs of the Govt. entities.

Milestones for the FY 2022-23

• South Indian Bank went LIVE for collection of Direct Taxes on behalf of Central Board of Direct Taxes.

• South Indian Bank went LIVE for the collection of Customs Duty (ICEGATE 2.0) on behalf of Central Board of Indirect Taxes.

• Accredited by Central Board of Indirect Taxes for collection of GST.

• South Indian Bank is LIVE on e-Treasury Portal of Govt. of Telangana.

• Accredited by Govt of Karnataka (Khajane ) for online Treasury Collections.

• Arrangement with Kerala State Electricity Board & Kerala Forest Department, Govt. of Kerala.

• Partnered with various Central/ State Government Project/Schemes rolled out through various LSGDs entities.

Major Central & State Government Collaborations

• Tie up with Chief Ministers Office (CMO) - Kerala for Chief Ministers Distress Relief Fund (CMDRF).

• Official Banker to M/s IRCTC for Online Booking of Railway tickets.

• Sole Banker to Govt. of Kerala for the Collection of Profession Tax across all Municipalities in Kerala State & partnering with all LSGDs in Kerala for numerous digitalisation initiatives.

• Banker to more than 10 + Welfare Boards & 25 + Govt Companies/Corporations in Kerala.

• Banker to Devaswom Boards, Electricity Boards, Water Authorities, Smart Cities, Central/State Department Projects, LSGDs, Govt. Companies/Corporations/PSUs across India.

• Associated with Govt. of India for numerous Single Nodal Agency (SNA) Projects in Kerala & Tamil Nadu.

Upcoming Projects

• Integration with Non-Tax Receipts Portal (NTRP) - Bharatkosh.

• Association with Government e-Marketplace (GeM). Priority Banking Service

South Indian Banks Prime Platinum and Prime are exclusive priority banking programs offered to the HNW clients of the Bank to provide them with privilege banking experience. Under this program, customers can enjoy exclusive priority benefits that suit their individual needs.

Customers in priority banking program get red carpet treatment in all the branches across the country. Presently the Bank has 2.59 lakh customers under the program with total Saving Account book size of 11,400 crore and term deposits of priority customers as on March 31, 2023 is 28,277 crore.

The following are the highlights of the program:

• Introduced TRV (Total Relationship Value) based priority eligibility where 10 per cent of TD balance of customers are also considered along with their CASA balances.

• Free PIS account with zero AMC has been added to the program for the benefit of NRI customers.

• 35,330 customers have been added to the Priority Banking Program that include 16,339 NTB customers.

• 102 Liability Relationship Managers were assigned to the branches to engage Priority Customers.

• RMs have sourced 126.22 crore NTB account value and 15.52 crore life insurance premium in the FY 2022-23.

SIB Wealth X- Wealth Management Program in partnership with Geojit Financial Services Limited

The South Indian Bank has rolled out the Wealth Management Services to Banks esteemed customers in association with Geojit Financial Services from September 22, 2022. The Bank has branded this premium program as SIB Wealth X and through this programme, the Bank helps HNI customers in wealth creation by understanding the customer risk appetite and support in investing suitable products as Bank values their hard-earned money. With this new tie up all Products of the investment universe is now available with SIB. Through SIB Wealth X, the Bank offers Mutual Funds, PMS, AIF, Bonds, Structure and offshore investment products to customers. These offering will help in attracting new HNI customers as well as to cater the investment requirement of the existing customers. The Bank is launching a separate banking programme to add more NTB - SHNI customers to the Bank and will be offered with the best in class features compared to competition.

Visibility Enhancement Initiatives during the FY 2022-23

• The Bank had executed various promotional campaigns in media like Print, Television, Radio, Outdoor and Digital. The campaigns proved economical as well as ensured target delivery across the geography.

