IDFC First Bank Ltd

Dear Members,

Your Board of Directors (‘Board') are pleased to present the Annual Report of IDFC FIRST Bank Limited (‘IDFC FIRST Bank' or the ‘Bank') together with the Audited Financial Statements for the Financial Year (‘FY') ended March 31, 2025.

Since December 2018, the Bank has created a robust deposit franchise focused on retail deposits as well as launched many products to diversify and grow its balance sheet in a steady manner, while keeping the high standards of asset quality. The achievements during FY 2024-25 are mentioned below:

1. Growth in Funded Assets:

• Loans and Advances (including credit substitutes and net of IBPC) increased to R 2,41,926 crore as on March 31, 2025 by 20% YoY from R 2,00,965 crore as on March 31, 2024.

• The Bank has increased its corporate (non-infra) loan book by 32% to R 40,058 crore as on March 31, 2025.

Infrastructure financing reduced by 17% on a YoY basis and now constitutes less than 1% of total loans and advances as on March 31, 2025.

• In line with strategy to reduce the concentration risk, the Bank has further reduced its exposure to top 20 single borrowers from 6% as of March 31, 2024 to 4% as of March 31, 2025.

• Similarly, the Bank has maintained its exposure to top 5 industries stable at 20% as on March 31, 2025, which has further strengthened the balance sheet.

2. Growth in Retail Liabilities:

• The Bank is seen as a ‘high quality institution', with high focus on customer service, strong digital capabilities and high levels of corporate governance, attracting the customers to open an account with the Bank and enabling the Bank to grow deposits at a strong pace.

The total deposits including certificate of deposits increased by 26% YoY to reach R 2,52,065 crore as of March 31, 2025 from R 2,00,576 crore as of March 31, 2024.

• Customer Deposits of the Bank increased to R 2,42,543 crore as on March 31, 2025 as compared to R 1,93,753 crore as on March 31,

2024, YoY increase of 25%.

• The total CASA Deposits increased to R 1,18,237 crore as on March 31, 2025 from R 94,768 crore as on March 31, 2024, YoY increase of 25%.

• Average CASA Ratio for FY 2024-25 stood at 46.10% as compared to 45.58% for FY 2023-24.

Retail Deposits are now 79% of the overall customer deposits as of March 31, 2025, in line with the strategic priority to retailize the deposits.

• The Bank continues to run-down, the pre-merger legacy borrowings. It has reduced the dependence on certificate of deposits and is building a high-quality retail deposits franchise.

• The Bank maintained incremental credit to deposits ratio of only 76.11% in FY 2024-25.

3. Growth in Core Earnings:

• Healthy Net Interest Income (‘NII') Growth: For the full year, total NII increased by 17% to R 19,292 crore in FY 2024-25 from R 16,451 crore in FY 2023-24. The moderation in NII was attributable to decline in high-yielding microfinance portfolio.

• Net Interest Margin (‘NIM'): The NIM (NIM = Net Interest Income as a % of interest earning assets gross of IBPC and sell-down) for the full FY 2024-25 was at 6.09% as compared to 6.36% in FY 2023-24.

• Steady growth in Total Income (NII + Fees and Other Income + Trading Income): The total income for the full year increased by 17% to

R 26,314 crore in FY 2024-25 from R 22,453 crore in FY 2023-24.

• Stable Growth in Core Operating Profit (Operating Profit Net of Trading Gain): For the full year, the Core Operating Profit grew by 17% to R 7,069 crore in FY 2024-25 from R 6,030 crore in

FY 2023-24.

• Provision: For the full year, total Provisions stood at R 5,515 crore in FY 2024-25 as compared to R 2,382 crore in FY 2023-24.

• Profit After Tax: The Net Profit for the FY 2024-25 was R 1,525 crore as compared to R 2,957 crore in FY 2023-24.

4. Strong Asset Quality of the Bank:

During the year, the Bank's overall asset quality was impacted by the microfinance industry crisis.

• Bank's Gross NPA ratio as of March 31, 2025 stood at 1.87% as compared to 1.88% as of March 31,

2024.

Excluding the NPA in the micro financing book, the Gross and Net NPA of the Bank would be

1.63% and 0.47% and the Provision Coverage Ratio would be 71.26%, as of March 31, 2025.

• Bank's Net NPA ratio as of March 31, 2025 stood at 0.53% as compared to 0.60% as of March 31, 2024.

Provision Coverage Ratio was 72.26% as of March 31, 2025 as compared to 68.79% as of March 31,

2024.

5. Asset Quality on Retail, Rural & SME Finance Book:

• The Gross NPA % in the Retail, Rural and MSME finance book stood at 1.70% as of March 31, 2025 as compared to 1.38% as of March 31, 2024.

• Net NPA ratio of this segment stood at 0.62% as of March 31, 2025 as compared to 0.44% as of March 31, 2024.

Provision Coverage Ratio was 64.07% as of March

31, 2025 as compared to 68.18% as of March 31, 2024.

However, excluding the Microfinance portfolio, all other businesses in the retail, rural and commercial loan portfolio had a steady asset quality performance despite the credit normalization in the overall industry.

Excluding the microfinance book, the Gross NPA% of this book stood at 1.40% as of March 31, 2025 as compared to 1.39% as of March 31, 2024. The Net NPA% stood at 0.56% as of March 31, 2025 as compared to 0.46% as of March 31, 2024.

6. Strong Capital Adequacy:

• The Bank raised equity capital of ~ R 3,200 crore from set of Marquee investors through Preferential Placement in July, 2024.

• Capital Adequacy Ratio stood at 15.48% with

CET-1 Ratio at 13.17% as of March 31, 2025.

• In April 2025, the Bank announced plans to raise an additional R 7,500 crore via preferential allotment of Compulsorily Convertible Cumulative Preference Shares to support its next phase of growth.

