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Sustainability Report 2018-19

Administrative Office‘Mahaveer’,179/E Ward,Shri Shahu Market Yard,Kolhapur - 416 005,Maharashtra, India.Phone: +91 231 2650981/984Fax: +91 231 2657386

Corporate OfficeOne Indiabulls Centre,Tower 2B, 6th Floor,841, Senapati Bapat Marg,Lower Parel,Mumbai - 400 013,Maharashtra, India.Phone: +91 22 4302 0600Fax: +91 22 4302 0520

Building TrustDelivering Value

Building Trust Delivering Value

At RBL Bank, we are committed to creating an impact on the lives of all our stakeholders through our sustainability efforts. Our endeavour is to build trust and deliver value through equitable and inclusive growth.

Through our products, processes and actions, we put our customers and communities at the heart of everything we do. We constantly use our learnings to move forward in all key areas and operate in a more sustainable way.

Today, sustainability is embedded in our operations. Through these operations, we draw resources from the natural and man-made capitals; and add, create, and deliver value to our stakeholders. The objective of this Sustainability Report is to demonstrate our value creation and delivery process.

Contents

A Message from the MD & CEO 02

Delivering Consistent Value to Our Stakeholders 04

About RBL Bank 05

Our Business Model 08

Our Value Creation Process 10

Stakeholder Engagement 12

Materiality Assessment 13

Financial Capital 20

Manufactured Capital 28

Intellectual Capital 34

Human Capital 40

Social and Relationship Capital 46

Natural Capital 54

Online version of the Sustainability Reportcan be viewed at: www.rblbank.com

HumanCapital

FinancialCapital

Social and Relationship Capital

Manufactured Capital

Natural Capital

IntellectualCapital

About this Report At RBL Bank, we are committed to sustainability through the products we offer, processes, and our approach. This report is a synopsis of the activities undertaken during FY 2018-19 towards ensuring sustainability.

The report is prepared in accordance with the International Integrated Reporting Council’s (IIRC) Integrated Reporting (<IR>) standard. This is in line with the Securities and Exchange Board of India’s Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/10 dated February 6, 2017, which advises top 500 listed companies to prepare IIRC framework-based non-financial report.

Through the report, we intend to provide a holistic perspective of our value creation process centred around the usage of six capitals (financial, manufactured, intellectual, human, social and relationship, and natural) and their interlinkage, depicting the value generated for our stakeholders. We also cover issues material to our stakeholders. Where possible, indicators have been aligned with the United Nations Sustainable Development Goals.

This report is not only a review of FY 2018-19, but it also lays the aspirational foundations of our sustainability journey in the coming years.

To aid navigation and to indicate cross-referencing, the below icons have been used through the report:


Dear Stakeholders, I am happy to present to you RBL Bank’s second Sustainability Report, representing a step forward in the Bank’s commitment to encourage inclusive growth and development.

It has been satisfying to witness the achievements of embedding sustainability as an integral part of our corporate strategy. While fuelling steady business growth, it has also enabled us to make a meaningful contribution towards building a sustainable future.

In this report, we have highlighted the six capitals including financial, manufactured, intellectual, human, social and relationship; and natural, which have been interlinked with the Bank’s growth and development.

Internal strengthWe have embraced sustainability as a ‘business as usual’ modality and not as a separate silo. It is the matrix in which all our strategising and implementation happens.

If an organisation needs to sustain over time, it should have the right talent pool, right customers, and right acceptance by society. In addition to managing financials and balance sheet strength, there is a need to look at the impact of one’s business and conduct on society. Each of us needs to look internally and leverage all our capabilities, financials, and business components to move the needle on sustainability on a consistent basis. We, at the Bank, understand that we have a larger societal responsibility and our business success has to include the wellbeing of people and the environment.

Our steadfast journeySince the early part of our Bank’s transformation, Financial Inclusion has been one of the key focus area. We took our first step towards sustainability in

but also responding to the country’s social and economic issues. Our aim now is not only to provide credit to the customers, but also evolve and move forward with them.

We are sure that this report will help us gauge internal and external expectations and align our actions accordingly.

Going forward, we are building a strong platform on which we can develop the next stage of our sustainability strategy. We remain steadfastly committed to continue to build an institution that is inclusive and impacts businesses, lives and society meaningfully.

Thanks, once again, for your interest in RBL Bank’s sustainability performance.

We hope you find this report informative. It is our modest attempt at living up to our commitment of building trust and delivering value.

Vishwavir AhujaManaging Director & CEO

A Message from the MD & CEO

FY 2012-13, when we received capital from International Finance Corporation (IFC) as an equity investor. Soon we were able to successfully raise high quality patient capital from pedigreed domestic and global investors such as CDC Group, Asian Development Bank, HDFC, Gaja Capital, Norwest Capital and a host of Indian and multinational private equity and mutual funds. Our holistic and undeterred approach towards providing a range of financial services to customer segments that are under-served by the market has helped us garner trust and accolades from some of our investors. It is the confidence of these investors that has helped us stay true to our commitment of building a sustainable Bank.

Our sustainability strategyWe have aligned our sustainability strategy with the global megatrend and have hence embraced sustainability like most large and multinational financial institutions who are guided by a set of responsible investment principles. For example, the United Nations Principle of Responsible Investment has in excess of 2,300 members and manages assets worth USD 20 trillion, and Equator Principle (EP) which has 90+ participants.

Under the Board’s guidance, our Environmental, Social and Governance (ESG) Committee oversees the Bank’s sustainability performance. This Committee is represented by senior staff members, some of our directors, and external experts. Today, the ESG effort is much more formalised within the Bank. In our sustainability journey, we have equipped ourselves with the right resources and tools to making a meaningful impact on the lives of millions throughout India.

Future outlookAs a financial services provider, we wish to play a key role in India’s economy by not only providing outstanding service,

Our holistic and undeterred approach towards providing a range of financial services to customer segments that are under-served by the market has helped us garner trust and accolades from some of our investors. It is the confidence of these investors that has helped us stay true to our commitment of building a sustainable Bank.”


RBL Bank Limited

Delivering Consistent Value to Our Stakeholders

Satisfied Customers86% service resolution index

(i.e. 86% of 9,538 customers surveyed were very happy with resolution of service requests).

81.5% complaint resolution index (i.e. 81.5% of 8,472 customers surveyed felt overall experience was excellent).

Growing Profitability for ShareholdersDividend of 27% declared in

FY 2018-19, amounting to ` 2.7 per share.

Registered Profit After Tax of ` 867 Crore. A Y-o-Y growth of 37%.

Growing Contribution to Community and the Government 45,000 Lives impacted by CSR

activities in FY 2018-19.

10.55 Crore invested in CSR activities in FY 2018-19.

432.2 Crore provision made for taxes in FY 2018-19.

Nurturing Human Capital 636.18 Crore wages and other benefits

paid to employees.

1.96 and 1.66 person-days training received by female and male employees respectively.

8.4% equity held by employees through ESOPs.

About RBL Bank

RBL Bank at a Glance*

Shareholding Pattern as on March 31, 2019

RBL Bank is one of India’s fastest growing private sector banks with an expanding presence across the country. The Bank offers specialised services under six business verticals, namely: Corporate & Institutional Banking (CIB), Commercial Banking (CB), Branch & Business Banking, Retail Assets, Development Banking and Financial Inclusion (DB&FI) and Treasury & Financial Market Operations.

As on December 31, 2019, the Bank services 78 Lakh customers (including 25 Lakh credit card customers) through its 7,157 employees, 371 branches and 1,245 business correspondent outlets in 28 States and Union Territories. RBL Bank is listed on both National Stock Exchange and Bombay Stock Exchange (RBL BANK).

Individual/HUFs 27.7%

Foreign Corporates 23.0%

Venture Capital Funds/ Mutual Funds/ Pension Funds/ Insurance 21.5%

Foreign Portfolio Investments 18.8%

Body Corporates 7.0%

Non-Resident Indians 1.3%

Others 0.8%

` 54,308 Crore(USD 7,821 Million)

Net Advances

*all numbers pertain to March 31, 2019USD to INR exchange rate for March 31, 2019: 69.44

` 58,394 Crore(USD 8,409 Million)

Total Deposits

` 3,982 Crore(USD 573 Million)

Total Income

` 867 Crore(USD 125 Million)

Profit After Tax


RBL Bank Limited

Bank of ChoiceTo be the preferred choice for the banking needs of our customers.

Customers at the HeartTo engage customers and understand their needs, provide best-in-class products and services, be responsive and quick in resolving queries – resulting in true customer delight and peace of mind.

Community as the CauseTo deliver robust and cost-effective banking services that promote financial inclusion, catalyse growth, and reduce social inequalities.

Creating and Nurturing Enduring RelationshipsTo create and build lasting partnerships with all our customers based on full disclosure and transparency.

Shareholder Value as the FocusTo demonstrate high corporate governance standards that protect and balance stakeholder interests in the journey to achieving short-term and long-term business goals.

Trust and Respect of Our StakeholdersTo engage with stakeholders and ensure that all our commitments to them are fulfilled, while working as a team.

Employees as the PillarTo provide an enabling work culture where career aspirations can be realised through consistent performance and demonstration of the Bank’s core values and beliefs.

RESPECTTo be sensitive and responsible for what we say and do.

EXCELLENCETo act in a manner that earns the trust and admiration of others.

PROFESSIONALISMTo conduct our duties with good judgement and in good faith.

ENTREPRENEURIALTo be enterprising and take ownership of our actions.

TEAMWORKTo be successful together.

Our Vision Our Values

Our Mission


RBL Bank Limited

Segment Products and Services

Offered

Customers Interaction Channels

Corporate & Institutional

Banking (CIB) and

Commercial Banking (CB)

Lending, deposits (CA),

transaction banking and other

banking services.

Large CIB

Medium and small CB

corporate borrowers

Dedicated relationship team

Branch/ net/ mobile banking

Corporate credit cards

Bank’s website

Other channels of communication

Branch & Business Banking

and Retail Assets

Lending, deposits, other

banking services and

parabanking activities like

Bancassurance, credit

cards, etc.

Retail customers

Credit card users


Branch/ net/ mobile banking

Credit and debit cards

Bank’s website


Treasury & Financial

Market Operations

Investments, financial market

activities (for customers),

proprietary trading, bullion

business, maintenance

of reserve requirements

and resource mobilisation

from other Banks and

Financial Institutions (FIs),

intersegment earnings of

Balance Sheet management

function.

Large corporate customers

Other banks

FIs


Corporate teams

Bank’s website


Development Banking and

Financial Inclusion (DB&FI)

Financial inclusion products

like secured and unsecured

small loans, crop loans,

insurance products, etc.

