Your Board of Directors (the “Board”) have pleasure in
presenting you the 105^th Annual Report of CSB Bank
Limited (“CSB Bank/ the Bank”) together with the Audited
Financial Statements, Independent Auditors' Report and
the Report on the business and operations of the Bank for
the financial year ended March 31, 2026.

FINANCIAL PERFORMANCE AND STATE OF THE BANK’S
AFFAIRS

The financial highlights of the Bank for the financial year
under review, are presented below:

PERFORMANCE OVERVIEW

During the period under review, your Bank continued to
deliver sound performance across most key parameters,
notwithstanding a challenging external environment
characterised by tight systemic liquidity, elevated cost of
funds, global market volatility, and sector specific stress in
certain portfolios. The Bank's growth trajectory remained
steady and clearly discernible, with several key business,
operational and financial metrics reflecting robust growth.
The Bank achieved a total business of ' 84,605 crore,
supported by strong growth in advances and overall
deposits, notwithstanding moderation in CASA deposits.
The Bank also demonstrated consistent performance
across its core operating segments and successfully
achieved its topline growth targets. However, the bottom¬
line performance was marginally below expectations,
primarily on account of prevailing liquidity constraints in
the system, sectoral stress, and higher slippages.

In the Financial year 2025-26, the total income grew by ' 1,113
crore to ' 5,682 crore from ' 4,569 crore in the corresponding
previous financial year. During the same period, Interest
Income increased by ' 908 crore to ' 4,505 crore from ' 3,597
crore and Non-Treasury Other Income increased by ' 246
crore to ' 1,100 crore from ' 853 crore in the corresponding
previous financial year. During the same period, Net Treasury
Income decreased by ' 35 crore to ' 86 crore from ' 121 crore
in the corresponding previous financial year.

In the same period, the total Operating Profit of the
Bank increased by ' 175 crore to ' 1,085 crore from
'910 crore and Net Profit increased by ' 39 crore to
' 633 crore from ' 594 crore in the corresponding previous
financial year. The growth in profitability was supported by
robust non-interest income, comprising processing fees,
commissions from distribution of third-party products,
charges on deposit accounts, and income from sale of
Priority Sector Lending Certificates (PSLCs).

In the same period, the Bank's gross advances grew by
' 8,517 crore to ' 40,359 crore led by 53% growth in gold
loans to ' 21,567 crore from ' 14,094 crore, 37% growth in
corporate loans to ' 9,979 crore from ' 7,274 crore and 3%
growth in SME/MSME to ' 4,350 crore from ' 4,241 crore.
In the same period, the Deposits grew by ' 7,384 crore to
' 44,246 crore from ' 36,862 crore in the corresponding
previous financial year.

Gross non-performing assets (GNPAs) increased by ' 172
crore to ' 670 crore as on March 31, 2026 from ' 498 crore
as on March 31, 2025. Net non-performing assets (Net
NPAs) decreased by ' 6 crore to ' 158 crore as on March 31,
2026 from ' 164 crore as on March 31, 2025. The gross NPA
as percentage of advances increased by 9 basis points to
1.66% as on March 31, 2026 as against 1.57% as on March
31, 2025. Net NPAs decreased by 12 basis points to 0.40%
as of March 31, 2026 from 0.52% as on March 31, 2025.
Provision Coverage Ratio (including write off) stood at
86.33% at the end of the financial year as against 83.71% in
the corresponding previous financial year.

Total Assets have increased by ' 9,890 crore and stood at
' 57,727 crore as on March 31, 2026 as against ' 47,836
crore as on March 31, 2025. Net Advances have increased
by ' 8,341 crore and stood at ' 39,848 crore as on March
31, 2026 as against ' 31,507 crore as on March 31, 2025.

FINANCIAL PERFORMANCE

Net Interest Income (NII) increased by ' 244 crore to
' 1,720 crore in FY 2025-26 from ' 1,476 crore in FY 2024-25.
Non-Treasury Other Income increased by ' 247 crore to
' 1,100 crore in FY 2025-26 from ' 853 crore in FY 2024-25.
Net Treasury Income decreased by ' 35 crore to ' 86 crore
in FY 2025-26 from ' 121 crore in FY 2024-25.