• The Corporate Communication initiatives yielded remarkable achievements this year. Through strategic campaigns, the Banks Share of Voice (SoV) increased significantly, expanding its visibility and reach in both national and regional media. This has facilitated meaningful engagement with diverse stakeholders nationwide, boosting South Indian Banks growth and reputation. The PR initiatives successfully positioned the Banks spokes people as industry thought leaders, earning admiration from experts, media outlets, and customers alike. The proactive approach of nurturing strong

relationships with the media fraternity, especially on the national level, has cultivated trust and credibility. This has empowered the Bank to effectively communicate the key messages, share notable achievements and address any concerns. With the symbiotic relationship cultivated with the media, Bank has amplified the reach and enhanced the brand reputation.

• Through effective PR strategy, major events and financial results pertaining to the Bank were promoted globally across the digital and print media. Exclusive interviews of MD & CEO with the prominent print and online media like The Economic Times, Business Standard, Mint, Money Control, The Hindu Business Line, Financial Express, Mathrubhumi, etc. were conducted across the financial year.

• Press Releases were done on occasions like Declaration of Financial Results, World Record for mega event Onnichirikkam Oonjaladam at Kochi, Kerala, Launch of EXIM Trade Portal, SIBs partnership with Kerala Forest & Wildlife Department for digital collection of payments, Launch of Digital Banking Unit in Thrissur, Launch of Remit Money Abroad feature in SIB Mirror+ app, CBIC integration for GST etc.

• The South Indian Bank organised a first-of-its-kind cultural connect event called Onnichirikkam Oonjaladam at Kochi, Kerala in October 2022 where the Bank set a world record by synchronising and swinging 101 coir swings for 90 seconds. It was the largest sustainable event of its kind, with beautifully decorated wooden swings adorned with flowers. The event brought together customers, visitors and dignitaries, promoting social unity and prosperity during Diwali. The achievement was recognised by the World Book of Records and received extensive media coverage in 131 publications. Over

10.000 attendees witnessed the event and it was live- streamed on YouTube and Facebook, reaching more than

21.000 viewers worldwide.

• In order to establish and position, The South Indian Bank as a Universal Tech-savvy Bank, the Bank has launched the Trust Meets Tech since 1929 campaign across TV, Connected TV and Digital media including social media influencers, theatre, and outdoor. The campaign helped in positioning the Bank as a Tech- savvy Bank with a unique approach that resonated with the Indian audience, particularly the youth. Multiple duration digital videos were prepared for better reach and engagement among the target audience on various online platforms. During the campaign period, the brand video received 2 crore views online. Operating on a limited budget, The South Indian Bank has achieved

impressive results through optimised production and media planning, outperforming the competition. The campaigns ROI showcased the Banks strategic and cost- effective approach. The digital innovations guided by the Digital Marketing team, expanded SIBs reach and engagement. Strategic outdoor advertising in Kerala including hoardings, bus branding, metro pillars and medians, garnered significant audience attention and brand visibility. In conclusion, The South Indian Banks Trust Meets Tech since 1929 campaign revolutionised BFSI marketing. With its unique approach, strong ROI, digital innovations and impactful outdoor advertising, South Indian Bank positioned itself as a Tech-savvy Bank, resonating with the Indian audience, especially the youth.

• To enhance the effectiveness of its communication channels, SIB implemented automation, martech and AI solutions, enabling the Bank to deliver personalised and customised messaging. This strategic integration of advanced technologies has empowered South Indian Bank to tailor communications to individual preferences and optimise engagement with the target audience.

• Regular social media posts of digital products, assets and liability products were promoted through the official social media handles of The South Indian Bank. Special days/ festive occasions were also promoted to engage the customers with the brand. The Bank has strategically utilised platforms such as Facebook, Twitter, Instagram, LinkedIn, YouTube among others to ensure effective communication regarding product announcements, corporate updates, milestones and crucial customer interactions. Additionally, Bank has leveraged the power of influencers to extend the reach and connect with the target audience more effectively. Sustained efforts have helped us in expanding the digital presence of the Bank and successfully engaged with the intended audience.

• Along with exploring social media and google platforms, during the year, the Bank also explored new mediums to reach out more to the Millennials and GenZ. In the digital campaigns, Bank has considered platforms such as Bobble AI which works on conversational approach and VEVE which follows notification-based approach.