7. Strong Franchise:

• As on March 31, 2025, the Bank has built a national footprint through the operation of 1,002 branches

(out of which 657 are Urban Branches and 345 are Rural Branches, reflecting an overall addition of 58 branches during FY 2024-25) across India,

274 asset outlets, 1,041 ATMs and 705 Corporate

Business Correspondent (‘BC') branches.

The Bank offers a wide gamut of products to cater to the needs of customers from all segments which can be viewed on our website at www.idfcfirstbank.com.

(Rin crore)

The Board, at its meeting held on April 26, 2025, has recommended a dividend of R 0.25 (2.50% of face value) per equity share of R 10 each, for the Financial Year ended March 31, 2025, subject to approval of the shareholders at the ensuing 11^th Annual General Meeting (‘AGM') of the Bank. In accordance with Regulation 43A of the Securities and Exchange Board of India [‘SEBI'] (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

(‘SEBI Listing Regulations'), our Bank has formulated a Dividend Distribution Policy, which ensures a fair balance between rewarding its members and retaining enough capital for the Bank's future growth.

This Policy is available on the Bank's website: www.idfcfirstbank.com under ‘Investors' ? ‘Other Investor Information' ? ‘Corporate Governance - Know More' ? ‘Policies' section.

The Board at its meeting held on July 03, 2023, had amongst others, approved the Composite Scheme of Amalgamation of IDFC Financial Holding Company Limited

(‘IDFC FHCL') into and with IDFC Limited, and amalgamation of IDFC Limited into and with IDFC FIRST Bank Limited, and their respective shareholders, under Sections 230 to

232 of the Companies Act, 2013 (‘Companies Act') and other applicable laws including the rules and regulations (‘Scheme'). Basis the approvals/ no-objections received from various regulatory and statutory authorities, as required in terms of applicable laws, the Hon'ble National Company Law Tribunal, Chennai Bench, Chennai (‘NCLT'), by its order dated March 22, 2024, directed the Bank, to inter-alia convene the meetings of its equity shareholders and Non-Convertible Debenture (‘NCD') holders, for the purpose of considering and approving the arrangement embodied in the Scheme. The equity shareholders and NCD holders of the Bank approved the Scheme at their respective meetings held on May 17, 2024. Subsequently, post filing of Company Scheme Petition, the NCLT vide its order dated September 25, 2024 sanctioned the Scheme under applicable provisions of the Companies Act and the rules made thereunder.

Pursuant to filing of the certified copy of the order of NCLT sanctioning the Scheme with the Registrar of Companies, Chennai (‘ROC'), the Scheme has become effective from October 01, 2024.

Pursuant to effectiveness of the Scheme, IDFC FHCL and IDFC Limited (Promoter of the Bank) stood dissolved without being wound-up and the Bank continues as a professionally managed entity with only public shareholders.

The necessary update on Amalgamation of Promoter with Bank is available on the website of the Stock Exchanges i.e. BSE Limited (‘BSE') and National Stock Exchange of India Limited (‘NSE') and on website of the Bank at www.idfcfirstbank.com under ‘Investors' ? Composite Scheme of Amalgamation with IDFC Limited

As on April 1, 2024, the Authorised Share Capital of the Bank was R 7538,00,00,000 comprising of 750,00,00,000 equity shares of face value of R 10 each and 38,00,000 preference shares of face value of R 100 each.

Pursuant to Scheme becoming effective, the authorized share capital of IDFC FHCL and IDFC Limited has been merged with the authorized share capital of IDFC FIRST Bank as per the Scheme. The authorized share capital of IDFC FIRST Bank stood increased to R 22905,10,00,000 comprising of 2186,71,00,000 equity shares of face value of R 10 each and 10,38,00,000 preference shares of face value of R 100 each.

In compliance with provision of Section 12(1)(i) of the Banking Regulation Act, 1949 (‘Banking Regulation Act'), the authorized share capital was reduced from

R22905,10,00,000 comprising of 2186,71,00,000 equity shares of face value of R 10 each and 10,38,00,000

preference shares of face value of R 100 each to R 14000,00,00,000 comprising of 1296,20,00,000 equity shares of face value of R 10 each and 10,38,00,000 preference shares of face value of R100 each. The authorized share capital remains same as on March 31, 2025.

Subsequent to FY 2024-25, the Board at its meeting held on

April 17, 2025, had approved re-classification of the aforesaid authorized share capital of the Bank to 1270,00,00,000 equity shares of face value of R 10 each and 130,00,00,000 preference shares of face value of R 10 each, subject to approval of Reserve Bank of India (‘RBI'), shareholders of the Bank and such other statutory/ regulatory approval as may be required.

Basis approval of the Board at its meeting held on May 30, 2024 and by virtue of special resolution passed by the shareholders of the Bank through postal ballot on June 29, 2024, the duly authorised Committee of the Board at its meeting held on July 04, 2024, approved the issue and allotment of 39,68,74,600 equity shares of face value of R 10 each to several marquee investors on a preferential basis, at an issue price of R 80.63 per equity share (including a premium of R 70.63 per equity share) aggregating to ~ R 3,200 crore (‘Preferential Issue').

The Bank has fully utilized the amount raised through Preferential Issue for the purpose for which it was raised. The Bank has also ensured to comply with all legal/ statutory guidelines and procedures with respect to the aforesaid Preferential Issue.

Pursuant to effectiveness of the Scheme, the duly authorised Committee of the Board at its meeting held on October 11, 2024, approved the allotment of 247,99,75,876 equity shares of face value of

R 10 each, in accordance with the share exchange ratio (i.e. 1.55:1) provided in the Scheme, to such eligible shareholders of IDFC Limited who were holding shares as on the Record Date.

Further, 264,64,38,348 equity shares held by IDFC Limited in the Bank (through IDFC FHCL) stood cancelled and hence, there was a corresponding reduction of 16,64,62,472 equity shares in the paid-up share capital of the Bank.

