c) Bank charges, lockers, nominations, facilities to disabled persons: The extant provisions applicable
to scheduled commercial banks shall be applicable to SFBs as well.

d) Marginal cost of funds based lending rate, other related regulations on interest rates and fair
practice code for lenders: The extant provisions applicable to scheduled commercial banks shall be
applicable to SFBs as well.

4, KYC requirements: At their discretion, SFBs may (like all other banks) decide not to take the wet signature
while opening accounts, and instead rely upon the electronic authentication/ confirmation of the terms and
conditions of the banking relationship or account relationship keeping in view their confidence in the legal
validity of such authentications or confirmations. However, all the extant regulations concerning KYC including
those covering the Central KYC registry, and any subsequent instructions in this regard, as applicable to
commercial banks, would be applicable to SFBs.

Reserve Bank of India Master Direction on Priority Sector Lending — Small Finance Banks — Targets and
Classification dated July 29, 2019, as amended (“SFB Priority Sector Lending Regulations”)

The SFB Priority Sector Lending Regulations apply to every SFB licensed to operate in India by the RBI. In terms of
these regulations, the sectors categorised as priority sectors are agriculture, micro, small and medium enterprises
(“MSME”), export credit, education, housing, social infrastructure, renewable energy and other sectors. Further, the SFB
Priority Sector Lending Regulations requires SFBs have a target of 75% for PSL of their adjusted net bank credit. For
agriculture sector, micro enterprises and advance to weaker sections, the targets are 18%, 7.5% and 10% of the adjusted
net bank credit respectively.

The SFB Priority Sector Lending Regulations provides conditions, thresholds and requirements for determining
agriculture, micro, MSME, export credit, education, housing, social infrastructure, renewable energy and other sectors.

RBI on September 4, 2020 issued Master Direction - FIDD.CO.Plan.BC.5/04.09.01/2020-21, dated September 4, 2020
on ‘Priority Sector Lending (PSL) — Targets and Classification’ wherein the sub-target for small and marginal farmers is
increased from 8% currently to reach 10% in phased manner by financial year ending 2023-24 and weaker section target
from 10% currently to reach 12% in phased manner by financial year ending 2023-24. In addition, certain other changes
were made such as change in definition of MSME in line with Government of India (Gol), Gazette Notification S.O. 2119
(E) dated June 26, 2020 read with circular RBI/2020-2021/10 FIDD. MSME & NFS.BC.No.3/06.02.31/2020-21 read
with FIDD.MSME & NFS. BC. No.4 /06.02.31/2020-21 dated July 2, 2020, August 21, 2020 respectively on ‘Credit flow
to Micro, Small and Medium Enterprises Sector’ and updated from time to time.

Reserve Bank of India’s Compendium of Guidelines for Small Finance Banks — Financial Inclusion and Development
dated July 6, 2017

Considering the differentiated nature of business and financial focus of the SFBs and taking into account the important
role that SFBs can play in the supply of credit to micro and small enterprises, agriculture and banking services, the RBI
issued a specific compendium of guidelines for SFBs on areas relating to financial inclusion and development. SFBs are
required to open at least 25% of its branches in unbanked rural centres. The identified priority sectors are agriculture,
MSMEs, export credit, education, housing, social infrastructure, renewable energy and certain categories of loans
identified therein.

Reserve Bank of India’s Guidelines on Compensation of Whole Time Directors/ Chief Executive Officers/ Material
Risk Takers and Control Function Staff dated November 4, 2019 (“RBI Compensation Guidelines”)

The Financial Stability Board Principles for Sound Compensation Practices, 2009 and Implementation Standard, 2009
(together, “FSB Principles”) aim to ensure effective governance of compensation, alignment of compensation with
prudent risk taking, effective supervisory oversight and stakeholder engagement in compensation. The FSB Principles
have been endorsed by the G-20 countries and the Basel Committee on Banking Supervision (“BCBS”) which has
published remuneration related reports and disclosure requirements. Pursuant to the stipulations in the reports and
disclosure requirements published by BCBS, the RBI issued the RBI Compensation Guidelines which are based on the
FSB Principles and are applicable to all private sector banks (including small finance banks) and foreign banks operating
in India. In line with the FSB Principles banks are required to take steps to implement certain guidelines by putting in
place necessary policies/systems. These guidelines include, inter alia, formulation of a compensation policy, constitution
of nomination and remuneration committee, alignment of compensation of whole-time directors / chief executive officers
and material risk takers with prudent risk taking etc. All applications for approval of appointment/re-appointment or
approval of remuneration/revision in remuneration of whole-time directors/chief executive officers shall be submitted to
the RBI with the details as prescribed in the guidelines. These guidelines shall be applicable for pay cycles beginning
from/after April 1, 2020.

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