15.

16.

17.

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.

We have not determined with any degree of certainty the impact that such adoption will have on our financial reporting.
Furthermore, the new accounting standards will change, among other things, our 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.

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 the 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.

We could be subject to volatility in income from our treasury operations, which could have an adverse effect on our
results of operations and cash flows.

Our income from treasury operations comprises interest and dividend income from investments, and profit from sale of
investments. Income from our treasury operations represented 7.66%, 6.31%, 7.02% and 12.21%, of our total income in
Fiscal 2018, 2019 and 2020 and in the nine months ended December 31, 2020, respectively. Our treasury operations are
vulnerable to changes in interest rates, exchange rates, equity prices and other factors beyond our control, including the
domestic and international economic and political scenario, inflationary expectations and the RBI’s monetary policies. In
particular, if interest rates rise, the valuation of our fixed income securities portfolio, such as Government securities and
corporate bonds would decline. Although we have operational controls and procedures in place for our treasury operations,
such as counterparty limits, position limits, stop loss limits and exposure limits, that are designed to mitigate the extent of
such losses, there can be no assurance that we will not incur losses in the course of our proprietary trading on our fixed
income book held in the available for sale and held for trading portfolios. In addition, there can be no assurance that the
policies and procedures governing our treasury operations will not be breached or that we will at all times be in compliance
with the limits set forth therein. For instance, we have previously breached the investment limits for mutual fund
investments as set out by our internal treasury management policies. Any such losses could adversely affect our financial
condition, results of operations and cash flows.

We have entered into tie-ups with Business Correspondents and payment banks for sourcing and servicing customers.
If these Business Correspondents prefer to promote our competitors’ products or our agreements with them are
terminated or not renewed it would adversely affect our business, financial condition, results of operations and cash
flows.

Our BCs are responsible for sourcing and servicing customers of our banking products. As of March 31, 2018, 2019 and
2020 and as of December 31, 2020, advances to customers through our Asset BC network represented 0.33%, 0.39%,
0.92% and 0.58%, respectively, of our Gross Advances as of such dates. As of March 31, 2018, 2019 and 2020 and as of
December 31, 2020, deposits sourced through our Liability BC and URC Liability BC network together represented 0.58%,
4.30%, 4.17% and 6.25% of our total deposits as of such dates, respectively. In the event that our Business Correspondents
prefer to promote our competitors’ products over ours or our agreements with them are terminated or not renewed, it would
have an adverse effect on our business, financial condition, results of operations and cash flows.

We have also entered into tie-ups with payment banks for our liability products, and under these arrangements, deposits
by customers in these payment banks that are above = 100,000 as at the end of day are swept into an account maintained
by us. As of December 31, 2020, we entered into these arrangements with three payment banks. We have also entered into
an arrangement for sourcing of fixed deposit with one of the above-mentioned payment bank. Further, we have entered
into an arrangement for sourcing of MSME loans with a fintech player. For further information on our tie-ups with payment
banks, see “Our Business” beginning on page 241. These agreements are valid for a period of three years with an option
to renew for successive terms. We cannot assure you that such arrangements will be renewed on the same terms as currently
entered into upon their expiry, or at all. In the event these arrangements are terminated or not renewed, it may have an
adverse effect on our business, financial conditions, results of operations and cash flows.

Negative cash flows from operating activities in the future could adversely affect our cash flow requirements, our ability

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