To the Members,

The Board of Directors is pleased to place before you,
the 98^th Annual Report on the business and operations
of the South Indian Bank Ltd. ("the Bank") along with
the audited accounts for the Financial Year (FY) ended
March 31, 2026.

PERFORMANCE OF THE BANK

The performance highlights of the Bank for the Financial
Year ended March 31, 2026, are as follows:

? in crore

BUSINESS ACHIEVEMENTS

The Bank has achieved a total Business of ?2,23,620.37
crore, consisting of Deposits of ?1,23,346.32 crore and
Gross Advances of ?1,00,274.05 crore as on March 31,
2026.

DEPOSITS

The total Deposits of the Bank as on March 31, 2026,
were ?1,23,346.32 crore as against ?1,07,525.60 crore
as on March 31, 2025, registering a growth of 14.71%.
The break-up of Deposits as on March 31, 2026, is as
under:

The Bank during the year has focused on Retail
Advances and CASA.

The CASA has grown from ?33,729.72 crore as on March
31, 2025 to ?39,620.92 crore as on March 31, 2026, with
a growth of 17.47%. The Savings Bank Deposits grew by
17.24% on a year-on-year (y-o-y) basis. While opening
new banking relationships, the Bank has accorded
priority to meaningful financial inclusion during the
period under reporting.

ADVANCES

The Advance portfolio of the Bank grew by 14.50% on a
y-o-y basis to reach ?1,00,274.05 crore as on March 31,
2026. The focused strategies implemented by the Bank
have facilitated rapid growth in advances.

The Bank has registered robust recovery and
upgradation of NPAs during the Financial Year 2025¬
26 and GNPA stood at ?1,430.50 crore as at March 31,
2026. The Gross NPA of Bank as on March 31, 2026, as
a percentage to gross advance is 1.43% and Net NPA
stood at 0.29%.

Ensuring the Bank's vision on asset quality, the
underwriting standards are revisited & reviewed from
time to time. The GNPA and Net NPA percentage of the
new Loan book stood at 0.38% and 0.09% respectively.

During the Financial Year, the Bank could register
growth, with focus on building quality assets across all
verticals like SME, Gold Loan, Housing loan, Auto loan,
etc.

The Bank has adopted a forward-looking approach and
envisaged more co-lending arrangements to enhance
priority sector lending. All the priority sector advance

targets stand achieved and the Bank was also able to
generate additional revenue of ?85.53 crore during the
year, through sale of Priority Sector Lending Certificates
(PSLCs).

Priority sector target & achievement as on March 31,
2026 are as follows:

Break-up of exposure under Priority Sector as on March
31, 2026 is furnished below:

The high-quality portfolio growth was channelized by
the Relationship Management structure at numerous
locations/touch points which helped the Bank in tapping
various Retail, SME and cross-selling opportunities.
Decentralisation of credit processing centres resulted
in speedy disposal of credit facilities.

The Business Process Group (BPG) has been
spearheading the Bank's Strategic Digital Transformation
by executing a robust Business Process Re-engineering
(BPR) exercise coupled with innovative improvements
that optimizes core workflows and eliminates
operational friction. The Group has significantly
contributed to strengthening the digital ecosystem of
the Bank by implementing a host of strategic initiatives
focused on automation, Straight-Through Processing
(STP), AI-driven solutions, and enhanced customer and
internal user experience.

Key developments included roll out of 11 flagship
process/product flows, AI-enabled document
generation, digital verification, and process automation
across RAM (Retail including Gold, Agri and MSME),
Trade Finance segments, besides transaction based

and simplified auto renewal flows of existing loans.
Looking ahead to FY 2026-27, the group is expanding
its pipeline by developing advanced initiatives such
as ULI & Account Aggregator integration, Unified
Technical Valuation Platform, AI enabled solution for
Non - Individual current account onboarding & CAM
generation for corporate credit files and in-house
Loan Origination Systems to build a scalable, efficient,
and technology-driven platform. These initiatives are
expected to enhance operational efficiency, improve
turnaround times, strengthen risk management, and
support sustainable business growth.

FINANCIAL PERFORMANCEProfit

The Net Operating Income (Net Interest Income and
Other Income) of the Bank increased by ?147.78 crore
(2.79%) from ?5,299.07 crore in FY 2024-25 to ?5,446.85
crore in FY 2025-26. The Non-Interest Income increased
by ?196.06 crore (10.81%) during the year, which was
mainly on account of amount recovered from written off
accounts during the FY 2024-25. The Operating Profit
for the year under review was ?2,373.37 crore (before
taxes and provisions) as against ?2,270.08 crore (before
taxes and provisions) for FY 2024-25. The Net Profit
for the year was ?1,455.14 crore as compared to a net
profit of ?1,302.88 crore during the previous year and
the profit available for appropriation are as per details
given below:

Dividend

The Board of Directors has recommended a dividend
of 45%, i.e., ?0.45 per Equity share of face value of ?1/-
each per share for the financial year ended March 31,
2026, as against dividend at the rate of 40%, i.e., ?0.40
per Equity share of face value of ?1/- each per share
paid during the previous Financial Year.

CAPITAL & RESERVES

The Capital plus Reserves of the Bank has moved up from
?10,099.92 crore, as on March 31, 2025, to ?11,403.50
crore as on March 31, 2026, mainly on account of
plough back of profits, during the current financial year.
Apart from the disclosed transfers, no other amounts
are proposed to be carried to any reserves.

THE CAPITAL TO RISK WEIGHTED ASSETS RATIO
(CRAR)- BASEL III

The Capital to Risk Weighted Assets Ratio (CRAR) of
the Bank according to Basel III guidelines is 19.66 as on
March 31, 2026, as against the statutory requirement of
11.50 (including Capital Conservation Buffer). Tier I CRAR
constitutes 18.76 while Tier II CRAR works out to 0.90.
The Bank follows Standardized Approach, Standardized
Duration Approach and Basic Indicator Approach for
measurement of capital charges in respect of credit
risk, market risk and operational risk respectively.

LISTING AGREEMENT WITH STOCK EXCHANGES

The Bank's shares continue to be listed on BSE Ltd. and
The National Stock Exchange of India Ltd. The Bank
confirms that it has paid the listing fees to all the Stock
Exchanges for the financial year 2026-27. The shares of
the Bank are actively traded on NSE and BSE and have
not been suspended from trading.

BANKING NETWORK

The Bank has its network across India with 953 banking
outlets (948 Branches, 3 Satellite branches and 2 Ultra
small Branches (USB)) and 1,147 ATMs &126 CRMs as
on March 31, 2026. Bank has opened a new Regional
Office at Vijayawada. The Bank has also opened 8 new
ATMs and 2 CRMs across the country and closed 16

ATMs and 1 CRM. The branch network covers 26 States
and 4 Union Territories.

INVESTMENT

Global economic activity remained resilient yet subdued
during FY26, amid heightened geopolitical tensions,
evolving trade dynamics, and persistent macroeconomic
uncertainties. The global outlook became increasingly
fragile as Governments recalibrated fiscal, trade, and
strategic priorities in response to renewed supply-side
disruptions and elevated commodity prices. In its April
2026 World Economic Outlook (WEO), the International
Monetary Fund (IMF) projected global growth at 3.1%
for 2026 and 3.2% for 2027, reflecting a moderation
in growth momentum amid continued geopolitical and
inflationary pressures. While inflationary trends eased
across several advanced and emerging economies,
risks from energy prices, supply-chain disruptions,
and currency volatility continued to pose challenges
for policymakers. Divergence in monetary policy
trajectories across major economies persisted, with
central banks adopting a cautious and data-driven
approach towards further monetary easing.

According to the latest estimates released by the
National Statistical Office (NSO), India's real GDP growth
for FY26 was estimated at around 7.6%, reflecting the
continued resilience of the domestic economy despite
global uncertainties. Growth was supported by strong
private consumption, sustained Government capital
expenditure, improving investment activity, and robust
performance across the services and manufacturing
sectors. On the supply side, real Gross Value Added
(GVA) was estimated to grow by approximately 7.3%
during FY26, led primarily by the services sector
along with steady contributions from manufacturing
and agriculture. India's headline CPI inflation averaged
around 1.7% in FY 2025-26, the lowest annual
rate in over half a decade, reflecting a prolonged
disinflationary phase in the domestic economy. By
March 2026, inflation had settled near 3.4%, indicating
a further acceleration from the low levels recorded in
the previous year, underpinned by persistent foodprice
inflation, urban and rural inflation. Looking ahead, the
disinflationary trend is expected to broadly wane,
with official and policy related commentary indicating
that headline CPI inflation is likely to hover around the
lower-single-digit band, underscoring a well-anchored
and structurally moderating inflation environment in
India through FY 2026-27 but India may see inflationary
expectations in the year ahead.

During FY26, the Monetary Policy Committee
(MPC) continued to follow a calibrated and data-
dependent monetary policy approach in response to
moderating inflation and evolving global and domestic

macroeconomic conditions. Building on the easing cycle
initiated in the latter part of FY 2025-26, the Reserve
Bank of India (RBI) further reduced the policy repo rate
by a cumulative 100 basis points during the FY, bringing
the rate to 5.25% by the end of the calendar year. The
MPC maintained a balanced stance throughout the
year, closely monitoring inflation trajectory, growth
momentum, liquidity conditions, and external sector
developments. Additionally, the Reserve Bank of India
(RBI) cut the Cash Reserve Ratio (CRR) by 100 bps
during FY 2025-26 to spur the liquidity in the Banking
system.

Indiacontinuedtoremainoneofthefastest-growingmajor
economies during FY26, supported by resilient domestic
demand, steady Government capital expenditure, and
improved private consumption. Economic activity was
underpinned by robust performance in the services
sector and sustained momentum in infrastructure and
manufacturing activities. Inflation moderated during
the year and broadly remained within the Reserve
Bank of India's tolerance band, although intermittent
pressures from food and energy prices persisted. Retail
inflation remained relatively contained, aided by easing
food prices and supportive supply-side measures.
Financial markets remained volatile through the year
due to uncertainty surrounding global interest rate
movements, geopolitical developments, energy price
fluctuations, and foreign portfolio investment outflows.
Equity markets witnessed intermittent corrections amid
rising concerns over global growth and geopolitical
risks.

India's bond market experienced fluctuations during
FY26, influenced by global yield movements, inflation
expectations, liquidity conditions, and evolving monetary
policy expectations. Domestic bond yields remained
relatively supported by prudent fiscal management,
continued investor participation in Indian debt markets,
and RBI liquidity operations. Meanwhile, the Indian
Rupee witnessed rapid phases of depreciation (9.88%
of depreciation during FY 2025-26) and consolidation
against the US Dollar amid strengthening global dollar
demand, elevated crude oil prices, and external sector
pressures. Despite volatility, India's macroeconomic
fundamentals and foreign exchange reserve position
continued to provide stability to the currency market.
However, FY26 was a dynamic year for the Indian Rupee,
marked by phases of relative stability interspersed
with bouts of volatility driven by evolving global
macroeconomic conditions, geopolitical developments,
and fluctuations in foreign capital flows. While the
Indian Rupee remained broadly range-bound during
the early part of the year, pressure on emerging market
currencies amid a strong US dollar environment and
elevated crude oil prices led to intermittent depreciation
in the latter half of FY26. Movements in the currency

market were further influenced by global interest rate
expectations, trade-related uncertainties, and foreign
portfolio investor activity. Despite these pressures, the
Indian Rupee demonstrated resilience supported by
India's robust macroeconomic fundamentals, healthy
foreign exchange reserves, and timely interventions by
the Reserve Bank of India (RBI) to ensure orderly market
conditions.

The Bank's gross investment portfolio stood at
?27,418.36 crore as on March 31, 2026, compared to
?21,856.51 crore as on March 31, 2025, up by 25.45%.
Investment Deposit ratio moved to 22.23% as on March
31, 2026 from 20.33% as on March 31, 2025. Profit
on sale of investment for FY 2025-26 stood at ?339.65
crore. Total interest income from investment for the
year was ?1,789.48 crore (Inclusive of dividend income
of ?4.03 crore and amortisation cost of -?110.67 crore).
Yield on investments (profit + interest earned to average
investments) during FY 2025-26 was 7.78%.

During FY26, the fixed income instruments trading
desk, equity trading desk, and forex trading desk within
the Treasury Department managed their portfolios
prudently through data-driven analysis and disciplined
risk management amid evolving market conditions. The
SLR trading desk effectively planned and executed
the Bank's participation in the Government Securities
market while efficiently managing the Held-To-Maturity
(HTM) portfolio in a dynamic interest rate environment
while SLR Trading Desk, Equity Trading Desk and Forex
Trading Desks had recorded one of the highest profit in
the Financial Year.

The equity trading desk adopted calibrated investment
strategies in the secondary market and actively
participated in select primary market issuances,
capitalizing on market opportunities during the year.
The forex trading desk also contributed meaningfully
to the overall treasury performance through well-timed
and strategic trading positions amidst currency market
volatility. Overall, the Treasury function delivered a
strong performance (highest ever yearly profits) during
FY26, supported by prudent portfolio management,
strategic market positioning, and effective risk
management practices.