Retail MSMEs

Women from segments

Joint Liability Group/Self

Help Group

Bank’s/BC’s relationship teams

Branch/BC branch banking

Micro ATMs

Our Business Model

Bank’s Board and Board Committees

Bank’s Top Leadership

Bank’s Culture and Aspirational Status

Influencing Bank’s Employees,

Products and Services

External Macro-Economic

Environment

Product Stewardship Process Improvement Talent Management and Training of Employees Relationship Management

Value creation framework:We create long-term value for shareholders and society by

Independent Internal Audit Function

Vigilance Mechanism (Reports to Board)

Compliance Management

Statutory External Audit

Developing New Product/Services

Risk Management


RBL Bank Limited

Our Value Creation Process Our Value Creation Process

Financial Capital Job created for different sectors we

lend to Encouragement to female

entrepreneurship Return on assets: 1.27% (5.5% CAGR

over last three FY) Return on equity for investors: 12.15%

(1.35% CAGR over last three FY)

Manufactured Capital Job creation at retail bank branches Increased reach to unbanked/under-

banked FI customers Increased system reliability and less

downtime

Intellectual Capital Enhanced customer

satisfaction Performance and process

improvement

Human Capital Long-term, sustainable traction

created in the job market with the emphasis on recruitment from Tier II and III cities

Creation of trained/expert manpower pool and enrichment of job market

Introduction of women and differently- abled women employees in management cadre

Natural Capital Increasing compliance and resource

efficiency at clients’ end Reduction of input cost in agri business

initiatives like water, electricity and/or fertiliser

Enhancement in quality of lives and livelihood of farmers

Resource use efficiency

Output

Social/Relationship Capital Lives touched in FY 2018-19: 45,000

(1,50,000+ since inception of the CSR programme)

Empowering women borrowers by: Developing entrepreneurial skills Ensuring their active participation

in household financial decision-making process

Financial Capital

Deposits in FY 2018-19: ` 58,394 Crore Common equity Tier I capital adequacy ratio: 12.10% Tier II capital: 1.36%

Read about our activities under Financial Capital on pages 20-27 of this Report

Investment in innovation and process improvement Investment in information security and customer data protection

Read about our initiatives on process optimisation, leveraging analytics and digital banking under Intellectual Capital on pages 34-39 of this Report

Employees as on March 31, 2019: 5,843 New recruitment in FY 2018-19: 1,997 New enrolment in RBL Bank-Manipal PO training system: 47

Read about our talent attraction and retention process, employee engagement and training initiatives under Human Capital on pages 40-45 of this Report

CSR spending in FY 2018-19: ` 10.55 Crore Gross Financial Inclusion (FI) loan portfolio as on March 31, 2019: ` 5,038.06 Crore IFC loan of USD 100 Million to support the expansion of RBL Bank's micro, small

and medium enterprises (MSMEs) and individual business loans (<USD 100k) portfolio in the low-income states (LIS) of India

Read about our Social and Relationship Capital initiatives on pages 46-53 of this Report

GCPF loan towards climate smart business: USD 20 Million IFC loan of USD 50 Million towards climate smart financing Use of electricity in FY 2018-19: 11,826 MW Use of 47,99,186 paper sheets Use of petrol/diesel in FY 2018-19: 52.3 KL

Read about our Natural Capital initiatives like environmental and social risk management, sustainable agricultural initiatives and the Bank’s own environmental footprint on pages 54-61 of this Report

Space occupied by offices and branches as on March 31, 2019: 7,69,759 sq. ft. Number of branches as on March 31, 2019: 324 Number of BC branches as on March 31, 2019: 993 Number of ATMs as on March 31, 2019: 341 Servers as on March 31, 2019: 1,721 Number of terminals: 8,685

Read about our physical and IT infrastructure under Manufactured Capital on pages 28-33 of this Report


Manufactured Capital Number of customers: 65.1 Lakhs

(32.5% CAGR over last three FY)

Increase in CASA ratio

Two new offices opened in Mumbai

Hyper-converged state-of-the-art IT architecture

Financial Capital Net profit in FY 2018-19: ` 867 Crore

Dividends in FY 2018-19: ` 107 Crore

Interest expended to customers on savings account and term deposits in FY 2018-19: ` 3,244 Crore

Total advances: ` 54,308 Crore

Loan to retail MSME clients: ` 9,640 Crore / Number of retail MSME loans - 7,70,689

Financial inclusion book: ` 5,038 Crore / Number of women customers - 25 Lakhs

Intellectual Capital Digital payment: 13.63% of total

payments in FY 2018-19

Robust MoBank and internet banking platform

Process efficiency by straight-through processing and reduced turnaround time

Virtual relationship management

Digital initiatives for customers and merchants

Digital enterprise solutions

Human Capital Achieved target of having over 22%

women workforce (23.61% as on March 31, 2019)

Person-days spent in training in FY 2018-19: 13,555; 1.66 male person-days (10% YoY increase) and 1.96 female person-days (3% YoY increase)

Developing women mentorship and support programmes across the Bank

Social/Relationship Capital Active women borrowers: ~25 Lakhs

Number of FI loans in FY 2018-19: 15 Lakhs

New FI products being introduced for local needs; e.g. ‘hospicash’

Saksham training coverage in FY 2018-19: 28,616 women clients (1,35,286 since inception in December 2016)

Unnati training coverage: 32,251 women clients (overshooting target of training 30,000 women by January 2019)

Natural Capital Proportion of gross loan portfolio under

E&S risk assessment: 46.7% (65% of gross wholesale exposure)

Volume of sustainable agri business loans in FY 2018-19: ` 9.72 Crore

Solar power installed for self-consumption: 102 KW

Lending to renewables sector in FY 2018-19: ` 1,471 Crore

Installed clean energy capacity: 10,688 MW

Paper waste recycled in FY 2018-19: 3,489 MT

Outcomes (Long-term)

Intellectual Capital

Human Capital


Natural Capital

Input


RBL Bank Limited

Stakeholder Engagement Materiality Assessment

At RBL Bank, we believe that stakeholder engagement is vital for sustained value creation. We regularly engage with a large community of internal and external stakeholders through various communication mediums to understand their expectations and address their concerns.

Materiality Assessment ProcessA group of 23 material issues were identified that could affect the Bank’s financial and non-financial performance in the short-term and medium-term. These were identified through:

Internal brainstorming;

Review of analyst reports;

Review of non-financial disclosures made by marquee Indian and international banks.

These were communicated to stakeholders through e-mail for rating them on a scale of 1-10, with 10 being most and 1 being of least material concern. The survey included 104 external stakeholders and 55 key internal business leaders. We have addressed these material issues in the report either as management discussion or as performance indicators.

All material issues have scored more than 7 on the rating scale.

Most material issues pertained to economic issues (marked as ‘EC’). Only one environmental (marked as ‘EN’) and one social (marked as ‘SO’) issue got identified as being moderately material.

Of the 23 potentially material issues, 7 (~30.5%) are ranked as ‘Highly Material’, 4 (~17.4%) as ‘Moderately Material’, and 12 (~52.1%) as ‘Immaterial’.

The results of the responses are as follows

Stakeholder Groups and Engagement Modality

EC1

EC2EC3

EC4EC5EC6

EC7

SO1 SO2SO3

SO4SO5

SO6

SO7

EC8

SO8

EN1

EN2EN3

EC9 EC10

EC11

EC12

7.0

8.0

9.0

10.0

7.0 8.0 9.0 10.0

Impo

rtan

ce to

the

exte

rnal

stak

ehol

ders

Importance to the Bank

Materiality Matrix FY 2018-19

Shareholders/ InvestorsAnnual: Annual Report, Annual General Meeting of Shareholders Quarterly: Analyst Calls, Investor Meets & Road ShowsEventual: Investor Relations Vertical Communications, One-to-One Meetings, Press Releases, Communication to Stock Exchanges, Intimation to Bank’s Registrar & Transfer AgentsPerpetual: Company Website

CommunityEventual: CSR Programmes, Employee Volunteering, Community Events, Press Releases and Other Form of Communications

Perpetual: CSR Webpage, Environmental and Social (E&S) Grievance Redressal Mechanism

CustomersAnnual: Customer Satisfaction Surveys

Eventual: SMS/Email

Perpetual: Engagement through Branch Banking and Relationship Managers, MoBank and Netbanking Facilities, Social Media Interactions, Financial Literacy Programmes, Engagement through Business Correspondent [BC] Network, Customer Care Centres

Suppliers Perpetual: Standard Clauses included in Supplier’s Agreement, Supplier’s Code of Conduct Documents, Supplier’s Communication with Central Procurement Unit

EmployeesEventual: External Trainings

Perpetual: One-to-One Employee-Manager Interactions, V-Care - Employee Grievance Redressal Platform, Empower – Oracle Based HRMS System, Employee Fun Club, Open Houses and Town Hall (E/A), Internal E-Learning Platforms

MediaPerpetual: Press Releases & Media Coverage, Interviews of Top Management, Advertisement(s), PR Wire and Digital Updates undertaken by Bank’s Marketing and Corporate Communication vertical

Regulators Eventual: Communications Received and Sent, Regulatory Reporting Practices (W/Q/A/E), Idea Sharing Meetings/Workshops

Economic Social Environment Highly Material Moderately Material Immaterial


RBL Bank Limited

Materiality Matrix and Management Approach

Material Issues Normative Relevance to Financial Institutions Boundary Management Approach / Linkage

Code - EC1

Enhancing shareholder’s wealth

Consistent return on equity (RoE) drives loyalty of existing shareholders and attracts new ones. Infusion of fresh capital facilitates faster growth.

Shareholders We are dedicated to enhancing shareholders’ wealth. Our RoE has increased to 12.15% in FY 2018-19.

For more details, refer to Financial Capital section on pages 20-27 of this report.

Code - EC2

Maintaining robust risk management framework

Helps in reducing risks to acceptable levels.

Regulators, shareholders, wholesale and retail clients

Our Board defines our risk appetite, which is then disseminated across business functions through policies, processes, limits, controls and procedures. The Board also maintains oversight on effective risk management.

We also have capable risk teams across operations to keep risks under check.

For more details, refer to page 62 of our Annual Report of FY 2018-19 and Financial Capital section on pages 20-27 of this report.

Code - EC3

Ensuring suitable corporate governance practices

Maximises operational transparency, preserves minority shareholders’ interests and reduces potential reputation risk.

Shareholders We are committed to being a transparent and merit-based organisation and ensuring fairness, transparency and responsiveness in all transactions. We comply with Companies Act, 2013, SEBI LODR requirements and Banking Act, 1949.

For more details, refer to page 81 of Annual Report (Annexure I: Corporate Governance Report) and Financial Capital section on pages 20-27 of this report.

Code - EC4

Ensuring compliance with pertinent regulatory requirements

Reduces possibilities of coercive action by regulators and potential reputation risk.

Regulators and Shareholders

We stay updated with regulatory risks and have an independent compliance function guided by the Chief Compliance Officer, who reports to the Board.

We practice zero-tolerance of compliance breaches and have included adherence to regulatory and internal guidelines in the code of conduct.

For more details, refer to page 65 of Annual Report and Financial Capital section on pages 20-27 of this report.


Code - EC5Information security and customer data protection

Reduces cyber-threats to privileged information.

