or the promulgation of new laws, rules and regulations relating to our operations as a response to the pandemic may have
a material adverse effect on our business, financial condition and results of operations.

Any resulting long-term financial impact cannot be reasonably estimated at this time. The extent to which the COVID-19
impacts our business and results will depend on future developments, which are highly uncertain and cannot be predicted,
such as new information which may emerge concerning the severity of the coronavirus and the actions taken globally to
contain the coronavirus or treat its impact, among others. There is currently substantial medical uncertainty regarding
COVID-19 and government-certified treatment or vaccine is still at a preliminary stage. As a result of these uncertainties,
the impact may vary significantly from that estimated by our management from time to time, and any action to contain or
mitigate such impact, whether government-mandated or opted by us may not have the anticipated effect or may fail to
achieve its intended purpose altogether. Existing insurance coverage may not provide protection for all costs that may arise
from all such possible events. Additionally, if any one or more our employees are identified as a possible source of
spreading COVID-19 or any other similar epidemic, we may be required to quarantine employees that are suspected of
being infected, as well as others that have come into contact with those employees which could have an adverse effect on
our business operations.

As of the date of this Prospectus, there is significant uncertainty relating to the severity of long-term adverse impact of the
COVID-19 pandemic on the global economy, global financial markets and the Indian economy, and we are unable to
accurately predict the long-term impact of the COVID-19 pandemic on our business. To the extent that the COVID-19
pandemic adversely affects our business and operations, it may also have the effect of heightening many of the other risks
described in this “Risk Factors” section.

Our business is currently significantly dependent on advances to inclusive finance (JLG) customers and any adverse
developments in the microfinance sector including any regulatory changes could adversely affect our business,
financial condition, results of operations and cash flows.

As of March 31, 2018, 2019 and 2020 and as of December 31, 2020, advances to our inclusive finance (JLG) customers
represented 89.89%, 81.44%, 75.85% and 70.35%, respectively, of our total Gross Loan Portfolio as of such dates. Demand
for our inclusive finance (JLG) products is affected by a number of factors, including changes in regulations and policies,
any adverse publicity or litigation relating to the microfinance sector, political influence and policies and natural
calamities. Any decline in the demand for our inclusive finance (JLG) loans may adversely affect our business, financial
condition, results of operations and cash flows. As of March 31, 2018, 2019 and 2020 and as of December 31, 2020, Gross
NPAs in our inclusive finance (JLG) loan segment amounted to 2 543.78 million, = 270.80 million, = 675.96 million and
% 8.90 million, respectively, while Gross NPA ratios in our inclusive finance (JLG) loan portfolio were 3.82%, 1.24%,
2.48% and 0.03%, respectively. Our borrowers’ ability to repay their loans depends on various factors, including, the
results of operations of our borrowers’ businesses, the occurrence of event-based risks and natural calamities, such as
floods and cyclones. In particular, our target borrower segment for inclusive finance (JLG) loans primarily comprises
small traders, individuals with micro-enterprises and others belonging to the unorganized sector, who are most impacted
due to the economic downturn caused by COVID-19 related measures such as closure of non-essential services. In the
event our borrowers’ businesses have been unable to withstand the economic pressures caused by the COVID-19
pandemic, we may experience higher NPAs than anticipated in this segment driven by deterioration in asset quality due to
our borrower’s reduced ability to make timely repayments. We may therefore be required to recognize higher loan loss
provisions in future periods, on account of the uncertainty in the external environment due to COVID-19, which may
adversely impact our asset quality and profitability in future periods.

  

Banks in India, including our Bank, are subject to stringent regulatory requirements and prudential norms and our
inability to comply with such laws, regulations and norms may have an adverse effect on our business, results of
operations, financial condition and cash flows.

Banks in India, including our Bank, are subject to various regulations prescribed by the RBI and the Banking Regulation
Act. These include, but are not limited to, the following:

. certain restrictions and prohibitions from taking exposure in terms of loans and advances to our Directors,
companies in which our Directors are interested (as defined under applicable banking regulations), our Promoters,
major shareholders (holding 10% or more of our paid-up Equity Share capital), the relatives (as defined in Section
2 (77) of the Companies Act, 2013 and rules made there under) of the Promoters and entities in which our
Promoters, major shareholders have significant influence or control (as defined under applicable accounting
standards);

. regulations under the Banking Regulation Act and circulars and directives issued by the RBI that apply to
scheduled commercial banks. For instance, pursuant to Section 12(1)(i) of the Banking Regulation Act, the
subscribed share capital of a banking company is required to be not less than one-half of its authorised share
capital, and the paid-up share capital is required to be not less than one-half of the subscribed share capital;

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