The Fund Management and Money Markets Desks
at Treasury Department successfully managed the
liquidity risk by maintaining appropriate levels of
surplus funds and ensuring optimum return on the
same. The desk also ensured compliance with the
regulatory requirements for Cash Reserve Ratio
(CRR) and Statutory Liquidity Ratio (SLR). Besides the
above, the Forex Merchant Desk within the Treasury
Department continued to provide the Bank's customers
with comprehensive foreign exchange risk hedging
solutions and remittance-related services during FY26.

Forex Merchant activities contributed significantly
to the overall Treasury performance during the year,
supported by increased customer engagement, higher
transaction volumes, and effective market execution.

Going forward, the Treasury Department intends to
further strengthen its focus on the Forex Merchant
Business and allied customer-centric offerings with the
objective of diversifying revenue streams and enhancing
fee-based income. During FY26, the Treasury function
continued to leverage the recently implemented
Treasury Management Software, which has enhanced
the product portfolio, improved operational efficiency
and dealer productivity, and strengthened accuracy
in back-office processing and accounting functions.
Overall, FY26 was a productive and significant year
for the Treasury Department, marked by improved
operational capabilities, prudent market participation,
and sustained business growth.

NON-PERFORMING ASSETS (NPA)

During FY 2025-26, the Bank was able to consistently
continue with the improved performance in the recovery
front, highlighting the asset quality of the Bank and
thereby recording its best-ever performance across
several key parameters. Driven by focused recovery
strategies, robust credit monitoring, and well-structured
processes, the Bank registered total recoveries of
?1,352.72 Crores, including cash recoveries of ?1,188.64
Crores. The Bank effectively leveraged both legal and
non-legal recovery mechanisms, while a substantial
number of stressed accounts were resolved through
negotiated settlements.

Enhanced collection efficiency and proactive monitoring
led to a sharp reduction in SMA-2 accounts to ?181.83
Crores as at March 31,2026, from ?300.80 Crores during
the previous year. The Bank has achieved historic
milestones in GNPA and NNPA ratios. Incremental NPAs
were tightly controlled, with additions to Gross NPA
restricted to ?719.32 crore as against ?1,176.45 crore
during FY 2024-25. As a result, the Bank recorded a
remarkable improvement in asset quality, with the Gross
NPA ratio declining to 1.43% from 3.20%, while Net NPA
reduced to ?287.93 Crores as on March 31, 2026, from
?790.52 Crores as on March 31, 2025. In percentage
terms, Net NPA improved significantly to 0.29% from
0.92%.

These achievements represent a significant
improvement in the Bank's asset quality profile and
underscore the effectiveness of its recovery framework,
risk management practices, and credit underwriting.
The Bank remains committed to further strengthening
its recovery ecosystem and credit processes to sustain
this momentum and deliver continued excellence in
asset quality and portfolio performance.

The Risk Management processes are guided by well-
defined policies appropriate for various risk categories,
independent risk oversight, and periodic monitoring
through the committees of the Board of Directors.
The objective of risk management is not to prohibit or
prevent risk taking activity, but to ensure that the risks
are consciously taken with full knowledge, purpose and
clear understanding so that it can be measured and
mitigated. The essential functions of Risk Management
are to identify, measure and more importantly monitor
the risk profile of the Bank. Managing risk is fundamental
to banking and is the key to sustained profitability and
stability. Management of risk aims to achieve the best
trade-off between risk and return and to maximize
Risk Adjusted Return on Capital (RAROC). Sound risk
management is critical to a Bank's success. Business
and revenue growth have therefore to be aligned with
risk appetite in the context of the risks embedded in
the Bank's business strategy and balance sheet. Of the
various types of risks the Bank is exposed to, the most
significant are credit risk, market risk and operational
risk. The identification, measurement, monitoring and
mitigation of risks continue to be key focus areas for
the Bank.

The Risk Management function attempts to anticipate
vulnerabilities at the transaction level or at the portfolio
level through qualitative and quantitative examinations
of the embedded risks. The Risk Management strategy
of the Bank is based on a clear understanding of various
risks, disciplined risk assessment, risk measurement
procedures and continuous monitoring for mitigation.
The policies and procedures established for this
purpose are continuously evaluated and benchmarked
against the best practices followed in the industry.
Through continuous refinement/improvement of the
risk measurement/ management systems, including
automation of feasible processes, the Bank aims to
ensure regulatory compliance as well as better return
on and utilization of capital in line with the business
objectives.

Comprehensive review of Credit Risk Policy and other
Risk Management Policies are undertaken along with
other process improvements. Liquidity is also actively
being managed through the ALCO forum, where the
Bank is pursuing actively into increasing the sticky and
retail deposits along with operationalizing majority of
the wholesale banking financing relationships. As part
of the Business Continuity Management, the Bank's
Operational Risk team is working in close coordination
with various stakeholders to ensure smooth conduct of
operations.

The Bank has a comprehensive policy framework
which contains separate policies for identification,
measurement and management of all material risks
including but not limited to credit, market, operational,
liquidity and other Pillar-II risks. The Bank has put in place
integrated risk management policies which ensures
independence of the risk governance structure. The
required standard operating procedures to ensures that
all the parameters are well covered while implementing
the approved Policies. The details of Risk Management
practices are provided in the Management Discussion
and Analysis Report.

COMPLIANCE WITH CAPITAL ADEQUACY FRAMEWORK

In compliance with regulatory guidelines on Pillar I of
Basel III norms, the Bank has computed capital charge for
credit risk as per the Standardized Approach, for market
risk as per the Standardized Duration Method and for
operational risk as per the Basic Indicator Approach. To
address Pillar II risk, the Bank has implemented ICAAP
(Internal Capital Adequacy Assessment Process), to
integrate capital planning with budgetary planning and
to capture residual risks which are not addressed in
Pillar I, like credit concentration risk, interest rate risk in
the banking book, liquidity risk, earnings risk, strategic
risk, reputation risk, pension obligation risk etc. The
Bank has adopted a common framework for additional
disclosures under Pillar III for adhering to the market
discipline norms of Basel III guidelines. This requires
the Bank to disclose its risk exposures, risk assessment
processes and its capital adequacy to the market in a
consistent and comprehensive manner.

PARTICULARS REGARDING CONSERVATION OF
ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO PURSUANT
TO SUB SECTION (3)(M) OF SECTION 134 OF THE
COMPANIES ACT, 2013 READ WITH RULE 8(3) OF THE
COMPANIES (ACCOUNTS) RULES, 2014

The Bank ensures strict compliance with all statutory
requirements and voluntarily undertakes several
sustainable steps to contribute towards a better
environment. The Bank has undertaken various
initiatives for energy conservation at its premises, and
to reduce its carbon footprint and improve resource
efficiency. It ranges from using better technology to
improved energy efficiency, recycling and generating
energy from renewable sources. A detailed report on
the same is included in the Business Responsibility and
Sustainability Report forming part of this Annual Report.
We have engaged with certified agencies to handle
disposal of plastic, E-waste, hazardous and other waste,
as per our safe and sustainable Waste Management

Policy. Furthermore, the Bank ensures to invest in
specific technologies to improve the environmental and
social impacts of product and processes. Digitization
of agreements, paper-less electronic BG issuance,
digitization of loan-processing, dispatch of documents
to security holders in electronic form are a few of our
various green initiatives. Hence, sustainability is integral
to our ethos, and we are committed to minimizing our
environmental footprint and contributing positively to
the communities we serve. The Bank, being a banking
company and an authorized dealer in Foreign Exchange,
has taken all possible steps to enhance export credit.
Through its export financing operations, the Bank
supports and encourages the country's export efforts.

Disclosure under the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal)
Act, 2013

The Bank maintains a policy of zero tolerance towards
any action on the part of any executive/employees
which may fall under the ambit of 'Sexual Harassment'
at workplace and is fully committed to uphold and
maintain the dignity of every women staff working in the
Bank. The Bank has constituted an Internal Committee
("IC") at the Corporate Office together with Regional
level sub-committees, in compliance with provisions
relating to the constitution of the Internal Committee
under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 [14 of
2013]. The Policy provides for protection against sexual
harassment of women at workplace and for prevention
and redressal of such complaints. All the employees are
covered under this Policy. Each committee is chaired
by a Senior Woman Executive and includes an External
Member possessing the requisite legal and social
sector expertise, thereby meeting every requirement of
section 4 of the Act. Detailed records of proceedings,
decisions and follow-up actions are maintained and
are open to inspection by the appropriate authorities.
Through regular classroom sessions and mandatory
e-learning modules, the Bank continues to sensitize its
workforce on acceptable workplace conduct and on the
avenues of redressal available to them, underscoring
our commitment to a respectful and secure working
environment for every employee.

Number of cases filed, if any, and their disposal under
section 22 of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal)
Act, 2013

(a)    Number of complaints of sexual harassment received
in the year- 4

(b)    Number of complaints disposed of during the year
-4

(c) Number of cases pending for more than ninety days
- Nil

All the complaints were investigated in accordance
with the prescribed procedure and resolved well within
the statutory ninety-day timeframe. Further, no matter
remained pending as at 31^st March, 2026.

Disclosure under Maternity Benefit Act, 1961

The Bank affirms full compliance with the Maternity
Benefit Act, 1961 and other regulatory requirements
applicable to the Bank from time to time. All women
employees are entitled to twenty-six weeks of paid
maternity leave, during which salary, allowances and
insurance coverage remain unaltered. On completion
of leave, every returning mother may opt for a posting
at a branch located near her domicile or any centre
of her choice, ensuring a smoother transition back to
work. The staff health-insurance scheme continues
throughout the leave period and covers both mother
and child from the date of delivery. Complementing
these statutory entitlements, the Bank's Staff Welfare
Leave Scheme permits additional child-care leave.

Compliance with Rights of Persons with Disabilities
Act, 2016

The Bank has implemented various accessibility
measures across its physical and digital touchpoints to
foster an inclusive and accessible banking environment
for customers with disabilities, in compliance with the
Rights of Persons with Disabilities Act, 2016 and the
regulatory guidelines issued by the Reserve Bank of
India (RBI) and the Securities and Exchange Board of
India (SEBI), across its branches, offices, ATMs and
digital channels for an inclusive and accessible banking
environment for customers with disabilities . The Bank
is undertaking a comprehensive revamp of its website
to further enhance accessibility and align with evolving
regulatory and industry standards.

To facilitate seamless access to banking services most
of the Bank's branches and offices are situated on the
ground floor and are equipped with ramp facilities,
wherever possible, for differently abled visitors and
senior citizens. Dedicated service arrangements,
including separate counters or single-window
facilities, are provided wherever feasible, supported by
accessibility features such as ATMs with Braille-enabled
keypads and voice guidance facilities, magnifying
glasses, and other assistive infrastructure.

The Bank has also initiated a detailed assessment to
identify additional measures for improving accessibility
across its operations, the findings of which are planned
to be implemented in the coming years. The Bank
remains committed to continuously strengthening
accessibility across its physical and digital channels to

ensure equitable, dignified and convenient access to
banking services for all its stakeholders.

Particulars of Employees

The Bank had 9,147 employees as on March 31, 2026.
Please note that the details of the top 10 employees
including the employees who were in receipt of
aggregate remuneration of more than ?1.02 crore per
annum (employed throughout the year) or who were
in receipt of remuneration of ?8.5 lakhs per month
(employed for a part of the year) during the FY 2025-26,
in terms of remuneration drawn pursuant to provisions
of Section 197(12) of the Companies Act, 2013 read with
Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014
will be made available for inspection at the Registered
Office of the Bank during the working hours up to
the date of ensuing AGM and any members who is
interested in obtaining these particulars may write up
to the Company Secretary of the Bank. The ratio of the
remuneration of each director to the median employees'
remuneration and other details in terms of sub-section
12 of Section 197 of the Companies Act, 2013 read
with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is
annexed to this report (Annexure A).

Number of Employees as at the closure of Financial
Year 2025-26:

THE ANNUAL REPORT ON CORPORATE SOCIAL
RESPONSIBILITY (CSR) ACTIVITIES:

A brief outline of the Bank's CSR Policy, including
overview of projects or programs undertaken/to be
undertaken.

South Indian Bank's CSR Policy

At South Indian Bank, Corporate Social Responsibility
(CSR) is embedded in the Bank's core values and
reflects its commitment towards sustainable and
inclusive growth. The Bank recognizes that its long¬
term success is closely linked with the well-being of
the communities it serves and therefore continues to
integrate social and environmental considerations into
its business philosophy and operations.

In compliance with the provisions of Section 135 of the
Companies Act, 2013 and the applicable CSR Rules,

the Bank undertook various need-based and impact-
oriented CSR initiatives during FY 2025-26. The Bank's
CSR interventions were focused on key areas including
education, healthcare, sanitation, environmental
sustainability, rural development, empowerment of
women skill development, support for differently
abled persons, promotion of sports, financial literacy,
preservation of heritage and culture, and community
welfare.

The Bank implemented its CSR programmes in
association with reputed charitable institutions,
educational and healthcare organizations, Local
Self-Government Bodies, and Non-Governmental
Organizations. Major initiatives undertaken during the
year included support to special schools, old age homes
and orphanages, healthcare and sanitation programmes,
vocational training and livelihood enhancement
initiatives, environmental conservation activities, rural
infrastructure development projects, establishment of
libraries, financial literacy programmes, and assistance
for differently abled persons.