The operating profit increased by ' 175 crore to ' 1,085 crore
in FY 2025-26 from ' 910 crore in FY 2024-25, supported by
higher other income. Provisions other than taxes increased
by ' 124 crore from ' 111 crore to ' 234 crore.

The Net Profit for the financial year 2025-26 was ' 633
crore as compared to Net Profit of ' 594 crore in the
financial year 2024-25.

DIVIDEND

The Bank has formulated the Dividend Distribution Policy
as per the requirements of Regulation 43A of Securities
and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, ("SEBI Listing
Regulations”) and guidelines issued by Reserve Bank of
India (the "RBI”).

The objective of the Policy is to lay down the criteria to be
considered by the Board, before recommending dividend
to its shareholders, whether it be Interim/Special Dividend
or Final Dividend. The Bank believes in optimizing the
shareholder's wealth by offering them various corporate
benefits from time to time after considering the Capital
to Risk (Weighted) Assets Ratio (CRAR) and reserve
requirements subject to regulatory stipulations.

The Board, with the object of conserving profits to
strengthen its balance sheet further, does not propose
to recommend any dividend for the financial year ended

March 31, 2026, notwithstanding the Bank has posted a
commendable net profit during the period under review.
The Dividend Distribution Policy is available on the Bank's
website at https://www.csb.bank.in/sites/default/files/
annexure-IX_17_dividend_distribution_policy.pdf

CHANGE IN THE NATURE OF BUSINESS

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

MATERIAL CHANGES AND COMMITMENTS AFFECTING
THE FINANCIAL POSITION OF THE BANK

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

CAPITAL STRUCTURE

The Authorised share capital of the Bank stood at ' 220
crore divided into 22 crore equity shares with a face value of
' 10/- each as on March 31, 2026. During the financial year
under review, there has been no change in the Authorised
share capital of the Bank.

The Paid-up Equity Capital of the Bank stood at ' 173.49
crore comprising 17,34,85,827 fully paid-up Equity Shares
of ' 10/- each as on March 31, 2026. The Bank has not
allotted any shares during the financial year 2025-26,
and as a result, the paid-up capital of the Bank remains
unchanged, i.e., ' 173.49 crore, in the said period.

NET OWNED FUNDS

The Bank's Networth grew to ' 4,649 crore from
' 4,257 crore as of the previous financial year, and market
capitalisation stood at ' 5,907 crore as on March 31, 2026
as against ' 5,244 crore as on March 31, 2025.

CAPITAL ADEQUACY RATIO

The Bank's overall Capital Adequacy Ratio (CRAR) under
Basel III stood at 20.66% at the end of fiscal 2026, well
above the benchmark requirement of 11.50% stipulated
by Reserve Bank of India. Of this, the Common Equity
Tier I (CET I) CRAR was 18.93% (against minimum
regulatory requirement of 8%) and Tier I CRAR was 18.93%
(against minimum regulatory requirement of 7%). As on
March 31, 2026, the Bank's Tier II CRAR under Basel III
stood at 1.73% as against 1.87% as on March 31, 2025.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) read with Section 134 (5)
of the Companies Act, 2013, the Board of Directors, to the
best of its knowledge and ability, confirm that;

a. In the preparation of the annual accounts for
the financial year ended March 31, 2026, the
applicable accounting standards had been
followed along with proper explanation relating
to material departures.

b. The directors have selected such accounting
policies and applied them consistently and made
judgments and estimates that are reasonable
and prudent so as to give a true and fair view of
the state of affairs of the Bank at the end of the
financial year 2025-26 and of the profit and loss
of the Bank for that period.

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

d. The directors had prepared the annual accounts
for the financial year ended on March 31, 2026,
on a going concern basis.

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

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.

PROMOTER HOLDING - FIH MAURITIUS INVESTMENTS LTD

FIH Mauritius Investments Ltd (FIHM), the promoter of the
Bank holds 40% of the paid-up capital of the Bank in line with
Reserve Bank of India (Commercial Banks - Acquisition and
Holding of shares or Voting Rights) Direction, 2025 dated
November 28, 2025. FIHM holding in the Bank is subject to
the dilution schedule as mandated by Reserve Bank of India
and the RBI guidelines/directions as applicable, from time
to time.