• Focused campaign approach based on age group and affinity segments helped us to reach more among the Banks TG. Currently, more than 60% of the website traffic are between the age group of 18 to 40 years. The Bank is also able to expand the brand visibility beyond its strong markets of South. As on March 2023, in terms of website visitors, two among the top 5 states are Non-South states.

• Product centric campaigns were rolled out for Home Loan, Car Loan and Gold Loan during the year. The Bank also initiated developing exclusive landing pages for separate campaigns which helped in considerable increase in lead generation & conversion also.

• The Bank has implemented over 360 segmented campaigns in this year which helped in promoting various products and generating business.

• The Bank had also associated in major cultural events outside its home state, like SS International Live - Fusion Music Show, The Great Mandolin Tribute Show in Tamil Nadu, Global Fintech Fest 2022 by Internet and Mobile Association of India (IAMAI) at Mumbai etc. Also, SIB partnered with Institute of Directors for 16th International Conference on CSR, 68th Nehru Trophy Boat Race, Varnakkuda cultural festival in Irinjalakkuda, Kerala, Thrissur Shopping Festival, State Forum of Bankers Club, Kerala for 14th SFBCK Banking Excellence Awards, Thrissur Management Association for Business and Annual Management Convention 2023. The Bank had also advertised in major Malayalam News channels in the event of Thrissur Pooram.

Awards & Recognitions

The Bank had received the following awards: -

• Six awards at IBAs 18th Annual Banking Technology Awards:

- Winner - Best IT Risk Management

- Runner Up - Best Technology Bank of the Year

- Runner Up - Best Use of AI/ML adoption

- Runner Up - Digital Sales & Engagement

- Runner Up - Technology talent and organisation

- Special Mention - Best Fintech Collaboration

• The South Indian Bank has won Banking Frontiers Finnoviti Awards, 2022 for Robotic Automation of Merchant Credit Processing.

• World Record for Staging and Swinging 101 Oonjals at Marine Drive, Kochi, Kerala.

• The South Indian Bank has been recognised as one of Indias Most Preferred Workplaces in BFSI 2022-23 by Team Marksmen India.

• The South Indian Bank Ltd. has been recognised in the ET Edge Best Brands in Best Brand 2022 Conclave 5th Edition organised by The Economic Times.

• The South Indian Bank Ltd. was awarded with "Outstanding Digital CX-SME Loans" at the 6th Digital CX Awards powered by The Digital Banker, Singapore.

• The South Indian Bank Ltd. has won the Asian CSR Leadership Award under the category Best use of CSR practice in Banking and Finance.

• Mr. Murali Ramakrishnan, MD & CEO was honoured with "ET Ascent Business Leader of the Year Award".

• The South Indian Bank Ltd. was chosen as a winner of "e4m Pride of India - The Best of South" Awards 2022 by exchange4media Group.

• The South Indian Banks Learning and Development (L&D) unit bagged two prestigious awards at The 8th National Awards - one each in the organisation and the individual category, at the National Awards for Leadership and Excellence.

• The South Indian Bank Ltd. was recognised as the "Wealth Creator of the Year" by Dhanam Business Magazine.

• Banks MD & CEO Mr. Murali Ramakrishnan was honoured with the Management Excellence Award by Thrissur Management Association (TMA).

• The South Indian Bank and Vayana Network won "Best Project Implementation" at IBS Intelligence Global Fintech Innovation Awards.

• SIB was honoured with ASSOCHAM Best Private Sector Bank Award during the 9th MSME Awards & Excellence Summit.

• SIB received the "Excellent use of AI and ML" award at the eLets BFSI Tech Innovation awards 2023.

• The South Indian Bank received the "Best Use of Experiential and Innovative Media" by Kamikaze Media for Installing and Swinging 101 Swings at a single venue in Kochi.

• The Chief Information Officer, Mr. Sony A was awarded with:

- Best CDO/CTO/CIO award, The Fintech & Digital Excellence Award was declared at the Bharat Fintech Summit 2023.

- CIO Leader award in recognition of exemplary tech leadership selected across multiple sectors in the country. It was given away in the BIGCIO SHOW powered by Intel, with support of NITI Aayog.