The Bank continues to strengthen its CSR governance
framework through structured monitoring and review
mechanisms to ensure transparency, accountability,
and effective implementation of CSR projects. The
initiatives undertaken during the year reflect the Bank's
enduring commitment towards creating sustainable
social impact and contributing to inclusive socio¬
economic development.

CSR Expenditure:

During FY 2025-26, the Bank spent a total amount of
?32.35 Crores towards CSR activities in accordance
with the provisions of the Companies Act, 2013.
Detailed disclosures relating to the CSR initiatives
undertaken during the year are provided in Annexure
'B' to this Report.

Web-Link to the CSR Policy

The CSR Policy of the Bank is available on the Bank's
website at: www.southindianbank.bank.in/other-links/
disclosures/corporate-social-responsibility-csr-policy

FINANCIAL INCLUSION

Financial inclusion refers to providing affordable,
timely, and adequate access to financial services such
as savings accounts, credit, insurance, remittance
facilities, and digital payment systems to all sections
of society, especially the underserved and weaker
sections. It aims to integrate every individual into the
formal financial system, thereby promoting economic
stability and inclusive growth.

Financial inclusion offers several benefits. It encourages
savings habits among people and ensures safe

custody of money. Access to formal credit helps small
businesses, farmers, and MSMEs avoid dependence
on informal money lenders charging high interest
rates. It also supports women empowerment and self¬
employment opportunities by enabling access to loans
and financial assistance.

As part of Financial Inclusion initiatives, bank has
expanded to rural and remote areas through Business
Correspondents, mobile banking, and schemes like
PMJDY, APY, PMJJBY, PMSBY.

Through corporate business correspondents, Bank has
on-boarded 30,475 borrowers with total outstanding
of ?164.90 crores in the FY 2025-26 in the agriculture
lending, hence reaching out to the unserved and
underserved strata of the Society.

Aadhaar Enabled Payment System (AePS)

Aadhaar Enabled Payment System (AePS) is a payment
service, empowering a bank customer to use Aadhaar
as his/her identity to access his/her respective Aadhaar
enabled bank account and perform basic banking
transactions through a Business Correspondent / POS
machine. National Payment Corporation of India (NPCI),
an umbrella organisation for all retail payments, controls
AePS operations. AePS offers basic banking services
such as Cash Withdrawal, Cash Deposit, Balance
Enquiry, Aadhaar to Aadhaar Fund Transfer and Mini
Statement. The Bank has also successfully migrated to
Aadhaar Enabled Payment System (AePS) for performing
transactions through Business Correspondents.

Business Correspondent

With a view of expanding banking penetration,
promoting digital inclusion, and supporting inclusive
economic growth in India at an affordable cost, the Bank
has active BCs in the states of Kerala and Tamil Nadu.

The Bank has adopted Corporate Business
Correspondent structure with 24 Business
Correspondents for strengthening financial inclusion
and improving banking outreach.

The wholly outsourced BC model will complement the
Bank's strength to increase business volume and improve
efficiency of operations. Through this arrangement,
the Bank is ensuring that the Business Correspondent
meets the benchmark performance standards at all
stages of delivery of services, without diluting Bank's
values and principles, control mechanisms, business
processes or goodwill and reputation.

Financial Literacy Counsellors

Financial Literacy Counsellors play a vital role in
spreading awareness about responsible financial
practices among the public. They educate people on

savings, budgeting, digital banking, insurance, pensions,
credit discipline, and fraud prevention. Their guidance
helps individuals make informed financial decisions,
avoid over-indebtedness, and improve financial well¬
being.

They also support vulnerable sections such as rural
households, senior citizens, students, MSMEs, and
low-income groups by explaining banking products
and Government schemes in simple language. Through
camps, counselling sessions, and awareness programs,
Financial Literacy Counsellors strengthen financial
inclusion and promote safe and effective use of formal
banking services.

As on March 31, 2026, Bank has engaged 16 FLCs in
different parts of Kerala, at Block-level to disseminate
financial literacy to the people. In addition to this, the
Bank has also appointed 6 FLCs in different Districts
of Tamil Nadu to emphasize the objectives of Financial
Literacy. Bank's FLCs are branded under the name "SIB
JYOTHIS". A Board approved Policy covering all aspects
of Financial Literacy Counsellors has been formulated,
giving due consideration to the revised guidelines on
FLCs issued by the RBI.

Pradhan Mantri Jan-Dhan Yojana (PMJDY)

The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is
a flagship financial inclusion initiative launched to
ensure universal access to banking services for every
household. The scheme provides basic savings bank
accounts with facilities such as RuPay debit cards,
direct benefit transfer, overdraft facility, insurance
coverage, and access to pension schemes.

PMJDY has played a major role in bringing unbanked
sections into the formal banking system, especially in
rural and economically weaker areas. It has strengthened
financial inclusion, promoted digital banking, enabled
transparent transfer of Government benefits, and
encouraged a culture of savings among the public.

Under the scheme, a Basic Savings Bank Deposit (BSBD)
account can be opened in any bank branch or Business
Correspondent (Bank Mitra) outlet, by persons who do
not have any other account.

Atal Pension Yojana (APY)

Atal Pension Yojana (APY), a pension scheme for citizens
of India is focused on the unorganized sector workers.
Under the APY, guaranteed minimum pension ranging
from ?1,000/- to ?5,000/- per month will be given at
the age of 60 years depending on the contributions
by the subscribers. Any citizen who is or has been an
income taxpayer, shall not be eligible to join APY from
01^st October, 2022.

The benefit of minimum pension under Atal Pension

Yojana would be guaranteed by the Government in the
sense that if the actual realized returns on the pension
contributions are less than the assumed returns for
minimum guaranteed pension, over the period of
contribution, such shortfall shall be funded by the
Government. On the other hand, if the actual returns on
the pension contributions are higher than the assumed
returns for minimum guaranteed pension, over the
period of contribution, such excess shall be credited to
the subscriber's account, resulting in enhanced scheme
benefits to the subscribers.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The Pradhan Mantri Jeevan Jyoti Bima Yojana is
available to people in the age group of 18 to 50 years
having a Bank account who give their consent to enable
auto-debit. Aadhar would be the primary KYC for the
Bank account. The life cover of ?2 lakhs shall be for the
one-year period stretching from 1^st June to 31^st May
and will be renewable. The PMJJBY offers an annual
life coverage of ?2 lakhs in case of the demise of the
policyholder during the policy term. The policy can be
availed at the lowest premium rate of ?436 per annum.

Pradhan Mantri Suraksha Bhima Yojana (PMSBY)

The Bank extends PMSBY social scheme to provide
financial protection against accidental death or
disability; the affordable lower premium is useful
especially for people in low income and unorganized
sectors.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

Dispatch of documents in Electronic Form:

As a responsible corporate citizen, the Bank supports
and pursues the 'Green Initiative' of the Ministry of
Corporate Affairs ("MCA"). In conformance with such
initiatives and in terms of Rule 18 of the Companies
(Management and Administration) Rules, 2014, the
Bank may give Notice through electronic mode including
e-mail to those Members who have provided their
e-mail address either to their Depository Participants
(DPs) or to the Registrar/Company. Pursuant to General
Circulars 03/2025 dated September 22, 2025 issued
by MCA and SEBI Circular No. SEBI/HO/DDHS/DDHS
PoD-1/P/CIR/2025/83 dated June 05, 2025 on Limited
relaxation from compliance with certain provisions
of    the    SEBI    (Listing    Obligations    and    Disclosure

Requirements) Regulations, 2015, Master Circular No.
SEBI/HO/DDHS/ DDHS-PoD-1/P/CIR/2025/0000000103
dated July 11, 2025, updated Master Circular No.
HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated
January 30, 2026 and SEBI Circular No. SEBI/HO/CFD/
CFD-PoD-2/P/ CIR/2024/133 dated October 03, 2024
on Relaxation from compliance with certain provisions
of    the    SEBI    (Listing    Obligations    and    Disclosure

Requirements) Regulations, 2015, the Notice of 98^th
Annual General Meeting (to shareholders) and the
Annual Report 2025-26 (to shareholders) will be sent via
email to all the shareholders and no physical copies will
be sent via post. However, in compliance with amended
regulation 36(1)(b) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Bank
will be sending a letter providing the web-link, including
the exact path, where complete details of the Annual
Report is available to those shareholder(s) who have
not registered their email address.

Further, in terms of Regulation 36 of the Listing
Regulations, the listed entity is required to send soft
copies of its Annual Report to all those shareholder(s),
who have registered their email address for this purpose.
Accordingly, the documents including the Notice and
explanatory statement of 98^th Annual General Meeting,
Annual Report of the Bank for the Financial Year 2025¬
26 including Standalone and Consolidated Audited
Financial Statements, Directors' Report, Auditors'
Report etc., for the year ended March 31, 2026, will
be sending to the e-mail address registered with their
Depository Participant (DP)/Registrar/Company. The
e-mail addresses indicated in respective DP accounts
which will be periodically downloaded from NSDL/CDSL
will be deemed to be their registered e-mail address
for serving notices/documents including those covered
under Section 136 of the Companies Act, 2013. In
case a Member, whose e-mail address has changed,
fails to update this new e-mail address, the said
documents will be sent to the existing e-mail address
and the said documents will be deemed to have been
delivered, in compliance with the relevant provisions
of the Companies Act, 2013, the relevant Rules made
thereunder and the Listing Regulations. Members
who have not yet registered their e-mail address are
requested to do so, at the earliest. In case of shares
held in electronic form and in case of any change in
the e-mail address, Members are requested to update
the same with their DP and in case of shares held in
Physical form, Members are requested to update the
same with the RTA/Company. Shareholders may please
note that, as allowed by MCA and SEBI circulars, the
Bank will not be sending physical copies of AGM Notice
to shareholders and Annual Report to the shareholders
unless the same is specifically requested. Further, the
Bank will send a letter providing the web-link, including
the exact path, where complete details of Annual Report
and AGM Notice available to those shareholders, who
have not registered their email addresses with the
Depositories/Bank/RTA.

Please note that the said documents will also be
uploaded on the Bank's website www.southindianbank.
bank.inand copies thereof will be made available for

inspection at the Registered Office of the Bank during
10.00 a.m. to 3.00 p.m. on all working days except
Saturdays, Sundays, Bank Holidays and Public Holidays
up to the date of ensuing AGM. Shareholders have been
requested on several occasions to update their e-mail
IDs in their folio/ Demat Account to help accelerate the
Bank's migration for paperless compliances. The Bank
seeks your support for the said green initiatives, as it is
designed to protect our fragile environment.

Further, as a part of green initiatives by the Bank,
all relevant agenda papers pertaining to the Board/
Committee are being circulated in advance to the Board
of Directors through electronic mode to facilitate easy
access of agenda which would provide sufficient time to
the Board for reading and understanding the proposals
placed in a meeting.

ANTI - MONEY LAUNDERING (AML)

Transactions processed through the Core Banking
Solution and other ancillary systems are monitored
for detecting suspicious transactions, using an AML
application to comply with the provisions under
Prevention of Money Laundering Act (PMLA) by a
centralized AML cell within Compliance Department.
The Bank already has a Centralized Processing Centre
(CPC) for customer creation with the objective of full
KYC compliance and to use KYC as a fraud prevention
tool. The Bank has attached great importance for
compliance of KYC/AML/CFT norms by the customers
as per the Reserve Bank of India directive.

FATCA-CRS

The Bank has been registered as a reporting entity
under FATCA, under GIIN No. IIK7HU.99999.SL.356, to
comply with the reporting requirement under the inter¬
Governmental agreement entered between Indian and
US Government and the CRS Multilateral Competent
Authority Agreement.

DIRECTORS

The composition of the Board of Directors is governed
by the Banking Regulation Act,1949, the Companies
Act, 2013, SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and the Code of
Conduct on Corporate Governance adopted by the
Bank. The Board comprises of 10 Directors as on the
date of this Report, with rich experience and specialized
knowledge in various areas of relevance to the Bank,
including Banking, Accountancy, Risk Management,
Treasury, Finance, Business Management, Small scale
Industry, Agriculture, Law, Human Resources and
Information Technology.

Except 2 Directors, all members of the Board are Non¬
Executive Directors and 6 Directors out of the total

10 Directors are Independent Directors. Declaration
has been obtained from the Independent Directors
as required under the RBI Regulations, SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 and Companies Act, 2013. The remuneration
and other benefits paid to MD & CEO of the Bank,
Executive Director and other Non-Executive and
Independent Directors during the Financial Year 2025¬
26 are disclosed in Corporate Governance Report.
Vide Companies (Appointment and Qualification of
Directors) Fifth Amendment Rules, 2019 an online data
bank for the Independent Directors ("Data Bank") has
been rolled out by the Indian Institute of Corporate
Affairs, all the Independent Directors of the Bank had
registered themselves in the Data Bank in compliance
with the same.

During the 97^th Annual General Meeting held on
August 20, 2025, as recommended by the Bank, the
shareholders accorded their approval for the following:

•    To appoint a Director in the place of Sri. Benny P
Thomas (DIN: 09448424) who retires by rotation
under Section 152 of the Companies Act, 2013 and
being eligible, offers himself for re-appointment.