Clients It remains a key risk associated for the financial service sector in general. We are reducing its impact by:

Having robust procedures, controls and monitoring tools along with Board-approved cyber security and information security management policy that covers people, processes and technology.

Having a robust cyber-crisis management plan that facilitates establishing strategic framework and actions to prepare for, respond to, and recover from a cyber-incident.

Training our customers on defence against phishing, vishing and social media attacks.

For more details, refer to page 65 of Annual Report and Intellectual Capital section on pages 34-39 of this report.

Code - EC6Providing transparent and fair advice to clients

Minimises mis-selling and unfair dealing which could adversely affect clients’ experience and our performance in the long run.

Wholesale and Retail Clients

We emphasise on providing quality service to customers through our dedicated central and regional services teams. Our focus on product/process transparency and having highly trained front office staff reduces/eliminates instances of mis-selling.

We practice explicitly spelling out clients’ rights and have a sophisticated complaints management system in place with defined turnaround time (TAT).


Code - EC7Enhancing customer delight

Helps in attracting new clients and increasing loyalty of existing ones.


We strive to provide ‘Service Beyond Excellence’ through our ISO 9001:2015 certified processes.

We have received a ‘high’ rating by Banking Codes and Standards Board of India (BCSBI) as per its Code Compliance Rating for which customer service is a key consideration.


Highly Material Issue


Moderately Material Issue






RBL Bank Limited


Code - EC8Enduring 'digital disruption' and changing consumer preferences

Technology, mobility and 'on-demand' information are reshaping strategy and offerings in short to medium-term.


We have a competent IT team to manage our IT infrastructure as per the best available technology (BAT). Our strong focus on digital channels and mobility won us “The Best Enterprise Mobility” recognition at the BFSI Digital Innovation Awards by Express Computers in FY 2018-19.


Code - EC9Coping with changes in global macro-economic environment

Helps identify trends and build strategies to safeguard from adverse effects of the market, commodity prices, Government policies, institutional borrowings on the revenues.

Shareholders Global macro-economic changes could affect Indian market, and potentially the way banks operate. However, Indian market being tightly controlled by regulators is insulated from external shocks. We are also protected due to our limited international exposure.

For more details, refer to pages 46-47 of Annual Report FY 2018-19.

Code - EC10Process automation and introduction of new technologies

Helps reduce turnaround time (TAT) and enhance workforce efficiency.


We are improving operations through automation and introduction of new technologies like SAS, server virtualisation and cloud migration of services. These are expediting TAT, reducing space and power consumption and enhancing reliability due to less downtime.


Code - EC11Managing/coping with regulatory changes

This affects financial institutions’ business model, product/service offerings and profitability. Some changes may be abrupt, while most could be predictable. It tests our adaptability.

Regulator, Shareholders and Clients

As an agile organisation, we keep ourselves abreast with the developments and make provisions where possible.

For more details, refer to page 64 of Annual Report.

Code - EC12Money laundering, fraud and terror financing

These could lead to regulatory actions, loss of profitability and reputation risk.

Regulators and Clients

Our KYC/AML Policy is prepared in accordance with the Prevention of Money Laundering Act, 2002 and RBI/IBA (Indian Banks’ Association) guidelines and employees are trained accordingly. We comply with various regulatory reporting requirements as set out by the Financial Intelligence Unit (FIU) of the Government of India.

We prevent fraud by using automated transaction monitoring system under supervision of centralised AML team.

For more details, refer to page 80 of Annual Report.


Code - SO1

Job creation Jobless economic growth is unsustainable in the long run. Financial institutions help generate significant direct and indirect employment through lending activities.

Community We recruited over 1,200 individuals in FY 2018-19. We also create job opportunities through our lending activities and CSR activities, especially upskilling.

For more details, refer to page 125 of Annual Report and Human Capital and Social and Relationship Capital sections on pages 40-53 of this report.

Code - SO2

Talent management and retention

This facilitates attracting best-in-class talent.

Internal Stakeholders

We invest in enhancing our people’s capabilities and effectiveness. It is also one of our key mission statements “EMPLOYEES AS THE PILLAR”, whereby we focus on providing an enabling work culture that nurtures career aspiration through consistent performance and demonstration of our core values and beliefs.

We strive to have satisfied employees through providing a motivating and innovation driven work environment.

For more details, refer to page 68 of Annual Report and Human Capital section on pages 40-45 of this report.

Code - SO3

Ensuring a diverse & inclusive workplace

Helps attract talent from all quarters and ensure long-term success.


With a pan-India presence, we are committed to creating an inclusive culture that respects and embraces the diversity of employees, clients and communities.

For more details, refer to pages 68-69 of Annual Report and Human Capital section on pages 40-45 of this report.

Code - SO4

Ensuring 'holistic' employee wellbeing

Workplace free of health and safety risks, physical or emotional stresses, and adequate work-life balance drives performance.


We ensure employee wellbeing through measures like parental leaves for both genders, extra Saturday off and flexi-timing for women workers, etc.


Immaterial

Immaterial

Immaterial

Immaterial

Immaterial

Immaterial





RBL Bank Limited


Code - SO5

Capacity development of employees

This ensures enhanced productivity and reduced operational risks.

Internal and External Stakeholders

We are creating a culture of learning and building in-house skills aligned with customer needs. Our learning programmes are based on the principle of 3Es i.e. learning through formal Education, Experience and Exposure.

Our capacity and capability building interventions are designed to deliver customer-centric solutions, nurture leaders, and cultivate deep domain skills.


Code - SO6

Developing financial products to cater to economically weaker sections

This is essential from the point of moral responsibility and for tapping the unbanked section of society.

Community We address the financial requirements of semi-urban and rural India by gaining insights into customer needs, their uncertainty and unevenness of cashflows, and providing customised products.

We have been operating in this space since 2010 and provide access to basic financial products for various income-generating activities through our business correspondent branches.

For more details, refer to pages 57-58 of Annual Report and Social and Relationship Capital section on pages 46-53 of this report.

Code - SO7

Running financial literacy programmes

Empowers people to actively participate in financial decision-making and avoid 'debt traps'.

Community Financial literacy is one of our core pillars. We promote inclusive growth by spreading awareness on financial discipline and educating customers to use the right financial product for the right purpose.

For more details, refer to pages 58-59 of Annual Report and Social and Relationship Capital section on pages 46-53 of this report.

Code - SO8

Responsible value chain management

Ensures vendors/suppliers comply with labour laws and standards, safety requirements and environmental norms.

Vendors We have a Supplier’s Standard that covers aspects of responsible business practice and human rights along our value chain. It is a part of all our tender documents and mandatory for our goods/service suppliers to follow.

For more details, refer page 122 of the Annual report.


Code - EN1

Management of Environmental & Social (E&S) Risk associated with transactions

Reduces compliance and potential reputational risks and improves E&S performance including resource efficiency.

Wholesale Clients Managing transaction level E&S risk is an integral part of our risk management strategy and credit appraisal and sanction process.

The system is implemented and overseen by the E&S Risk Governance (ESG) Committee, which also provides periodic updates to the Board.

For more details, refer to page 65 of Annual Report and Natural Capital section on pages 54-61 of this report.

Code - EN2

Optimising the Bank's own environmental footprint, like water and energy footprints

Creates a 'greener' image and cuts operational cost.

Internal Stakeholder

We measure and report our environmental footprint in the Business Responsibility Report (BRR) and Sustainability Report. We have a mandate to reduce GHG emission intensity.


Code - EN3

Managing climate change impacts

Reduces threat of having high exposure in (a) agri-business, (b) industries dependent on agri/forestry commodity (e.g. paper, sugar, oil etc.), (c) agri-dependent rural economy, (d) coastal and high altitude tourism, and/or (e) industries having high dependence on water/conventional power (e.g. thermal power, steel, cement).

Retail and Wholesale Clients and Community

Our E&S Risk assessment process covers identification of wholesale and agri-business clients’ climate-related risks (e.g. possible impairment of clients’ operations due to floods or other associated events).

Additionally, we have a dedicated line of credit for financing climate-friendly agricultural practices like drip/micro irrigation, installation of solar pump-sets and solar home solution (in off-grid area) to promote energy and water efficiency and improving quality of life of farmers.


Note: EC represents economic issues, SO represents social issues and EN represents environmental issues

While many of our stakeholders asserted that economic indicators are most important for Bank’s sustainability, however this does not imply that we ignore the social or environmental indicators. We have touched upon these material indicators in various sections of this report.

Immaterial

Immaterial

Immaterial

Immaterial

Immaterial

Immaterial



RBL Bank Limited

Financial CapitalFinancial Highlights of FY 2018-19

TOTAL ASSETS

` 80,269 Crore (USD 11,559 Million) (18.19% 3 years CAGR)Total assets grew by 29.92% in FY 2018-19, compared to ` 61,850.82 Crore in FY 2017-18.

NET PROFIT

` 867 Crore(USD 125 Million) (24.8% 3 years CAGR)Net profit grew by 36.51% compared to ` 635.09 Crore in the previous year.

TOTAL DEPOSITS

` 58,394 Crore(USD 8,409 Million) (19.07% 3 years CAGR)Total deposits grew 33% during FY 2018-19 and grew by a 19.07% CAGR in the past three years.

NET ADVANCES

` 54,308 Crore(USD 7,821 Million) (22.63% 3 years CAGR)Net advances increased by 34.87% from ` 40,268 Crore in the previous financial year.

NON-WHOLESALE

58%Growth in Retail loans

34%Growth in Development Banking and Financial Inclusion business (DB&FI).

NET INTEREST INCOME

` 2,539 Crore(USD 366 Million)Net interest income grew 44% with core fee income growing 52% to ` 1,348 Crore. Retail now contributes 70% of fee income.

CASA RATIO

25%CASA ratio grew by 70 basis points YoY and was propelled by growth in SA deposits.

NET INTEREST MARGIN

4.14%Net interest margin grew by 34 basis points owing to rising share of high yielding assets and tightly managed cost of funds.

NET NPA

0.69%Net NPA decreased to 0.69% in FY 2018-19 versus 0.78% in FY 2017-18.

For disclosure on our Bank’s financial performance and key performance indicators, please refer to ‘Financial and Operational Highlights’ section in the Bank’s Annual

Report 2018-19 on pages 08-09.USD to INR exchange rate for March 31, 2019: 69.44

CAPITAL ADEQUACY RATIO

13.46%We comply with Capital Adequacy guidelines of Reserve Bank of India that came into effect from April 1, 2013, referred to as ‘Basel III Guidelines’, and maintain it well above the thresholds defined therein.

