Risk management is fundamental to our operations and is critical to ensure sustained profitability and stability. We have
an independent integrated risk management function to identify, measure, monitor and manage credit, market and
operational risks including information security risk.

We have an established Risk Management Framework to ensure that our risk management operations are independent of
our business operations, through various policies and procedures. Set out below is a description of the functions of each
of these components/ committees:

The Board of Directors: The Board is ultimately responsible for our risk management framework. The Board is principally
responsible for approving our risk mitigation posture, risk tolerance and related strategies and policies. The key
responsibilities of the Board include providing adequate guidance and supervision for decisions taken by the Risk
Management Committee of the Board (““RMCB”). In addition the RMCB has the additional responsibility to managing
credit risk, particularly by (a) ensuring the establishment of a robust credit risk management culture by delegating
responsibilities for key decision making and controls to appropriate management authorities, (b) assessing the adequacy
of capital required to support business activities undertaken by our Bank, (c) approving portfolio limits, setting exposure
norms for the retail segment and MSE/ SME loans and (d) providing adequate supervision for the decisions taken by
other responsible authorities within our Bank.

Risk Management Committee of the Board: The RMCB is responsible for oversight and review of the risk management
in our Bank. The key responsibilities of the RMCB include (i) approving/ making recommendations to the Board for its
review and approval of the policies, strategies and associated frameworks for management of risk (ii) ensuring appropriate
risk organization structure and the independence of risk management functions (iii) ensuring compliance with the extant
internal policy guidelines and also regulatory guidelines (iv) monitoring and reviewing capital adequacy computation
with an understanding of methodology, systems and data (v) approving the stress testing results/ analysis and monitoring
the action plans and corrective measures periodically.

Asset Liability Management Committee (“ALCO”): The ALCO is a committee comprising members from senior
management. Primary responsibility of the ALCO is to review and ensure compliance with policies, frameworks, internal
limits and regulatory limits. The ALCO also regularly reviews the asset-liability position of our Bank.

Risk Management Committee of the Executives (“RMCE”): The RMCE is also a committee comprising senior
management and is responsible for overseeing implementation of the credit and operational risk management framework.
The RMCE ensures implementation of the credit risk management policy and operational risk management policy that is
approved by the Board.

Risk Management Department (“RMD”): The RMD together with its units, i.e. credit risk unit, market risk and ALM
unit and operational risk unit, are responsible for implementation of the risk management policies. The RMD is also in
the process of establishing systems and implementing processes for identification, measurement, management, mitigation,
monitoring and reporting of credit, operational, market and ALM, liquidity and interest rate risks.

Information Technology

Over the years, use of technology has enabled us to scale up our operations in an efficient manner. We have automated
our backend operations, supported by a core banking system and loan management functions. We have collaborated with
software solution providers and software service providers for these functions.

Our major functions including customer experience, digital transaction processing, enterprise accounting, expense
management, human resources, process management, risk management, and governance are also supported by various
technology platforms. With the use of technology, we have created a paperless onboarding process for originating micro
banking loans and opening bank accounts. We manage various stages of our customers’ banking transactions, from
onboarding to customer management, through our various technology platforms. We have also introduced handheld
devices for field employees and applications are enabled for these employees to conduct the activities through such
devices.

We have also initiated engagements with fintech partners for leveraging our digital platforms to perform business
intelligence and analytics. We are applying analytics in various business functions including customer acquisition, cross
selling and upselling opportunities, improved customer experience, MIS and performance monitoring and management,
and risk analysis. The objective of focusing on analytics is to improve identification of market potential for prioritizing
the geographies we should focus on, identifying relevant products for cross-selling and upselling, undertake detailed
portfolio review as part of our risk management functions, and improving early warning systems and delinquency
prediction for better asset quality control.

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