•    To re-appoint Sri. R A Sankara Narayanan (DIN:
05230407) as Independent Director of the Bank.

Sri. R A Sankara Narayanan (DIN: 05230407) was
appointed as an Additional Independent Director
pursuant to Section 161(1) of the Companies Act, 2013
on 15^th October 2020. Further he was appointed as
Independent Director of the Bank, for the purpose of
Section 149 of the Companies Act, 2013 for a period of
five (5) consecutive years, not liable to retire by rotation
by shareholders at 93^rd Annual General Meeting of the
Bank held on August 18, 2021. Further he was appointed
for a second term for a further period of three years
w.e.f. October 15, 2025, as 'Non-Executive Independent
Director' of the Bank, for the purpose of Section 149 of
the Companies Act, 2013, to hold office till 14^th October
2028, not liable to retire by rotation.

The Board of Directors has recommended to members:

•    To appoint a Director in the place of Sri. Dolphy
Jose (DIN: 10682246) who retires by rotation under
Section 152 of the Companies Act, 2013 and being
eligible, offers himself for re-appointment.

•    To appoint Sri. Mahesh Muralidhar Pai (DIN:
09164982) as Director on the Board of the Bank and
as Managing Director & Chief Executive Officer of
the Bank and to approve his terms and conditions of
appointment including remuneration.

•    To re-appoint Smt. Lakshmi Ramakrishna Srinivas
(DIN:10365580) as Independent Director of the Bank,

who was appointed by the Board of Directors on
November 20, 2023, and appointed by Shareholders
at the Postal Ballot concluded on Sunday, December
24, 2023, for a period of 3 years, and in respect of
whom the Bank has received a notice in writing,
proposing her candidature for the office of Director
of the Bank, for a second term as 'Non-Executive
Independent Director' of the Bank, for the purpose
of Section 149 of the Companies Act, 2013, to hold
office for a period not exceeding five(5) consecutive
years, not liable to retire by rotation.

Necessary information pursuant to SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, in respect of directors to be re-appointed at
the ensuing Annual General Meeting are given in the
Annexure to the Notice convening the Annual General
Meeting scheduled to be held on August 20, 2026.

None of the Directors of the Bank are disqualified from
being appointed as Directors, as specified in Section
164 (1), Section 164 (2) and Rule 14(1) of Companies
(Appointment and Qualification of Directors) Rules,
2014.

CHANGE IN KEY MANAGERIAL PERSONNEL

Sri. Biju E Punnachalil, General Manager, Chief Risk
Officer and Key Managerial Personnel has opted for
Voluntary Retirement from the service of the Bank and
exited on July 11, 2025.

Composition of Audit Committee

The Audit Committee of the Board is chaired by Sri.
M George Korah (DIN: 08207827) (Non-Executive
Independent Director), who is a Chartered Accountant.
The other members of the committee are Sri. Pradeep M
Godbole (DIN: 08259944) (Non- Executive Independent
Director), Sri. R A Sankara Narayanan (DIN: 05230407)
(Non- Executive Independent Director), Smt. Lakshmi
Ramakrishna Srinivas (DIN:10365580) (Non- Executive
Independent Director) and Sri. Thomson Thomas (DIN:
06948598) (Non- Executive Independent Director). The
constitution of the Committee is in compliance with
the regulatory requirements. The terms of reference of
the Audit Committee are in accordance with the SEBI
(LODR) Regulations, 2015, Companies Act, 2013 and RBI
guidelines.

Independent Directors

In terms of the definition of Independence of Director as
prescribed under Regulation 16(1) (b) of the SEBI (LODR)
Regulations, 2015 and Section 149(6) of Companies
Act, 2013 and based on the confirmation/disclosures
received from the Directors, the following Directors are
Independent Directors of the Bank as on the date of this
report.

1.    Sri. Jose Joseph Kattoor (DIN: 09213852)

2.    Sri. M George Korah (DIN: 08207827)

3.    Sri. Pradeep M Godbole (DIN: 08259944)

4.    Sri. R A Sankara Narayanan (DIN: 05230407)

5.    Smt. Lakshmi Ramakrishna Srinivas (DIN:10365580)

6.    Sri. Thomson Thomas (DIN: 06948598)

The Bank has received declaration from all the
Independent Directors that they continue to meet
the criteria of independence as provided under the
Companies Act, 2013 (the Act) and SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 and comply with the Code for Independent
Directors as specified under Schedule IV of the Act. In
terms of the Companies (Creation and Maintenance of
databank of Independent Directors) Rules, 2019 read
with the Companies (Appointment and Qualification
of Directors) Fifth Amendment Rules, 2019, the
Independent Directors of the Bank have enrolled
his/ her name in the online databank of Independent
Directors maintained by the Government. Further all the
Independent Directors have either qualified or being
eligible obtained exemption from the online proficiency
self-assessment test as per Companies (Appointment
and Qualification of Directors) Rules, 2014.

The Independent Directors have also confirmed that
they are not aware of any circumstance or situation,
which exists or may be reasonably anticipated, that
could impair or impact their ability to discharge their
duties with an objective independent judgement and
without any external influence. In the opinion of the
Board, the Independent Directors possess the requisite
expertise and experience and the persons of high
integrity and repute. They fulfil the conditions specified
in the Act and the Rules made thereunder and are
independent of the Management.

Women Directors

In terms of the provisions of Section 149 of the
Companies Act, 2013 and Regulation 17 of the SEBI
(LODR) Regulations 2015, the Bank has appointed
Smt. Lakshmi Ramakrishna Srinivas (DIN:10365580) as
Woman Director to the Board of the Bank.

Bank's policy on directors' appointment and
remuneration including criteria for determining
qualification, positive attributes, independence of a
director and other matters provided under subsection
(3) of Section 178.

The Nomination Policy of the Bank can be accessed at
www.southindianbank.bank.in/other-links/disclosures/
nomination-policy-of-the-board

Criteria for appointment as a Director of the Bank:

Nomination and Remuneration Committee of the Board
shall identify and ascertain the integrity, qualification,
expertise and experience of the person who is
considered for being appointed/reappointed as Director
of the Bank and apply due diligence in compliance with
The Banking Regulation Act,1949, Reserve Bank of India
directives on Fit & Proper Criteria, all other applicable
provisions of the Companies Act,2013 and SEBI(LODR)
Regulations,2015 including any amendments from time
to time.

The Nomination and Remuneration Committee shall
obtain all applicable declarations & undertaking as
provided under Banking Regulation Act,1949, RBI
Guidelines, The Companies Act,2013, Companies
(Appointment and Qualification of Director) Rule,2014,
SEBI Guidelines, SEBI(LODR)Regulations,2015 and
ensure that the proposed person is not ineligible to
be appointed/re-appointed as a Director of the Bank.
In case of Independent Directors, the Nomination
and Remuneration Committee shall ensure that the
Independent Directors meet the criteria of Independence
as laid down in the Companies Act,2013 and the rules
made thereunder and SEBI (LODR) Regulations,2015.

Criteria for determining qualifications, positive
attributes:

While recommending any potential new Board
member(s)/re-appointment of existing member(s) to
the Board, the Committee shall consider the following:

a)    Professional and personal ethics, integrity and track
record;

b)    Special knowledge or practical experience in
Banking, Accountancy, Agriculture and Rural
Economy, Co-operation, Economics, Finance, Law,
Small-Scale Industry, Information Technology,
Payment & Settlement Systems, Human Resources,
Risk Management, Business Management or any
other matter useful to the Banking Company in the
opinion of Reserve Bank of India;

c)    Ability to provide insights and practical wisdom
based on their experience and expertise relevant to
the Bank's line of business;

d)    Details of his/her association with other Companies/
LLPs/Firms(including NBFC);

e)    Details of substantial interest in other Companies/
LLPs/Firms (including NBFC);

f)    Details of financial facilities, if any, availed from the
Bank;

g)    Details of default in the re-payment of loans, availed
from the Bank or any other bank, if any;

h)    Commitment to enhancing stockholder value;

i)    Ability to develop a good working relationship with
members of the Board and contribute to the working
relationship with Senior Management of the Bank;

j)    Whether he/she suffers from any of the
disqualifications envisaged under the provision of
Banking Regulation Act, 1949, Companies Act, 2013
and Listing Regulations;

k)    Any other factors as the Committee may deem
fit and in the best interests of the Bank and its
stockholders;

Criteria for determining Independence of a Director

The criteria of Independence of a Director is determined
based on conditions as laid down in the Companies
Act, 2013 and SEBI (LODR) Regulations, 2015. The
Independent Director shall at the first meeting of the
Board in which he/she participates as a Director and
thereafter at the first meeting of the Board in every
financial year or whenever there is any change in the
circumstances which may affect his/her status as an
Independent Director, give a declaration that he/she
meets the criteria of Independence.

REMUNERATION POLICY

The Remuneration Policy for Whole-Time Directors,
Part-time Chairman, Non-Executive Directors and
Employees of the Bank:

The Bank has a Board approved Compensation Policy
which deals with the Compensation & Benefits of the
Whole-Time Directors, Part-time Chairman, Non¬
Executive Directors and Employees of the Bank.

The objectives of the Compensation Policy of the Bank
inter-alia includes, to provide a fair and persistent
basis for motivating, inspiring and rewarding the
employees appropriately, according to their jobs/role
size, performance, accomplishments, contribution,
skill, aptitude and competence, to implement standards
on sound compensation practices and incentives and
to provide effective governance of compensation
payable to the WTDs/CEO and other staff, alignment
of compensation with prudent risk taking and effective
supervisory oversight. The disclosure requirement of
the remuneration is separately provided in "Basel III-
Pillar 3 Disclosures".

Remuneration of Whole-Time Directors/MD & CEO
and Material Risk Takers:

The Board approved Compensation Policy deals
with the Compensation & Benefits of the Whole¬
Time Directors/MD & CEO/Material Risk Takers. The
remuneration of the Whole-Time Directors/MD & CEO/

Material Risk Takers is recommended by the Nomination
& Remuneration Committee (NRC) to the Board for
approval after considering the factors prescribed under
the Compensation Policy. The Compensation Policy
factors the guidelines issued by the RBI from time to
time.

The Board considers the recommendations of NRC
and approves the remuneration, with or without
modifications, subject to shareholders' and regulatory
approvals. The remuneration payable to Whole¬
Time Directors/MD & CEO is subject to prior approval
of the Reserve Bank of India (RBI). Therefore, the
remuneration or any revision in remuneration to Whole¬
Time Directors/MD & CEO is payable only after receipt
of the approval from RBI.

The compensation paid out to the referred
functionaries is divided into two components:

The fixed compensation is determined based on
the relevant factors such as industry standards, the
exposure, skill sets, talent and qualification attained
by the official over his/her career span and adherence
to statutory requirements. All the fixed items of
compensation, including the perquisites, will be treated
as part of fixed pay. Perquisites that are reimbursable
would also be included in the fixed pay so long as
there are monetary ceilings on these reimbursements.
Contributions towards superannuation/retirement
benefits will also be treated as part of fixed pay.

The variable compensation for Whole-Time Directors,
Managing Director & Chief Executive Officer and
Material Risk Takers is fixed based on organizational
performance (both business-unit and firm-wide) and
KPAs set for the Official. The organization's performance
is charted based on Performance Scorecard which takes
into account various financial indicators like revenue
earned, cost deployed, profit earned, NPA position and
other intangible factors like leadership and employee
development. The Performance Parameters provides
a mix of Financial and Non-Financial, Quantitative and
Qualitative Metrics. The variable pay is paid in the
form of a mix of cash and/or share linked instruments.
While considering/recommending the variable pay in
respect of Managing Director & CEO, MRTs and Whole¬
Time Directors, serious supervisory and regulatory
observations (if any) shall be factored.

Risk, Control and Compliance Staff

Members of staff engaged in financial and risk control,
including internal audit, are compensated in a manner
that is independent of the business areas they oversee
and commensurate with their key role in the Bank. The
total fixed and variable compensation paid out to the
employees in the Risk Control and Compliance Function

is decided independent of business parameters.

Other Categories of the Staff:

For the other employees, the Board, based on the
recommendation of the NRC may devise appropriate
compensation structure. The compensation paid to
other employees that include Award Staff, Officers
coming under Scale I to IV is fixed based on the periodic
industry level settlements with Indian Banks Association.
Further the compensation paid to Executives coming
under Scale V and above is fixed based on the Executive
Compensation Package of the Bank, which is finalised
after considering various parameters like industry
level/peer group status, burden for the Bank and all
other relevant factors. The variable compensation
paid to employees is based on the Performance Linked
Incentive Scheme, which has been formulated on the
basis of performance parameters set in the Performance
Management System.

Limit on Variable pay and Deferred Compensation:

As per the compensation policy of the Bank, the
compensation structure for the Whole-Time Directors/
Chief Executive Officers/Material Risk Takers (MRTs) of
the Bank is divided into Fixed Pay and Perquisites and
Variable pay.