- Financial Express, has bestowed FE Visionary leader felicitation under its FE Power.

• The Chief Financial Officer, Ms. Chithra H was selected as one of the "Leading Women CFO of the Year 2022" by CII.

• The Chief Marketing Officer, Ms. Azmat Habibulla was honoured with the "Woman Disruptors Award - Women Marketing Head of the Year" by Adgully on Womens Day 2023.

• The South Indian Bank Ltd won the award for "Best Use of Social Publishing-Banking" in the Konnect Insights Excellence Awards and Summit 2022.

Subsidiary Companies/Joint Ventures or Associate Companies

As on March 31, 2023, the Bank has one unlisted wholly owned subsidiary - M/s. SIB Operations and Services Limited, which was incorporated on May 28, 2021. SIB Operations and Services Limited is a wholly owned Non-Financial Subsidiary Company of The South Indian Bank Ltd. RBI has accorded the final approval on March 25, 2021 for setting up the Subsidiary Company and the Company was incorporated on May 28, 2021 to cater to the operational needs of The South Indian Bank Ltd. The authorised Capital as on March 31, 2023 is 2 crore and the Issued and Paid-up Capital is 50 lakh. The Company is providing exclusive services to the Bank in the operational areas of Telecalling, Business Development, Data Entry Operations, IT Support and other services permitted by the Reserve Bank of India.

HUMAN RESOURCE DEVELOPMENT

The Human Resources Department has undergone a remarkable transformation, evolving from a centre focused on operational excellence to a strategic partner of the Bank. With a clear understanding of the Banks strategic vision, "The Vision 2024," the HR Department plays a pivotal role in translating this vision into action. By aligning HR strategies and initiatives with the overall organisational goals, the Department has become an integral part of driving the Banks success.

Embracing the strategic partnership approach, the HR Department has proactively contributed to the realisation of "The Vision 2024" by implementing innovative HR practices and programs. By closely collaborating with key stakeholders, including senior management and department heads, the HR Department has gained a deep understanding of the Banks priorities and has tailored its initiatives accordingly.

Overall, the HR Departments transformation into a strategic partner has been instrumental in driving the Banks success and realising "The Vision 2024." Through its strategic alignment, innovative initiatives, and focus on talent, performance, engagement and diversity, the

HR Department continues to play a critical role in shaping the future of The South Indian Bank.

The newly established verticals have been staffed with the appropriate talent, primarily through internal redeployment and lateral recruitment from the market whenever a gap is identified. Furthermore, recruitment efforts have been significantly scaled up to align with the business plans for the upcoming years. As of March 31, 2023, the number of personnel on the rolls has increased from 9,219 to 9,678 compared to the previous year. The lateral hiring process was initiated to facilitate the adoption of industry standards at a faster pace and ensure the placement of the right individuals in the right positions, ultimately enabling the realisation of Experience Next Generation Banking in accordance with the strategic plan.

To align with the strategic objective of the Bank, HR team was grouped into an Operational team focussing on HR service delivery excellence and a Strategic team for driving the strategic objectives. The operational excellence is achieved through enhancements made in HRMS developed by in house HR Technology team. The HRMS system frontier are expanded through the introduction of mobile version of HRMS i.e. SIB m-HRMS. The mobile application now delivers more commonly used HRMS features in every employees mobile devises. The App also won the "South India Best Employer Brand Awards 2021 for excellence in HR through Technology" by Employee Branding Institute.

As part of the strategic HR initiative, the Bank has adopted balanced scorecard for all the job roles identified. More over single scorecard was used for appraisal, incentive and transfer prioritisation process. This gives clarity in deliverables of each job role. Transparency is ensured for promotion by publishing cut off marks for promotions which ensures trust in the newly formed system.

Learning & Development has assumed significant importance in the present banking scenario. The Banks Learning & Development division identifies the gaps in capability of the personnel and trains them for qualitative improvement. The development of employees are essential for the future strength of our business. Bank has moved towards the new age learning through the Introduction of LMS platform, where the employee has the opportunity to learn 24 x7. More over the proper weightage was given to every employees scorecard which has made learning their part of life. World class content of 100 + hours are added in the platform which was assigned to each employee based on their role.

