48,

49,

errors, including clerical or record keeping errors or errors resulting from faulty computer or telecommunications systems.
See “— Our operations involve handling significant amounts of cash, making us susceptible to operational risks, including
fraud, petty theft and embezzlement, which could harm our results of operations and financial position” on page 37.
Further, given the high volume of transactions that we handle on a day-to-day basis, certain errors may be repeated or
compounded before they are discovered and successfully rectified. In addition, our dependence on automated systems to
record and process transactions may further increase the risk that technical system flaws or employee tampering or
manipulation of those systems will result in losses that are difficult to detect.

We also outsource certain functions/ activities to other agencies. We are also, as a result exposed to the risk that such
external agencies may be unable to fulfil their contractual obligations to us (or will be subject to the same risk of fraud or
operational errors by their respective employees as we are), and to the risk that our (or such agencies) business continuity
and data security systems prove not to be sufficiently adequate. We also face the risk that the design of our controls and
procedures may prove inadequate, or are circumvented, thereby causing delays in detection or errors in information. We
are exposed to operational risks arising from the potential inadequacy or failure of internal processes or systems, and our
actions may not be sufficient to guarantee effective internal controls in all circumstances. Our management information
systems and internal control procedures that are designed to monitor our operations and overall compliance may not
identify every instance of non-compliance or every suspicious transaction. If internal control weaknesses are identified,
our actions may not be sufficient to fully correct such internal control weakness.

Weaknesses, disruption or failures in IT systems could adversely impact our business.

We substantially rely on our IT systems for certain critical functions including financial controls, risk management and
transaction processing. Our IT systems are outsourced to a technology service provider for end-to-end banking solutions,
comprising our core banking systems, risk management, domestic treasury, switching solutions, debit card management,
retail internet banking and mobile banking solutions, business origination systems, loan management systems, corporate
website and corporate internet banking. Any failure in performing any of these functions could adversely affect our
business, financial condition and results of operations.

Our alternate delivery channels including internet banking including UPI and bill payment services, mobile banking and
tablet banking are subject to various risks, such as network connectivity failure, information security issues and browser
compatibility issues. We may also be subject to disruptions of our IT systems arising from events that are wholly or
partially beyond our control (including, for example, damage or incapacitation by human error, natural disasters, electrical
or telecommunication outages, sabotage, computer viruses, hacking, cyber-attacks or similar events, or loss of support
services from other third parties, such as internet backbone providers). A significant system breakdown or system failure
would have an adverse impact on our operations and lead to financial loss. In the event we experience interruptions in our
IT systems, this could give rise to deterioration in customer service and to loss or liability to us and could adversely affect
our business, financial condition, results of operations and cash flows.

Our data centre is located in Mumbai and our disaster recovery centre is located in Hyderabad as part of our business
continuity measures. However, if there is a failure in switching to the back-up system in a timely manner, our data may be
compromised which would have an adverse effect on our financial condition, results of operations and cash flows.

Further, on September 14, 2020, RBI released guidelines on automation of income recognition, asset classification and
provisioning processes pursuant to which banks have been advised to put in place and upgrade their systems by June 30,
2021 to inter alia, recognize and derecognize income in case of impaired assets, configure the NPAs and NPIs in the
system without any manual intervention.

Certain of our Directors are on the board of directors of companies engaged in a line of business similar to that of ours.
Any conflict of interest that may occur as a result could adversely affect our business, prospects, financial condition,
result of operations and cash flows.

Certain of our Directors are on the board of directors of companies engaged in a line of business similar to that of our
Bank. John Arunkumar Diaz is a director on the board of directors of Tribetech Private Limited. Further, Aleem Remtula
is a nominee director on the board of directors of S.M.I.L.E. Microfinance Limited. These entities may provide comparable
services, expand their presence, solicit our employees or acquire interests in competing ventures in the locations or
segments in which we operate. A conflict of interest may occur between our business and the business of such entities,
which could have an adverse effect on our business, prospects, financial condition, results of operations and cash flows.
Certain of our Promoters and Directors may become involved in ventures that may potentially compete with our Bank,
and their interests in these ventures may conflict with the interests of our Bank. Our Promoters and Directors may, for
business considerations or otherwise, cause our Bank to take actions, or refrain from taking actions, in order to benefit
themselves instead of our Bank’s interests and which may be harmful to our Bank’s interests, which may materially
adversely impact our business, financial condition and results of operations.

46