During FY 2024-25, 2,17,71,003 equity shares were issued and allotted to the eligible employees of the Bank pursuant to exercise of stock options granted under ‘IDFC FIRST Bank Limited Employee Stock Option Scheme 2015' (‘IDFC FIRST Bank ESOS – 2015').

As on March 31, 2025, the issued, subscribed and paid-up equity share capital of our Bank was

R 7322,10,69,840 comprising of 732,21,06,984 equity shares of face value of R 10 each.

Subsequent to the year under review and as on date of this report, the Bank has allotted 2,80,597 equity shares of face value of R 10 each to the eligible employees of the Bank pursuant to exercise of stock options granted under IDFC FIRST Bank ESOS – 2015. Post the said allotment and as on date of this report, the paid-up equity share capital of the Bank stands at R 7322,38,75,810 comprising of 732,23,87,581 equity shares of face value of R 10 each.

Our Bank has not issued any equity shares with differential voting rights.

The Board at its meeting held on April 17, 2025, has approved to issue, offer and allot up to 124,98,80,388 CCPS of face value of R10 each, convertible into equal number of equity share of face value of R10 each of the Bank, by way of preferential allotment on a private placement basis (‘Preferential Issue of CCPS'), to Currant Sea Investments B.V. and Platinum Invictus B 2025 RSC Limited, subject to the approval of the Shareholders of the Bank, RBI and other applicable regulatory approvals.

The necessary update on Preferential Issue of CCPS is/will be available on the website of the Stock Exchanges i.e. BSE and NSE and on website of the Bank at www.idfcfirstbank.com under ‘Investors' ? ‘Announcements'.

As of March 31, 2025, our Bank remains well capitalised, with a Capital Adequacy Ratio of 15.48% under Basel III norms, which is well above the RBI's minimum requirement of 11.50%. Bank's Tier-I Capital Adequacy Ratio stands at a robust 13.17%. During FY 2024 25, the Bank successfully raised ~ R 3,200 crore in fresh equity capital. Furthermore, in April 2025, the Bank has proposed to raise an additional equity of R 7,500 crore via preferential allottment of CCPS to support its next phase of growth.

This solid capital position reinforces the high level of trust and confidence our Bank enjoys across the Indian financial ecosystem, including capital market participants, depositors, and customers.

India presents significant growth potential as a rapidly expanding emerging economy with a vast, underpenetrated market of consumers and SMEs. Backed by a strong asset performance history stemming from the combined legacy of Capital First and IDFC Bank along with robust asset quality and a stable, granular liability franchise, our Bank is well-positioned to capitalize on future growth opportunities. Our Bank remains committed towards the interest of our depositors and shareholders, with continued focus on strengthening the balance sheet with robust asset quality and ensuring long-term financial resilience.

The details of credit ratings obtained by the Bank along with revisions thereto, during the FY 2024-25, for various debt

& financial instruments outstanding as on March 31, 2025, are disclosed in the Corporate Governance Report, forming part of this Annual Report.

The Bank has one wholly owned Subsidiary Company, namely IDFC FIRST Bharat Limited (‘IDFC FIRST Bharat'). IDFC FIRST Bharat is acting as a Business Correspondent for distribution of the products of IDFC FIRST Bank and has given an added momentum to the financial inclusion plan of the Bank.

During FY 2024-25, IDFC FIRST Bharat has sourced loans worth R 10,984 crore. IDFC FIRST Bharat reported a Profit

After Tax of R 9.46 crore for FY 2024-25.

IDFC FIRST Bank's policy for determining material subsidiaries is available on the Bank's website at www.idfcfirstbank.com under ‘Investors' ? ‘Other Investor Information' ? ‘Corporate Governance - Know More' ? ‘Policies' section.

The Bank has two Associate Company as on March 31, 2025, viz. Millennium City Expressways Private Limited and Jetpur Somnath Tollways Private Limited in which the Bank holds 29.31% and 26.00% equity stake respectively. The statement in Form AOC-1 containing the salient features of the financial statements of the Subsidiary and Associate

Company of the Bank, also forms part of this Annual Report and is appended as ANNEXURE 1 to this report.

In accordance with the provisions of Section 129(3) of the Companies Act read with Rule 8 of the Companies (Accounts) Rules, 2014, as amended, the Bank has prepared consolidated financial statements, which forms part of this Annual Report. In accordance with the fourth proviso to Section 136(1) of the Companies Act and Regulation 46(2)(s) of the SEBI Listing Regulations, the Annual Report of the Bank, containing standalone financial statements and the consolidated financial statements and all other documents required to be attached thereto are available on the Bank's website at www.idfcfirstbank.com under ‘Investors' ? ‘View All Annual Reports'.

Further, in accordance with the fifth proviso to the said section, the Annual Report of IDFC FIRST Bharat containing therein its audited financial statements has been hosted on the Bank's website at www.idfcfirstbank.com under ‘Investors' ? ‘View All Annual Reports'

All appointments/ re-appointments of Directors are made in accordance with the relevant provisions of the Companies Act and the rules framed thereunder, the SEBI Listing Regulations, the Banking Regulation Act and the rules, guidelines and circulars issued by the RBI, from time to time.

The Bank has in place a framework for Board Diversity, Fit &

Proper Criteria and Succession Planning for appointment of Directors on the Board of the Bank.

The Nomination and Remuneration Committee (‘NRC') conducts due diligence before appointment of Directors and ensures adherence to ‘Fit and Proper' criteria, as prescribed by the RBI.

The Policy on Board Diverstity and Directors appointment is available on the Bank's website: www.idfcfirstbank. com under ‘Investors' ? ‘Other Investor Information' ? ‘Corporate Governance - Know More' ? ‘Policies' section. Changes in the Board of the Bank during the FY 2024-25, are as follows:

Mr. Sanjeeb Chaudhuri (DIN: 03594427) was re-appointed as the Part-Time Non-Executive Chairperson (Independent), of the Bank for a second term with effect from August 25,

2024 up to May 09, 2027 (both days inclusive), subject to approval of RBI. The said re-appointment was approved by the RBI vide its letter dated June 14, 2024.