Fixed Pay and Perquisites

Based on the recommendations of the Nomination
and Remuneration Committee, Board shall fix the fixed
portion of compensation payable which is reasonable,
taking into account all relevant factors including
adherence to statutory requirements and industry
practice. In case of MD & CEO and Executive Director,
the same is subject to the approval of Reserve Bank of
India.

Variable Pay

In order to have a proper balance between the cash
and share-linked components in the variable pay,
the variable pay is to be structured in the form of
share-linked instrument (including Cash-linked Stock
Appreciation Rights (CSARs)), or a mix of cash and share
linked instruments subject to the recommendation of
the Nomination and Remuneration Committee of the
Board. Only in cases where the compensation by way
of share-linked instruments is not permitted by law/
regulations, the entire variable pay can be in cash to be
exercised.

The assessment of the variable pay will be based on
'Key Performance Indicators' (KPI) achievement of
respective Whole-Time Directors/Chief Executive
Officers/Material Risk Takers (MRTs).

Limit on Variable Pay:

A.    For Whole-Time Directors and Chief Executive

Officers

i.    In compliance to the RBI Guidelines and other
applicable rules and regulations at least 50%,
should be variable and paid on the basis of
individual, business-unit and firm-wide measures
that adequately measure performance. The
total variable pay shall be limited to a maximum
of 300% of the fixed pay (for the relative
performance measurement period).

ii.    In case variable pay is up to 200% of the fixed
pay, a minimum of 50% of the variable pay; and
in case variable pay is above 200%, a minimum of
67% of the variable pay should be via non-cash
instruments.

iii.    In the event that an Executive is barred by
Statute or Regulation from grant of share-linked
instruments, his/her variable pay will be capped
at 150% of the fixed pay, but shall not be less
than 50% of the fixed pay.

iv.    The deterioration in the financial performance of
the bank should generally lead to a contraction
in the total amount of variable compensation,
which can even be reduced to zero.

B.    For Material Risk Takers (MRTs)

i.    In compliance to the RBI Guidelines and other
applicable rules & regulations, 50% of total pay
for all MRTs should be variable pay and paid
on the basis of individual, business-unit and
firm-wide measures that adequately measure
performance.

ii.    50% of the variable pay should be via non-cash
instruments.

iii.    The deterioration in the financial performance of
the Bank should generally lead to a contraction
in the total amount of variable compensation,
which can even be reduced to zero.

The Board will from time to time specify the
Material Risk Takers (MRTs).

a) Deferral of Variable Pay

i.    For senior executives, including WTDs, and
other employees who are MRTs, a minimum of
60% of the total variable pay must invariably
be under deferral arrangements. Further, if
cash component is part of variable pay, at
least 50% of the cash bonus should also be
deferred.

ii.    However, in cases where the cash component
of variable pay is under ?25 Lakh, deferral

requirements is not applicable.

b)    Period of Deferral Arrangement

The deferral period should be for a period of
three years. This would be applicable to both the
cash and non-cash components of the variable
pay arrangements.

c)    Vesting:

Deferred remuneration should be spread out
over the course of the deferral period on a pro
rata basis as follows:

•    not more than 33.33 % of the total deferred
variable pay should vest at the end of first
year.

•    Further, not more than 33.33 % of total
deferred variable pay should vest at the end
of second year.

Additionally, vesting should not take place more
frequently than on a yearly basis to ensure a
proper assessment of risks before the application
of ex-post adjustments.

In case of employee's death or permanent
disability, whole of the deferred variable pay
(Cash component) shall immediately vest on the
employee's legal heirs, or the employee, as the
case maybe.

Share-linked Instruments

Such instruments shall be included as a component
of variable pay. Norms for grant of share-linked
instruments should be framed by Banks in conformity
with relevant statutory provisions and should form part
of the Bank's compensation policy. The details of share-
linked instruments granted should also be disclosed in
terms of the disclosure requirements stipulated in these
Guidelines. Share-linked instruments should be fair
valued on the date of grant by the Bank using Black-
Scholes model in compliance with the RBI guidelines.
The fair value thus arrived at shall be recognised as
an expense beginning with the accounting period for
which approval has been granted.

The Variable pay assessment should consider the
following parameters

•    The HR Department in consultation with CFM
Department has to recommend that amount of
Variable pool of the Bank each year to the Nomination
and Remuneration Committee.

•    While recommending the variable Pool HR
Department should establish the linkage between the

variable pool at the Bank level and the performance
of the Bank vis-a-vis its financials and risk assumed.

•    Further HR Department should also detail the linkage
between performance of various units/functions/
divisions to performance of variable pool.

•    There should be a prudent basis for distribution
of the overall variable pool between various units/
functions/divisions including various control and
assurance functions.

•    Performance thresholds as defined and assessed by
HR Department to be attained for being eligible for
variable compensation.

The same to be included and form part of the
Performance Linked Incentive Scheme.

Malus / Clawback

The deferred compensation should be subject to malus/
clawback arrangements in the event of subdued or
negative financial performance of the Bank and/or the
relevant line of business in any year.

The Bank has identified a set of situations which require
the invocation of the malus and clawback clauses that
may be applicable as detailed below:

i.    Applying    of    Malus/Clawback    arrangement    on

entire variable pay on occurrence of the following
situations:

•    Identified    fraud/misconduct    by the Executive

(Whole-Time Directors, Chief Executive Officers/
Material Risk Takers (MRTs)) pertaining to the
corresponding period for which the clause to be
applied.

ii.    Applying    of    Malus/Clawback    arrangement    on

unvested    portion of deferred    variable pay    on

occurrence of the following situation:

•    Reporting of operating loss or more than 50% fall
in operating profit in any year.

iii.    Applying of Malus clause on unvested portion of
deferred variable pay on occurrence of the following
situation:

•    Wherever the assessed divergence in Bank's
provisioning for Non-Performing Assets (NPAs)
or asset classification exceeds the prescribed
threshold for public disclosure as detailed below:
(As referred in RBI circular No. DBR.BP.BC.
No.32/21.04.018/2018-19 dated April 1, 2019 and
in terms of Reserve Bank of India (Commercial
Banks: Financial Statements - Presentation and
Disclosures) Directions, 2025 as amended from
time to time),

a)    the additional provisioning for NPAs assessed by
RBI as part of its supervisory process, exceeds
five per cent of the reported profit before
provisions and contingencies for the reference
period, and

b)    the additional Gross NPAs identified by the RBI
as part of its supervisory process exceed five
per cent of the reported incremental Gross NPAs
for the reference period.

Further, in such situations, no proposal for increase
in variable pay (for the assessment year) shall be
entertained. In case the Bank's post assessment Gross
NPAs are less than 2.0%, these restrictions will apply
only if criteria for public disclosure are triggered either
on account of divergence in provisioning (clause (a)) or
both provisioning (clause (a) and asset classification
(clause (b)).

Any other act detrimental to the interest of the Bank
including and not restricted to violation of Code of
Conduct, violation of Framework for dealing with
Conflict of Interest, violation of rules and regulations of
the Bank, failure to discharge fiduciary and regulatory
duties and in respect of which the Bank would reserve
the right to institute appropriate civil, criminal or other
proceedings at the risks, costs and consequences of
such individuals.

As part of the criteria for the application of malus and
clawback, the following period during which malus and/
or clawback can be applied will be 36 months from
application of the clause. Covering at least deferral and
retention periods (a period of time after the vesting of
instruments which have been awarded as variable pay
during which they cannot be sold or accessed).

In case, the MRT(s) resigns, retires or takes early
retirement or has been terminated, the above provisions
of clawback shall apply subject to due process for
recovery of amounts adjudged.

Guaranteed Bonus

Guaranteed bonus is not consistent with sound risk
management or the 'pay for performance' principles and
should not be part of the compensation plan. Therefore,
guaranteed bonus should only occur in the context of
hiring new staff as joining/sign-on bonus and be limited
to the first year. Such bonus will neither be considered
part of fixed pay nor part of variable pay. Further,
Banks will not grant severance pay other than accrued
benefits (gratuity, pension, etc.) except in cases where
it is mandatory under any statute.

Hedging

The Bank will not provide any facility or funds or permit

employees to insure or hedge their compensation
structure to offset the risk alignment effects embedded
in their compensation arrangement. To enforce the
same, the Bank will establish appropriate compliance.

The compensation structure for the Non-Executive
Part-Time Chairman

The Nomination and Remuneration Committee after
taking into account all relevant factors such as,
performance, ability and experience of the individual,
recommend to the Board to fix the compensation
structure in compliance with the provisions of
Companies Act, 20l3, Banking Regulation Act,1949,
SEBI(LODR)/Listing Regulations and other regulatory
guidelines, as amended from time to time.

The remuneration payable to the Chairman is subject
to prior approval of the Reserve Bank of India (RBI).
Therefore, the remuneration or any revision in
remuneration of the Chairman is payable only after
receipt of the approval from RBI.

Remuneration of Non-Executive Directors (NEDs):

The independence of Bank's Non-Executive Directors
is critical for the proper functioning of the Bank's
governance framework. By compensating these
Directors appropriately, Bank can reinforce their
independence from management and other vested
interests, allowing them to make decisions that are in
the best interest of the Bank and its shareholders.

The Reserve Bank of India has issued guidelines,
on the need of Banks to attract qualified competent
individuals and retain professional expertise in their
Boards, keeping in view of individual director's (NEDs)
responsibilities, contribution of their time, vide RBI
Circular No. DBR.No.BC.97/29.67. 001/2014-15 dated
June 1, 2015, on payment of Compensation to Non¬
Executive Directors (other than the Part-time Chairman)
in the form of profit related commission which shall not
exceed ?10 Lakh per annum for each Director subject to
the bank making profits. Further as per revised Circular
No. RBI/2021-22/24 DOR.GOV.REC.8 /29.67.001/2021-
22 dated April 26, 2021, RBI has revised the fixed
remuneration for a NED, other than the Chair of the
Board, not exceeding ?20 lakh per annum. Further RBI
vide circular number RBI/2023-24/121 DoR.HGG.GOV.
REC.75/29.67.001/2023-24 dated February 9, 2024,
has increased the ceiling of the fixed remuneration for
a NED, other than the Chair of the Board, to ?30 lakh
per annum.

The Bank should obtain shareholder approval to fix
maximum Fixed Remuneration limit and also obtain
shareholder approval as and when there is a change
in maximum Fixed Remuneration limit payable to Non¬
Executive Directors/Independent Directors of the Bank

(other than Part Time Chairman), in line with regulatory
guidelines, as amended.

The compensation by way of Fixed Remuneration to
all Non-Executive Directors/Independent Directors
(Other than Non-Executive (Part-time) Chairman), shall
not exceed ?20,00,000/- (Rupees Twenty Lakhs only)
per Director per annum, in addition to sitting fees and
reimbursement of expenses for attending the meetings
of the Board of Directors and/or other meetings, as
approved by the Shareholders at the 95^th Annual
General Meeting held on 24^th August, 2023.

The compensation to be based on profitability at the
end of each Financial Year, as may be approved by the
Board of Directors from time to time.

The Board may every year approve the Fixed
Remuneration up to ?20,00,000/- (Rupees Twenty
Lakh Only) per annum per Director to each of the Non¬
Executive Directors/ Independent Directors of the Bank
(other than Part Time Chairman), for each year on a
proportionate basis of his office of directorship in the
respective Financial Year as per the limit approved by
the Shareholders at the 95^th Annual General Meeting
held on 24^th August, 2023.

The Nomination and Remuneration Committee after
taking into account all relevant factors such as ability
of Bank and experience of the individuals, recommend
to the Board to pay compensation to Non-Executive
Directors / Independent Directors (other than Non¬
Executive (Part Time) Chairman), in compliance with the
provisions of Companies Act, 2013, Banking Regulation
Act, 1949, Listing Regulations and other regulatory
guidelines, as amended from time to time.

The Non-Executive Directors are also paid sitting fees
for attending each meeting of the Board of Directors
or any committees of the Board and their expenses
for attending such meetings shall be reimbursed in
compliance with the provisions of the Companies
Act, 2013, Listing Regulations and other regulatory
guidelines, as amended from time to time.

The Board while recommending any change in the
remuneration or sitting fees will considers various
factors like size and complexity of organisation,
comparison with the peer Banks and Regulatory
guidelines as applicable.

Policy on Board Diversity:

Pursuant to SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 to ensure compliance
with the applicable provisions, the Bank has devised a
policy on Board Diversity to ensure adequate diversity
in its Board of Directors. The Bank believes that
diversity underpins the successful operation of an

effective Board and embraces diversity as a means
of enhancing the business. With a view to achieve
sustainable and balanced development, the Bank sees
increasing diversity at the Board level as an essential
element in supporting the attainment of its strategic
objectives. A diverse Board includes and makes good
use of differences in the skills, regional and industry
experience, background, race, gender and other
qualities of Directors.

Policy on Board Diversity of the Bank mainly depends
on the qualifications for appointment of Directors of the
Bank as contained in the Banking Regulation Act,1949
and satisfying the Fit and Proper Criteria for Directors
as per the regulatory requirement of RBI.

The Bank continuously seeks to enhance the
effectiveness of its Board and to maintain the highest
standards of corporate governance and recognizes and
embraces the benefits of diversity in the Board room.
Diversity is ensured through consideration of various
factors, including but not limited to skills, regional and
industry experience, background and other qualities. In
formulating its perspective on diversity, the Bank also
considers factors based on its own business model and
specific needs from time to time.

