KEY REGULATIONS AND POLICIES

The following description is a summary of certain key sector specific laws and regulations in India, which are applicable
to us. The information detailed in this section has been obtained from publications available in the public domain. The
regulations and their descriptions set out below may not be exhaustive and are only intended to provide general
information to the bidders and are neither designed nor intended to substitute for professional legal advice. Judicial and
administrative interpretations are subject to modification or clarification by subsequent legislative, judicial or
administrative decisions.

Our Bank is engaged in the business of operating as a small finance bank primarily serving the unserved and underserved,
with a focus on financial inclusion. We deliver our products and services through our banking outlets and business
correspondents. We offer a product portfolio, that includes both asset products (i.e. loans), liability products (i.e. deposits)
and cross sell/ referral products (i.e. mutual funds, insurance etc.). We also offer various digital platforms, including
mobile banking platforms, internet banking portals and RuPay branded ATM cum debit cards. Under the provisions of
various Central Government and State Government statutes and legislations, our Bank is required to obtain and regularly
renew certain licenses or registrations and to seek statutory permissions to conduct our business and operations. For
information regarding regulatory approvals obtained by our Bank, see “Government and Other Approvals” beginning on
page 341.

The following is an overview of some of the important laws and regulations, which are relevant to our business as an
SFB.

Banking Regulation Act, 1949 (“Banking Regulation Act”)

Banks in India are required to obtain a license from the RBI to carry on banking business in India. Such license is granted
to the bank subject to compliance with certain conditions some of which include, inter alia that: (i) the bank has or will
have the ability to pay its present and future depositors in full as their claims accrue; (ii) the affairs of the bank are not
being, or are not likely to be conducted in a manner detrimental to the interests of its present or future depositors; (iii) the
bank has adequate capital structure and earning prospects; (iv) public interest will be served if such a license is granted
to the bank; (v) the general character of the proposed management of the bank will not be prejudicial to public interest or
the interests of its depositors; and vi) that having regard to the banking facilities available in the proposed principal area
of operations of the bank, the potential scope for expansion of banks already in existence in the area and other relevant
factors the grant of the license would not be prejudicial to the operation and consolidation of the banking system consistent
with monetary stability and economic growth. The RBI has the power to cancel the license if a bank fails to comply with
the conditions or if the bank ceases to carry on banking business in India. Additionally, the RBI has issued various
reporting and record-keeping requirements for such commercial banks. The appointment of the auditors of the banks is
subject to the approval of the RBI. The RBI can direct a special audit in public interest, or in the interest of the banking
company or its depositors. It also sets out the provisions in relation to the loan granting activities of a banking company.
The Banking Regulation Act specifies the business activities in which a bank may engage. Banks are prohibited from
engaging in business activities other than the specified activities. As per the Banking Regulation Act read with the gazette
notification DBR.PSBD. No. 1084/16.13.100/2016-17 dated July 21, 2016, no person holding shares in the bank shall, in
respect of any shares held by such person, exercise voting rights in excess of 26% of the total voting rights of all the
shareholders of the bank. Pursuant to amendments to the Banking Regulation Act in January 2013, private sector banks
are permitted, subject to the guidelines framed by the RBI, to issue perpetual, redeemable or irredeemable preference
shares in addition to ordinary equity shares.

Further, the Banking Regulation Act, requires any person to seek prior approval of the RBI, to acquire or agree to acquire,
directly or indirectly, shares or voting rights of a bank, by himself or with persons acting in concert, wherein such
acquisition (taken together with shares or voting rights held by him or his relative or associate enterprise or persons acting
in concert with him) results in aggregate shareholding of such person to be 5% or more of the paid-up capital of a bank
or entitles him to exercise 5% or more of the voting rights in a bank. Further, the RBI may, by passing an order, restrict
any person or persons acting in concert with him, holding more than 5% of the total voting rights of all the shareholders
of the banking company from exercising voting rights on poll in excess of the said 5%, if such person is deemed to be not
fit and proper to hold shares or voting rights, by the RBI. Under the RBI (Prior Approval for Acquisition of Shares or
Voting Rights in Private Sector Banks) Directions, 2015, an existing shareholder who has already obtained prior approval
of RBI for having a “major shareholding” in a private sector bank, need not obtain approval for an additional fresh
acquisition resulting up to 10% aggregate shareholding in such bank. However, if the additional acquisition results in an
aggregate shareholding that is in excess of 10%, prior approval of RBI must be obtained. Further, persons with ‘major
shareholding’ shall also periodically report to the concerned bank on continuing to be fit and proper.

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