Mr. Pradeep Natarajan (DIN: 10499651) was appointed as the Whole Time Director, designated as an Executive Director and Key Managerial Personnel of the Bank, in terms of Section 203 of the Companies Act, for a period of three (3) consecutive years, commencing from June 01, 2024 up to May 31, 2027 (both days inclusive), basis the approval of

RBI vide letter dated May 16, 2024. The said appointment was approved by the shareholders of the Bank at the AGM held on August 30, 2024.

Mrs. Pankajam Sridevi (DIN: 06783360) was appointed as an Additional Director in the category of Independent

Director of the Bank, to hold office for her first term of four (4) consecutive years, commencing from September 27, 2024 up to September 26, 2028 (both days inclusive). The said appointment was approved by the shareholders of the Bank through Postal Ballot on December 17, 2024.

Mr. Uday Bhansali (DIN: 00363902) was appointed as an

Additional Director in the category of Independent Director of the Bank, to hold office for his first term of four (4) consecutive years, commencing from September 27, 2024 up to September 26, 2028 (both days inclusive). The said appointment was approved by the shareholders of the Bank through Postal Ballot on December 17, 2024.

Mr. Sudhir Kapadia (DIN: 05307843), was appointed as an Additional Director in the category of Independent

Director of the Bank, to hold office for his first term of four

(4) consecutive years, commencing from October 26, 2024 up to October 25, 2028 (both days inclusive). The said appointment was approved by the shareholders of the Bank through Postal Ballot on December 17, 2024.

Mr. V. Vaidyanathan (DIN: 00082596) was re-appointed as the Managing Director & Chief Executive Officer (‘MD & CEO') of the Bank, for a period of three (3) consecutive years, commencing from December 19, 2024 up to December 18,

2027 (both days inclusive), basis the approval of RBI vide letter dated September 19, 2024. The said appointment was approved by the shareholders of the Bank through Postal

Ballot on December 17, 2024.

Mr. Pradeep Natarajan (DIN: 10499651), Executive Director, whose office is liable to retire at the ensuing AGM, being eligible seeks re-appointment, in terms of the provisions of Section 152(6) of the Companies Act. The resolution for the said re-appointment will form part of the Notice of ensuing AGM.

Mr. Mahendra N. Shah (DIN: 00124629), ceased to be Non-Executive Non-Independent Director of the Bank, with effect from the close of business hours on August 29, 2024, upon completion of his term.

Dr. Jaimini Bhagwati (DIN: 07274047) joined the Board on

February 18, 2022, representing IDFC Limited. He tendered his resignation as Non-Executive Non-Independent Director of the Bank, with effect from the close of business hours on September 09, 2024, in view of the impending completion of the merger between IDFC Limited and IDFC FIRST Bank Limited.

Mr. Vishal Mahadevia (DIN: 01035771) tendered his resignation as Non-Executive Non-Independent Director of the Bank, with effect from the close of business hours on October 01, 2024.

Dr. (Mrs.) Brinda Jagirdar (DIN: 06979864), ceased to be

Independent Director of the Bank, with effect from the close of business hours on December 17, 2024, upon completion of her second term.

Brief profiles of all the Directors of the Bank are available on the Bank's website at www.idfcfirstbank.com under ‘About Us' ? ‘Board of Directors'.

None of the Directors of the Bank are disqualified in accordance with Section 164 of the Companies Act. Further, the Bank has received Secretarial Audit Report from M/s. Makarand M. Joshi & Co., Practicing Company

Secretaries, Bank's Secretarial Auditor, certifying that during the financial year under review, the Board of the Bank is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. Also, as per the SEBI Listing Regulations, the Bank has received certificate from M/s. Bhandari & Associates,

Practicing Company Secretaries that none of the Directors on the Board of the Bank as on March 31, 2025, have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other statutory authority.

As on the date of this report, in terms of Section 203(1) of the Companies Act, Mr. V. Vaidyanathan, MD & CEO, Mr.

Pradeep Natarajan, Executive Director, Mr. Sudhanshu Jain,

Chief Financial Officer & Head Corporate Centre, and Mr.

Satish Gaikwad, General Counsel and Company Secretary are the Key Managerial Personnel (‘KMP') of the Bank.

The Bank had received declaration from all the Independent Directors (‘IDs'), at the time of appointment and also at the first meeting of the Board held in FY 2024-25, that they meet the criteria of independence specified under sub-section (6) of Section 149 of the Companies Act, read with

Rule 5 of the Companies (Appointment and Qualification of

Directors) Rules, 2014, as amended and Regulation 16(1) (b) of the SEBI Listing Regulations, for holding the position of ID and that they shall abide by the ‘Code for Independent Directors' as per Schedule IV of the Companies Act. There has been no change in the circumstances affecting their status as Independent Director. In the opinion of the Board, the IDs possess the requisite integrity, experience, expertise and proficiency required under all applicable laws and the policies of the Bank.

Further, all the IDs of the Bank have complied by Rule 6 (Compliances required by a person eligible and willing to be appointed as an independent director) of the Companies

(Appointment and Qualification of Directors) Rules, 2014, as amended, and have also declared their enrolment in the databank of Independent Directors maintained by Indian Institute of Corporate Affairs.

At the time of appointment, all Directors of the Bank are formally inducted through a structured orientation programme designed to acquaint them with their roles, responsibilities, rights, and duties. This induction also includes a succinct overview of the Bank's operational framework.