Pursuant to Section 12(2) of the Banking Regulation Act,
1949, and the RBI Gazette Notification No. DBR.PSBD.
No.1084/16.13.100/2016-17 dated July 21, 2016, read with the
Reserve Bank of India (Commercial Banks - Acquisition and
Holding of Shares or Voting Rights) Directions, 2025 dated
November 28, 2025, the voting rights of FIHM in the Bank is
presently capped at 26% of the total voting rights of the Bank.

DISCLOSURE OF CERTAIN TYPE OF AGREEMENTS
BINDING THE BANK

The Bank has entered into an Investment Agreement
("Agreement”) dated February 20, 2018, with FIH Mauritius

Investments Ltd (FIHM), the promoter of the Bank, which
was superseded and replaced by Amended and Restated
Investment Agreement dated October 15, 2018, read with
Addendum No. 1 dated October 19, 2020 ("Addendum”) to
the Amended and Restated Investment Agreement dated
October 15, 2018.

The salient features of the agreement in terms of
Regulation 30A of SEBI (Listing Obligations and Disclosure
Requirements), Regulations, 2015 read with clause 5A of
paragraph A of Part A of Schedule III of the SEBI Listing
Regulations was disclosed in the Annual Report of the
Bank for the financial year 2023-24. The shareholders may
refer page no. 93 of the said Annual Report for further
information.

Except as stated above there are no other agreements
which mandates a disclosure under of Regulation 30A of
SEBI (Listing Obligations and Disclosure Requirements),
Regulations, 2015 read with clause 5A of paragraph A of
Part A of Schedule III of the SEBI Listing Regulations.

LEARNING INITIATIVES

During FY 2025-26, CSB Institute of Learning &
Development ("CSBILD”) played a strategic role in enabling
organisational priorities by shifting decisively from activity-
based training to outcomes driven capability building. The
year marked maturation of the L&D agenda, with focus
on building future ready skills, strengthening leadership
capacity, and embedding mechanisms to measure and track
the return on investment (ROI) of learning interventions.
This approach enhanced accountability, reinforced the
link between learning and business performance, and
ensured that training initiatives delivered measurable and
sustainable impact.

During the year, CSBILD achieved a significant milestone
by ensuring 100% employee participation across a
wide spectrum of learning platforms, including online,
classroom-based, self-paced, and external programmes.
Total training hours during the year stood at 461,845
hours, translating to an average of 56.9 learning hours per
employee. This commitment to continuous development
was evident across the workforce, with male employees
averaging 54.86 hours and female employees averaging
59.87 hours of training, underscoring CSBILD's focus on
inclusive and impactful learning.

In the same financial year, CSBILD rolled out two key
learning initiatives aimed at strengthening employee
capabilities and overall development. The first Saksham- A,
CRO functional training programme designed to enhance
sales effectiveness and service delivery. The second
Skill Development Programmes, focussed on building
behavioural competencies and strengthening workplace
skills for employees across retail and non-retail functions.

Building on this momentum, CSBILD enhanced its
onboarding framework by revising the flagship programme
‘Neev' to ‘Neev 2.0', a comprehensive four-day module.
The programme integrates self-paced learning, Virtual
Instructor-Led Training (VILT), and hands-on exposure to
the Bank's core software systems, enabling new hires to
transition smoothly into their roles.

Additionally, a self-paced /VILT programme titled ‘Neev
NXT' was introduced to support new joiners and users
with role-specific learning needs, particularly for Branch
Managers, Branch Operations Managers, Business Lending
Group (BLG) and Trade & Business Group (TBG) and SWIFT
and SFMS users.

CSBILD successfully retained its ISO 9001:2015
certification during the year, reaffirming its commitment
to quality management standards, process excellence,
and continuous improvement in learning and development
practices.

HUMAN RESOURCES

For a detailed update on Human resources activities, please
refer to the chapter on Human Resources / Industrial
Relations in the Management Discussion and Analysis
section for detailed analysis.

DIVERGENCE IN ASSET CLASSIFICATION AND
PROVISIONING FOR NPAs

In terms of Reserve Bank of India (the "RBI”) guidelines,
banks are required to disclose the divergences in asset
classification and provisioning consequent to the RBI's
annual supervisory process in their notes to accounts to
the financial statements. The disclosure is required if either
or both of the following conditions are satisfied: (a) the
additional provisioning for NPAs assessed by the RBI exceeds
5% of the reported profit before provisions and
contingencies for the reference period; and (b) the additional
gross NPAs identified by the RBI exceed 5% of the published
incremental gross NPAs for the reference period.