Sustainability and financial well-being are tightly integrated. They are two sides of the same coin. Both are deeply ingrained in our value creation process”

- Rajeev Ahuja, Executive Director


RBL Bank Limited

Economic Contribution to Society

Value Generation Over a 3-Year Period(All Values in ` Crore)

Particulars FY 2018-19 FY 2017-18 FY 2016-17

A. Direct Economic Value Generated (DEVG)

1. Interest income 6,300.71 4,507.57 3,713.16

2. Other income 1,442.37 1,068.19 755.46

Total DEVG 7,743.08 5,575.76 4,468.62

B. Direct Economic Value Distributed (DEVD)

1. Purchases of goods and services (incl. provisions and contingencies)

2,371.96 1,626.46 1,242.19

2. Employee compensation and benefits 636.18 550.68 446.14

3. Provisions for payment of taxes to the government 432.20 331.46 235.44

4. Penalty (if any) 0.00 0.04 1.01

5. Community investments (CSR) 10.55 6.98 3.68

6. Interest paid to customers 3,244.07 2,340.97 1,960.80

7. Interest paid to RBI/other banks 181.16 84.08 133.32

Total expenditure 6,876.12 4,940.67 4,022.58

8. Dividend paid (incl. taxes) 106.99 82.17 -

Total DEVD 6,983.11 5,022.84 4,022.58

C. Economic Values Retained (EVR)

1. Net profit in FY 866.96 635.09 446.04

2. Profit brought forward 114.98 88.05 3.92

Total profit 981.94 723.14 449.96

Less, dividend paid to shareholders (see entry B.8) 106.99 82.17 -

3. Total EVR (towards appropriation) 874.95 640.97 449.96

We remain committed to fostering inclusive growth by addressing socio-economic challenges, driving economic growth and job creation.

Indirect Economic Contribution

Driving production of economic goods and services through lending activity.

Driving individual consumption.

Assisting local job creation, especially in MSME sectors (refer to ‘MSME Financing’ section under Social and Relationship Capital on pages 52-53 of this report).

Imparting training and increasing future employability of workforce (refer to Human Capital section on pages 40-45 of this report).

Assisting corporate clients to achieve higher resource consumption benchmark(s) and improve their bottom lines (refer to ‘E&S Risk Assessment as a Sustainability Value Driver’ section under Natural Capital on pages 54-61 of this report).

Direct Economic Contribution

Contributing to the economy by lending to manufacturing, infrastructure development, and service sectors through wholesale banking.

Offering a wide range of banking products and services for retail customers. (refer to ‘Products and Services’ section on pages 38 & 39 of Annual Report).

Empowering women customers through Financial Inclusion products like secured and unsecured small loans (refer to Social and Relationship section on pages 46-53 of this report).

Lending to MSMEs for scaling them up (refer to ‘MSME Financing’ section under Social and Relationship Capital on pages 52-53 of this report).

Investing in communities through our Corporate Social Responsibility Programmes (refer to Social and Relationship section on pages 46-53 of this report).

FY 2016-17 FY 2017-18 FY 2018-19

6,98

3.11

7,74

3.08

874.

95

4,02

2.58

4,46

8.62

449.

96

5,02

2.84

5,57

5.76

640.

97

Amount of Economic Value Distributed and Retained

Direct Economic Value Generated (DEVG)

Direct Economic Value Distributed (DEVD)

Economic Values Retained (EVR)


RBL Bank Limited

Corporate Governance

Corporate GovernanceWe have a robust corporate governance structure. Good governance is embedded into our processes, planning, and delivery of our objectives and strategy.

We ensure that the number of Independent Directors is more than Executive Directors in the Bank. We follow stringent procedures for the selection of an Independent Director, subject to availability of precise skill sets, as prescribed in the Banking Regulation Act, 1949.

The Independent Directors need to abide by the Code of Conduct, which follows the provisions made in Schedule IV of Companies Act, 2013, as amended from time to time.

Most of the Board Committees are headed by Non-Executive Directors. They engage in collective decision-

We follow strict corporate governance measures, which include:

Transparency(i) Timely and detailed disclosure of performance

(viz. annual report, quarterly results, analysts’ call transcripts, investors’ meeting initiations, media disclosures) as required by regulatory bodies/stakeholders;

(ii) Conducting annual general meetings with shareholders (AGM).

Accountability(i) Relevant functions are subjected to periodic internal

and external audits;

(ii) Audit results are presented to the top management;

(iii) The Bank’s Board is severally and jointly responsible for decision-making.

Fairness(i) Most Board Committees are chaired by non-

executive directors;

(ii) Establishing and operationalising internal control procedures manned by suitable qualified manpower.

For more details, refer to page 81 of Annual Report 2018-19 (Annexure I: Corporate Governance Report).

making, and there is a quorum needed to pass any resolution. An independent statutory and secretarial audit is conducted periodically. The performance of Directors is monitored and reported in the Corporate Governance Report.

As on March 31, 2019, the Board comprises of eight (8) Directors, out of whom two Directors are Executive/ Whole-time Directors (one of whom is a Managing Director and Chief Executive Officer), five Directors are Independent Directors (one of whom is also the part-time Chairman of the Board) and one Director is Non-Executive Director. We have established a strong corporate governance practice, which rests on the principles of transparency, fairness, and accountability. These are essential for ensuring regulatory compliance, our brand management and preservation of minority shareholders’ interest.

`

Sr. No.

Name of Director Designation Age as on March

31, 2019

Original Date of AppointmentDirector since (date)

B O D

A C B

S R C

BI C C

A F C

C S B M C

N C

R M C

H R R C

C S R C

I T S C

C R C @

W D R C @

N C B R C @

A G M

Number of meetings held during FY 2018-19 4 6 4 11 2 4 2 4 4 2 3 - - - 1

1 Mr. Narayan Ramachandran*

1 - - 1 - - 1 1 1 - - - - - NA

2 Mr. Prakash Chandra^ Non-Executive Independent Part-Time Chairman

67 25-Jan-16 4 6 4 - 2 4 2 2 2 - - - - - Y

3 Mr. Vishwavir Ahuja Managing Director & CEO

59 23-Feb-10 4 - 3 9 1 3 - 3 - 2 2 - - - Y

4 Mr. Rajeev Ahuja Executive Director

55 27- Feb-2017

4 - 3 10 - 1 - 4 - - 3 - - - Y

5 Mr. D. Sivanandhan Independent Director

68 18-Dec-12 4 6 - - 2 4 2 - - 2 2 - - - N

6 Mr. lshan Raina Independent Director

60 30-Apr-16 4 - - 3 - 4 1 - 4 2 - - - - Y

7 Mr. Jairaj Purandare Independent Director

59 16-Sep-11 4 6 - 9 - - - 2 4 2 3 - - - Y

8 Mr. P. Sudhir Rao Independent Director

58 30-Jan-12 3 3 - 4 - - 2 3 3 - 2 - - - N

9 Ms. Rama Bijapurkar# - - - 2 - 2 - - - 1 - - - - - - - N

10 Mr. Vimal Bhandari$ - - - 2 2 - 6 - - - 2 2 - - - - - N

11 Mr. Vijay Mahajan^^ Non-Executive Director

64 27-Apr-18 1 - 1 - - - - - - - - - - - N

List of the Bank’s Directors, Affiliations with Various Board Committees and Attendance at Various Meetings during FY 2018-19

Note: * Ceased to be a Director w. e. f. May 19, 2018. ^ Up to May 19, 2018 Independent Director. From May 20, 2018

appointed/designated as Part-time Chairman of the Bank. # Resigned as a Director on January 10, 2019. $ Ceased to be a Director w. e. f. September 13, 2018. ^^ Appointed as a Non-Executive Director w. e. f. April 27, 2018.@ No meeting was held during the year under review.BOD: Board of DirectorsACB: Audit Committee of Board SRC: Stakeholders’ Relations CommitteeBICC: Board Investment and Credit Committee

AFC: Anti-Fraud CommitteeCSBMC: Customer Service, Branding and Marketing CommitteeNC: Nomination CommitteeRMC: Risk Management CommitteeHRRC: Human Resource and Remuneration CommitteeCSRC: Corporate Social Responsibility CommitteeITSC: IT Strategy Committee CRC: Capital Raising CommitteeWDRC: Wilful Defaulter Review Committee NCBRC: Non-Cooperative Borrower Review CommitteeAGM: Annual General Meeting


RBL Bank Limited

Risk Management We have a fundamental objective to run a business that is successful and stands us in good stead in the foreseeable future. We have invested our time, effort and money in people, technologies and tools to detect and control the risks and manage them better, and also to have a solid, sustainable and robust business at all times.

We have identified certain risks, and to counter these risks, there are adequate policies, multiple procedures, and capable manpower, tools and supervisory functions. The Board and the Risk Management Committee of Board (RMCB) are ultimately responsible for all decisions related to this. The Head – Risk and Governance is ably supported by Chief Risk Officer

(CRO), Chief Credit Officer (CCO), and Chief Information Officer (CIO).

For details, refer to Basel III disclosures on Page 233 of our Annual Report 2018-19.

Information SecurityThe Bank follows a multi-layer security architecture framework and has implemented IT security tools and applications protecting Internet, Intranet and Partner interfaces. It follows international security standards and guidelines released by the Centre for Internet Security (CIS) and National Institute of Standard and Technology (NIST) for system hardening.

For more details on Information Security, please refer to Intellectual Capital on pages 34-39 of this report.

Disclosure of Complaints made by Clients

Number of complaints pending at the beginning

of the financial year

Number of complaints received during

the financial year

Number of complaints redressed during the financial year

Number of complaints pending at the end of

the financial yearFY 2016-17 453 20,739 20,479 713FY 2017-18 713 27,182 27,105 790FY 2018-19 790 31,700 31,861 629

Customer Satisfaction SurveysService Resolution Index (SRI) This index aims to measure customers’ experience with regard to service requests placed by them at the Bank’s branches. To measure SRI, clients are randomly selected and contacted to rate their request resolution experience on a scale of 1-10, where 10 stands for ‘Excellent Service Provided’ and ‘1’ stands for ‘Needs Improvement’.

Complaint Resolution Index (CRI)This index aims to understand the clients’ experience in terms of resolution of complaints. Outbound calls are made by contact centre agents to customers. The customers are requested to rate their overall experience on a scale of 1-10, where 10 denotes ‘Excellent Service Provided’ and 1 denotes ‘Needs Improvement’.

8,472Customers surveyed

81.5%Customers responded

“Excellent”Average response from customers

9,538Random customers

contacted

86%Customers responded

“Very Happy”Average response from customers

In the last financial year, the number of unimplemented awards by banking ombudsman were nil.

Customer Complaints and Satisfaction Survey We aim to provide our customers with best-in-class products and services. Our employees are trained to provide efficient service at all times, regardless of the size of the transaction or the type of customer (retail or institutional) they are dealing with. We undertake periodic customer satisfaction surveys to design better products and services, and to identify service glitches.

Key Achievements in Customer Survey Received the highest rank in Banking

Codes & Standards Board of India (BCSBI) Code Compliance Rating in FY 2016-17.

Scored high in information dissemination, transparency, customer-centricity and grievance redressal, indicating superior service delivery and customer service.

Complaint Handling GuidelineOur Complaint Handling Guideline (CHG) makes it easy for an aggrieved customer to approach the competent

authority. The CHG states that complaints should be resolved within a period of 30 Efficient Customer Service days (three stages of 10 days each) till the complaint reaches the Principal Nodal Officer/ Sr. Management/ MD & CEO.

