K. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
In accordance with Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets, the
Bank creates a provision when there is a present legal or constructive obligation as a result of past events and
it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and
are determined based on best estimate required to settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If it is no longer
probable that an outflow of resource would be required to settle the obligation, the provision is reversed.
A disclosure for contingent liability is made when there is:
i) A possible obligation arising from the past events, the existence of which will be confirmed by occurrence
or non- occurrence of one or more uncertain future events not within the control of the bank; or
ii) A present obligation arising from a past event which is not recognized as it is not probable that an outflow
of resources will be required to settle the obligation or a reliable estimate of the amount of obligation
cannot be made.
When there is a possible obligation or present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related
income are recognised in the period in which the change occurs.
L. ACCOUNTING FOR LEASE:
Operating Lease:
Leases, where the lessor effectively retains substantially all the risks and rewards of ownership
of the leased term are classified as operating leases in accordance with Accounting Standard 19,
Leases. Lease rentals on assets under operating lease is charged off to the Profit and Loss Account
on a straight-line basis in accordance with the Accounting Standard-19.
Finance Lease:
Leases under which the Bank assumes substantially all the risks and rewards of ownership are
classified as finance leases. Assets taken on finance lease are initially capitalised at fair value of the
asset or present value of the minimum lease payments at the inception of the lease, whichever
is lower. Lease payments are apportioned between the finance charge and reduction of the
outstanding liability. The finance charge is allocated to periods during the lease term so as to
produce a constant periodic rate of interest on the remaining balance of liability for each period.
Asset given on finance lease:
In case of assets given under finance lease, leased assets are recognised as a receivable at an
amount equal to the net investment in the lease. Lease rentals are apportioned between principal
and interest on the internal rate of return. The principal amount received reduces the net
investment in the lease and interest is recognised as revenue.
M. CASH AND CASH EQUIVALENTS:
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks/institutions
and money at call and short notice.
N. CASH FLOW STATEMENT:
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the Bank are segregated.
O. SHARE ISSUE EXPENSES:
Share issue expenses are adjusted against Share Premium Account in terms of Section 52 of the Companies
Act, 2013.
P. SEGMENT INFORMATION:
The disclosure relating to segment information is in accordance with Accounting Standard-17, Segment
Reporting and as per the guidelines issued by RBI. Bank has classified its business into following for segment
reporting:
(a) Treasury includes all investment portfolios, Profit / Loss on sale of Investments, equities, income from
money market operations.
(b) Corporate / Wholesale Banking includes all advances to companies and statutory bodies, which are not
included under Retail Banking.
(c) Retail Banking includes lending to and deposits from retail customers and identified earnings and
expenses of the segment.
(d) Other Banking Operations includes all other operations not covered under Treasury, Corporate /
Wholesale Banking and Retail Banking.
Unallocated includes Capital and Reserves and other unallocable assets, liabilities, income and expenses.
Q. CORPORATE SOCIAL RESPONSIBILITY:
Expenditure incurred towards corporate social responsibility are recognised as and when it becomes due.
R. EMPLOYEE STOCK OPTION PLAN AND RESTRICTED STOCK UNITS:
Designated employees of the Bank receive remuneration in the form of share based payment transactions,
whereby employees render services as consideration for equity instruments (equity-settled transactions).
The Bank has adopted fair value method for options granted and the fair value of options has been estimated
on the dates of each grant using the Black-Scholes model. The compensation cost is amortised on a straight¬
line basis over the vesting period of the option with a corresponding credit to Employee Stock Options
Outstanding. On exercise of the stock options, corresponding balance in Employee Stock Options Outstanding
is transferred to Share Premium Account.
S. BORROWING COST:
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement
of borrowings and exchange differences arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
During the year the Bank has not repaid any subordinated debt (Tier 2 capital) (March 31, 2024: '80 crores).
Subordinated debt (Tier 2 capital) outstanding as at March 31, 2025 is '350 crores (March 31, 2024: '350
crores).
1. The Capital Adequacy Ratio (CAR) has been computed in accordance with RBI Circular No. RBI/2016-17/81
DBR.NBD.No. 26/16.13.218/2016-17 dated October 6, 2016 on Operating Guidelines for Small Finance Banks.
As per the said circular, prudential regulatory framework will largely be drawn from the Basel standards for
capital requirements and Basel II standardized approach for credit risk. Further, the RBI vide its Circular No.
DBR.NBD.No.4502/16.13.218/2017-18 dated November 08, 2017 has provided an exemption to all Small
Finance Banks whereby no separate capital charge is prescribed for market risk and operational risk.
2. The Bank has applied 100% risk weight on advances charged as security against grandfathered borrowings
on the date of conversion into a Small Finance Bank.