To facilitate a deeper understanding of the Bank's governance structure and internal practices, Directors are provided with a comprehensive set of documents and policies. These include, inter-alia, the Board Committees Chart, the Code of Conduct for Directors, the Code for Prohibition of Insider Trading, the Policy on Related Party Transactions, and details pertaining to the remuneration of Non-Executive Directors by way of sitting fees and remuneration. Furthermore, Directors are familiarized with

Bank's website to access historical financial results, annual reports, investor presentations, the Bank's Memorandum and Articles of Association, and other pertinent regulatory documents.

The Directors of our Bank are given opportunity to select and participate in professional development programmes conducted by reputed institutions such as the Centre for Advanced Financial Research and Learning, the Institute for Development and Research in Banking Technology, and the Indian Institute of Corporate Affairs among others.

In addition, comprehensive presentations are made at meetings of the Board and its Committees on a periodic basis. These presentations cover a wide range of topics including the Bank's financial and operational performance, strategic initiatives, macroeconomic and industry developments, regulatory updates, risk management practices, and the evolving fiduciary responsibilities of Directors. Throughout the financial year, the Board and its Committees were regularly apprised of key developments through detailed presentations and discussions, thereby ensuring that Directors remain well-informed and are able to discharge their duties effectively.

The Board met eight (8) times during FY 2024-25, i.e. on

April 27, 2024, May 30, 2024, July 27, 2024, September 27, 2024, October 26, 2024, November 25, 2024, January

25, 2025 and March 26, 2025, details of which alongwith attendance are given in the Corporate Governance Report, forming part of this Annual Report.

In compliance with various regulatory requirements, several Board-level Committees have been constituted to delegate matters that require greater and more focused attention. Details on the constitution, brief terms of reference, meetings held and attendance of all the Board-level Committees are given in the Corporate Governance Report forming part of this Annual Report.

The Bank has formulated and adopted the Remuneration Policies for the (i) Non-Executive Part-Time Chairman and Non-Executive Directors; (ii) Whole Time/ Executive Directors, Material Risk Takers, Key Managerial Personnel, Senior Management Personnel and Control Function and all other employees; (‘Remuneration Policies'), in terms of the relevant provisions of the Companies Act and rules made thereunder, SEBI Listing Regulations, Banking Regulation Act and the RBI guidelines issued in this regard, from time to time.

During the year, the Remuneration Policies were reviewed and approved by the NRC and the Board.

The Remuneration Policies have been hosted on the website of the Bank at www.idfcfirstbank.com under ‘Investors' ? ‘Other Investor Information' ? ‘Corporate Governance - Know More'?‘Policies' section.

Remuneration Policy - (For Non-Executive Part-Time Chairman and Non-Executive Directors) Remuneration Policy - (For the Whole Time/ Executive Directors, Material Risk Takers, Key Managerial Personnel, Senior Management Personnel and Control Function and all other employees) All the Non-Executive Directors are paid sitting fees for attending meetings of the Board and its Committees, which are determined by the Board based on applicable regulatory provisions. Further, expenses incurred by them for attending meetings of the Board and Committees in person are reimbursed at actuals.

Pursuant to the relevant RBI guidelines and approval of the members, for FY 2024-25, a fixed remuneration of R 26 lakh p.a. was paid to each of the Non-Executive Directors of the Bank on a proportionate basis, other than the Chairperson of the Bank, who was paid R 30 lakh p.a. on a proportionate basis. Mr. Vishal Mahadevia and Mr. Mahendra N. Shah, Non-Executive Non-Independent Director(s), opted not to receive any fixed remuneration and sitting fees from the

Bank, during their tenure with the Bank.

The Bank has formulated and adopted a CSR Policy which provides the focus areas (in accordance with Schedule VII of the Companies Act) under which various developmental initiatives are undertaken. The CSR Policy is available on the Bank's website at www.idfcfirstbank.com under ‘Investors'

? ‘Other Investor Information' ? ‘Corporate Governance - Know More'?‘Policies' section.

The CSR initiatives of the Bank in FY 2024-25 were implemented directly or through various implementation agencies/ partners. In order to achieve impact and scale, the CSR activities undertaken during the year mainly focused on areas: [a] Livelihoods & Entrepreneurship, [b] Education, [c] Environment [d] Others.

In terms of the Section 135 of the Companies Act, the Bank was required to spent R 42.40 crore in FY 2024-25, subject to set-off amount available from previous financial years.

The Bank has spent R 31.90 crore (including R 0.04 crore spent out of surplus/interest from previous year and net of refund of R 0.03 core from previous years) based on its commitment to CSR programs for the FY 2024-25.

The Annual Report on CSR activities and details of amount spent by the Bank during FY 2024-25, in accordance with the CSR Rules, is attached as ANNEXURE 2 to this report.

Our Bank fosters a strong risk culture across the organization, aimed at enhancing resilience through a balanced approach to risk and return, and effective management of capital and reputation. The Bank has established a robust risk governance framework aligned with its Board-approved Risk Appetite Statement. The Board is responsible for the oversight of risk management, supported by the Risk Management Committee (‘RMC') and various management-level committees. The RMC reviews key risk areas including credit, market, liquidity, operational, and information security risks, and oversees frameworks such as ICAAP and stress testing to ensure preparedness for adverse scenarios. Our Bank has put in place a Board approved Risk Management Policy. The Policy aims at establishing a risk culture and governance framework to enable identification, measurement, mitigation and reporting of risks within the Bank in line with the Bank's risk appetite, risk - return trade-off and an escalation & accountability framework.

Having a comprehensive risk management framework in the Bank including well-articulated risk appetite statements, polices and robust stress testing program facilitates our Bank to manage any potential susceptibility to extreme but plausible business risks. Through proactive risk assessment frameworks & risk mitigation techniques, our Bank has built adequate Capital and Liquidity buffers through diversified granular funding profile, including ensuring business continuity during stressed conditions.