The following four areas are the keys to the Banks success:

1. Talent Management: HRD, the Human Resources Department played a crucial role in ensuring that all recently established asset verticals were staffed with highly skilled employees. These individuals possessed the capabilities needed to effectively drive the verticals growth and provide excellent support to customers during the transitional phase.

2. Recruitment: To staff the new verticals, a two-pronged approach was adopted, involving the redeployment of existing employees and the recruitment of fresh talents. The recruitment process was exceptionally swift, setting a new record for efficiency and enabling the organisation to quickly source the skilled individuals needed to drive the success of these verticals.

3. Strategic and Operational HR: In order to ensure a seamless transformation and align the workforce with the strategic objectives of the Bank, the HR team was divided into two main categories; the operational team and the strategic team. The operational team prioritised service delivery excellence, while the strategic team was dedicated to driving the

achievement of strategic objectives through the implementation of impactful new initiatives.

4. Learning and Development: The organisation embraced modern learning practices and cutting-edge technology, incorporating tools such as Learning Management Systems, e-learning platforms and Micro Learning. These initiatives allowed for the adoption of innovative learning approaches to enhance employee development and knowledge acquisition.

DISTRIBUTION OF MANPOWER (CADRE WISE)

As on March 31, 2023, the Bank had 9678 personnel on its

payroll. The cadre wise break up is as follows:

Cadre	Gender		Total
	Male	Female
OFFICERS	3,972	2,267	6,239
CLERK	1,122	1,902	3,024
SUB-STAFF	198	20	218
PTS	46	151	197
GRAND TOTAL	5,338	4,340	9,678

The average age of employees is 32.8 as on March 31, 2023

As on March 31, 2023 Staff members having professional qualification constitute 52% of the overall workforce. The detailed breakup is as follows:

PERFORMANCE MANAGEMENT SYSTEM

Number of Staff Members Having Professional Qualification As on April 1, 2023

Educational Stream	Number of Staff
CA	50
CS	5
Engineering	2,227
ICWA / CM A	27
Legal	72
Management	1,507
PHD	2
Post Graduation	1,495
Total	5,385
Total Staff as on April 1, 2023	9,678

The HR Department has also prioritised the implementation of robust performance management systems. By introducing transparent and fair performance evaluation processes, the department ensures that employees efforts are recognised, rewarded, and aligned with the Banks strategic objectives. This has not only enhanced individual performance but also fostered a culture of accountability and continuous improvement throughout the organisation.

HRD reworked the then existing job roles such that they are linked to performance. Thus a job role based performance management system was developed. The whole system is based on a Balance Score Card framework which is one of the most popular and well accepted framework. Another major change was making the Score Card more quantitative in nature. This ensures that every job role knows his / her key deliverables upfront and also on a day to day basis.

EMPLOYEE ENGAGEMENT

A range of employee engagement initiatives were introduced to foster trust and recognition within the organisation. Amongst, the notable initiatives were the following:

1. Core Value Ambassador Awards: In order to better align the staff members with the core values of the Bank , an award ceremony was organised for 27 staff members at Taj Hotels, Wayanad.

2. Make A Difference: As a Christmas engagement activity, staff members were encouraged to formulate teams within Branches, Departments, Regions and Clusters to do social service activities

such as charity, volunteering and cloth donations on PAN India basis.

3. Diwali Contest: A video contest was organised for staff members across the country - "KHUSHIYON KI DIWALI" and 7 teams emerged as winners of the contest.

4. SIB Onam Vibes: A photo contest was organised for staff members on PAN India basis in connection with Onam celebration and 18 staff members were rewarded for emerging as winners in various categories.

5. SIB SYMPHONY: A virtual music competition was organised for staff members across the country in connection with International Music Day and 20 staff members winning prizes in various categories.

6. Earth Day- Photo Contest : In connection with The Earth Day celebration, a photo contest was organised for staff members across the country and 3 staff members securing prizes in the contest.