3. Sub-ordinated debt inclusion in Tier 2 capital has been limited to 50% of Tier 1 capital.
The total Capital Adequacy ratio of the Bank as at March 31, 2025 is 20.68% (previous year: 20.31%) against the
regulatory requirement of 15.00% as prescribed by RBI. No Capital Conservation Buffer and Counter - Cyclical
Capital Buffer is applicable on Small Finance Bank (SFB) as per operating guidelines issued on SFB by RBI.
In accordance with the RBI guidelines, banks are required to make Pillar 3 disclosures under the Basel III
Framework and Net Stable Funding Ratio (NSFR) Disclosures. These disclosures are available on the Bank's
website at the following link: https://www.janabank.com/regulatory-disclosures/. These disclosures have not
been subjected to audit by the statutory auditors of the Bank.
1.2 Capital Infusion
The Bank equity shares got listed with NSE and BSE on 14th February 2024, in compliance with SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2018, the Bank converted all the outstanding convertible
securities into equity shares of the Bank as on date of filing Red Herring Prospectus with SEBI i.e., 31st January
2024. The Board of Directors of the Bank vide their meeting dated 15th January 2024 approved the re¬
classification of Authorised capital in compliance with Section 12(1)(i) of Banking Regulation Act, 1949 and
Section 61(1)(e) of Companies Act, 2013. Further, Reserve Bank of India provided their no-objection for the
said reclassification and amendment to Memorandum of Association of the Bank vide their letter dated 02nd
April 2024.
Accordingly during the year the authorized Equity Share Capital of the Bank is increased from '1,35,00,00,000
dividend into 13,50,00,000 equity shares of '10/- to '2,00,00,00,000 divided into 20,00,00,000 equity shares
of '10/- each. The Bank has completely diminished it's preference share capital of '450,00,00,000 dividend
into 45,00,00,000 preference share of '10/- each.
During the year ended March 31, 2025, the Bank has neither issued any equity shares for cash pursuant
to preferential allotment nor pursuant to rights issue (March 31, 2024: '100.99 crores and '449.94 crores
respectively).
During the year ended March 31, 2025, the Bank has not issued any compulsorily convertible cumulative
preference shares (CCPS) (March 31, 2024: '124.15 crores). The Bank has not converted any CCPS outstanding
to equity shares during the year ended March 31, 2025 (March 31, 2024: '394.15 crores).
Further, during the year ended March 31, 2025, the Bank has allotted 4,66,248 equity shares (March 31, 2024:
1,14,071) with respect of stock options exercised aggregating to '21.19 crores including share premium
(March 31, 2024: '3.46 crores).
1. Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year.
2. Diluted earnings per equity share is computed by dividing net profit or loss for the year attributable
to equity shareholders by weighted average number of equity shares including potential equity shares
outstanding as at the end of the year, except when results are anti dilutive.
3. The dilutive impact is on account of stock options granted to employees.
3. RESERVES AND SURPLUS
3(a) Statutory Reserve
The Bank has transferred '125.35 crores (March 31, 2024: '167.39 crores) to statutory reserves pursuant to the
requirements of Section 17 of the Banking Regulation Act, 1949 and RBI guidelines dated September 23, 2000.
3(b) Capital Reserve
The Bank has transferred '8.58 crores (March 31, 2024: '0.00 crores) to capital reserves, being the profit from
sale of HTM investments, net of taxes and appropriation to statutory reserve, as per the RBI regulations.
3(c) Share premium account
During the year share premium account balance increased by '20.75 crores pursuant to issue of shares
(March 31, 2024: '1,360.94 crores). Bank has not adjusted any share issue expenses from securities premium
account (March 31, 2024: '37.74 crores) in terms of section 52 (2) (c) of the Companies Act, 2013.
3(d) Investment Reserve
On transition to the revised norms on investments, the Bank has transferred '0.30 crores from the Investment
Reserve to General Reserve during the year ended March 31, 2025.
3(e) Investment Fluctuation Reserve ('IFR')
As per RBI master direction, Banks were required to create an IFR with effect from 2018-19 to reach a level of
2% of HFT and AFS portfolio within a period of three years, where feasible. IFR shall be created by transferring
an amount not less than the lower of the following:
(i) Net profit on sale of investments during the year
(ii) Net profit for the year less mandatory appropriations
The Bank has already created 3.49% of FVTPL and AFS portfolio as investment fluctuation reserve, hence it is
not required to transfer any amount during the year (March 31, 2024: '20.00 crores).
3(f) General Reserve
On transition to the revised norms of investments, the Bank has recognised a net discount accretion of '2.47
crores on HTM investment which has been credited to the General Reserve.
The Bank has also transferred balance in Investment Reserve amounting to '0.30 crores on the date of the
transition to General Reserve.
The Bank has transferred '17.07 crores to general reserves from employer stock option outstanding account,
due to surrendered, lapse and repricing of stock option during the year ended March 31, 2024
3(g) Capital Redemption Reserve
The Bank has not transferred any amount to capital redemption reserve (March 31, 2024: '0.00 crores)
pursuant to the requirements of Section 55 of the Companies Act, 2013.