Based on the above, no disclosure on divergence in asset
classification and provisioning for NPAs is required with
respect to RBI's annual supervisory process for fiscal 2026.

CREDIT RATINGS OF DEBT INSTRUMENTS

CRISIL, vide letter dated May 20, 2026, reaffirmed the
rating ‘CRISIL A1 ' to the ' 2,500 crore Certificate of
Deposits Programme and ' 2,000 crore Short Term Fixed
Deposits Programme of the Bank. Further, CRISIL, vide
letter dated May 20, 2026, reaffirmed ‘CRISIL A /Stable'
rating to the ' 500 crore Tier II, Basel III compliant bonds
issue Programme of the Bank.

India Ratings and Research, vide letter dated
August 14, 2025, revised its rating of ‘IND A' with Outlook
‘Stable' to ‘Positive', to the ' 500 crore Tier II, Basel III
compliant bonds issue Programme of the Bank. The Bank
has not yet issued any bonds as part of the programme.

The detailed report on credit ratings obtained by the Bank
for all the debt instruments outstanding as on March 31,
2026, are provided in the Report on Corporate Governance,
forming part of this annual report.

DEPOSITS ISSUANCE PROGRAMME

During the period under review, your Bank raised ' 3,550
crore under the Certificate of Deposits (CD) programme,
sourced from various mutual funds and banks. As of
March 31, 2026, the outstanding amount under this
programme stood at ' 1,475 crore compared to ' 1,750
crore as on March 31, 2025. The Bank has not raised
deposits under the Short-Term Fixed Deposits Programme
during the period under review.

ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING
RIGHTS

As on the date of this Report, the Bank has not issued any
equity shares with differential voting rights.

ISSUE OF SWEAT EQUITY SHARES

As on the date of this Report, the Bank has not issued any
sweat equity shares.

EMPLOYEE BENEFITS SCHEME/PLAN
(A) SHARE BASED/LINKED SCHEME

(1) Equity-settled:

CSB Employees Stock Option Scheme 2019

The Bank, with the approval of shareholders obtained
through a postal ballot on May 04, 2019, adopted the
"CSB Employees Stock Option Scheme 2019” (“ESOS
2019” or "Scheme”). The Scheme is in compliance with the
SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021. The Scheme is administered through an
employee stock option trust ("ESOS Trust”) in the nature
of an irrevocable employee welfare trust in due compliance
with the applicable laws.

Under the Scheme, 6,53,176 stock options were granted in the
financial year 2025-26. All the options were granted at market
price as per the Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations,
2021, to be vested subject to the vesting conditions/ malus
and claw back arrangements and be exercised within the
period as per the terms of the grant and the Scheme.

As on March 31, 2026, out of total number of 20,18,734
options vested and in force since the date of first grant
made under the scheme, 6,32,803 options vested during
FY 2025-26 in accordance with the vesting schedule.
10,22,970 vested options were exercised by the grantees,
while 1,16,419 vested options lapsed due to resignation or
non-exercise by grantees within the stipulated timelines.
Further, 4,98,254 unvested options lapsed prior to vesting
on account of the resignation or separation of grantees.
Consequently, the total number of options in force as on
March 31, 2026 stood at 33,35,215 of which 8,79,345 were
vested options.

Pursuant to the approval received from Reserve Bank of
India on November 27, 2025, the Nomination & Remuneration
Committee of the Board on December 12, 2025, granted
1,03,958 stock options to Mr. Pralay Mondal, Managing
Director & CEO and 29,873 stock options to Mr. B K Divakara,
Executive Director, at an exercise price of ' 388.70 per
option, as part of variable pay for the performance period
from April 01, 2024 to March 31, 2025.

Amendment proposed in the CSB Employees Stock
Option Scheme 2019

No amendment is proposed to the CSB Employees Stock
Option Scheme 2019 in the ensuing Annual General Meeting
of the Bank.

CSB Employees Stock Option Scheme - Statutory
Compliance

A Certificate of Secretarial Auditors of the Bank pursuant
to Regulation 13 of the Securities and Exchange Board
of India (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021, that the CSB Employees Stock
Option Scheme 2019 has been implemented in the Bank in
accordance with the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021, and the resolution
passed by the Shareholders for the Scheme, will be
placed to the Annual General Meeting for the scrutiny of
Shareholders.