The NRC has the responsibility to lead the process for
Board appointments and for identifying and nominating,
candidates for appointment to the Board. The benefits
of diversity continue to influence succession planning
and continue to be the key criteria for the search and
nomination of Directors to the Board.

The Board appointments are based on merit and
candidates will be considered against objective
criteria, having due regard for the benefits of diversity
on the Board, including gender. The policy of Board
Diversity is displayed on Bank's website:https://www.
southindianbank.bank.in/other-links/disclosures/
policy-on-board-diversity

Familiarization Programme

The Bank had conducted various sessions during the
financial year to familiarize the Independent Directors of
the Bank, including various topics on Banking Industry,
Business Model, Corporate Law, Risk Management
System and Cyber Security. Further, the Directors are
encouraged to attend the training programmes being
organized by various Regulators/ bodies/institutions on
the above matters. The details of such familiarization
programmes are displayed on the website of the Bank.
https://www.southindianbank.bank.in/investors-desk/
corporate-governance/directors-training-register

Board Level Performance Evaluation

The Companies Act, 2013 and SEBI (LODR) Regulations,

2015 stipulates the performance evaluation of
the Directors, MD & CEO, Chairman, Board and its
Committees. Considering the said provisions, the
Bank has devised the process and the criteria for
performance evaluation which have been recommended
by the Nomination & Remuneration committee and
approved by the Board. The process for formal annual
performance evaluation is as under:

•    Committee of Independent Directors at their
separate meeting evaluates the performance of
Non- Independent Directors, MD & CEO, Executive
Director, Chairman of the Bank and the Board as a
whole.

•    The Board evaluates the performance of the
Independent Directors, Non-Executive Directors,
Chairman of the Bank, Executive Director and MD
& CEO (excluding the Director being evaluated) and
submit its report to the Nomination & Remuneration
committee.

•    The Board and Nomination & Remuneration
Committee evaluates the fulfilment of the
independence criteria as specified in the regulations
and their independence from the Management.

•    The Board evaluates the performance of Board as a
whole and for Board level committees.

•    Nomination & Remuneration Committee evaluates/
reviews the performance of each Director and
recommends the appointment/re-appointment/
continuation of Directors to the Board. Based on
the recommendation of Nomination & Remuneration
Committee, Board will take appropriate action.

The criteria for performance evaluation, inter-alia,
include the following:

Performance Evaluation of Non-Executive Directors,
MD & CEO, Executive Director and Chairman

Participation at Board/Committee Meetings, Managing
Relationship, Knowledge and Skill, Personal Attributes,
Compliance and Corporate Governance; Leadership;
Strategy Formulation, Strategy Execution, Financial
Planning/ Performance, Relationships with the Board,
Human Resource Management and Succession
Planning, Personal Qualities, Financial Parameters,
Credit Quality and Risk Management, Customer
Acquisition & Retention, Expansion of Loan Portfolio,
Resources and Conduct of Meetings.

Performance Evaluation of Board

Composition and Diversity, Strategic Foresight, Value
Creation, Process and Procedures, Oversight of the
Financial Reporting Process and Internal Controls,
Oversight of Audit Functions, Corporate Governance,

Corporate Culture, Monitoring of Business Activities,
Understanding of the business of the Bank and
Regulatory Environment, Contribution to Effective
Corporate Governance and Transparency in the
Company's Operations, Deliberations/ decisions on the
Company's strategies, policies, plans and guidance to
the Executive Management.

Performance Evaluation of the Board Level
Committees

The performance and effectiveness of the Committee;
Frequency and duration; Spread of talent and diversity
in the Committee; Understanding of regulatory
environment and developments; Interaction with the
Board.

Outcome of Performance Evaluation

An annual performance evaluation of the Board,
Committees of the Board and the individual members
of the Board was conducted in June 2025 as per the
aforesaid process and the report on the evaluation were
presented at the meeting of the NRC and the Board of
Directors. The Directors expressed their satisfaction
with the evaluation process. The feedback of the
Board, post completion of the exercise of performance
evaluation of the Board and Committees of the Board
were as under:

•    Continued efforts and actions are required for growth
and margins in Retail/ MSME Sectors, unsecured
loans and deposit mobilization to reduce excessive
reliance on Corporate, Treasury and other income.

•    W.r.t. SIB @ 100, Management has prepared a
preliminary document for SIB @ 100 and the same
should be shared with the directors at the earliest.
Based on initial information, more work is required in
this area.

•    There should be rationalization of HO / RO / Cluster
business reviews so that branches can focus more
on business development. Such reviews should be
conducted on specified day & time, preferably after
business hours.

•    AI / DPDP / ECL will require focus next year from
regulatory perspective.

EMPLOYEE STOCK OPTION SCHEME

The SIB ESOS 2008 Employee Stock Option Scheme ('the
Scheme') provides for grant of stock options on equity
shares of the Bank to employees and Managing Director
& CEO and Whole-Time Director(s) of the Bank. The
Scheme is in compliance with Securities and Exchange
Board of India (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021. The Bank followed
Black-Scholes model for calculating fair value of options

to account for its stock-based employee compensation
plans as per the Guidelines for all the options granted
during the Financial Year ended March 31, 2026. The
fair value thus arrived was being recognised as expense
beginning with the accounting period for which approval
has been granted as per RBI circular No. RBI/2021-
22/95 DOR.GOV. REC.44/29.67.001/2021-22 dated
August 30, 2021. Till March 2026, 6,37,05,722 stock
options were vested, out of which 3,05,90,831 stock
options were exercised by eligible employees. The
money realised due to exercise of the said options was
?45,73,47,682.39 and consequently 3,05,90,831 shares
of ?1/- each have been allotted to the employees/ legal
heirs concerned.

A Certificate of the Secretarial Auditors pursuant to
Regulation 13 of SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 will be placed to
the AGM for the scrutiny of Shareholders. The total
options granted under twenty phases of SIB ESOS
2008 works out to 3.02% of the paid-up share capital
of the Bank as at March 31, 2026. The Scheme has
generated the intended motivation amongst the staff.
The Employee Stock Option Scheme (SIB ESOS 2008) is
modified latest by shareholders at 97^th Annual General
meeting dated August 20, 2025. The modification
to the ESOS Scheme is intended solely to make the
provisions of the Scheme more specific and to explicitly
cover the scope of provisions permitted under the SEBI
(Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 and to refer to the provisions of latest
statutes. The changes were clarificatory in nature and
aim to enhance regulatory alignment, without altering
the intent, structure, or key terms of the Scheme and
the scheme is in compliance with SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations,
2021.Statutory disclosures regarding details of the
stock options granted, vested, exercised, forfeited
and expired during the year under review is hosted on
the website of the Bank and can be viewed athttps://
www.southindianbank.bank.in/investors-desk/annual-
reports/annual-report-for-the-fy-2025-26

AUDITORS

a) Statutory Auditors:

The shareholders at its 96^th Annual General Meeting
held on August 27, 2024 has appointed M/s. M.
P. Chitale & Co, Chartered Accountants, Mumbai
(Firm Registration Number 101851W) and at its 97^th
Annual General Meeting held on August 20, 2025
has appointed M/s. Borkar & Muzumdar, Chartered
Accountants, Mumbai (Firm Registration Number
101569W) as the Joint Central Statutory Auditors
of the Bank for a continuous period of 3 years
respectively. Accordingly, the appointment of M/s M.

P. Chitale & Co, Chartered Accountants will be until
the conclusion of the 99^th Annual General Meeting
and appointment of M/s. Borkar & Muzumdar,
Chartered Accountants will be until the conclusion
of the 100^th Annual General Meeting of the Bank.

For the year ended March 31, 2026, fees paid/
payable to the Joint Statutory Central Auditors M/s
M. P. Chitale & Co, Chartered Accountants and M/s.
Borkar & Muzumdar, Chartered Accountants are as
follows:

(? in lakh)

# Excluding out of pocket expenses

There is no qualification or adverse remark in
Auditors' Report. There is no incident of fraud
requiring reporting by the Auditors under Section
143(12) of the Companies Act, 2013.

The Reserve Bank of India vide. Letter No CO.DOS.
RPD.No.S2071/08.21.005/2026-27 dated June 17,
2026 has approved to continue with the appointment
of M/s. M P Chitale & Co., Chartered Accountants
(Firm Registration Number : 101851W) and M/s.
Borkar & Muzumdar Chartered Accountants (Firm
Registration Number: 101569W) as the Joint
Statutory Auditors of the Bank for the FY 2026-27,
for their third year and second year respectively.

An item for fixing the remuneration payable to
Joint Statutory Auditors is placed for the approval
of the Shareholders in the ensuing Annual General
Meeting.

b) Secretarial Auditors and Secretarial Audit Report:

Pursuant to Section 204 of the Companies Act, 2013,
and Regulation 24A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (the
"SEBI Listing Regulations") read with SEBI circular no.
SEBI/HO/CFD/ CFD-PoD-2/CIR/P/2024/185 dated
31^st December 2024, the Bank had appointed M/s
SVJS & Associates, Practicing Company Secretaries,
Kochi (Firm Registration No. P2008KE17900) and
holding a valid peer review certificate (Certificate
No. 6215/2024) issued by the Institute of Company
Secretaries of India (the "ICSI"), as its Secretarial
Auditors to conduct the secretarial audit of the Bank
for a period of five (5) years, commencing from

Financial Year 2025-26 till Financial Year 2029-2030.
The Bank has provided all assistance and facilities
to the Secretarial Auditor for conducting their audit.
The Report of Secretarial Auditor for the FY 2025-26
is annexed to this report as Annexure C. There are
no reservations, adverse remark or disclaimer in the
Secretarial Audit Report. No offence of fraud was
reported by the Secretarial Auditor of the Bank.

Pursuant to circular no. CIR/CFD/CMD1/27/2019
dated February 08, 2019, issued by SEBI and
Regulation 24A of the SEBI (LODR) Regulations,
2015, the Bank has obtained Secretarial Compliance
Report from Practicing Company Secretaries on
compliance of all applicable SEBI Regulations and
circulars/ guidelines issued thereunder and the copy
of the Secretarial Compliance Report was submitted
with the Stock Exchanges.

INTERNAL CONTROL AND AUDIT/INSPECTION

Internal Control and their Adequacy

The Bank has put in place extensive internal controls and
processes to mitigate operational risks, which includes
maker checker authentication of CBS transactions,
centralized processing of opening and modifications
of CASA accounts and loan accounts, centralized
sanctioning of loan facilities etc.

Various Preventive controls viz., Dual custody for
cash, gold and other security items, maintenance of
daily control registers for security items, finger-scan-
authentication for processing of transactions in CBS
in addition to login passwords, stringent guidelines
on password usage, STP processes between CBS
and payment interface systems for transmission of
messages etc. are in place.

In addition to that the transactions generated in the CBS
are monitored by the Fraud Risk Management (FRM)
CBS by the way of alert generated in a near real time
basis and the transactions happening through various
digital channels are being monitored centrally on a 24x7
basis by Fraud Risk Management (FRM) Cell, for real
time detection and prevention of frauds.

As per the requirement of Companies Act, 2013, the
Bank has formulated an Internal Financial Controls
framework. Risk and Controls associated with each
process in the Bank are documented under the Internal
Financial Controls Framework. The Inspection and
Vigilance Department plays a significant role in testing
the control effectiveness for each process under the
framework.

Internal audit function provides vital assurance to a
Bank's Board of Directors, Senior Management and the
Regulator as to the quality of the Bank's internal control

system. The scope of internal audit activities includes
the examination and evaluation of the effectiveness
of internal control, risk management and governance
systems and processes of the Bank and monitoring of
compliance with laws and regulations. The inspection/
audit brings out the irregularities/deficiencies in the
working of branches/offices and enables the Bank to
take corrective action.

Audit/Inspection

The Primary focus of Internal Audit is to provide
reasonable assurance to the Board and Top
Management about the adequacy and effectiveness
of the risk management and control framework in
the Bank's operations. The Department is manned by
appropriately qualified personnel to handle the Risk
Based Internal Audit, Management Audits, Credit Audits
including Centralized Credit Audits, Information Systems
Audit and Special Audits including Investigations. All the
internal audits are conducted based on the RBI guidance
note in relation to conducting risk based internal audit
and RBI circular on concurrent audit of branches and
identified critical processes of the branches.

In respect of matters relating to Inspection & Vigilance
Department, Head of Internal Audit and Chief of Internal
Vigilance (HIA & CIV) directly reports to MD & CEO.

All activities (including outsourced activities) of the
Bank and its wholly owned non-financial subsidiary,
M/s. SIB Operations and Services Limited (SIBOSL),
whose main objective is to provide manpower supply to
Bank, fall within the ambit of Internal Audit.

Audit of Branches

All the branches are subjected to Risk Based Internal
Audit (RBIA). This audit is conducted at periodic
intervals based on the risk perception. All the audits
are conducted based on pre-defined check points and
all the operational areas are covered under this audit.
Credit audit/ Centralized Credit Audit (CCA) is also
conducted as part of Risk Based Internal Audit where
aggregate credit exposure of a borrower is ?5 crores
and above.