EMPLOYEE WELL-BEING

1. The South Indian Bank Staff Welfare Scheme:

This year 165 staff members have availed the benefit of The South Indian Bank Staff Welfare Scheme introduced in December 2008. Leave can be availed for the purposes of child care after maternity and medical treatment. The scheme ensures the Banks employee friendly approach towards its employees and the concern for their family members.

2. The Staff Welfare Study Support Scheme:

The Staff Welfare Study Support Scheme which was introduced in the FY 2016-17 for children of staff members has been successfully continued in the current financial year also. The number of children availed Staff Welfare Study Support Scheme for the FY 2022-23 is 1,328.The scheme has proved to be effective in its implementation with the aim of encouraging the children of staff members to soar greater heights.

3. On boarding Kits were introduced for all new joiners.

TECHNOLOGY DRIVEN HRMS SYSTEM

The HR Department has a dedicated IT team, which aims

at leveraging on technology and mobility to drive service

excellence and employee experience. Following projects were

successfully implemented by the team in the FY 2022-23:

• Regular updates for SIB mHRMS mobile app with each update carrying new features such as AD unlock facility, Festival Advance Request Entry, PL encashment entry, E-circular abstracts, Digital business card etc.

• Release of Ex-Staff portal for the Bank.

• Introduction of employee on boarding facility in HRMS along with generation of welcome greetings to newly joining staff members.

• Introduction of Employee Referral Module in HRMS.

• Introduction of E-circular module in SIB mHRMS that keeps the staff members updated about new release of Bank products, change in rules & procedures etc. even if they are out of office. Understanding the staff requirement to access e-circulars anywhere anytime, HRD has included the e-Circular segment in SIB mHRMS which enables the staff to read the e-circulars with annexures that have been published by the Bank in the last 30 days.

• Introduction of Staff Personal Overdraft (POD) facility in HRMS with direct integration with NeSL Digital Document Execution (DDE) portal for digital execution of loan documents.

• Completion of automation of staff settlement process. Facility for direct transfer of settlement benefits to staff accounts on staff exit due to superannuation, resignation etc.

• Digital signing power document for officers.

• Facility for applying NOC for going abroad/ availing passport.

• Introduction of Transfer Support Facility in SIB mHRMS app. This is a novel initiative from HRD that allows SIBians to leverage on the vast SIB employee network to seek help/referral on their various needs such as finding a rented apartment, finding a school / daycare and getting referral of a good doctor.

• Consolidated Nomination Register for various staff welfare schemes such as GSLIS, GTLIS, GLIS etc. and for Gratuity.

• Direct credit facility of allowance/expense such as executive soft furnishing, executive driver allowance, entertainment expense (branch heads), retiree memento, bereavement expense etc. to beneficiary salary accounts were implemented in HRMS.

AWARDS AND RECOGNITION TO HUMAN RESOURCES DEPARTMENT

• The Bank has been recognised as one of Indias Most Preferred Workplaces in BFSI 2022-23 by Team Marksmen India.

SIB- Executive Brief

"SIB-Executive Brief" - a daily news update on Banking, Finance, Economy, Industry, Sports, Market Rates etc. is compiled by HR-L&D. It is mailed on a daily basis to members of the Board, Executives and is also made available in SIB Insight for the ready access of all staff members every day. The Bank has also included more information like yields on 10-year G-Sec., AAA Corporate bond of 5 years, 3 months CD & CP, 3 months forward premium, US10-year yield and Forex reserves.

E-Learning Tests

The Bank has conducted 2 online tests on IS and Cyber Security for Clerks, Scale I, Scale II, Scale III, Scale IV and Scale V Officers during the FY 2022-23 through the LMS platform, iLearn. There is active participation from the branches and offices for the tests. These tests were conducted for cyber security awareness among staff members.

Continuous Assessment Test for Probationary Officers

To facilitate updating of knowledge and continuous learning by the probationary officers, HR-L&D conducts E learning tests on 20 modules for each batch of POs, BDOs and PGDBF. HR-L&D also shoulders the responsibility to ensure that all the POs take efforts to clear the test on time and get confirmed without delay.