The disclosures as required as per rule 12(9) of the
Companies (Share Capital and Debentures) Rules, 2014 and
Regulation 14 of the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021, are given on the
website of the Bank at https://www.csb.bank.in/general-
meetings ->Annual General Meeting - 2026. which forms
part of this report as Annexure - I.

(2) Cash-settled:

CSB Cash Settled - Stock Appreciation Rights Scheme
2025

The Bank introduced the ‘CSB Cash Settled - Stock
Appreciation Rights Scheme 2025' (“CSAR 2025”) on
August 13, 2025, with the objective of attracting, retaining

and motivating eligible employees, fostering longterm
performance, value creation and a co-ownership mindset.
Under the Scheme, employees are granted CashSettled
Stock Appreciation Rights (SARs), which are equitylinked
but settled in cash and do not involve dealing in the Bank's
equity shares. The value (Appreciation) is calculated as the
excess of the market price of the Bank's shares on the date
of exercise over the predefined Base Price per CSAR. As per
the Scheme, Vesting of CSARs granted shall not be earlier
than minimum Vesting Period of 1 (One) year and not later
than maximum Vesting Period of 2 (Two) years from the
Grant Date. Subject to this overall band of Vesting Period,
the Nomination & Remuneration Committee prescribes
Vesting Period for a particular Grant or different Vesting
Period for different Grants made at same time. Under the
Scheme, payouts shall be settled entirely in cash and are
based solely on the appreciation value determined at the
time of exercise.

Under the Scheme, 5,24,741 SARs were granted during the
financial year 2025-26. All SARs were granted at market
price and vest equally over a period of two years from the
grant date, subject to the vesting conditions as per the
terms of the grant and the Scheme.

CASH BASED PLAN/SCHEME

(1) Long Term Cash Reward Plan (LTCRP)

The Bank introduced the Long Term Cash Reward Plan on
August 13, 2025, for senior level employees, specifically
those in Grade 6B of the Bank's organisational hierarchy.
The plan provides a cash reward once in every two years,
with a two year deferral from the date of award. Payouts are
made in two equal instalments of which 50% on completion
of 12 months and the remaining 50% on completion of 24
months from the award date, subject to continuous service
and the prescribed performance rating. The Plan is grade
based and linked to a percentage of fixed pay, subject to
fulfilment of performance and other prescribed conditions.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT

CSB Bank's centurylong legacy is built on the principles
of trust, ethics, and transparency. Since its inception, the
Bank has remained committed to responsibly serving the
needsbased segments of society and contributing positively
to the communities it serves. While strengthening its core
business, the Bank continues to prioritise environmental,
social, and governance (ESG) considerations, which remain
embedded in its policies and practices. By upholding high
standards of corporate governance, the Bank ensures that
transparency, accountability, and robust disclosure form
the foundation of its operating philosophy.

The Bank, in compliance with Regulation 34(2)(f) of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 read with the SEBI Master
Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026
dated January 30, 2026, presents the Business
Responsibility and Sustainability Report (BRSR) of the Bank
for the FY 2025- 26, being the fourth report of its kind, in
the format as specified by SEBI, describing the initiatives
taken by the Bank from an environmental, social and
governance perspective.

The Report indicates the Bank's performance against the
nine principles of the ‘National Guidelines on Responsible
Business Conduct'. Reporting under each principle is
divided into essential and leadership indicators. The report
has been hosted on the website of the Bank and can be
accessed at https://www.csb.bank.in/general-meetings
Annual General Meeting - 2026.

BUY-BACK OF SHARES OR PROVISION OF FINANCIAL
ASSISTANCE FOR PURCHASE OF THE BANK’S SHARES

The Bank has not effected any buy-back of its shares
or provided any financial assistance for purchase of its
shares, to any persons including directors and employees
of the Bank in terms of Section 67 of the Companies Act,
2013.

DISCLOSURE RELATED TO DETAILS OF DEPOSITS
ACCEPTED

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

SUBSIDIARIES AND ASSOCIATES

The Bank does not have any subsidiaries, joint ventures or
associate companies.

There are no companies which have become or ceased to
be its subsidiaries, joint ventures or associate companies
during the year under review.