3(h) AFS - Reserve
The Bank not transferred any amount during the year ended March 31, 2025 (March 31, 2024 - Nil) to AFS -
reserve.
3(i) Drawdown of Reserves
During the year ended March 31, 2025; there were no drawdown from reserves (March 31, 2024 : Nil).
4. Employees Stock Option Plan Scheme
The Bank has share based payment schemes for it's employees. Schemes in operation during the year are
Employee stock option plan scheme 2017, Employee stock option plan scheme 2018, Restrictive Stock Units
Scheme 2017 and Restrictive Stock Units Scheme 2018.
The expected life of the stock option is based on historical data and current expectation and is not necessarily
indicative of the pattern that may occur. The expected volatility reflects the assumption that the historical
volatility of a comparable listed entity for 5 years period ended on the date of the grant is indication of future
trends which may not necessarily be the actual outcome.
* Provision includes amount received from ECLGS and invocation of guarantees received from business
correspondents of '24.5 crores during the year (March 31, 2024 - Nil)
5(e) Sale and Transfers to/from HTM Category
During the year ended March 31, 2025,the Bank has not transferred any securities from held-to-maturity
(HTM) category to available-for-sale (AFS) category.
During the year ended March 31, 2025, the Bank undertook transactions involving the sale of securities
classified under the Held to Maturity (HTM) category, with an aggregate net book value of '200.41 crore. This
represented 4.94% of the HTM portfolio as on April 1, 2024.
During the year, the Bank had also undertaken transactions with the Reserve Bank of India (RBI) under
pre-announced Open Market Operation (OMO) auctions amounting to '496.97 crore, in accordance with
applicable RBI guidelines. As OMO transactions are specifically excluded from the 5% limit on sale of HTM
securities, these have not been considered for the purpose of calculating the threshold.
During the year ended March 31, 2024, the Bank had transferred '380.00 crores of securities from held-to-
maturity (HTM) category to available-for-sale (AFS) category.
During the year ended March 31, 2024, the Bank had not undertaken any transactions for sale of HTM
securities. The above sale is excluding sale to RBI under pre-announced open market operation auctions and
repurchase of Government Securities by Government of India, as permitted by RBI guidelines.
In accordance with the RBI guidelines, sales from, and transfers to / from, HTM category exclude the following
from the regulatory limit of 5% cap:
(i) Sales to the RBI under liquidity management operations of RBI such as the Open Market Operations
(OMO) and Government Securities Acquisition Programme (GSAP).
(ii) Repurchase of Government Securities by Government of India from banks under buyback or switch
operations.
(iii) Repurchase of State Development Loans by respective state governments under buyback or switch
operations.
(iv) Repurchase, buyback or exercise of call option of non-SLR securities by the issuer.
(v) Sale of non-SLR securities following a downgrade in credit ratings or default by the counterparty.
(vi) Sale of securities as part of a resolution plan under the Prudential Framework for Resolution of Stressed
Assets 2.0 for a borrower facing financial distress.
(vii) Additional sale of securities explicitly permitted by the Reserve Bank of India.
6. Derivatives
Disclosure with respect to outstanding Cross Currency Interest Rate Swap (CCIRS)
a) Forward rate agreement/ Interest rate swap/ Cross Currency Interest Rate Swap
The Bank has not entered into any forward rate agreement, Interest rate swaps or Cross Currency Interest
Rate Swap agreement during the year ended March 31, 2025 and previous year ended March 31, 2024.
b) Exchange Traded Interest Rate Derivatives
The Bank has not entered into any exchange traded interest rate derivatives during the year ended March
31, 2025 and previous year ended March 31, 2024.
c) Disclosures on Risk Exposure in Derivatives
i. Qualitative Disclosure
ii. Quantitative Disclosure
The Bank has not entered into any derivative instruments for trading / speculative purposes either in Foreign
Exchange or domestic treasury operations during the year ended March 31, 2025 and previous year ended
March 31, 2024.
d) Credit default swaps
The Bank has not transacted in credit default swaps during the year ended March 31, 2025 and previous year
ended March 31, 2024.
# Additions and reductions does not include accounts which turned NPA during a particular month and
subsequently moved out of NPA in the same month.
* Balancing figure
$ Represent provision made during the year (including write offs) as per the Profit & Loss account.
A The Bank created standard asset provision at rates higher than the regulatory minimum during the year
ended March 31, 2023 based on evaluation of the risk and stress in unsecured advances in SMA category as
approved by the Board of Directors. These additional provisions continues to remain in the books amounting
to '0.50 crores as on March 31, 2025 (March 31, 2024: '4.51 crores).
