was an FY20 important in milestone as the journey the Bank was with conferred the Scheduled Status.

Dear Friends,

FY20 was a year of many milestones for the Bank. In the quest for building a best in class bank, the Bank registered impressive growth in all key financial and operating metrics during FY20.

STAKEHOLDER SYNERGY IS KEY

An important variable in this growth journey is the support of the key stakeholders and it is heartening to note that the Bank has benefitted from the undaunting support of the Board, the resolute leadership of the management team and the constructive confidence of the shareholders. This well-aligned trio of board, management and shareholders has helped the Bank establish its position as a customer-centric, digital-first and good-governance oriented institution. As a result, the Bank enjoys the goodwill of the regulator, other statutory bodies, customers, vendors, and the society at large.

BUSINESS MATRIX

At the onset, let me make a mention of the overall performance. I am pleased to share that the Bank's total business grew to D9,996 Crore during the year under review. The Bank expanded geographical reach across 19 states and Union Territories through a network of 711 banking outlets. The Bank's net NPAs stood at 0.41% in FY20 showcasing the effectiveness of the Bank's robust processes and business practices.

FY20 was an important milestone in the Bank's journey. In the first quarter of FY20, Fincare Small Finance Bank was included in the Second Schedule to the Reserve Bank of India Act, 1934, published in the Gazette of India. I consider this to be an inflection point for the Bank as it expands its lines of funding and liquidity.

Consequent to the scheduled status, the Bank could issue certificates of deposits and get access to interbank borrowings at competitive interest rates, enabling it to bring down its cost of funds. It also managed to get deposits from new sources such as government, public sector undertakings, corporate, mutual funds, insurance companies and other market participants. This status also enabled the bank to lend funds vide Reverse Repo and

TREPS (Tri-Party Repo) which helped the Bank in efficient liquidity management. I believe that this will go a long way in sustaining the Bank's growth momentum over the coming years.

POWER OF MORE

The ‘Power of More' has been the driving force of the Bank as it builds a strategy for the future. The ecosystem of products, processes and channels of the Bank is built around this credo. The quest for More continues to power the team to ideate and implement products and services that address the growing needs and aspirations of our customers. On the ground, the Bank launched products such as Affordable Housing Loan, Two-Wheeler Loan – which are particularly relevant for its customers. The response to these additions has been heartening.

During FY20, the Bank has made significant progress in the technology and digital space to enable speed, convenience and access to banking services for customers. During the year several initiatives such as UPI, Bill Pay, WhatsApp Banking, Website Chat Bot and inhouse developed tab-based, digitized loan origination and loan collection applications such as mCare and mServe saw light of the day, instantly putting the Bank on the digital banking leadership map. Several of these innovations received accolades from the external world as well.

1. Agency Banking Channel: Added to add greater reach to the Rural Banking vertical. This allowed the Bank to deepen its presence in rural locales.

2. Aadhaar enrolment and updation services: Launched at designated branches across India. This initiative provides greater convenience to the customers.

3. Self Service Portal (SSP): Introduced on mobile banking platform and web portal. This initiative shall enable transition for customers from assisted banking model to self- banking model.

4. WhatsApp Banking: Launched in order to connect with the customers through the popular social media application. The Bank also introduced banking services via a multilingual conversational BOT on WhatsApp, multilingual ATM screens and multilingual Mobile App.

5. Financial Inclusion: Financial

Inclusion is the fulcrum of the business and is evident in the fact that Microloans constituted more than 80% of the Bank's Gross Loan portfolio and empowered 19 Lakhs women borrowers by opening their Bank accounts.

6. Scaling up Automation:

The Bank took multiple automation initiatives during the year and leap frogged further in its automation journey. Many of the internal systems such as P&L statement are fully automated.

LOOKING AT TOMORROW

The year FY21 may be a bumpy ride for many businesses due to the Covid-19 pandemic. Such trying time calls for a concerted effort and immense confidence in order to stay the course. I know that the Bank is made up of very resilient matter and a very passionate family of Fincarers, strong enough to cross the hurdle.

The Bank will continue to invest in nurturing its intellectual capital, increasing its product and service offering and building the digital strength in order to scale newer heights in the years to come.

In the next few months, our focus will be on ensuring safety and well-being of our staff as well as connecting with our customers and supporting them in re-building their livelihood and income.

We also remain committed to ensure the highest standards in customer-centricity, compliance, fairness and transparency in our business activities. Lastly, we remain firm in our mission to support the financial inclusion of low-income households in rural and semi-urban India through the active participation of the more a_uent customer segments.

As we continue the journey of being better by doing more every day, I would like to take this opportunity to thank all the investors, stake holders, and valued customers, for their continued belief and support provided throughout our journey.

Without your faith in us, this journey could never be so rewarding. I solicit your continued support.