The strong Tier-I capital position of the Bank is a source of competitive advantage and provides assurance to regulators, credit rating agencies, depositors, and shareholders. Capital management practices are designed to maintain a risk reward balance, while ensuring that businesses are adequately capitalized to absorb the impact of stress events. Our Bank has continued to proactively work on the resolution of the legacy stressed asset portfolio and has further reduced the position. Our Bank has also de-risked the portfolio by diversifying the credit portfolio and focusing more on granular exposures. The Bank has been continuously working towards ensuring that the asset growth is funded by diversified & granular stable funds, is adequately capitalized and asset quality is maintained within acceptable thresholds.

The Bank has adequate internal controls and processes in place with respect to its financial statements that provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications which also ensure the orderly and efficient conduct of the Bank's business, including adherence to Bank's policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The controls and processes are being reviewed periodically. The Bank has a mechanism of testing the controls and processes at regular intervals for their design and operating effectiveness to ascertain the reliability and authenticity of financial information.

The Bank has always been committed to good corporate governance practices, including matters relating to the Related Party Transactions (‘RPTs'). All the RPTs that were entered into during the financial year were on an arm's length basis and were in ordinary course of business. Transactions entered into by the Bank with related parties in the normal course of its business were placed before the Audit Committee of the Board (‘ACB'). Prior omnibus approval for normal banking transactions is also obtained from the ACB for the RPTs which are repetitive in nature as well as for the normal banking transactions which cannot be foreseen. A statement giving details of all RPTs, entered pursuant to the omnibus approval so granted, is placed before the ACB for their review.

In terms of Regulation 23(9) of the SEBI Listing Regulations, the Bank submits the disclosure of RPTs, in a prescribed format, on half yearly basis to the Stock Exchanges. There were no transactions entered into individually or taken together with the previous transactions during the financial year with related parties, which were not in the normal/ ordinary course of the business of the Bank, nor were there any transactions with related parties or others, which were not on an arm's length basis. Hence, pursuant to Section 134(3)(h) of the Act, read with Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended, there are no RPTs to be reported under Section 188(1) of the Act. Hence, Form AOC-2 is not applicable to the Bank.

The Bank has not entered into any material financial or commercial transactions with its subsidiaries and other related parties as per Accounting Standard - 18 and the

SEBI Listing Regulations that may have potential conflict with the interest of the Bank at large.

During FY 2024-25, the Bank had entered into a material related party transaction in terms of SEBI Listing

Regulations with Goldman Sachs (India) Capital Markets Private Limited, in the ordinary course of business and on arms-length basis. The details in this respect is provided in the Corporate Governance Report forming part of this Annual Report.

Pursuant to the provisions of the Companies Act and the rules made thereunder, SEBI Listing Regulations and in the back-drop of the Bank's philosophy on such matters, the Bank has in place a Board approved policy on related party transactions. The said policy is also uploaded on the Bank's website at www.idfcfirstbank.com under ‘Investors'

? ‘Other Investor Information' ? ‘Corporate Governance - Know More' ? ‘Policies' section.

The Bank since its inception has put in place a robust Information/ Cyber Security Framework. The Bank has Information Security woven into its banking platform and seamlessly merges both culturally and technologically. The Bank has strategically invested in a diverse team comprising security partners, subject matter experts (SMEs), specialist teams, and robust processes to orchestrate, construct, manage, and oversee the Information Security operations of the Bank.

The Bank has put in place state of the art security technologies including several industries ‘firsts' technology solutions and adopted ‘defence in depth' approach & industry best practices as part of its security framework and architecture.

This year, while continuing its journey to mature its posture, Bank's focus will include new age threat mitigations and continue improving its deployment posture of the technologies invested in the previous years.

Bank continued to maintain and upkeep its compliance posture to standards such as ISO 27001 ISMS (Information

Security Management System), PCI DSS (Payment Card Industry Data Security Standard) and regulatory requirements. Given the changing threat landscape, the attempt is to progressively move towards maturity of proactive and adaptive platforms for automated detection, response, recovery and resilience.

The Board members carries out an annual evaluation of the Board, Board Committees, and Individual Directors, including Chairperson, pursuant to the provisions of the Companies Act and the SEBI Listing Regulations.

The evaluation brings out the cohesiveness of the Board, a Boardroom culture of trust and co-operation, and Boardroom discussions which are open, transparent and encourage diverse viewpoints. Other areas of strength includes effective discharge of Board's roles and responsibilities.

The detailed process indicating the manner in which the annual evaluation has been carried out pursuant to the SEBI Listing Regulations and Companies Act, is provided in the Corporate Governance Report, which forms part of this Annual Report.

The Management Discussion and Analysis Report for the year under review, as required by Regulation 34(2)(e) of the SEBI Listing Regulations, forms part of this Annual Report.

Your Directors are committed to achieve the highest standards of Corporate Governance. A separate section on Corporate Governance standards followed by our Bank and the relevant disclosures, as stipulated under the SEBI Listing Regulations, Companies Act, and rules made thereunder forms part of this Annual Report.

A certificate from the Secretarial Auditors of the Bank, M/s. Makarand M. Joshi & Company, Practicing Company Secretaries, confirming compliance to the conditions of

Corporate Governance as stipulated under the SEBI Listing Regulations is enclosed in the Corporate Governance Report and forms part of this Annual Report.

A certificate issued by Mr. V. Vaidyanathan, MD & CEO and Mr. Sudhanshu Jain, Chief Financial Officer & Head - Corporate Centre of the Bank, in terms of Regulation 17(8) of the SEBI Listing Regulations, for the year under review was placed before the Board and forms part of this Annual Report.

Pursuant to the requirement under Section 134(5) of the

Companies Act, it is hereby confirmed that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the

Bank as on March 31, 2025 and of the profit of the

Bank for that period;

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

d. the Directors had prepared the annual accounts on a going concern basis; e. the Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

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

Being a Banking Company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, as amended, read with Sections 73 and 74 of the

Companies Act, are not applicable to our Bank.