Provision is maintained at rates higher than the regulatory minimum, on specific buckets in NPA based on
evaluation of the risk and stress as approved by the Board. Additional provision of '234 crores is made as at
March 31, 2025 (March 31, 2024: '143 crores)
7(c) Overseas Assets, NPAs and Revenue
The Bank does not hold any overseas assets / NPA as at March 31, 2025 and no overseas operations were
undertaken during the year ended March 31, 2025 hence revenue from overseas operation is Nil. (March 31,
2024: Nil)
7(d) Details of Resolution Plan implemented under Prudential Framework for Resolution of
Stressed Assets
There were no accounts that have been restructured under prudential framework on resolution of stressed
assets as per the circular no. RBI/2018-19/203 DBR.No.BP.BC.45/21.04.048/2018-19 dated June 07, 2019 during
the year ended March 31, 2025. (March 31, 2024: Nil).
7(e) Divergence in the asset classification and provisioning
In terms of RBI guidelines, banks are required to disclose the divergences in asset classification and provisioning
consequent to RBI's annual supervisory process in their notes to accounts to the financial statements. The
disclosure is required if either or both of the following conditions are satisfied: (a) the additional provisioning
for NPAs assessed by RBI exceeds 5% of the reported profit before provisions and contingencies for the
reference period and (b) the additional Gross NPAs identified by RBI exceed 5% of the published incremental
Gross NPAs for the reference period ended 31 March, 2024 and 31 March, 2023.
Based on the above, and basis the Risk Assessment Report from RBI for FY 2023-24 , there are no reportable
divergence in asset classification and provisioning for NPAs with respect to RBI's annual supervisory process
for the year ended 31 March, 2024.
Consequent to the Supervisory Risk Assessment as of 31st March 2023 conducted by the Reserve Bank of India
inspection team in Sept/Oct 2023, RBI communicated the below divergence. Further, as this the supervisory
process was in the nature of select scope inspection for FY 2022-23 we had sought clarification from RBI on
applicability of disclosure and post confirmation, the same is included as part of disclosure in current financial
year. Out of ' 124.58 crores of GNPA divergence identified, accounts with GNPA of '771 crores continues to
be in NPA as on March 31, 2025.
Further, reportable divergence in asset classification and provisioning for NPAs with respect to RBI's annual
supervisory process for the year ended 31 March, 2023 is as below:
9(e) Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL) exceeded by the Bank
During the year ended March 31, 2025 and previous year ended March 31, 2024, the Bank's credit exposures
to single borrowers and group borrowers were within the limits prescribed under extant RBI guidelines.
9(f) Factoring Exposure
The Bank does not have any factoring exposure as at March 31, 2025 (March 31, 2024 : Nil).
9(g) Intra Group Exposure
The Bank does not have any intra group exposure as at March 31, 2025 (March 31, 2024 : Nil).
9(h) Unhedged Foreign currency Exposure
The RBI, through its master direction dated October 11, 2022, had advised banks to create incremental
provision on standard loans and advances to entities with unhedged foreign currency exposure (UFCE). The
Bank assesses the UFCEs of the borrowers through its credit appraisal and internal ratings process. The Bank
also undertakes reviews of such exposures through thematic reviews evaluating the impact of exchange rate
fluctuations on the Bank's portfolio on a yearly basis.
Incremental provisioning (over and above provision applicable for standard assets) is made in Bank's Profit
and Loss Account, on borrower counter parties having UFCE, depending on the likely loss/EBID ratio, in
line with stipulations by RBI. Incremental capital is maintained in respect of borrower counter parties in the
highest risk category, in line with stipulations by RBI. These requirements are given below:
Notes:
*The disclosure is arrived taking into account the simple average of individual monthly averages. Simple average of each line of the LCR component
reported during the month have been considered to compute the individual monthly averages.
Qualitative disclosure on LCR
1. The Liquidity Coverage Ratio (LCR) is a global minimum standard for bank liquidity. It aims to ensure that
a bank has an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted
into cash immediately to meet its liquidity needs for a 30 calendar day liquidity under stress scenario.
2. The LCR is calculated by dividing the amount of high quality liquid unencumbered assets (HQLA) by the
estimated net outflows over 30 calendar day period. The net cash outflows are calculated by applying
RBI prescribed outflow factors to the various categories of liabilities (deposits, unsecured and secured
wholesale borrowings), as well as to undrawn commitments and derivatives-related exposures, partially
offset by inflows from assets maturing within 30 days.
3. The Bank has started submitting LCR reports to RBI from March 2018. Currently the Liquidity Coverage
Ratio is higher than minimum regulatory threshold. The Bank follows the criteria laid down by the RBI
for month end calculation of High Quality Liquid Assets (HQLA), gross outflows and inflows within the
next 30-days period (subject to Note* mentioned above). HQLA predominantly comprises Government
securities in excess of minimum SLR and CRR requirement viz. Treasury Bills, Central government securities,
marginal liquidity facility allowed by RBI under marginal standing facility (MSF) and facility to avail liquidity
for liquidity coverage ratio (FALLCRR). Bank is presently funded through deposits, IBPC and long term
borrowings viz Debentures, Term loans and money market operations. All significant outflows and inflows
determined in accordance with RBI guidelines are included in the prescribed LCR computation.