Complaints GroupThe Bank’s Complaints Group oversees satisfactory resolution of complaints within designated turnaround time (TAT). Only the client /person registering the complaint can register a satisfactory closure of a complaint.

The risk ecosystem keeps changing with every passing year. If an organisation fails to identify the risks and does not take appropriate measures, it may lead to serious consequences. Therefore, timely identification and mitigation of risks on a forward-looking basis are among the most important functions for the long-term sustainability of any business”

- Ramnath Krishnan, Chief Risk Officer

Related Sustainable Development Goals (SDGs)


RBL Bank Limited


In India, majority of customers still feel comfortable banking with a person. Therefore, it is important for any Bank to have multiple touchpoints – physical and digital – to reach out to a larger base of customers”

- Surinder Chawla, Head – Branch and Business Banking

OUR GROWING MULTI-LAYERED DISTRIBUTION NETWORK

We are rapidly adding branches in metro and urban areas and growing our base of Savings and Current Account customers. In semi-urban and rural areas, our BC partners have densified their network and added more rural customers.

Our POS machine penetration has grown phenomenally over the past few years. The number of POS machines in India increased to 35.9 Lakhs in December 2018, up 19% from 30.3 Lakhs in December 2017, according to data published by the RBI. RBL Bank’s POS machine count grew by 104% between March 31, 2017, and March 31, 2019, to 6.93 Lakhs. We are currently the leading bank in terms of our POS machine penetration in India through our partners.

RBL Bank Branch and BC Network and CASA Ratio

Self-Owned Branches

BC Branches

FY 2016-17

651

239

21.98%

FY 2017-18

807

265

24.32%

FY 2018-19

993

324

25.00%

CASA Ratio

7,69,759 sq. ft.Office and branches floor

space (as on March 31, 2019)

6.93 LakhsRBL Bank’s POS machine

count grew by 104% in FY 2018-19. We rank #1 in

India in terms of the number of POS machines deployed

10

84

94

96

38

159

98

59

93

119

Bank’s Physical Footprint

371Branches

As on December 31, 2019

1,245BC Branches

Map not to scale. For illustrative purposes only.


RBL Bank Limited

IGBC Platinum Certification for the Bank’s Office in Airoli

With this office, we have taken a step towards conserving the environment and have been recognised with Platinum Certification by the Indian Green Building Council. Our focus is on providing a healthier workspace for employees through improved environment quality and comfort in the interiors.

Following are the key features of Airoli office:

The office is spread over 75,000 sq.ft. and has been designed uniquely to offer employees an interactive and enjoyable workspace. The office space has moveable workstations for the ease of our employees.

Achieved over 50% water saving by using water-efficient fixtures.

CFC-free and HCFC-free air-conditioning refrigerants have been used.

Highly efficient HVAC systems are used, thereby cooling more sq. ft. per tonne.

BEE 5-star rated hardware equipment.

The lights in the building are intelligently designed and positioned. Average lighting load is less than 0.5W per sq. ft.

Around 50% of the building receives natural daylight throughout the operational hours (9 am to 6 pm), leading to significant power saving.

Separate meters are installed to monitor and track uses of various electrical installations.


RBL Bank Limited

Hardware

Count of Assets

Desktop 2,090

Laptop 4,337

Thin Client 2,258

Grand Total 8,685

Software Standard softwares such as MS Office, Google Chrome, 7-Zip, Acrobat Reader, Citrix Receiver.

Security softwares such as Symantec Antivirus, Forcepoint DLP, Cisco Anyconnect Secure Client, Manage Engine Desktop Central, EMC SourceOne Offline Access, McAfee Drive Encryption (for Laptops).

Bank’s Information Technology Infrastructure The Bank’s IT has heterogeneous server infrastructure powered by Nutanix HCI or Cisco UCS/VMware. It has NetApp FAS All-Flash storage connected to director-class fabric chassis for 16 GBPS fibre storage connectivity. Nutanix Hyper converge infrastructure delivers high-performing computing platform for 5,000+ Citrix users, whereas, some of the mission critical workload is also hosted on HCI platform. This has resulted in better utilisation of server infrastructure and reduce downtime by up to 20%, compared to the previous financial year.

Count of Assets

Windows 956

Linux 730

AIX 35

Grand Total 1,721

Servers

Digital Transformation Programme During the year, the Bank has virtualised 1,450 servers through VMWare-based virtual servers. This has resulted in reduction of energy consumption and server load optimisation.

The Bank is in the process of migrating some key services to the AWS cloud, including part of its core banking system. This service will help to optimise costs, curb interruptions, and prevent any sort of IT failure. The objective of our digital transformation programme is to ensure zero disruption and 100% availability of IT systems.



RBL Bank Limited

Banking has moved from being an institution to being a service. This has happened due to introduction of digital channels”

- Sankarson Banerjee, Chief Information Officer

Our Digital Journey We are at the forefront of leveraging technology for increasing customer convenience, providing targeted products and services and reducing turnaround times (TAT). The technology systems used by us are best-in-class, highly responsive and scalable.

Our collaborators include well-known software solution providers such as Infosys, IBM, Oracle, Ebixcash, Nucleus Software and First Data. We are the first bank in India to deploy Application Program Interface (API) Banking and also have a basket of APIs that are available for consumption by partners. We were among the first few banks to launch a digital savings account for our customers in FY 2016-17. Finding more opportunities for digital channels to disrupt conventional banking is our goal.

Automated Processes for Higher Efficiencies

Reduced human intervention and increased real-time activities.

Reduced the cost of running end-of-day batches and compliance cost.

Monitored real-time risk as per transaction level for better efficiency and fraud management.

Improved Products and Services through Analytics

Identified areas of disruptions to tap customers.

Leveraged strong analytics to introduce cutting-edge Artificial Intelligence technology to gain competitive advantage.

Curated Mix of Digital Marketing Channels

Executed aggressive digital campaigns for higher effectiveness, wider reach and generating large volumes.

RBL Bank’s Digital InitiativesLeveraging Analytics for Deep Learning We have identified analytics as a key differentiator and leverage it extensively. It helps us take better decisions on what products to launch and measure the performance of existing products. Multiple verticals within the Bank from Consumer Banking to Human Resources leverage analytics for their decision-making on key matters.

Our focus is on building a data bank and reaping the benefits of a comprehensive data repository.

Data plays a key role in offline and digital acquisition strategies across the Bank. Post-acquisition, analytics is used extensively to drive the customer life cycle management including cross-sell, upsell, and retention. Analytics enable us to reach-out to customers in a personalised manner and makes the impact of this engagement measurable.

We are also in the process of leveraging AI and Machine Learning to understand customer journeys better, improve customer service, and predict risks

like potential delinquency. The Bank has launched a Chatbot ‘RBL Cares’ to provide 24x7 and instant responses to customer queries.

Intellectual Capital


RBL Bank Limited

Process Optimisation through Technology

Tweaked CBS to drive efficiency, resulting in significant reduction in month-end batch job processing time.

Performance Impact Reduction in Escrow FD balance transfer batch job time from

26 minutes to 26 seconds. 30% reduction in time taken for interest booking on accounts batch job. 50% reduction in time taken for CMS application for booking of

interest batch job, one of the top 10 time-consuming batch jobs. 7 hours reduction in yearly batch processing time since 2018. 20 minutes reduction in average daily batch job processing time.

Core Banking System (CBS)

Modified system code to reduce the processing time for NEFT transactions, resulting in faster outward transactions, increased transaction handling capability and higher accuracy.

Performance Impact Enhancement in daily NEFT transaction handling capacity from

60,000 to 3,50,000 per day. Reduction in processing time per transaction from 4 seconds to

400 milliseconds. 99.99% accuracy achieved.

NEFT Transactions

Undertook efforts to automate personal loan disbursement to the pre-approved customer base. The objective is to build a seamless and robust service platform that is hassle-free, easier to access and interactive. It facilitates strong lead conversion with resumed/continued functionality without compromising quality and security.

Performance Impact ` 3.5 Crore loan disbursement to 92 customers in last three months of

FY 2018-19.

Automating Loan Disbursement

Indigenously developed Aadhaar Vault in just two months, becoming the first bank to meet the new Aadhaar Act and UIDAI guidelines. The vault generates a unique reference key for each Aadhaar number, which would be stored for all peripheral systems instead of Aadhaar number, thus reducing its footprint.

Performance Impact 90 Lakh Aadhaar numbers secured in our Aadhaar Vault.

Protecting Customer Privacy with Aadhaar Vault

Digitised the process of sending and signing MFX confirmations, cancellation, outstanding deals and MTM to do away with the cumbersome process of manually printing each confirmation, physically signing it, couriering it and tracking its delivery.

Performance Impact Reduction in operational/reputational risk involved in manual

preparation of confirmation/other documents. Reduction in time saves 1 hour per day, increasing productivity of

Treasury Back Office Team. Paper, printing ink, and physical space saving.

Digitising Merchant FX (MFX) Process

Digitalisation We are at the forefront of digitalisation and technology-driven services. Our mobile banking app (MoBank) was launched in FY 2015-16 for retail users, and then relaunched in FY 2017-18 along with our netbanking interface. This has significantly improved the user experience.

We have launched several other apps including MYCard (for credit card), BHIM RBL Pay (Unified Payment Interface app) and RBL CorpAuth (for corporate API banking interface) for the ease of our customers.

Financial YearTotal number of

transactions through conventional channels

Value of total transactions through

conventional channels (in ` Crore)

Total number of transactions through

digital channels

Value of total transactions through

digital channels (in ` Crore)

FY 2016-17 1,00,08,313 2,64,624.67 1,72,38,000 32,201.70

FY 2017-18 1,00,29,712 3,26,897.46 3,92,39,035 47,116.01

FY 2018-19 1,10,09,688 4,50,112.90 8,64,96,646 84,997.22

Total 3,10,47,713 10,41,635.03 14,29,73,681 1,64,314.93

3-year CAGR 3% 19% 71% 38%

As can be seen from the above table, conventional channels (branch banking and cash transactions) still significantly dominate our books by value, but the number of transactions through digital channels is far higher.

The digital channels do not have a uniform mix. While debit cards and credit cards dominate the number of transactions over the years (cumulative almost 87% of all transactions), Internet banking dominates the total value. However, UPI has registered the highest CAGR over the past 3 years.

A comparison of transaction numbers and volumes flowing through the conventional (branch and ATM) channels and through the digital channels (debit and credit cards, netbanking, mobile banking or MoBank and UPI) is given below:


RBL Bank Limited

Information Security The Bank’s information security applications conform with:

Reserve Bank of India’s guidelines on information security, electronic banking, technology risk management and cyber-frauds circular.

ISO/IEC 27001: 2013 (Information security management systems).

It has developed vulnerability management programmes, which are not limited to requirements from the Open Web Application Security Project (OWASP) top 10 for web and mobile applications.

The Bank has implemented cyber-resilience programme and is focussed on improving cyber security control maturity across its infrastructure, technology and processes. We are automating information security processes and implementing updated security solutions with emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), Security Orchestration.

