31.

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government authorities, or any orders of judiciary to ban the sale of a particular segment of vehicles, impose additional
specifications or impose additional taxes on any particular segment of vehicles, could lead to a decline in the sales of such
vehicles and also in the value of such vehicles held as collateral. This would adversely impact the ability of borrowers
within that industry (both new and used commercial vehicles) to service their debt obligations to us. For example, the
Supreme Court of India imposed a ban on the sale of vehicles not complying with Bharat Stage Emission Standards IV
(BS IV) and imposed a ban on diesel vehicles more than 10 years old and petrol vehicle more than 15 years from plying
within the Delhi-NCR jurisdiction. Such regulatory amendments or orders of the judiciary may lead to a decline in our
disbursements and adversely affect our business, results of operations and prospects. The occurrence of any of these events
and other factors could lead to an increase in impairment losses and adversely affect our business, results of operations
and cash flows. As of December 31, 2020, the Gross NPAs for this product segment were = 155.29 million, representing
4.20% of our Gross Advances. We cannot assure you that we will be able to diversify our exposure over different industry
sectors in the future. Failure to maintain diverse exposure resulting in industry sector concentration may adversely impact
our financial condition, results of operations and cash flows, in case of any significant deterioration in the performance of
any such industry sector.

The Indian banking industry is very competitive and our growth strategy depends on our ability to compete effectively.

We have a limited operating history as an SFB and the success of our banking operations depends on a number of factors,
including the demand for our services and our ability to compete with other banks and financial institutions effectively.
The banking and financing sector in India is highly competitive and we face competition in all our principal areas of
business. We face our most significant organized competition from other SFBs, NBFCs, microfinance institutions and
cooperative banks which have significant presence in rural areas, public sector banks, private sector banks, housing finance
companies and other financial services companies in India. SFBs have grown at a CAGR of 29% from Fiscal 2017 to
Fiscal 2020, in terms of assets under management (“AUM”). Top three SFBs accounted for 63% of the total SFB AUM
in Fiscal 2020, compared to 55% in Fiscal 2017. Our Bank’s AUM accounted for 4% of the overall AUM of SFBs in
Fiscal 2020 (Source: CRISIL Report). In addition, many of our potential customers in economically weaker segments do
not have access to any form of organized institutional lending, and rely on loans from informal sources, especially
moneylenders, landlords, local shopkeepers and traders, at higher interest rates. In the organized sector, our competitors
may have a better brand recognition, greater business experience, more diversified operations, greater customer and
depositor base, wider network of branches and better access to, and lower costs of funding than we do. Further, the RBI
issued Guidelines for On-Tap Licensing of SFBs in the Private Sector on December 5, 2019, which permits applicants to
apply for SFB license to the RBI at any time, subject to fulfilment of certain eligibility criteria and other conditions. We
anticipate that this will increase competition within small finance banks operating in India, including our Bank. Further,
consolidation in the industry driven by the merger of other banks is likely to further increase competition by creating
larger, more homogeneous and potentially stronger competitors in the market. Increase in operations of existing
competitors or entry of additional banks offering similar or a wider range of products and services could also increase
competition. Further, with the advent of technology based initiatives and alternative modes of banking, we may face
increased competition in this sector, which may in turn impact our revenues and profitability. We may also face
competition from specialized fintech companies who could disrupt our origination, sales and distribution process. Our
inability to compete effectively may adversely affect our business, results of operations financial condition and cash flows.

Due to competitive pressures, we may be unable to successfully execute our growth strategy and offer products and
services at reasonable returns and this may adversely impact our business, future financial performance and the trading
price of the Equity Shares. See “Our Business - Competition” on page 170.

An inability to obtain, renew or maintain our statutory and regulatory permits and approvals required to operate our
business may adversely impact our business, financial condition, results of operation and cash flows.

We are required to obtain various statutory and regulatory permits and approvals to operate our business which requires
us to comply with certain terms and conditions to continue our banking operations. For instance, we require approvals
from the RBI for various aspects of our banking operations (including for services such as NEFT and RTGS), approvals
for commencing and providing internet and mobile banking services and licenses from other regulatory authorities, such
as the IRDAI and PFRDA, for distribution of third-party insurance products, mutual fund units, and pension products
under the Atal Pension Yojana and National Pension Scheme. Failure to obtain these permits and approvals may result in
imposition of fines and penalties by the relevant regulator. For instance, the RBI In-Principle Approval and RBI Final
Approval also require us to comply with certain terms and conditions. See “Key Regulations and Policies” beginning on
page 172. In the event that we are unable to comply with any or all of these terms and conditions, or seek waivers or
extensions of time for complying with these terms and conditions, it is possible that the RBI may place stringent restrictions
on our operations. This may result in the interruption of all or some of our operations and may have a material adverse
effect on our business, financial condition, results and cash flow. Further, we may need to apply for new licenses and
approvals, including for conversion of our Bank into a universal bank subject to compliance with applicable regulations,
and renew our existing ones, which expire from time to time. In the event that we are unable to obtain, renew or maintain
other statutory permits and approvals or comply with regulatory requirements, it may result in the interruption of all or

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