4. The Bank classifies deposits from non-natural persons into Unsecured wholesale funding (Small business
customers, Non-financial corporates and Other legal entity customers accordingly)
5. For LCR computation, deposits of other than natural persons are considered on due basis.
14. EMPLOYEE BENEFITS
Employment benefits - Gratuity
The Bank maintains a non-contributory defined benefit scheme under which gratuity is payable, determined
with reference to the employee's final drawn salary and years of service. Gratuity is provided in accordance
with the provisions of the Payment of Gratuity Act, 1972, as amended. The scheme is funded with the Life
Insurance Corporation of India.
The Bank did not have any unamortised gratuity or pension liability as at March 31, 2025 and March 31, 2024.
The following tables present the components of the net benefit expense recognized in the Profit and Loss
Account, as well as the funded status and amounts recognized in the Balance Sheet.
A) Qualitative Disclosures
a) Information relating to the composition and mandate of the Nomination and Remuneration
Committee:
Name, composition and mandate of the main body overseeing remuneration
The Nomination and Remuneration Committee (NRC) of the Board is the main body overseeing
remuneration. As at March 31, 2025, the NRC had six members of which four are Independent Directors.
The functions of the NRC include recommendation of appointment of Directors to the Board, evaluation
of performance of the Board, its Committees and directors including the Managing Director & CEO,
overseeing the grant of options under the Employees Stock Option Scheme.
External consultants whose advice has been sought, the body by which they were commissioned,
and in what areas of the remuneration process
Not Applicable
Scope of the Bank's remuneration policy (e.g. by regions, business lines), including the extent to
which it is applicable to foreign subsidiaries and branches
The Remuneration Policy of the Bank was approved by the Board on February 8, 2018, pursuant to the
guidelines issued by RBI, to cover all employees of the Bank.
The Remuneration policy was amended by the Board on August 13, 2020 to align the policy in line with
current regulatory amendments, Compensation Policy covers all employees of the Bank.
Type of employees covered and number of such employees
All permanent employees of the Bank are covered. The total number of permanent employees of the
Bank at March 31, 2025 was 25,381 (March 31, 2024: 21,800), who were live as on reporting date including
those on probation and confirmed employees.
b) Information relating to the design and structure of remuneration processes and Key features and
objectives of remuneration policy
The Bank has formulated a Compensation Policy in alignment with the RBI guidelines. The components
of the total remuneration includes fixed pay, variable pay in the form of performance-linked incentives
or bonus, perquisites, gratuity, pension plan, Share- linked instruments, allowances and other benefits as
per the Bank's policies. Some of the new hires may be given joining bonus on a case to case basis at the
time of appointment.
The compensation philosophy of the Bank is structured to support the achievement of the Bank's
business objectives by rewarding the contribution of employees to the strategic business and governance
objecives. The main objectives of the remuneration policy of the Bank are as follows:
• Attract, engage and retain talent.
• Ensure fairness in the pay structure
• Ensure alignment with the organizational values, i.e Honesty, Discipline, Respect and Service
• Foster a culture of rewarding and recognizing performance and values.
Effective governance of compensation:
The NRC shall oversee the framing, review and implementation of the compensation policy.
Alignment of compensation philosophy with prudent risk taking:
The employee's compensation will take account of the risks that he/she takes on behalf of the organization
and intends to discourage excessive risk taking. It ensures that the compensation works in harmony with
other practices to implement balanced risk postures. Also, the NRC shall ensure that employees engaged
in financial and risk control will be interdependent, have appropriate authority and be compensated in a
manner that is independent of the business areas they oversee and commensurate with their key role in
the Bank.
Whether the remuneration committee reviewed the firm's remuneration policy during the past year,
and if so, an overview of any changes that were made:
The Board/NRC has reviewed the Bank's remuneration policy during the year and there are no changes
from previous year policy.
Discussion of how the Bank ensures that risk and compliance employees are remunerated
independently of the businesses they oversee:
The NRC shall ensure that employees engaged in financial and risk control will be independent, have
appropriate authority, and be compensated in a manner that is independent of the business areas they
oversee and commensurate with their key role in the Bank. The remuneration for the employees in the risk
and compliance function will be determined independent of other business areas and shall be adequate
to attract qualified and experienced professionals. The performance measures of such employees shall be
based principally on the achievement of the objectives of their functions.
c) Description of the ways in which current and future risks are taken into account in the remuneration
processess, including the nature and type of the key measures used to take account of these risks
Overview of the key risks that the Bank takes into account when implementing remuneration
measures:
Feedback of all control function heads(Audit, Compliance, Risk) is considered while determining the
annual appraisal/rating of all middle and senior level employees to ensure that any serious issues leading
to significant increase in compliance risk, operational and fraud risk, credit risk are adequately factored
into the employees' rating and variable pay for the year.
