SECTION II: RISK FACTORS
RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all the information disclosed in
this Prospectus, including the risks and uncertainties described below, before making an investment in the Equity Shares. The
risks described below are not the only risks relevant to us or the Equity Shares or the industry in which we currently operate.
Additional risks and uncertainties, not presently known to us or that we currently deem immaterial may also impair our
business prospects, results of operations, financial condition and cash flows. In order to obtain a complete understanding
about us, prospective investors should read this section in conjunction with the sections “Our Business", “Selected Statistical
Information”, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, “Summary of
Financial Information” and “Financial Information” on pages 141, 211, 306, 59 and 241, respectively, as well as the other
financial and statistical information included in this Prospectus.

If any of the risks described below, or other risks that are not currently known or are currently deemed immaterial actually
occur, our business prospects, results of operations and financial condition could be adversely affected, the trading price of
the Equity Shares could decline, and investors may lose all or part of the value of their investment. The financial and other
related implications of the risk factors, wherever quantifiable, have been disclosed in the risk factors mentioned below.
However, there are certain risk factors where the financial impact is not quantifiable and, therefore, cannot be disclosed in
such risk factors. In making an investment decision, prospective investors must rely on their own examination of our Bank and
the terms of the Issue, including the merits and risks involved. You should consult your tax, financial and legal advisors about
the particular consequences to you of an investment in this Issue.

This Prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations
described below and elsewhere in this Prospectus. Please see “Forward-Looking Statements” beginning on page 21.

Our Bank's Fiscal commences on April I and ends on March 31 of the immediately subsequent year, and references to a
particular Fiscal are to the 12 months ended March 31 of that year. Unless otherwise indicated or the context otherwise requires,
the financial information included herein is based on or derived from our Restated Financial Statements included in this
Prospectus. For further information, see “Financial Information” and “Management's Discussion and Analysis of Financial
Condition and Results of Operations” on pages 241 and 306, respectively.

Unless otherwise indicated, industry and market data used in this section has been derived from the report “Report on Small
Finance Banks and various loan products” dated September 2020 (the “CRISIL Report”) prepared and released by CRISIL
Limited and commissioned by us in connection with the Issue. Neither we, nor the BRLMs, nor any of their affiliates or advisors,
nor any other person connected with the Issue has independently verified such information. Unless otherwise indicated, all
financial, operational, industry and other related information derived from the CRISIL Report and included herein with respect
to any particular year refers to such information for the relevant fiscal year. For further information, see “Certain Conventions,
Presentation of Financial, Industry and Market Data and Currency of Presentation — Industry and Market Data” beginning on
page 17.

RISKS RELATING TO OUR BUSINESS

1. The continuing impacts of COVID-19 are highly unpredictable and could be significant, and may have an adverse
effect on our business, operations and our future financial performance.

In late 2019, COVID-19 emerged and by March 11, 2020 was declared a global pandemic by The World Health
Organization. Governments and municipalities around the world instituted measures in an effort to control the spread of
COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions, and closure of non-essential
businesses. By the end of March 2020, the macroeconomic impacts became significant, exhibited by, among other things,
a rise in unemployment and market volatility.

Effective March 24, 2020, in compliance with the lockdown orders announced by the Indian Government, we temporarily
closed certain of our Banking Outlets and substantially all of our employees were working remotely. Additionally, many
of our customers, service providers and business correspondents/ direct selling agents temporarily ceased operating their
respective enterprises. As a result, while our financial results for Fiscal 2020 reflect historical trends for the most part, we
experienced a decline in collections, reduced disbursements and increased general provisioning in the last week of March
2020 and during nine months ended December 31, 2020 due to continuing impact of COVID-19 and various regulatory
measures in response to COVID-19, including moratoriums availed by customers. Due to a surge in COVID-19 cases
during January and February 2021, few State Government announced lockdown in selected regions and there may be
further lockdown by Central and other State Governments and may lead to further deterioration in collections,
disbursement and increase in provisioning. The impact of the pandemic on our business, operations and future financial

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