Perimeter Security

Layered firewall placed at the perimeter level to protect the infrastructure from external threats with IPS functionality

Proxy for web filtering

Email filtering solution

WAF used to protect web-based applications from external threats

IPS/IDS

DDOS solution in place to protect any DDOS attack targeted towards RBL Bank network

Scheduled vulnerability assessment, penetration testing & application testing of infrastructure

Phishing and malware monitoring for RBL Bank websites by two different partners

Defacement monitoring of RBL Bank websites

Multifactor authentication solution

Mobile store monitoring of Android and Apple iOS applications on Play Store

Dark web monitoring

Global threat intel services

Internal Security

Majority of users are on HSD (Hosted Shared Desktop) environment:

Information is always residing on servers Control over presence of data at branches or

operationsLicence complianceActivity control

Enhanced safety and security

Antivirus for endpoint protection

PIM (Privileged Identity Manager) solution to monitor privileged users’ activity on system

Anti-APT (Advanced Persistent Threat) solution

Data Loss Prevention (DLP) solution

Information security policies and processes

SIEM for monitoring security events from core and critical systems

Data encryption solutions

Spear phishing campaign ensuring enhancement in user awareness

‘Aavaran’ – an internal information security programme where a security movie with regular mailers, awareness notifications, awareness on specific threat and their remedy and dos & don’ts are mentioned with desktop wallpapers, screensavers and posters

Network access control solution

Participation in cyber-security drills

Vulnerability management programme

Red team exercises

Number of transactions through digital channels

FY 2016-17 FY 2017-18 FY 2018-19

0.0%3.7%9.0%

49.4%

37.9%

3.7%3.9%4.9%

60.4%

27.0%

8.3%3.3%3.1%

66.1%

19.2%

Debit Cards Credit Cards Internet Banking

MoBank UPI

Value of transactions through digital channels

FY 2016-17 FY 2017-18 FY 2018-19

0.0%2.4%

83.2%

9.3%5.1%

0.3%5.6%

73.6%

14.8%5.7%

1.3%6.7%

68.0%

19.4%

4.6%

Debit Cards Credit Cards Internet Banking

MoBank UPI

Debit Cards Credit CardsInternet Banking

MoBank UPI

3-year CAGR of total number of transactions through digital channels

36% 89% 21% 65% 1,117%

3-year CAGR of total value of transactions through digital channels

34% 77% 29% 94% 854%


Growth of Digital Channels


RBL Bank Limited

Human Capital

Our employees are a critical pillar of the Bank. We are making the right investments to create a dynamic talent pool with the right experience at all levels”

- Shanta Vallury Gandhi, Head - HR, CSR & Internal Branding

RBL Bank’s Talent PoolAt RBL Bank, people drive performance. We have created a dynamic talent pool at junior and mid-senior level, which has high motivation and loyalty. The Bank is becoming future-ready by investing in People, Processes and Systems.

4,478 (YoY growth of 5.53%)

Total Number of Male FTEs as on March 31, 2019

5,843 (YoY growth of 10.24%)

Total Number of Full Time Employees (FTEs) as on March 31, 2019

1,365(YoY growth of 29.13%)

Total Number of Female FTEs as on March 31, 2019

Male FTEs Female FTEs

Distribution of FTEs by Gender and Management Level

Jr. Mgt. (< AVP)

Mid. Mgt. (AVP – SVP 1)

Sr. Mgt. (SVP 2 >)

208

1,098856

1,149

3,324

Male FTEs Female FTEs

FTEs by Age Group and Gender

< 30 years 30-50 years > 50 years

700

3,160

20132

645

1,186

Median Age: 27 Years



Recruitment and AttritionThe recruitment and attrition statistics of FY 2018-19 are presented below. The trends are similar for male and female FTEs. This attrition rate is in line with last FY’s rate (23%) and attrition rates disclosed by industry peers.

Total FTE Male FTE Female FTE

New recruitment 1,997 (34.17% of total FTE*) 1,424 (31.79% of total male FTE) 573 (41.97% of total female FTE)

Attrition 1,421 (24.32% of total FTE*) 1,092 (24.38% of total male FTE) 329 (24.10% of total female FTE)

*as on March 31, 2019

Geographic Distribution of FTEs

North 1,182

East 216

West 3,388

South 1,057

Total 5,843

Distribution of FTEs by Management Level

Junior Management (below Assistant Vice-President grade) 76.55%

Middle Management (Assistant Vice-President to Senior Vice-President grade 1) 22.35%

(Senior Vice-President grade 1 and above) 1.10%


RBL Bank Limited

Employee CompensationCompensation plays a key role in talent retention. The Bank offers fair remuneration to entry-level employees (does not include management graduates). A ratio of entry-level wage to minimum wages for skilled workers in Maharashtra state is presented in the table below:

Ratio of Entry Level Wage to Stipulated Minimum Wage by Gender

Male Female1.15 1.14

Note: Standard minimum wage rate of ` 9,904 per month has been taken for skilled employees in Shops and Commercial Establishments in Maharashtra

Ratio of Remuneration of Key Managerial Personnel to an Average Employee Name Designation RatioMr. Prakash Chandra Non-Executive & Part-time Chairman 4.53x*Mr. Vishwavir Ahuja Managing Director & CEO 37.14xMr. Rajeev Ahuja Executive Director 34.97x

*For calculation of ratio, remuneration of ` 12,98,387/- for FY 2018-19 which will be paid in FY 2019-20 is also included.

Average annual raise in compensation for junior and mid-level management employees has grown by 8.2% Y-o-Y (in June 2018); while the raise for the Bank’s Key Managerial Personnel (KMP) was 15.5%. We have commissioned a remuneration benchmarking survey for setting an overall rewards philosophy to attract, retain and motivate the employees. This will enable us to implement best practices and policies, and take informed decisions during hiring, promotions and general remuneration budget planning. We have also initiated the ‘Job Sizing Project’, which would provide a basis for comparing and grading all senior jobs. Consequently, this would help the Bank take better decisions on succession planning, talent management and career progression.

INCREDIBLES - CEO’s Supreme League Award

Awarded for Individual and Team Excellence.

Employee Education Reimbursement Programme

For employees seeking higher education credentials.

PREET Award

For outstanding display of RBL Bank’s PREET values in action.

Spot Award

Awards given through a digital platform by a line manager as and when great work is spotted.

Achiever’s Award

Recognises employees who drive key initiatives that have a bank-wide, business-wide or function-wide impact.

Cross Functional Awards

Celebrates the Spirit of One and collaboration at RBL Bank.

Employee Rewards and RecognitionThe rewards & recognition programme ensures that employees’ exemplary work is given a proper platform, showcased and rewarded. This motivates employees and aids retention.

Diversity and InclusionWith a pan-India presence, embracing diversity is vital for our long-term success. It also enables us to tap a vast pool of talent. At the Bank, we are committed to creating an inclusive culture that respects and embraces the diversity of employees, clients and communities.

RBL Bank’s diversity and inclusion practice hinges not only on gender, but also on multi-generational equity and inclusion of specially-abled employees.

Employees with special needs

In FY 2018-19, RBL Bank had 5 employees with special needs.

Gender Diversity During FY 2018-19, we surpassed the target of 22% women employees set as a part of our Vision 2020. As on March 31, 2019, the Bank’s workforce had 23.36% women employees.

One of the key changes made in the Bank’s policy in recent years was aligning with the Maternity Benefit (Amendment) Act, 2017. This paved the way for paid maternity leave of 26 weeks.

Equal RemunerationThe Bank is an equal opportunity employer, and puts significant emphasis on equal remuneration for women and men. A comparative ratio of remuneration of female and male employees across various grades is presented in the below table:

GradeFemale/Male FTE

Remuneration Ratio

Junior Management 0.90:1

Middle Management 0.88:1

Senior Management 1.03:1

Number of Sexual Harassment CasesThe Bank has a Prevention of Sexual Harassment (POSH) Policy and POSH Committee in compliance with the prevalent regulation. The POSH policy supports multiple modes of reporting, transparency and scope for tough actions, in case allegations are proven. The table below provides a list of sexual harassment cases in the past three financial years.

Nos. of sexual harassment cases

Carried forward from last FY

Nos. registered in present FY

Nos. successfully resolved in present FY

Nos. pending resolution at end of FY

FY 2016-17 0 3 3 0

FY 2017-18 0 0 0 0

FY 2018-19 0 3 2 1

The Bank has developed a POSH-related awareness e-learning module, which new joinees have to complete within 30 days of joining. Apart from this, periodic awareness sessions are carried out by the Bank’s HR team.

39FTEs have rejoined after

maternity leave in FY 2018-19

47FTEs availed maternity benefits

in FY 2018-19

29FTEs have completed one year since

rejoining after maternity leave

Note: Junior Management is below AVP grade, Middle Management is AVP – SVP2 grade, Senior Management is above SVP2 grade.


RBL Bank Limited

Capacity Development of Employees Investing in upskilling of employees to enhance productivity is a continuous process at RBL Bank.

Training programmes are conceptualised using input data from the Performance Management System (PMS) by identifying the skill gap. We conduct training needs analyses with business heads to come up with solutions. These programmes are calendared and published quarterly to employees for nomination process.

In FY 2018-19, 0.33% of PAT was spent on developing the training courses. We have optimised on cost by utilising internal knowledge trainers and facilities.

The modality of training delivery is either through e-learning or through F2F programmatic or interventional trainings. An overview of the different types of training conducted is given below:

E-learning Programmes

Compliance: AML, KYC, Insider Trading

Behaviour: Performance Conversation, Business Etiquette, Responding to feedback you disagree with, Sustainability Primer

Product & Process: Programmes on Accounts, Credit Cards, Investments, Cash Management etc.

Classroom-based Programmes

Compliance: Information Systems Control and Audit, Trends in Cyberattacks, Advanced Fraud Detection & Forensic Investigation etc.

Behaviour: Managerial Effectiveness Programme, Behavioural Events Interview, Service Excellence, RM Essentials, Eye for Detail etc.

Product & Process: Advance Excel, Data Visualisation, Financial Modelling etc.

Leadership Programmes: Young Leader Development Programme (YLDP), Mid-level Leadership Development Programme (MLDP) and Senior-level Leadership Development Programme (SLDP)

Employee Safety TrainingsWe have invested in a robust automated security and surveillance system that operates round-the-clock. Additionally, we have invested significantly in a Business Continuity Programme. This strategy ensures the safety of employees, clients, vital business data, and shareholder interest.

Our Security Team provides safety training to all the employees and contract workers on the premises. This includes training in security, safety, evacuation planning and fire training.

Training Programmes ConductedThe details of training programmes conducted in FY 2018-19 are presented in the table below:

Mode of training Number of programmesUnique employees covered

(including resigned employees)Total Man-hours Invested

E-Learning 147 6,688 25,152Classroom Programme 452* 2,826 83,288

*Includes only unique programmes, viz. ILT: 74 nos.; Operations: 374 nos.; Leadership: 4 nos.