Overview of the nature and type of key measures used to take account of these risks, including risk
difficult to measure:
HR works in coordination with the control functions and the vigilance department to implement balanced
risk postures , including the risks which are difficult to measure.
Discussion of the ways in which these measures affect remuneration:
The employee's compensation takes account of the risks that he/she takes on behalf of the organization
and intends to discourage excessive risk taking. It is designed so that the compensation works in harmony
with other practices to implement balanced risk postures.
Discussion of how the nature and type of these measures have changed over the past year and
reasons for the changes, as well as the impact of changes on remuneration:
There is no changes from previous year hence not applicable
d) Description of the ways in which the Bank seeks to link performance during a performance
measurement period with levels of remuneration:
The main performance metrics include profitability, business growth, asset quality, compliance and
customer service.
e) A discussion of the bank's policy on deferral and vesting of variable remuneration and a discussion
of the bank's policy and criteria for adjusting deferred remuneration before vesting and after vesting:
The Banks remuneration policy covers Whole Time Directors / Chief Executive Officer/ Other Material Risk
Takers of the Bank. As per the RBI guidelines, 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. However, in cases where the cash component of variable pay is under
' 25 lakh, deferral requirement would not be necessary, The deferral period should be a minimum of three
years. This would be applicable to both the cash and noncash components of the variable pay.
f) Description of the different forms of variable remuneration (i.e., cash and types of share-linked
instruments) that the bank utilizes and the rationale for using these different forms.
Variable remuneration includes following distinct forms:
1. Statutory Bonus:
Statutory Bonus is paid as per Payment of Bonus Act, 1965.
2. Variable Pay :
Variable pay component ensures that we reward the employees based on the Individual achievements
and the Bank's performance measured against goals established for the performance year.
a) Cash Bonus:
The budget for Annual Cash Bonus, will depend on the bank's profitability. The actual pay-out
to the individual will further depend on his/her performance, and at the sole discretion of the
management.
b) Incentives:
All Business roles up to the level of Zonal Business Heads are eligible for incentives. Pay out of
incentive for aggregator roles depends upon average incentives earned by the front line team.
These incentives are capped to ensure integrity and compliance.
For the front line field roles like Customer Relationship Executive Collections, Customer Relationship
Executive Sales, Branch Operation Manager, Business Development Executive, Area Heads in
Collections, Relationship Officer Executive and Manager in Assets and Liabilities Collections,
incentives are paid on a monthly basis. Roles in operations such as Customer Relationship Executive,
Teller, Branch Customer Service & Delivery Manager ,Branch Customer Service & Delivery Officer or
other aggregator roles in Business like Branch Manager, Regional Heads and Zonal Heads, a portion
of monthly incentives are retained and is paid after the end of performance year.
Any addition/modification would be approved by the MD & CEO.
c) Share-linked Instruments:
Currently ESOPs/ RSUs are granted to employees by the management, based on the Board approved
schemes. Share-linked instruments will be fair valued on the date of grant by the bank. As per the
Good Leavers policy of the Bank, payment towards any deferred instrument or cash bonus will
require approval of the MD & CEO.
3. Rewards & Recognition:
The Bank may, with the approval of the MD & CEO, run various contests for its employees to support
the achievement of the Bank's on-going business objectives. These contests may carry financial/other
rewards as permitted by extant regulations.
The quantitative disclosures covers details of Whole Time Directors / Chief Executive Officer/ Other Material
Risk Takers of the Bank. Key Material Risk Takers are individuals who can materially set, commit or control
significant amounts of the Bank's resources, and / or exert significant influence over its risk profile.
B) Quantitative Disclosure
1. The remuneration does not include the provisions made for gratuity and compensated absences, as they
are obtained on an actuarial basis for the Bank as a whole.
2. Fixed pay includes basic salary, contribution to provident fund, reimbursements and car EMI (shown
separately also)
* The list of 'Material Risk Takers' are reassessed during in the context of Standard Qualitative and Standard
Quantitative criteria to determine if their roles and responsibilities warrants for MRT classification and
accordingly the list is updated as on March 31, 2025.
# The Bank is in the process of invoking malus clause in respect of two MRT's.
Overall Ceiling as per the Act (sitting fees not to exceed '100,000 per meeting), The Bank pays sitting fees
to Non-Executive Directors which is below the ceiling of '100,000 per meeting as prescribed under the
Companies Act, 2013. The amount disclosed above is excluding taxes.
16. SEGMENT REPORTING
Business Segments
Business segments have been identified and reported taking into account, the customer profile, the nature of
products and services, the differing risks and returns, the organisation structure and the guidelines prescribed
by the RBI. The Bank operates in the following segments:
a) Treasury
The treasury segment primarily consists of entire investment portfolio of the Bank.
b) Retail Banking
The retail banking segment serves retail customers through a branch network. Exposures are classified under
retail banking taking into account the status of the borrower (orientation criterion), the nature of product,
granularity of the exposure and the quantum thereof.