As per the applicable provisions of the Banking Regulation Act, details of the Bank's deposits have been included under Schedule 3 - Deposits, in the preparation and presentation of the financial statements of the Bank.

Pursuant to Section 186 (11) of the Companies Act, the provisions of Section 186 of the Companies Act, except sub-section (1), do not apply to a loan made, guarantee given, or security provided, or any investment made by a banking company in the ordinary course of business. The particulars of investments made by the Bank are disclosed in Schedule 8 - Investments of the Financial Statements as per the applicable provisions of the Banking Regulation.

The Bank is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act.

During the year under review, no instances of fraud committed against the Bank by its officers or employees were reported by the Statutory Auditors and Secretarial Auditors under Section 143(12) of the Companies Act to the ACB or the Board.

The details of provisioning pertaining to Fraud Accounts during the year under review are provided in Note No. 18.05(g) to the Standalone Financial Statements as at March 31, 2025.

The Business Responsibility and Sustainability Report, in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, describing the initiatives taken by IDFC FIRST Bank from an environmental, social and governance perspective is hosted on the Bank's website at www.idfcfirstbank.com under ‘Investors' ? ‘View All Annual Reports' and constitutes a part of this Annual Report. Further, in terms of the said regulation, the Bank will obtain reasonable assurance on

BRSR Core from TUV India Private Limited (‘TUV'). The assurance statement issued by TUV will form part of the

BRSR provided on the website.

Our Bank's ESG approach primarily straddles three key priorities. These include integrating ESG into the Bank's products and services; building a culture of sustainability within the organisation; and driving initiatives that can create large-scale impact. Towards this extent, the Bank has introduced products such as electric vehicles financing and green deposits for customers; engaged its employees with dedicated ESG sessions; and have taken initiatives that can further the sustainability imperative. These efforts continue to scale, under the guidance from the Bank's

Corporate Social Resposiblitity & ESG Committee. The Bank is also an official participant of the United Nations Global

Compact. As a result of its ESG strategy and initiatives, the Bank continues to be scored by several external ESG rating agencies, across which it has seen progressively improving performance.

Detailed initiatives taken for environmental management and conservation of energy have been mentioned in the Annual Report and Business Responsibility and Sustainability Report, which are hosted on the Bank's website at www.idfcfirstbank.com under ‘Investors' ? ‘View All Annual Reports'.

Also, our Bank has been increasingly using information technology in its operations, for more details, please refer Management Discussion and Analysis Report, which forms part of this Annual Report.

Further, Foreign Exchange earnings and outgo are part of the normal banking business of the Bank.

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status or the operations of the Bank.

During the year under review, there has been no change in the nature of business of the Bank.

There are no material changes and commitments, affecting the financial position of the Bank between the end of the financial year of the Bank i.e. March 31, 2025 and the date of the Board Meeting in which the Directors' Report was approved i.e. April 26, 2025.

In compliance with regulatory guidelines, Mr. Ramesh Garimella is appointed as the Internal Ombudsman of the Bank, to enhance our Bank's customer grievance redressal mechanism and to improve service delivery.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is appended as ANNEXURE 3 to this report.

In terms of Section 197(12) of the Companies Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of this Annual Report and any member interested may obtain the said statement by writing to the Company Secretary of the Bank. In accordance with the provisions of Section 136(1) of the Companies Act, the Annual Report excluding the aforesaid information, is being sent to the members of the Bank and others entitled thereto.

The Employee Stock Option Scheme (‘IDFC FIRST Bank ESOS - 2015'/ ‘ESOS') was framed with an object of encouraging higher participation on the part of employees in the Bank's growth and success. An effective stock option scheme enables retention of talent and aligning employee interest to that of the shareholders.

There were 17,85,41,835 stock options outstanding at the beginning of FY 2024-25. During FY 2024-25, 7,34,41,368 stock options were granted to the eligible employees under IDFC FIRST Bank ESOS - 2015.

Further, 1,45,05,455 stock options had lapsed/forfeited and 2,17,71,003 stock options were exercised during the year ended March 31, 2025. Accordingly, 21,57,19,318 stock options remained outstanding as on March 31, 2025. All stock options vests in a graded manner and are required to be exercised within a specific period in accordance with

IDFC FIRST Bank ESOS - 2015 and SEBI (Share Based

Employee Benefits and Sweat Equity) Regulations, 2021

[‘ SEBI (SBEB & SE) Regulations'].

There has been no material change in IDFC FIRST Bank ESOS - 2015 during FY 2024-25 and the said IDFC FIRST

Bank ESOS - 2015 is in compliance with the SEBI (SBEB &

SE) Regulations.

The details and disclosures with respect to ESOS as required under SEBI (SBEB & SE) Regulations and circulars issued thereunder, have been uploaded on the Bank's website www.idfcfirstbank.com under ‘Investors' ? ‘View All Annual Reports'.

Further, disclosure as per the ‘Guidance Note on Accounting for Employee Share-based Payments' issued by the Institute of Chartered Accountants of India, are appearing under the Note 18.24 to the Standalone Financial Statements of IDFC FIRST Bank, forming part of this Annual Report.

The Reserve Bank of India vide its Circular No. RBI/2021-22/25 Ref. No. DoS.CO.ARG/ SEC.01/08.91.001/2021-

22 dated April 27, 2021, had issued the Guidelines for

Appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs) of Commercial Banks (excluding RRBs),

UCBs and NBFCs (including HFCs) (‘RBI Guidelines'). Pursuant to the RBI Guidelines, the Bank is required to appoint at least two (2) Joint Statutory Auditors, considering its asset size (i.e. more than R15,000 crore). Accordingly, the Members at their 8^th AGM of the Bank held on August

5, 2022, had approved the appointment of Kalyaniwalla &

Mistry LLP, Chartered Accountants (Firm Registration No.

