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 “Risk Factors — The Indian banking industry is very competitive and our growth strategy depends on our ability to
compete effectively.” on page 39.

Transition to Ind AS and impact on preparation and presentation of our future financial statements

The Ministry of Corporate Affairs, in its press release dated January 18, 2016, issued a roadmap for implementation of Ind AS
for scheduled commercial banks, insurance companies and NBFCs, which are also applicable to our Bank. Such roadmap
provided that these institutions were required to prepare Ind AS financial statements for accounting periods commencing April
1, 2018 (including comparative financial information for the corresponding periods in the previous year). The RBI, by its
circular dated February 11, 2016, required all scheduled commercial banks (except regional rural banks) to comply with Ind
AS for accounting periods beginning from April 1, 2018 onwards, with comparatives for periods ending March 31, 2018 or
thereafter, and also required such entities to be in preparedness to submit proforma Ind AS financial statements to the RBI from
the six months ended September 30, 2016. Further, the RBI on October 13, 2017 advised SFBs to be prepared for
implementation of the Ind AS accounting standards and instructed SFBs to submit proforma financial statements under Ind AS
on a quarterly basis from the quarter ended June 30, 2017, in the format prescribed by them. In compliance of such regulatory
requirements, we commenced submitting proforma Ind AS financial statements for the quarter ended June 30, 2017. However,
the RBI, through its notification dated March 22, 2019, decided to defer the implementation of Ind AS until further notice for
all scheduled commercial banks (except regional rural banks). Under applicable regulations, scheduled commercial banks,
including our Bank, are not permitted to undertake early adoption of Ind AS. Accordingly, we continue to prepare and present
our financial statements under Indian GAAP.

Ind AS differs in many respects from Indian GAAP, and our Restated Financial Statements prepared under Indian GAAP will
therefore not be comparable to our financial statements prepared under Ind AS for such respective periods. The key areas of
difference between Indian GAAP and Ind AS as it applies to our Bank include the methodology for estimating allowances for
probable loan losses and for classifying and valuing our investment portfolio and revenue recognition policy. For estimation of
probable loan losses, the new accounting standards may require us to calculate the present value of the expected future cash
flows realizable from our loans, including the possible liquidation of collateral (discounted at the loan’s effective interest rate).
This may result in us recognizing allowances for probable loan losses in the future which may be higher or lower than under
current Indian GAAP. In addition, given the relatively recent introduction of Ind AS in India, and in particular since under
applicable regulations, Ind AS is still not applicable to scheduled commercial banks, there is limited established practice
available for drawing informed judgments regarding the implementation and application of Ind AS to the financial statements
of scheduled commercial banks, and consequently our Bank. The Ind AS financial information that we may be required to
prepare when applicable to us in the future will therefore not be comparable to the Restated Financial Statements included in
this Prospectus.

Therefore, there can be no assurance that our financial condition, results of operations, cash flows or changes in shareholders’
equity will not appear materially worse under Ind AS than under Indian GAAP. In our transition to Ind AS reporting, when
applicable, we may encounter difficulties in the ongoing process of implementing and enhancing management information
systems. Further, there is no significant body of established practice on which to draw in forming judgments regarding the new
system’s implementation and application. There can be no assurance that our adoption of Ind AS will not adversely affect our
reported results of operations or financial condition and any failure to successfully adopt Ind AS could adversely affect our
business and the trading price of the Equity Shares.

SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation

The financial statements have been prepared and presented under the historical cost convention and accrual basis of accounting,
unless otherwise stated and are in accordance with Generally Accepted Accounting Principles in India (‘GAAP’), statutory
requirements prescribed under the Banking Regulation Act, 1949, circulars and guidelines issued by the RBI from time to time,
Accounting Standards (‘AS’) specified under Section 133 of the Companies Act, 2013 to the extent applicable, in so far as they
apply to banks and current practices prevailing within the banking industry in India.

Significant Accounting Policies
Investments

Classification: In accordance with the RBI guidelines on investment classification and valuation, investments are classified on
the date of purchase into “Held for Trading” (‘HFT’), “Available for Sale” (‘AFS’) and “Held to Maturity” (‘HTM’ or “Banking

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