Revenues of the retail banking segment are primarily derived from interest and fees earned on retail loans,
interest on deposits placed as collateral with banks and financial institutions. Expenses of this segment primarily
comprise interest expense on borrowings, deposits, infrastructure and premises expenses for operating the
branch network, personnel costs and other direct overheads.
c) Wholesale Banking
Wholesale Banking includes all advances to companies and statutory bodies, which are not included under
Retail Banking.
d) Other Banking Operation
Other Banking includes other items not attributable to any particular business segment.
e) Unallocated
All items which are reckoned at an enterprise level are classified under unallocated. This includes capital and
reserves, and other unallocable assets and liabilities not identifiable to particular segment such as deferred
tax, prepaid expenses, etc.
Part B: Geographic segments
The business operations of the Bank are only in India hence geographical segment is not applicable.
Segment Notes:
1. The Reportable segments are identified into Treasury, Corporate/Wholesale Banking, Retail Banking and
Other Banking Operations in compliance with the RBI guidelines.
2. The Bank has formulated and implemented Funds Transfer Pricing (FTP) methodology and the allocation
of revenue and cost on account of FTP is made between the segments.
3. Unallocated assets and liabilities pertains to the assets and liabilities not identifiable to the particular
segment.
c) Marketing and distribution
The Bank has received '1.65 crores in respect of Marketing and Distribution function (excluding bancassurance
business) during the year ended March 31, 2025 (March 31, 2024: 32.48 crores).
d) Priority Sector Lending Certificates ('PSLCs'):
The Bank enters into transactions for the sale or purchase of Priority Sector Lending Certificates (PSLCs). In
the case of a sale transaction, the Bank sells the fulfilment of priority sector obligation and in the case of a
purchase transaction the Bank buys the fulfilment of priority sector obligation through RBI trading platform.
There is no transfer of risks or loan assets in such transactions. The details of purchase / sale of PSLC during
the period are as under:
g) Inter-bank Participation (IBPC) with risk sharing
The Bank has raised funds through issue of IBPCs with risk sharing. The outstanding balance of IBPC (risk
sharing) is '986 crores as on March 31, 2025. (March 31, 2024: Nil).
h) Implementation of IFRS converged Indian Accounting Standards (Ind AS)
The Ministry of Corporate Affairs, in its press release dated January 18, 2016, had issued a roadmap for
implementation of Indian Accounting Standards (IND-AS) for scheduled commercial banks, insurers/insurance
companies and non-banking financial companies, which was subsequently confirmed by the RBI through its
circular dated February 11, 2016. This roadmap required these institutions to prepare IND-AS based financial
statements for the accounting periods beginning April 1, 2018 with comparatives for the periods beginning
April 1, 2017. The implementation of IND-AS by banks requires certain legislative changes in the format of
financial statements to comply with the disclosures required under IND-AS. In April 2018, the RBI deferred
the implementation of IND-AS by a year by when the necessary legislative amendments were expected.
The legislative amendments recommended by the RBI are under consideration by the Government of India.
Accordingly, the RBI, through its circular dated March 22, 2019, deferred the implementation of IND-AS until
further notice.
n) Long term contracts
The Bank has a process whereby on a yearly basis all long term contracts including derivative contracts if
any, are assessed for material foreseeable losses. At the year end, the Bank has reviewed and ensured that
no provision is required under any law or accounting standard on such long term contracts as on March 31,
2025 (March 31, 2024: Nil).
p) Deferred Tax Assets
During the financial year ended March 31, 2025, the bank has recognised '29.83 crores of deferred tax asset
based on virtual certainty of future profitability, accordingly total deferred tax asset created as on March 31,
2025 is '185.02 crores (March 31, 2024: '155.19 crores). The Bank has assessed the virtual certainty of profits
supported by the convincing evidence, by estimating profits based on contracted cash flows of static book as
on reporting date and deferred tax asset is created on the profits so ascertained.
t) Change in accounting policy
The Bank has followed consistently the same significant accounting policies in the preparation of these
financial statements for the year with those followed in the annual financial statements for the year ended
March 31, 2024, except for the classification and valuation of investments which is as per the Master direction
No. RBI/DOR/2023'24/104 DOR.MRG.36 /21.04.141/2023-24 on Classification, Valuation and Operation of
investment Portfolio of Commercial Banks (Directions), 2023 issued by Reserve Bank of lndia dated September
12, 2023 which is applicable from April 1, 2024.
In compliance with the RBI's Master Directions on Investments, the Bank has accounted net transition discount
accretion of '2.47 crores in General Reserve. The Bank has also transferred balance in Investment Reserve
amounting to '0.30 crores on the date of the transition to General Reserve.
u) Accounting Software Used for maintenance of Books of Accounts and Audit Trail
As per the requirements of rule 3(1) of the Companies (Accounts) Rules 2014, the Bank uses only such
accounting software for maintaining its books of account that have a feature of recording audit trail (edit
log) facility of each and every transaction along with the date when such changes were made within such
accounting software. This feature of recording audit trail has operated throughout the year and was not
disabled, tampered with during the year, except for records in Expenzing and Oracle software where in during
the year, the audit trail feature was not enabled for.