104607W/W100166) as one of the Joint Statutory Auditors of the Bank, for a period of 3 years, i.e. from the conclusion of 8th AGM until the conclusion of the 11^th AGM.

Also, pursuant to expiry of term of MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W), the Members at their 10^th AGM of the Bank held on August 30, 2024, had approved the appointment of M/s. M.P.

Chitale & Co., Chartered Accountants (Firm Registration No.

101851W) as one of the Joint Statutory Auditors of the Bank, for a period of 3 years, i.e. from the conclusion of 10^th AGM until the conclusion of the 13^th AGM.

In terms of RBI Guidelines, the appointment of M/s. M.P.

Chitale & Co., is subject to it satisfying the eligibility norms and approval of the RBI, each year. Accordingly, the Board of Directors of the Bank recommends to RBI for approval, the appointment of M/s. M.P. Chitale & Co., Chartered

Accountants, for its second year, as one of the Joint Statutory Auditor.

Since Kalyaniwalla & Mistry LLP, Chartered Accountants would be completing 3 years of continuous association with the Bank at the conclusion of the 11^th AGM, which is maximum permitted tenure as per RBI Guidelines, the Bank is required to appoint a new Joint Statutory Auditor in place of Kalyaniwalla & Mistry LLP, Chartered Accountants.

Accordingly, the Bank is in the process of identifying the

Statutory Auditor in place of Kalyaniwalla & Mistry LLP.

Further, in terms of the provisions of Section 139 of the Companies Act, the appointment of Statutory Auditors is subject to approval of Members. Accordingly, the proposal of appointment of one of the Joint Statutory Auditor in place of Kalyaniwalla & Mistry LLP will be placed before the

Members of the Bank at the ensuing AGM for their approval and would be forming part of the AGM Notice.

There were no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditors in their report for the financial year ended March 31, 2025.

Pursuant to the provisions of Section 204 of the Companies Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the Bank had appointed M/s. Makarand M. Joshi

& Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Bank for the financial year ended

March 31, 2025.

There were no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors in their report for the financial year ended March 31, 2025. The

Secretarial Audit Report is appended as ANNEXURE 4 to this report. Further the report is self explanatory.

Further, pursuant to the provision of SEBI Listing Regulations, the proposal for appointment of Secretarial Auditors of the Bank will be placed before the Members of the Bank at the ensuing AGM for their approval and would be forming part of the AGM Notice.

Our Bank has established a robust and well-structured process for conducting concurrent audits across key functions and processes, including treasury, trade finance operations, retail and wholesale banking operations, information technology, SWIFT, office accounts etc., in line with the extant regulatory guidelines. The audits are executed by empanelled, renowned Chartered Accountant

/ CERT-IN certified firms. The key findings from these audits are presented to the ACB of the Board on a periodic basis.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, the Annual Return as on March 31, 2025 is available on the Bank's website www.idfcfirstbank.com under ‘Investors' ? ‘View All Annual Reports'

Disclosures in relation to Whistle Blower Policy and Vigil Mechanism forms part of Corporate Governance Report.

Our Bank has complied with the provisions relating to constitution of Internal Committee to investigate and inquire into sexual harassment complaints in line with ‘The Sexual Harassment of Women at Workplace (Prevention, Prohibition

& Redressal) Act, 2013'.

Our Bank has in place a policy on Anti-Sexual Harassment, which reflects the Bank's zero-tolerance towards any form of prejudice, gender bias and sexual harassment at the workplace. Our Bank undertakes ongoing trainings to create awareness on this policy.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 forms part of Corporate Governance Report.

During the year under review, our Bank was recognized in various ways and the significant awards presented to our

Bank are listed below:

• IDFC FIRST Bank wins FE India's Best Banks Award for best ‘Savings Product'

• IDFC FIRST Bank wins The Great Indian Corporate Communication Team of the Year in Banking Award

• Automobile Lending Initiative

• Digital Consumer Banking Initiative of the Year – India

• Financial Inclusion Initiative of the Year – India

• The Brandon Hall Group recognizes IDFC FIRST Bank for its Candidate Onboarding experience

• IDFC FIRST Bank wins the Best Mid-Sized Bank Award

• Capital Finance International recognizes IDFC FIRST Bank for the Best Mobile Banking App 2024

• IDFC FIRST Bank wins the International Banker Award for the Best Innovation in Retail Banking India

• IDFC FIRST Bank has been honored with the Award for Best Bank for Creating Awareness among MSMEs, (Private Sector) by the Chamber of Indian Micro and Small Enterprises (CIMSME)

• IDFC FIRST Bank has been honored with the Jury Special Award for Supporting MSMEs

• IDFC FIRST Bank wins the Best MSME Friendly Bank (Private Sector) Award

• IDFC FIRST Bank has been recognized as India's

Leading Private Bank (Mid) at Dun & Bradstreet's BFSI & Fintech Summit 2025

• IDFC FIRST Bank wins the Best Private Sector Bank Award

• IDFC FIRST Bank wins Best Private Sector Bank by M1 TReDS Exchange

To support the ‘Green Initiative', the members who have not updated their e-mail addresses are requested to update the same with their respective Depository Participants (‘DPs'), in case shares held are in electronic form or communicate their e-mail address to the Registrar and Share Transfer Agent i.e. KFin Technologies Limited or to the Bank, in case shares are held in physical form, so that future communications can be sent to members in electronic mode. Note on Green Initiative forms part of the 11th AGM Notice.

Your Directors would like to place on record their gratitude for all the guidance and co-operation received from the Reserve Bank of India and other government and regulatory agencies. The Board would also like to take this opportunity to express appreciation to its valued customers for their continued patronage and to the members of the Bank for their continued support.

Your Directors sincerely acknowledge the commitment and hard work put in by all employees of the Bank through its transformational journey. Their valuable contribution has enabled the Bank to make significant progress towards building a great institution.