Gender-Wise Training InitiativesGender-wise break-up of this information is presented in the table below. Women have 18% higher training rate than men.

Gender Coverage Unique FTE covered in FY 2018-19

Average person-day covered in training in FT 2018-19

Male 5,321 1.66

Female 1,566 1.96

The Bank has started ‘Women Mentoring Circles’. Within this initiative, the Bank’s senior women leaders motivate, mentor and solve day-to-day challenges faced by younger women staff. The objective is to enhance the skill sets and instil a sense of leadership in women employees.

2,786Total number of

attendees

183Trainings conducted in

FY 2018-19

Safety-related Trainings



RBL Bank Limited


The Financial Inclusion market in India is highly under-penetrated. About two-thirds of the potential customers today have no access to formal financial instruments and lack of financial literacy. To harness this opportunity, it is important for us to educate customers through various structured financial literacy programmes”

- Harjeet Toor, Head - Retail Lending, Inclusion and Rural Business, Credit Cards

Driving Financial Inclusion We are focussed on providing affordable, accessible and customised financial products and services to unbanked/underbanked groups to meet their needs. This is made possible through our extensive network of (833 FI + 160 MSME), 43 direct branches and 1,94,296 customer service points across 20 states as on March 31, 2019.

In FY 2018-19, nearly 14% of our advances were towards the Financial Inclusion business. Over the past three financial years, our loan book has grown at a CAGR of 32.4%, while the number of active borrowers has grown at a CAGR of 22.4%. Average ticket size has increased from around ` 25,406 to ` 31,446 over the last three financial years, reflecting the increased credit appetite of the women customers.

Women’s empowerment is a focus of our Financial Inclusion strategy. We provide credit facilities to women’s Joint Liability Groups (JLG) and mentor them about the loan taken, its usage for income generation and importance of timely repayment. This has proved effective in driving female entrepreneurship, women’s engagement in household financial decisions and entry into the formal banking system.

Our Financial Inclusion Product Offerings:

Micro-Finance

Term loans Working capital finance

Personal Banking Products

Savings account

Current account

Loans

Deposit

Insurance

Micro-Enterprise Finance

Working capital finance Asset finance Term loans

Micro-Savings and Remittances

No-frills savings account

Domestic remittance

Flexible RD

Insurance

Life insurance General insurance Credit-life micro-insurance Health insurance

Micro-Banking

Crop loan

Agri investment loan

Loan for allied activities - dairy & poultry

Farm equipment financing

Micro-enterprise loan

Loan against agri commodities


RBL Bank Limited

Key Drivers of RBL Bank’s Financial Inclusion Portfolio

Consistent Introduction of New Products

Launch of new products as per evolving needs of clients.

Launched Hospicash, a health insurance product, in June 2017. It covers both the borrower and spouse for hospitalisation cash benefit of ` 1,000 for up to 30 days. At present being offered for 1-year and 2-year tenures, it has been received extremely well, with 12.28 Lakh policies issued in FY 2018-19. This translates into a market penetration level of 68.5% across all geographies.

Customer Education Programme for First-Time Borrowers

Imparting knowledge to customers on financial product offerings, loan availed details, existing credit situation, available banking facilities, customer responsibility, credit bureau, grievance, etc. through classroom training, focus group discussion, poster presentation, flipchart and storytelling.

Large and Growing Business Correspondent Branch Network

RBL Bank’s BC Branch Network

Robust Technology Support

Investment in robust technology platforms and innovations to support last-mile delivery.

Dedicated core banking software for financial inclusion.

Development of micro ATM devices.

Fintech partnership to widen transaction infrastructure.

TAB-based banking service for end-to-end support.

FY 2016-17 FY 2017-18 FY 2018-19

651807

993

Performance

and empowerment of women in the unbanked and underbanked community.

At RBL Bank, we have been at the forefront of supporting women by providing financial literacy training

Enabling Financial LiteracyLack of awareness, low financial literacy and education are key bottlenecks to banking penetration. A nationwide Financial Literacy and Inclusion Survey (NCFE-FLIS) by National Centre for Financial Inclusion draws the same conclusion. The survey indicates that urban and male respondents, at 78% and 80% respectively, are more financially literate compared to rural and female respondents, at 65% and 62% respectively. The results also indicate a direct correlation with education – women with less than secondary school education have less financial knowledge when compared to their more educated counterparts. They have little say in family financial decision-making and are easy prey for loan sharks.

Structured financial literacy programmes enable women to take control of their income, expense and savings. They start looking for small savings account, life insurance, crop insurance, mediclaim and small loans. This leads to a slow but sustained increase in adoption of financial instruments offered by multiple financial institutions, primarily banks. This leads to financial inclusion

since FY 2014-15. In FY 2018-19, we had two active financial literacy training programmes – ‘Saksham’ and ‘Unnati’.

(Source: https://www.ncfe.org.in/images/pdfs/nasional-surveyy/NISM_Final%20Report%20-%20All%20India.pdf)

FY 2018-19 FY 2017-18 FY 2016-17

Gross FI Loan Portfolio (` Crore) 5,038 3,620 2,169

Number of Active Borrowers (Lakhs) 25 19 14

Average Ticket Size of Loans (`) 31,446 28,343 25,406

Number of Loans Disbursed (Lakhs) 15 13 9

Loan Amount Disbursed (` Crore) 4,789 3,599 2,200

15.1% 3-year CAGR


RBL Bank Limited

Investing in CommunitiesWe help underprivileged communities by supporting the causes of preventive healthcare, sustainable livelihood generation, skill development, education and women’s empowerment. In FY 2018-19, we undertook 28 CSR projects that directly benefited over 45,000 individuals. We also worked with several like-minded partners to ensure a lasting impact of these initiatives.

1,53,000Lives touched since inception through

CSR initiatives

Saksham impact

StateQ2 FY 2018-19

No. of Training Programmes No. of Clients Trained

Maharashtra 1,597 10,198

Gujarat 2,124 16,999

Rajasthan 140 1,417

Bihar 149 1,605

Total 4,010 30,219

Saksham Financial Literacy Programme Launched in December 2016, the programme is operational in Gujarat, Rajasthan, Maharashtra and Bihar and has provided classroom-based trainings to 1,36,889 trained till March 2019.

Unnati, meaning progress, was launched in March 2018 across four districts of Bihar together with CDC Group and RBL FinServe. Targeted at providing basic financial literacy to 30,000 women, the programme, designed as an interactive session, provides rural women financial training for two days, for 90 minutes each day. We are ensuring its higher effectiveness

with our ‘Swadhar Saathi’ mobile application that facilitates a synergistic approach and helps participants stay connected with us. Its features include:

Tracking financial income and expenses

Setting financial goals and tracking progress

EMI reminders

Video training modules Different financial products

We successfully completed Phase I of Unnati in January 2019, and by March 31, 2019, we exceeded the target by training 31,452 women clients. Phase II of the programme commenced from April 2019.

Unnati Financial Literacy Programme

CSR Spending (` Crore)

FY 2016-17 FY 2017-18 FY 2018-19

3.67

6.94

10.55CAGR42.19%

For further information on CSR initiatives, refer to Business Responsibility Report (Page 120) in Annual Report FY 2018-19

Skill Development Partnered with Green Communities Foundation (GCF) in Mumbai

and engaged in Waste Management Expert (WME) programme in slum pockets. 20 WMEs developed to keep five housing societies clean and green.

In Mumbai’s Ghatkopar and Bhandup slums, provided banking and financial services related training to 80 youths, in association with Natarajan Education Society (NES).

Preventive Healthcare Partnered with Aditya Jyot Foundation for the Twinkling Little

Eyes initiative to spread awareness among 35,000 people on Diabetic Retinopathy in Mumbai.

Partnered with Iksha Foundation for screening, detection and surgery of 20 children suffering from retinoblastoma (eye cancer).

On our 75th anniversary, donated four ambulances in Kolhapur and Sangli to enhance healthcare accessibility for people.

Promoting Access to Education The 5th edition of Umeed 1,000 Cyclothon involved cycling

across 10 major cities including Mumbai, Pune, Satara, Kolhapur, Belagavi, Hubballi, Ranibennuru, Chitradurga, Tumakuru and Bengaluru. The event witnessed participation from 30 RBL Bank employees who braved the 1000 km journey. To extend their support, 50 participants from Karnataka Special Reserve Police also joined from Belagavi. A total sum of ` 3.25 Crore was raised through this initiative for Udbhav-RBL School, Hyderabad.

Partnered with Gautam Gambhir Foundation to support education of 50 children from families of martyred soldiers.

Conducted teacher training programmes with Muktangan Education Trust to enhance quality of primary and secondary school education.

Sustainable Livelihood and Women’s Empowerment Partnered with the NGO Under the Mango Tree in the Bees for

Poverty Reduction (BPR) programme to help 463 farmers from rural Maharashtra, Gujarat, and Madhya Pradesh increase their annual income by 40%.

The Bank partnered with Mann Deshi Foundation in Hubballi, Karnataka, which provides skill development on the go (a Mobile Van project), to enable women to set up their own enterprises.

Our 4-Dimensional CSR Approach


RBL Bank Limited

MSME Financing The financing of micro, small and medium enterprises (MSMEs) is another important focus area for us, as this business segment contributes nearly 29% of the GDP and employs nearly 3.6 Crore workers (nearly 70% of all workers employed in the manufacturing sector). According to NRI Consulting, the MSME sector could create one Crore jobs in the next 4-5 years.

We reach out to MSMEs through our network of Own Branches, BC Branches and Banking Outlets, while offering a gamut of products across secured/unsecured business loan, loan against property and working capital loans. Apart from corporate loans, RBL Bank offers small business loans of up to ` 25 Lakhs in the MSME segment through a Business Correspondent model, largely through its wholly-owned subsidiary, RBL Finserve Limited.

During FY 2018-19, we disbursed ` 9,639.77 Crore of advances to 7,70,689 MSMEs across the country, which is 28.67% higher compared to FY 2017-18. The book size in retail MSME business has crossed ` 1,000 Crore in FY 2018-19, with 76% growth YoY. Around 75% of these loans fall under the Mudra scheme of the Government, referred to as Kishore and Tarun loans. The Mudra loan growth has been 63% YoY.

RBL Bank is targeting MSME vendors and channel partners of large companies, which have strong cash flows and low delinquency. The Bank has deployed web tools for seamless information input and analytics for risk assessment. This has increased efficiency, reduced turnaround time (TAT) and will curb potential delinquencies in the near future.

Impact of our MSME Lending

A study1 carried out by International Finance Corporation and CDC Group Plc. on our retail SME loan portfolio has led to the following conclusion:

79% of clients reported an improvement in their business performance (proportionate to growth in sales, income and assets) in the two years following the loan.

Their income and sales grew by a CAGR of 10% and 9%, respectively, on an average.

Their assets grew by 7%, displaying their ability to invest in businesses after covering costs.

They exhibited an average annualised employment growth of 6%, translating into an estimated number of 10-15 direct annual jobs creation for every USD 10 Lakhs (~` 7 Crore) financed by us.

