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repayments susceptible to be affected during economic downturns. In the past, there have been certain instances of write-
offs in respect of the inclusive finance (JLG) and unsecured MSME/SME loan portfolio. In Fiscal 2018, 2019 and 2020
and in the nine months ended December 31, 2020, our write-offs in these portfolios was = 427.93 million, = 335.62 million,
% 460.55 million and 2 626.60 million, respectively. Our borrowers may default on their obligations as a result of various
factors including bankruptcy, lack of liquidity and/ or failure of the business or commercial venture in relation to which
such borrowings were sanctioned. We may be unable to collect our outstanding advances in part or at all in the event of
non-payment by a borrower. As of March 31, 2018, 2019 and 2020 and as of December 31, 2020, such unsecured loans
represented 94.81%, 84.32%, 77.49% and 74.59%, respectively, of our Net Advances.

For our inclusive finance (JLG) business, we rely primarily on non-traditional guarantee mechanisms including the peer-
guarantee loan model, wherein borrowers form a JLG and provide guarantees for loans obtained by each member of such
group without such members having to provide collateral or security on an individual basis. There can be no assurance
that such joint liability arrangements will ensure full or partial repayment by the other members of a JLG in the event of
default by any one of them. These arrangements are likely to fail if there is no meaningful personal relationship among
members of such group; if inadequate risk management procedures have been employed to verify the group members and
their ability to repay such loans; or as a result of adverse external factors such as natural calamities or forced migration.
Any increase in delinquency in our loan portfolio may require us to increase our provision for credit losses, which would
decrease our earnings. For further information on the JLG model, see “Our Business” beginning on page 141.

Further, certain state governments have recently waived loans to certain customer segments. These waivers have an
adverse impact on the overall loan recovery climate. If such loan waivers become more widespread in the future, it may
have a negative impact on borrower behavior such as resistance by borrowers’ to make repayments in anticipation of
further loan waivers across other customer segments. The loan waiver programs may have an adverse impact on the
banking sector as a whole as well as our Bank’s business, future financial performance and the trading price of the Equity
Shares.

The value of our collateral may decrease or we may experience delays in enforcing collateral when borrowers default
on their obligations, which may result in failure to recover the expected value of collateral security exposing us to
potential loss.

While majority of our Gross Advances are unsecured, we also disburse certain loans that are secured by assets. For our
secured advances we follow certain procedures to evaluate the credit profiles of our customers and to assess the value of
the collateral. However, the value of the collateral obtained by us may fluctuate or decline due to factors beyond our
control, including deterioration in regional economic conditions or of asset values or as a result of adverse changes in the
credit quality of our borrowers and counterparties or delays in foreclosure proceedings or defects or deficiencies in the
perfection of collateral. In the event of a decline in any of these, some of our loans may exceed the value of their underlying
collateral. Our secured net advances have grown from 813.50 million as of March 31, 2018 to % 4,201.34 million as of
March 31, 2019 and to = 7,949.37 million as of March 31, 2020 and were = 9,610.15 million as of December 31, 2020.
Our secured advances represented 5.19%, 15.68%, 22.51% and 25.41% of our Net Advances as of March 31, 2018, 2019,
and 2020 and as of December 31, 2020, respectively.

Any reduction in asset prices may cause the value of our collateral to decline. While we factor in a reduction in value to
an extent, the security may not be sufficient if the value of the collateral reduces substantially. This is particularly
applicable in situations where the advances are secured by highly depreciating fixed assets such as commercial vehicles.
As a result, if our customers default, we may receive less money from liquidating the collateral than is owed under the
relevant loan, and incur losses, even in cases where we are able to successfully seize and liquidate the collateral. We have
previously recorded loss of value on seizing and liquidating commercial vehicles from borrowers that have defaulted on
their repayments. We have previously recorded write-offs with respect to our commercial vehicle loan portfolio.

Collateral for our secured business loans primarily includes mortgage over our customers’ residential or commercial
property. The value of this security is largely dependent on housing and property market conditions prevalent at that time,
and may decline due to adverse market conditions including an economic downturn or a downward movement in real
estate prices. We are also exposed to the risk arising out of fraudulent title deeds and property documents given as collateral
for our secured loans, particularly as there is no centralized land title registry in India to verify the land title of first-time
borrowers.

We cannot assure you that we will be able to successfully seize the collateral in the event of customer default and may
face delays and incur legal and administrative costs in the repossession and sale of the collateral. Legal proceedings for
such purposes in India are often time consuming and if we are unable to seize and recover the full value of collateral in a
timely manner, or at all, our business, results of operations, financial condition and cash flows may be adversely affected.
In the event our borrowers default on the repayment of loans, we may not be able to realize the full value of the collateral
due to various reasons, including a possible decline in the realizable value of the collateral, defective title or pledge of
damaged items as security, prolonged legal proceedings and fraudulent actions by borrowers, or we may not be able to

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