In addition to RBIA of branches, the Bank has a concurrent
audit system, which covers selected Branches,
conducted by qualified Chartered Accountants/
Firms/retired officers. The selection of branches for
concurrent audit is done in such a way that it covers
branches having substantial advance or deposit, entire
specialized Branches such as 'B' Category Branches,
Corporate Branches etc., and all poorly rated branches
as per the latest rating awarded.

In addition to the risk based internal audits and
concurrent audits, the branches are subjected to

Surprise Inspection, IS Audit, Revenue Audit, Self-Audit,
Gold Loan Inspection/Asset Verification, Surprise Gold
Loan Inspection/ Asset Verification and Compliance
Inspection during the financial year.

Separate monitoring team - Inspection Monitoring
Group (IMG) closely monitors various inspections/
audits at the Branches. There are four IMGs who are
reporting to the Head of IMG. These Monitoring groups
are assigned the task of ensuring the compliance and
closure of the inspection report of the branches. During
the course of inspections, serious irregularities if any,
concerning regulatory guidelines, legal requirements
and operational processes are found, these are
escalated to the Management for timely action.

All the branch-related audits are presently automated
through system where reporting, risk rating, compliance
and closure of the reports are done through software
application which provides the Bank with an overall
control on various audits conducted in the branches.
Continuous improvements are made to the application
to automate several activities at HO and digitize the
records in a single application.

Internal inspectors conduct inspection at regular
intervals based on the risk rating and the inspection
reports are placed to Audit Committee at Executive
level (Sub Committee of Audit Committee of Executives
(SACE)/Audit Committee of Executives - (ACE)) for
review, which is overseen and controlled by Board Level
committee (Audit Committee of Board - ACB).

Audit of Departments and critical process

Management Audit involves the review of managerial
aspects like organizational objective, policies,
procedures, structure, control and system to check the
efficiency and performance of the management over
the activities of the Bank.

Further to the traditional audits, the department
introduced Thematic Audits to assess the risks and
evaluate the controls across the selected areas/
activities/sub-activities to verify whether the process
is effective, controlled and compliant with regulatory
and internal guidelines. The Audit aims to ensure that
management is made aware of the status and can initiate
appropriate steps for correction and remediation.

The Management Audit is conducted at periodical
intervals based on the risk perception of respective
Department/ Business Vertical/ Regional Offices.
In addition to the management audit conducted by
Inspection Department, all the critical operations such
as International Banking Division, Treasury Department,
Credit Department and Centralized Processing Centers,
etc., are subjected to concurrent audit by Independent
Chartered Accountant firms.

All these reports are reviewed by Audit Committee
of Executives (ACE/SACE) and Audit Committee
of Board (ACB) and corrective steps are taken to
rectify the lapses/ irregularities, if any, pointed out in
such inspection reports as recommended by vetting
department.

There is a team available within the Inspection
Department exclusively for conducting audit of IT
systems and applications. Various IS audits and
Vulnerability Assessment & Penetration Testing (VAPT)
are conducted in a stipulated frequencies as per
approved audit plan. Guidelines from regulators like RBI,
Cert In, NPCI, UIDAI, SEBI, etc. related to IT security are
incorporated in the periodic IS audits. Any new software
application or modification in the existing application
undergoes a thorough audit with respect to IT controls
before going live.

New product/process whenever introduced in the
Bank is reviewed by Inspection Department and
recommendations are made for necessary controls/
improvements for deficiencies / gaps observed in
existing internal controls.

Inspection Division also carries out independent
evaluation of Bank's Internal Financial Controls in
terms of Companies Act, 2013 and also the adequacy
of Internal Financial Controls with reference to the
Financial Statements.

EXPLANATION FOR AUDITOR'S COMMENT IN THE
REPORT

The Joint Statutory Auditor's Report for the year 2025¬
26 does not contain any qualification.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129(3)
of the Companies Act, 2013 read with Rule 8 of
Companies (Accounts) Rules, 2014 and other applicable
provisions of the Banking Regulation Act,1949, the Bank
has prepared its Consolidated Financial Statement
including its Wholly Owned Subsidiary Company M/s.
SIB Operations and Services Limited, which is forming
part of this Annual Report. The financial position and
performance of its Subsidiary Company is given in Form
AOC-1, the statement containing salient features of the
financial statements of the Subsidiary Company.

In accordance with third proviso to Section 136(1) of the
Companies Act, 2013, the Annual Report of the Bank,
containing therein its Standalone and the Consolidated
Financial Statements has been hosted on its website
(www.southindianbank.bank.in). Further, as per fourth
proviso to the said Section, the Audited Annual Accounts
of the said Subsidiary Company of the Bank, considered
as part of the Consolidated Financial Statements

have also been hosted on the Bank's website (www.
southindianbank.bank.in). The said documents have
been hosted on the website of the Subsidiary Company
of the Bank also, in compliance with the said Section.
The documents/details available on the Bank's website
(www.southindianbank.bank.in) will also be available
for inspection by any Member at its Registered Office.
Further, pursuant to the provisions of Accounting
Standard ('AS') 21, Consolidated Financial Statements
notified under Section 133 of the Companies Act, 2013,
read together with Rule 7 of the Companies (Accounts)
Rules, 2014 issued by the Ministry of Corporate Affairs,
the Consolidated Financial Statements of the Bank
along with its Subsidiary Company for the year ended
March 31, 2026 forms part of the Annual Report.

CORPORATE GOVERNANCE

A separate report detailing Corporate Governance
as required under applicable regulations of the SEBI
(LODR) Regulations, 2015 and a certificate from M/s.
SVJS & Associates Company Secretaries, Secretarial
Auditors of the Bank, are annexed to this Report.

Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub
section (3) of Section 92 of the Companies Act, 2013,
read with Rule 11 and 12 of the Companies (Management
and Administration) Rules, 2014, copy of Annual Return
as at March 31, 2026 in Form No. MGT-7 is hosted on
the website of the Bank and can be viewed athttps://
www.southindianbank.bank.in/investors-desk/annual-
return

Statement of deviation or variation

Pursuant to Regulation 32 and other relevant
provisions of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, read with Master
Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/12 dated
July 11, 2023 issued by SEBI, the statement of deviation/
variation in the use of proceeds for the quarter ended
on March 31, 2024, of issue of shares on a rights basis at
a ratio of 1:4 and issued 52,31,85,254 (Fifty Two Crores
Thirty One Lakhs Eighty five thousand two hundred and
fifty four) shares of face value of ?1.00 (Rupee One)
each ("Shares") at an issue price of ?22 (Rupees Twenty
Two only) aggregating to ?1,151.01 Crore (Rupees One
thousand One Hundred Fifty One Crore and One Lakh)
made by the Bank is Nil. The same has been reviewed by
the Audit Committee of the Board and submitted to the
Stock Exchanges on May 2, 2024. As the Bank has not
raised any fund during the Financial Year 2025-26, No
Statement of deviation or variation were filed Pursuant
to Regulation 32, 52 and other relevant provisions of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 for FY 2025-26.

Environmental, Social and Governance

Environmental, Social and Governance (ESG) matters
have become increasingly relevant for companies
across the Globe. Being in the financial sector, the
Bank has focused on promotion of sustainable and
environmentally friendly assets by identifying and
recognising ESG risks viz-a-viz opportunities.

As part of developing a sustainable financing policy
and for implementing ESG benchmarks in lending
and also for addressing issues in Environmental risk
management and governance, the Bank has formulated
ESMS policy (for governing Lending standards), Green
Deposit Policy and Green Financing Framework (to
promote investments in green projects and activities
that contribute to sustainable development) and ESG
Policy (for addressing other ESG issues). The Bank has
taken following steps in this regard.

•    Corporate Social Responsibility Committee of
the Board is made responsible for overseeing the
Environmental, Social and Governance (Reporting
& review) activities of the Bank under the ESG
framework.

•    MD & CEO has been authorized as the designated
Director for implementing ESG in the Bank for BRSR
reporting.

•    The Board has constituted an Executive Level
Committee for implementing the ESG initiatives
of the Bank. Executive Level Committee will be
responsible for supervision and implementation of
ESG activities in the Bank.

•    For effective Reporting of BRSR and to review
the ESG practices at the Bank, the Bank had also
appointed a Professional agency for assisting
Business Responsibility and Sustainability Reporting.

•    Environmental and Social Management System
(ESMS) Policy reflects Bank's commitment for
integrating environmental and social considerations
into the business practices and decision-making
processes. The Bank employs a robust grading
model to assess environmental and social risks, with
emphasis on climate risk for high-value credit, in
accordance with the thresholds prescribed by ESMS
Policy.

•    The Bank collaborated with The New Indian Express,
in June 2025 to distribute seed packets to Kerala
Edition newspaper consumers, encouraging them to
plant hope and nurture a greener tomorrow under
the theme 'Tiny Seeds, Big Impact'.

•    As part of the Bank's sustained Green Initiative, plants
were distributed to retirees and other participants on

the occasion of the Bank's Founder's Day celebration
held on 29^th January, 2026. This initiative, which saw
the distribution of 300 plants during FY 2025-26,
has been institutionalised as an annual programme
to promote environmental consciousness among the
Bank's extended community.

As part of Environment Day Bank had distributed
vegetable saplings to the employees. This promotes
green awareness and environmental responsibility
among employees.

•    To optimise energy consumption and reduce
the Bank's overall carbon footprint, a Bank-wide
temperature policy has been implemented across
all branches, departments, offices and ATMs,
mandating the setting of air conditioner units at
24 degrees Celsius. This standardised thermal
management policy is expected to yield measurable
reductions in electricity consumption across the
branch network.

In addition, all new procurement orders for air
conditioning equipment are exclusively mandated
for inverter-type machines carrying a 5-star energy
rating. This procurement policy ensures that future
additions to the Bank's fixed assets align with the
highest standards of energy efficiency, reducing
lifecycle energy costs and environmental impact.

•    The Bank's new flagship building, SIB Tower at
Kakkanad, Ernakulam, has been constructed with a
deliberate focus on sustainability. The external walls
of SIB Tower have been built using Porotherm blocks
— an eco-friendly walling solution manufactured
from natural clay. Porotherm blocks provide superior
thermal insulation by significantly reducing heat
transfer between the external environment and
the interior work areas. This results in reduced
dependency on mechanical cooling, lower energy
consumption and optimal indoor temperatures,
contributing to both occupant comfort and
environmental sustainability.

•    In a significant milestone for the Bank's renewable
energy journey, a 110 KW rooftop solar power plant
has been installed and commissioned at SIB Tower,
Kakkanad. This installation represents the Bank's
concrete commitment to transitioning towards
clean energy sources and reducing dependence on
conventional grid electricity.

Furthermore, plans are actively underway to
extend solar installations to additional Bank-owned
premises, with a view to progressively increasing the
share of renewable energy in the Bank's total energy
consumption. The Bank intends to identify suitable
rooftop and ground-mounted solar opportunities at

select branch locations and administrative buildings
as part of this phased solar expansion programme.

•    SIB Tower is equipped with automatic and intelligent
lighting systems that dynamically minimise power
consumption by regulating light intensity and
operational hours based on occupancy and ambient
conditions. This smart lighting infrastructure
contributes meaningfully to the building's overall
energy efficiency profile.

The Bank has also mandated the exclusive use
of energy-efficient LED lighting across all Bank-
owned premises and administrative buildings, to
the extent possible. This directive, applicable to
all new installations and replacements, ensures
that the Bank's lighting infrastructure progressively
transitions to the most energy-efficient technology
available, reducing both electricity consumption and
maintenance costs.

•    Recognising the criticality of responsible water
management, the Bank has taken proactive steps to
ensure sustainable water treatment across its owned
properties. A 75 KLD (Kilolitres per Day) Sewage
Treatment Plant (STP) has been successfully
installed and commissioned as part of the SIB Tower
project at Kakkanad, Ernakulam. The treated water is
recycled for non-potable uses within the premises,
including horticulture, thereby contributing to
significant conservation of freshwater resources.

The Bank's strategy envisions the installation of
sewage treatment facilities across all Bank-owned
buildings, ensuring compliance with environmental
regulations while actively contributing to water
conservation objectives.

•    As part of the Bank's social responsibility and
green initiative to reduce the consumption of tissue
paper and other single-use disposable products,
automatic hand dryers have been installed at the
ITOD Building, Kakkanad, Ernakulam. SIB Tower has
similarly been provided with automatic hand dryers
across all restroom facilities.

This initiative reflects the Bank's commitment to
eliminating avoidable waste at source and fostering
a culture of resource consciousness among
employees and visitors. The Bank proposes to
progressively extend this facility to other owned
administrative buildings and major branch premises.

•    SIB Tower, Kakkanad has been integrated with a
centralised Building Management System (BMS)
— a technology-driven infrastructure that enables
real-time monitoring, control and optimisation of
all critical building utilities from a single platform.
The BMS encompasses the management of HVAC

(Heating, Ventilation and Air Conditioning) systems,
electrical distribution, lighting controls, fire safety
systems and other electro-mechanical assets within
the building.