24% of new jobs were for women.


1 Kehoe, A. and Khanna, M., “SME Finance and Growth: Evidence from RBL Bank”. CDC. 2017.


RBL Bank Limited

E&S Risk Assessment ProcessBased on inherent risks, all transactions are classified as ‘High’, ‘Medium’ or ‘Low’ E&S risk.

All E&S risks are reviewed by the Business and Credit Risk Team.

‘High’ and ‘Medium’ risk transactions are reviewed (and approved) by the Bank’s dedicated E&S Risk Team.

‘Low’ E&S risk rated transactions are approved by our Regional Credit Risk Heads.

As part of risk assessment process, environmental risks, occupational health & safety risks, labour and community related risks and borrower’s internal risk management capacity are checked.

An integral part of the risk assessment process is development of risk mitigants or Corrective Action Plans (CAPs). We actively engage with clients to develop them.

Compliance with CAPs is monitored by the Relationship Manager (RM) and the Credit Administration Department (CAD), and the process is guided by the E&S Risk Team.

The team develops tools to facilitate risk assessment and also develops e-learning modules for training of Business and Credit Risk Teams. It also carries out face-to-face trainings.

46.7%*

RBL Bank’s gross total exposure qualified for E&S risk assessment

as on March 31, 2019.

*This is approx. 65% of gross wholesale exposure.

Environmental & Social Risk Assessment of Transactions

PerformanceAs on March 31, 2017 As on March 31, 2018 As on March 31, 2019

High 7.6% 5.6% 5.6%

Medium 28.7% 26.6% 27.7%

Low 14.5% 12.2% 13.4%

E&S applicable 50.8% 44.4% 46.7%

E&S not applicable* 49.2% 55.6% 53.3%

*Note: As exposure does not meet E&S risk assessment criteria, retail transaction etc.

What does E&S Risk Assessment Cover

RBL Bank is among the first Indian banks to have integrated Environmental & Social Management System in the credit risk assessment processes.

We follow a strict ‘Exclusion List’ as laid down by International Finance Corporation (IFC), and any transaction triggering the list is not financed.

All wholesale transaction having exposure greater than USD 1 Million (approx. ` 7 Crore) and tenure more than 12 months is eligible for E&S risk assessment.

Borrower’s Internal E&S Risk Management

Capacity

Labour and Community Related Risks

Environmental Risk

Occupational Health & Safety

Natural Capital

Our ESG framework has only evolved since its inception in FY 2012-13. As we became more comfortable and confident on our capability, we have always raised the bar and benchmarks on having a positive impact on the environment and on the lives of our stakeholders”

- Rajeev Ahuja, Executive Director


RBL Bank Limited

Sustainable Agri-Business InitiativesThrough our initiatives in Agri-Business, we provide sustainable solutions for farming issues across the nation.

The loans from GCPF are utilised for financing sustainable retail agri-businesses, which includes micro-irrigation, old pump set replacement, installation of solar pumps, and solar household installations.

Following are some of our Sustainable Agri-Business initiatives:

Micro-Irrigation and Drip IrrigationWe disburse small loans to farmers to adopt micro-irrigation and drip irrigation systems. These methods significantly reduce water consumption when compared to traditional flood irrigation.

Benefits of Drip Irrigation

Impact of RBL Bank’s Micro and Drip Irrigation Financing Activities

Estimated Water Savings

47% for Sugarcane

33% for Banana

5,352 HaTotal water saved by Sugarcane

farmers on account of drip irrigation loans disbursed by RBL Bank

6,470 MWhElectrical energy savings in

FY 2018-19

5,623 tCO2e Abated emission

Reduced CO2 Emissions Per Hectare

1 MT CO2e for Sugarcane

0.9 MT CO2e for Banana

Increased productivity by

30% for Sugarcane

Our focus on E&S risk assessment has shifted substantially since FY 2013-14. Resource efficiency, carbon emission intensity, and labour-related performance are considered the key indicators of the client’s E&S performance.

For an iron and steel manufacturing client in Odisha, one of the key E&S risks identified was resource consumption benchmarking with regards to water and power. A Corrective Action Plan (CAP) was suggested, which included conducting water and energy audit, but the cost of a comprehensive audit was prohibitive for the client.

We leveraged our long-standing partnership with Global Climate Partnership Fund (GCPF). They extended a technical assistance credit line of USD 20,000 for conducting water and energy audit. Confederation of Indian Industry (CII) – Godrej Green Business Centre was selected as the energy and water auditor. Two teams from CII conducted the audit between January and February 2019.

The audits have been conducted at no cost to the client. It helped in developing a business case for energy and water savings to the client. This case study demonstrates how E&S risk assessment can be a value driver and can also help increase client stickiness.

Estimated Water and Energy Savings

Water Savings

543 m3/day water savings potential @ ` 19.67 Lakhs cost savings per year

Energy Savings

722.6 tCO2e coal savings per year1,712.2 KW electricity savings per yearInvestment required ` 97 LakhAnnual cost savings ` 83.7 Lakh

Addressing Climate Change RiskClimate change is a critical risk of our times. No industry, infrastructure project, or service sector can claim to be completely insulated from its impact. At the same time, it is not possible to evaluate with a high degree of certainty the impact of climate change at an individual project level, given the limitation of data and tools used.

E&S Risk Assessment as a Sustainability Value Driver

Integrating Climate ChangeAll transactions eligible for our E&S risk assessment mandatorily use a probabilistic tool. This enables us to identify impairment in services/productivity during design and construction, operation and/or maintenance of the lifecycle of the project. The tool uses an ordinate scale to denote identified climate related risks. High-risk cases are flagged off to the concerned lenders.

Climate Change AssessmentFor water risk assessment, we make use of third-party GIS-based databases like the UN Food and Agricultural Organisation’s Aquamaps, World Wildlife Fund’s The Water Risk Filter, and World Resources Institute’s India Water Tool and Aqueduct Water Risk Tools. We also use various open source databases for energy and GHG emission benchmarking.

Auditing and BenchmarkingAs part of our E&S risk assessment, we insist on auditing and benchmarking resource usage, adoption of corrective measures and periodic disclosures. There is an immediate alert on transactions that are excessively dependent on natural resources.


RBL Bank Limited

137 tCO2eapprox. emission

9,700 tCO2eapprox. emission

61 tCO2eEmission from operation of

owned vehicles at Corporate Office, Mumbai; Head Office, Kolhapur; and Zonal Office,

Delhi.

~10%Increase in Scope 2

emission over FY 2017-18*

(On account of 10% addition in employee numbers and 22% increase in branches in FY 2019)

76 tCO2e Emission from operation of DG sets in Bank’s branches.

Performance

RBL Bank’s Own Environmental FootprintAs a part of our commitment to optimising our natural resource consumption, we constantly monitor our own environmental footprint. At present, we measure Scope 1 and Scope 2 CO2 emission and paper consumption.

Listed below are our efforts to rationalise and optimise natural resource consumption.

CO2 Emissions

Replacement of Old Pump Sets and Solar Installation at Farm or Household LevelWe provide financing options to farmers and retail customers, particularly in areas with irregular electricity supply, for solar energy operated equipment (solar pumps, solar panels etc.) at their farms and homes/offices respectively.

10,000+ Sustainable

Agri-Business Borrowers

6 Key crop growing farmers financed (Pomegranate,

Banana, Sugarcane, Chilli, Cotton, Tomato)

3 Targeted locations

(Western Uttar Pradesh, Maharashtra and Karnataka)

1.68 tCO2eEmission per full-time employee

~9,737 tCO2eGross total CO2 emission of the Bank

Scope 1Direct greenhouse gas emissions from DG set operations and plying of Bank’s own vehicles.

Scope 2Indirect upstream GHG emissions from purchased electricity.

For further details on our Sustainable Agri-Business Initiatives, please visit:https://www.gcpf.lu/news-detail/productivity-gains-a-piece-of-cake.htmlhttps://green-lending-forum.gcpf.lu/2018/04/11/climate-finance-in-agriculture/

Ensuring EfficiencyWe give loans to farmers for replacement of old pumps with new ones, resulting in better crop yield and energy efficiency.

4,246 MWh Total energy conservation in

FY 2018-19

3,541 tCO2e Abated in FY 2018-19

Up to 30% Reduction in energy consumption

Impact of RBL Bank’s Energy Efficient Water Pump Financing Activities

Impact of Loan Disbursement to 5,046 Households for Solar Home Solutions:

Benefits of Installing New Energy Efficient Pumps to Farmers

Scope 1 and Scope 2 emission

Marginal increase over FY 2018 emission of 1.66 tCO2e per full time employee (FTE)


RBL Bank Limited

Recycling of Paper and other Consumables

22,451 kgPaper consumed in FY 2018-19 at our

Corporate Office and National Operating Centre based in Mumbai.

3,489 kgTotal paper, cardboard and other packaging waste and plastics recycled from Corporate Office and National

Operating Centre. Recycling was done through Viagreen, a Mumbai-based environmental protection organisation.

1. CO2 savings assumed compare to 1 person’s return air travel from Mumbai to VC call destination e.g.: Delhi. Emission factors used- India GHG programme ‘India Specific Air Transport Emission Factor for passenger transport and material transport 2015’

2 Weighted Average Emission Rate (WAER) of 0.82 MTCO2e/MWh considered from Central Electricity Authority’s CO2 baseline database (http://www.cea.nic.in/reports/others/thermal/tpece/cdm_co2/database_14.zip)

3 Assuming all server visualisation has taken place at the beginning of the financial year and were operational 24x7 throughout the year. WAER of 0.82 MTCO2e/MWh considered from Central Electricity Authority’s CO2 baseline database (http://www.cea.nic.in/reports/others/thermal/tpece/cdm_co2/database_14.zip)

4 Calculation of notional savings basis the following assumptions: (a) power consumption by a thin client terminals assumed as 11 watt/hour compared to 63 watt/hour by a desktop PC, (b) TC terminal is operational 8 hour/day for 278 day/year, and (c) 100% thin clients are operational throughout the year. Source: https://www.comspace.de/en/news/specialist-topics/green-in-it-what-ways-to-save-energy-does-the-it-offer/. WAER of 0.82 MTCO2e/MWh considered from Central Electricity Authority’s CO2 baseline database (http://www.cea.nic.in/reports/others/thermal/tpece/cdm_co2/database_14.zip)

172 tCO2e2

Through 102 KWp of solar energy produced for branches in Sangli and Kolhapur, we were able to offset

171.2 tCO2e1 of emission.

214 tCO2e4

By adopting thin clients, the Bank has saved 261 MWh electricity in FY 2018-19, resulting in saving

of 214 tCO2e of emission.

34 tCO2e1

The Bank was able to offset 33.7 tCO2e of carbon emission during the year as a result of increased

adoption of video conference.

6,250 tCO2e3

Virtualisation of 1,450 servers led to savings of 7,260 MWh electricity, which potentially saved 6,250 tCO2e of

emission in FY 2018-19.

Carbon Emission Offset Mechanism



RBL Bank Limited

Notes Notes