SIB STUDENTS ECONOMIC FORUM (SIB SEF)

This is a monthly publication which discusses and analyses relevant themes related to the recent economic, financial and banking topics. As on March 31, 2023, 375 themes have been published since the first publication in December 1991. The objective of this venture is to kindle interest in economic affairs among the younger generation and also to provide a learning platform for the student community. All contemporary topics relating to Economics and Finance are discussed in this publication. The publication is dispatched to offices of RBI, Banks, other Corporates and various educational institutions. It is a well-accepted & appreciated publication among students, professionals and the academic community.

SIBLINK

SIBLINK is our corporate family magazine in which the articles, reviews, interview with great personalities, experiences and other literary content written by our staff members and their family members are published on a quarterly basis and shared as hard copy to Branches/ Departments/Offices of the Bank as well as shared on

SIB Insight and Banks website in the digital form. The publication also features the achievements of our staff members, their wedding photos, campaign results etc. The new section to include the contributions of staff members children was introduced last year. During the last financial year, the Bank has published 4 SIBLINK issues.

Daily Quiz

HR-L&D steadily endeavours to ensure that the learning and development curve of staff members continues to grow at all times. The Daily Quiz is administered through the HRMS which consists of 5 questions on content from Executive Brief and general topics like credit, forex, NRI business etc.

ISO 27001:2013 CERTIFICATION

IT Departments and CISO Office are ISO 27001 certified for the implementation of Information Security Management System (ISMS).

INDUSTRIAL RELATIONS

The Bank has enjoyed a mutually respectful and cooperative relationship with its employees and their representative organisations, namely the Workmen Union and Officers Association. This harmonious atmosphere has fostered a strong sense of shared responsibility towards the overall progress and well-being of the Bank and its staff. As a result of the positive industrial relations established with both associations, the Bank has experienced significant growth throughout the years.

A jovial and employee friendly approach by the Bank is the only reason to have a very minimal attrition rate of 4.88% .

PERFORMANCE LINKED INCENTIVE SCHEME (PLIS)

In order to ensure enhanced productivity and efficiency in all areas of operations and cultivate motivation among employees in all cadres, the Bank has implemented the Performance Linked Incentive Scheme (PLIS) from the

FY 2007-08 onwards. PLIS calculation is based on the score obtained by each employee in respective balanced scorecard. From FY 2021-22 onwards the Bank has moved to balanced score card based appraisal process for all the job roles in the Bank. In which single score is considered for promotion, PLIS calculation, etc.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

To motivate the employees further and to inculcate in them a sense of ownership, Employees Stock Option Scheme (ESOS) was approved by the shareholders at the Annual General Meeting held on August 18, 2008. The Bank has introduced Tranche 1 of the scheme in 200910, Tranche 2 of the scheme in 2010-11, Tranche 3 of the scheme in 2011-12, Tranche 4 and Tranche 5 during 201213, Tranche 6 during 2013-14, Tranche 7 during 2014-15, Tranche 8 & Tranche 9 during 2017-18 and Tranche 10 during 2020-21, Tranche 11 and Tranche 12 during the FY 2022-23.

The SIB ESOS 2008 Employee Stock Option Scheme (the Scheme) provides for grant of stock options on equity shares of the Bank to employees and Managing Director &CEO of the Bank. The Scheme is in compliance with Securities and Exchange Board of India (Share-Based Employee Benefits and Sweat Equity) Regulations, 2021. The Bank followed Black Scholes model for calculating fair value of option to account for its stock based employee compensation plans as per the Guidelines for all the options granted till the accounting period ended March 31, 2023. The fair value thus arrived were being recognised as expense beginning with the accounting period for which approval has been granted as per RBI circular No. RBI/2021-22/95 DOR.GOV. REC.44/29.67.001/2021-22 dated August 30, 2021. Till March 2023, 5,69,80,858 stock options were vested, out of which 2,89,49,199 stock options were exercised by eligible employees. The money realised due to exercise of the said options was 42,74,54,572.64 and consequently 2,89,49,199 shares of 1/- each have been allotted to the employees/ legal heirs concerned.