Through automated scheduling, load management
and predictive controls, the BMS ensures that energy¬
intensive systems operate only when required and
at optimal efficiency levels, significantly reducing
wasteful consumption. The system also generates
operational data and analytics that enable the Bank's
facilities management team to identify inefficiencies,
schedule preventive maintenance proactively and
make informed decisions on energy usage. The
integration of BMS represents a significant step
in the Bank's commitment to smart, sustainable
building operations and will serve as a model for
future Bank-owned infrastructure projects.

•    In a commendable initiative towards achieving a
circular economy within its premises, SIB Tower is
equipped with a food waste management system
wherein organic food waste generated within the
building is processed through a bio-digester unit.
The food waste is mechanically ground and fed
into the bio-digester, where it undergoes anaerobic
decomposition to produce biogas.

The biogas thus generated can be utilised as a clean
fuel source for cooking or other thermal applications
within the premises, effectively closing the loop on
organic waste and reducing dependency on LPG
or other conventional fuel sources. This initiative
simultaneously addresses two environmental
objectives — diversion of organic waste from landfills
and generation of renewable energy from waste
— and is aligned with the principles of sustainable
resource management and waste minimisation. The
Bank intends to replicate this model across other
owned administrative buildings as the programme
matures.

•    Under its Corporate Social Responsibility (CSR)
programme, the Bank extends financial assistance
for the establishment and installation of solar
energy systems, the development of solid waste
management infrastructure, afforestation initiatives,
deployment of terrain vehicles, and the creation of
other infrastructure to promote sustainable eco¬
tourism and environmental conservation. ¹

footprint across logistics operations and reinforces
our dedication to responsible corporate practices.
Through our partnership with DHL, South Indian
Bank continues to pioneer sustainable banking
practices, not just in financial services but also in
operational logistics. The GoGreen initiative is a
reflection of our long-term vision to embed climate
consciousness into every aspect of our ecosystem.

•    During the year, the Human Resources Department
broadened the Bank's sustainability curriculum:

>    Course rollout: Thirty-seven new e-learning
courses (aggregating 106 credit hours) were
released on the iLearn platform, which include
courses devoted to Human Rights, ESG-aligned
investing and Green Finance.

>    Participation and reach:

During FY 2025-26, a total of 8,877 staff
members underwent various internal/external
training sessions, both in-person/online. 8,968
staff members successfully completed courses
on the learning platform amounting to a total of
4,93,404 learning hours.

> ESG-Aligned Learning    Framework:    The

updated curriculum now includes Environmental
Economics, Climate Risk Disclosure & Sustainable
Banking, ESG & Climate Risk etc

>    Forward commitment: The Bank has set a
target of extending ESG and related foundational
training to 100 % of employees in the coming
cycle.

•    The Bank has committed to promote sustainable
finance and environmental stewardship. One of the
ways we demonstrate this commitment is through
the green deposit product. Green deposits are a
unique financial product that allows customers to
align their savings with environmentally responsible
initiatives. The objective of the Green Deposit is
to promote environment-friendly initiatives by
encouraging depositors to invest in green projects
and activities that contribute to sustainable
development. It aims to mobilize deposits and use
the proceeds for funding projects and activities that
promote environmental conservation, renewable
energy, energy efficiency and other green initiatives.

Green Deposit Policy & Green Financing Framework

Green Deposit Policy & Green Financing Framework: In
line with our commitment to sustainability, the Board
of the Bank has approved the "Green Deposit Policy
and Green Financing Framework," which introduces
a pioneering financial product known as the "Green

Deposit." This product enables depositors to contribute to sustainability objectives by channelling surplus funds
into environmentally beneficial projects, following the RBI guidelines issued on April 11, 2023. The funds raised
through Green Deposits are dedicated to supporting green financing activities. These activities aim to foster
initiatives that have positive environmental impacts, including renewable energy, energy efficiency, sustainable
agriculture, and other eco-friendly ventures. The Green Deposit scheme has successfully raised ?97.66 crore
during FY2025-26. In addition, an unutilized balance of ?58.62 crores from FY 2024-25, which was previously kept
in liquid instruments, was also available for allocation. During FY2025-26, a total of ?156.28 crore (including ?58.62
crores from the previous year) was allocated to permissible green activities and projects. The Bank acknowledges
its pivotal role in addressing sustainability challenges and is committed to facilitating the transition to a low-carbon
economy. Through the provision of a diverse range of sustainable financing products and services to customers,
the Bank aims to drive sustainable development and contribute to a greener future.

Portfolio-level information on the use of funds raised from green deposits    (?. In Crore] ²

Business Responsibility and Sustainability Reporting
(BRSR)

As stipulated in Listing Regulations, the Business
Responsibility and Sustainability Report describing the
initiatives taken by the Bank from Environmental, Social
and Governance perspective is attached as part of the
Directors' Report as Annexure-D.

Dividend Distribution Policy

In accordance with the Regulation 43A of Securities
and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Bank
has formulated a Dividend Distribution Policy and the
Policy is hosted on the website of the Bank and can be
viewed athttps://www.southindianbank.bank.in/other-
links/disclosures/dividend-distribution-policy

Subsidiary Companies/Joint Ventures or Associate
Companies

As on March 31, 2026, the Bank has one unlisted Wholly
Owned Subsidiary - M/s. SIB Operations and Services
Limited, which was incorporated on 28^th May, 2021, M/s
SIB Operations and Services Limited is a wholly owned
Non-Financial Subsidiary Company of the South Indian
Bank Ltd. The RBI has accorded the final approval on
March 25, 2021 for setting up the Subsidiary Company
and the Company was incorporated on May 28, 2021 to
cater to the operational needs of the South Indian Bank
Ltd. Its authorized Capital as on March 31, 2026 is ?2
crores and the Issued and Paid-up Capital is ?50 lakh.
The company is providing exclusive services to the
Bank in the operational areas of Tele calling, Business
Development, Data Entry Operations, I.T. Support and
other services permitted by Reserve Bank of India. The
Subsidiary Company has reported a profit of ?50.16
lakhs as on March 31, 2026.

There are no companies which have ceased to be Bank's
Subsidiaries, Joint Ventures or Associate Companies
during the Financial Year 2025-26.

Sri. M George Korah (DIN: 08207827), Non-Executive
Independent Director of the Bank, Sri. P R Seshadri
(DIN: 07820690), MD & CEO of the Bank, Sri. Benny
P Thomas (DIN: 09448424), Non-Executive Non¬
Independent Director of the Bank and Sri. Anto George
T (DIN: 10702382), Chief Operating Officer of the Bank
were Directors of SIB Operations and Services Limited
as on March 31, 2026.

Except Sri. M George Korah (DIN: 08207827) and Sri.
Benny P Thomas (DIN: 09448424), no other Directors in
the Board of SIB Operations and Services Limited were
drawing any sitting fee from the subsidiary company.
Sri. M George Korah (DIN: 08207827) and Sri. Benny P
Thomas (DIN: 09448424), have received ?1,60,000/-

and ?1,60,000/- each as sitting fee for attending the
Board Meetings of the subsidiary company during the
Financial Year 2025-26.

The Board of Directors has formulated a policy for
determining 'material' subsidiaries pursuant to the
provisions of the Listing Regulations, though the Bank
has no material subsidiary. The same is displayed on
the website of the Bankhttps://www.southindianbank.
bank.in/other-links/disclosures/policy-for-determining-
material-subsidiaries

Related Party Transactions

The Board of Directors has formulated a Policy on
Materiality of Related Party Transactions and also on
dealing with Related Party Transactions pursuant to
the provisions of the Companies Act, 2013 and SEBI
(LODR) Regulations, 2015. The same is displayed on
the website of the Bank.https://www.southindianbank.
bank.in/other-links/disclosures/policy-on-related-
party-transactions

Since the related party transactions are in the ordinary
course of business and on an arm's length basis and not
material, as per Section 188 of Companies Act, 2013,
a Nil AOC-2 is disclosed in compliance with Section
134(3)(h) of Companies Act, 2013 and Rule 8(2) of the
Companies (Accounts) Rules, 2014 as Annexure-E.

Material Changes and Commitment Affecting
Financial Position of the Bank

There are no material changes and commitments,
affecting the financial position of the Bank which has
occurred between the end of the financial year of the
Bank i.e. March 31, 2026 and the date of the Directors'
report i.e. July 16, 2026.

Significant and material orders passed by Regulators

During the year under review, there are no significant
and material orders passed by the Regulators or Courts
or Tribunals impacting the going concern status and
Bank's operations in future.

Maintenance of Cost Records

Being a Banking Company, the Bank is not required to
maintain cost records as per sub-section (1) of Section
148 of the Companies Act, 2013.

Details in respect of frauds reported by auditors

There is no fraud reported by auditors under subsection
(12) of section 143 of the Companies Act, 2013 which
are reportable to the Central Government.

Compliance to Secretarial Standards

The relevant Secretarial Standards issued by the
Institute of Company Secretaries of India (ICSI) related

to the Board Meetings and General Meeting have been
complied with by the Bank.

Strictures and Penalties

During the last three financial years, there were no
penalties or strictures imposed on the Bank by the SEBI
or any of the stock exchanges and/or any other statutory
authorities on matters relating to capital market.

Deposits

Being a Banking Company, the disclosures required as
per Rule 8(5) (v) & (vi) of the Companies (Accounts)
Rules, 2014, read with Section 73 and 74 of the
Companies Act, 2013 are not applicable to the Bank.

THE DETAILS OF APPLICATION MADE OR ANY
PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016 (31 OF 2016)

As per section 3(7) of The Insolvency and Bankruptcy
Code, 2016, Corporate person does not include any
financial service provider, thereby the Bank is excluded
from the purview of the Code. There have been
several applications made or are pending in the name
of the Bank as a Financial creditor against any default
occurred as part of the course of business. The Details
of applications made by the Bank during FY 2025-26
and cases which are pending as on 31.03.2026 where
applications are made by the Bank as a Financial
Creditor against default occurred as part of the course
of business are as follows:

Management Discussion and Analysis Report

This has been dealt with in a separate section in the
Annual Report.

Particulars of Loans, Guarantees or Investments

Pursuant to Section 186 (11) of the Companies Act, 2013,
the provisions of section 186 of Companies Act, 2013,
except subsection (1), do not apply to a loan made,
guarantee given or security provided or investment

made by a banking company in the ordinary course of
business.

Directors' Responsibility statement

Pursuant to the requirement under Section 134(5) of
the Companies Act, 2013, with respect to the Director's
Responsibility Statement, it is hereby confirmed that:

a.    in the preparation of the annual accounts for the
Financial Year ended March 31, 2026, the applicable
accounting standards had been followed along with
proper explanation relating to material departures;

b.    the Directors had selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so
as to give a true and fair view of the state of affairs
of the Bank at the end of the Financial Year 2025-26
and of the profit of the Bank for that period;

c.    the Directors had taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of the Companies
Act, 2013 and other applicable laws for safeguarding
the assets of the Bank and for preventing and
detecting fraud and other irregularities;

d.    the Directors had prepared the annual accounts for
the Financial Year ended on March 31, 2026, on a
going concern basis;

e.    the Directors had laid down internal financial controls
to be followed by the Bank and that such internal
financial controls are adequate and operating
effectively; and

f.    the Directors had devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively.

GENERAL

No disclosure or reporting is required in respect of
the following items as it is not applicable / there were
no transactions on these items during the year under
review:

?    Neither the Managing Director nor the Whole-Time
Director of the Bank received any remuneration or
commission from Bank's subsidiary.

?    There were no Issue of equity shares with differential
rights as to dividend, voting or otherwise.

?    There were no revisions in the financial statements.

?    There were no Issue of share (including sweat
equity shares) to employees of the Company under
any scheme as permitted under any provision of
Companies Act, 2013 except under Employee Stock

Option Scheme (ESOS) as mentioned elsewhere in
the Directors' Report.

? The requirement to disclose the details of difference
between amount of the valuation done at the time
of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions
along with the reasons thereof, is not applicable.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude
to the Reserve Bank of India, Securities and Exchange
Board of India, Government of India, Government of
Kerala and all other State Governments where the
Bank operates, other Government and Regulatory
Authorities, including Stock Exchanges, where the
Bank's securities are listed and correspondent Banks
for their strong support and guidance, during the
year. The Board also places on record its gratitude to
the Bank's security-holders and customers for their

continued support, patronage and goodwill. The single
most important pillar of any Institution is its personnel,
more so in the case of a service entity like a Bank, the
Board acknowledges this fact and thanks all of them for
their diligence and loyalty towards the Bank. The Board
expresses its sincere appreciation for the dedicated
services rendered by officers and employees of the
Bank at all levels.

By orders of the Board

(Jose Joseph Kattoor)    (P R Seshadri)

Chairman    Managing Director    & CEO

DIN :09213852    DIN:07820690

Place : Kochi
Date: July 16, 2026

1

   DHL GoGreen Initiative - Advancing Sustainability
Together: As part of our unwavering commitment to
sustainability and environmental stewardship, South
Indian Bank has partnered with DHL Express under
the GoGreen Plus initiative. This alliance signifies
a proactive step towards reducing our carbon

2

Includes green finance allocation of ? 58.62 crs pertaining to FY 2025.

$ The figures reported above correspond to the period from 01.06.2023 to 31.03.2026.