Additionally, the Bank has recorded and preserved audit trail in compliance with the requirements of section
128(5) of the Companies Act, 2013, in respect of entire financial year ended March 31, 2025 to the extent it
was enabled and recorded and from August 1, 2023 for financial year ended March 31, 2024 to the extent it
was enabled and recorded.
v) Royalty Expenses
The Bank has been using the trademark "JANA" since commencement of its business, which is owned by
Jana Urban Foundation, a related party of the bank. In this regard, the bank has entered into a trademark
license agreement with Jana Urban Foundation effective from November 01, 2019 which is valid for a period
of 5 (five) years under a consideration of 0.4% (excluding GST) of the revenue from operations, as recorded in
the audited financial statements of the respective financial year.
While the Bank submitted the Draft Red Herring Prospectus, the Red Herring Prospectus and Prospectus with
SEBI for undertaking the Initial Public Offering of the equity shares of the Bank, it was undertaken to obtain
shareholders' approval for the trademark license agreement in the first general meeting of the Bank held after
successful listing, though presently, the consideration payable is less than the threshold stipulated by SEBI.
Accordingly, pursuant to the approval obtained from the Members, the Bank has continued its existing
agreement with Jana Urban Foundation for the payment of royalty towards the usage of the "JANA"
trademark. For the period up to October 31, 2024, the royalty is payable at 0.4% (excluding GST) of revenue
from operations, subject to an overall cap of '25.00 crores per annum. With effect from November 01, 2024,
a fixed royalty of '3.81 crores per annum is payable in equal quarterly instalments.
w) Portfolio-level information on the use of funds raised from green deposits.
The Bank has not raised green deposits on or after June 1, 2023 based on the Framework for the acceptance
of Green deposits issued by RBI.
x) Code on Social Security
The Code on Social Security 2020 ('the Code') relating to employee benefits, during the employment and
postemployment, has received Presidential assent on September 28, 2020. The Code has been published in
the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on
November 13, 2020. The effective date from which the changes are applicable is yet to be notified and rules
for quantifying the financial impact are not yet issued. The Bank will assess the impact of the Code and will
give appropriate impact in the financial statements in the period in which, the Code becomes effective and
the related rules to determine the financial impact are published.
y) Disclosure under Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014
To the best of our knowledge and belief, the Bank, as part of its authorised normal business, grants loans and
advances and guarantees, makes investment, to and accepts deposits and borrowings from its customers,
other entities and persons. These transactions are part of Bank's authorised normal business, which is
conducted ensuring adherence to regulatory requirements.
Other than the transactions described above
(a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium
or any other sources or kind of funds) by the Bank to or in any other person(s) or entity(ies), including
foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise,
that the Intermediary shall lend or invest in other persons or entities identified by or on behalf of
the Bank ("Ultimate Beneficiaries") or provide any guarantee, security or like on behalf of the Ultimate
Beneficiaries.
(b) The Bank has not received any funds from any person(s) or entity(ies) ("Funding Party") with the
understanding, whether recorded in writing or otherwise, that the Bank shall, whether, directly or
indirectly, lend or invest in other persons or entities identified by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
z) Listing requirement for equity shares of the Bank
The Bank completed the process of Initial Public Offer (IPO) and raised '462 crores by issue of 1.12 crores of
equity shares having face value of '10 each at '414 per share. Equity shares of the Bank listed on National
Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) on February 14, 2024. The Bank had
incurred share issue expenses towards IPO activity, which was charged-off to Securities Premium account in
accordance with section 52 Companies Act, 2013.
aa) Comparatives
Figures for the previous year have been regrouped and reclassified wherever necessary to conform with the
current year's presentation. Previous year numbers were audited by erstwhile joint statutory auditors.
As per our report of even date
For S.R Batliboi & Associates LLP
For and on behalf of the Board of Directors
Chartered Accountants
Jana Small Finance Bank Limited
ICAI Firm Registration No: 101049W/
E300004
Sarvesh Warty R Ramaseshan A' K 1
Partner Part-time Chairman & Independent Ajay Kanwal
Managing Director & CEO
Membership Number: 121411 Director din 07886434
Bengaluru, April 29, 2025 DIN: 00200373 07886434
For Batliboi & Purohit Krishnan Subramania Raman
Chartered Accountants Executive Director AbA ^
ICAI Firm Registration No: 101048W DIN: 10380292 Chief Financia1 Officer
Janak Mehta
Lakshmi R N
Partner
Membership No: 116976 C°mpfny
Bengaluru, April 29, 2025 Bengaluru 29, 2025
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