The Bank has formulated a Policy for determining material
subsidiaries pursuant to the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and the same is displayed on the website
of the Bank at: https://www.csb.bank.in/pdf/Annexure-I
Policy for Determining Material Subsidiaries 15072024.pdf

RISK MANAGEMENT

The Bank has a comprehensive policy framework which
contains separate policies for identification, measurement,
monitoring & control and mitigation of all material risks
including but not limited to credit, market, operational,

liquidity, fraud risk, ESG and other Pillar- II risks. The
Bank has put in place an integrated risk management
policy which ensures independence of the risk governance
structure. The Charter of the Integrated Risk Management
Department (IRMD) is included in the Integrated Risk
Management policy. The risk management policy details the
principles, rules and guidelines to be adopted by the Bank
for managing and controlling various kinds of risks through
various sub- policies. The policies are implemented in an
uninterrupted, reliable and comprehensive manner across
the Bank.

The details of risk management practices are provided in
the Management Discussion and Analysis Report annexed
to the Director's Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

A set of policies, that include Whistle Blower Policy, Anti
Bribery & Anti-Corruption Policy and Policy to deal with
Employee frauds are devised and formulated by the Vigilance
Department as part of its ongoing preventive vigilance. These
are scrupulously followed, for surveillance and control to
prevent frauds and thereby manage the risk of eventual
financial loss or Bank's reputation. These policies are aligned
with the directions of the RBI, Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Companies Act, 2013 and SEBI
(Prohibition of Insider Trading) Regulations, 2015, as amended.
One such policy, the Whistle Blower policy is an effective
tool to report concerns regarding unethical behaviour,
violation of systems & procedures, questions of law,
wrong business practices or grave misconduct by the
employees. As per this Policy, all stakeholders viz, Directors
and employees of the Bank, customers, vendors, Non¬
Governmental Organisations (NGO) or any other person
can lodge complaints. Link for the same is published on
the Bank's Website. The Audit Committee of the Board
(ACB) oversees the vigil mechanism through its committee
processes. The Chairman of ACB directly hear grievances
reported in the whistle blower complaints. Policy provides
reassurance/protection to the whistle blower from
victimisation, discrimination or reprisals for having blown
the whistle, in good faith and in the interest of the Bank,
identity of the whistle blower kept secret. The investigation
under this policy shall be completed within 60 days from
the date of receipt of the complaint and the report thereof
should be placed before the ACB.

As part of the awareness programme, the said policies as
well as the Ethics & Code of conduct for staff are included
in sessions of the training programme conducted at the
Bank's Human resource team, for enhancing awareness
of fraud risk and for promoting a culture of compliance
amongst the employees.

Bank is taking stringent action against those employees,
vendors who fail to comply with the Bank's policy.
Deficiencies/irregularities/Lacunae in the system and
procedures, if any, observed during the investigation are
plugged and wherever necessary systemic corrections
are suggested and placed before the ACB for necessary
directions. Further, with regard to the irregularities
committed, the concerned officials, vendors are suitably
cautioned so that incidents do not recur. Vigilance
Department issues Caution Note on a regular basis that
create awareness regarding the different modus operandi
adopted by the fraudsters. This enables the Branches /
Offices to prevent similar kind of fraudulent attempts in
future. This policy is reviewed every year by the ACB and
the Board and suitably amended, as required. A reference
to the Whistle Blower Policy/Vigil Mechanism is also made
in every caution note issued by the Vigilance Department.
Further the Anti-Bribery and Anti-Corruption Policy ensures
that the stakeholders including employees (whether
full-time or contractual, including trainees and interns),
Directors, Agents, Associates, Vendors, Consultants,
Advisors, Representatives, or Intermediaries do not indulge
in any act of ‘Bribery' or ‘Corruption' while discharging
their official duties, either in their own name or in the name
of the Bank.

As part of the preventive mechanism, the department also
undertakes Preventive Vigilance Audits, to ensure that
all the checks and balances are in place. This promotes a
culture of compliance amongst its employees. Moreover,
the Bank is making all out efforts to prevent frauds by
strengthening the existing control measures and by
reiterating the systems and procedures, to update and
alert its employees.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to the provisions of Regulation 34(2)(e) of the
SEBI Listing Regulations, the Management Discussion
and Analysis Report for the year under review is provided
in a separate section forming part of this Report as
Annexure - III.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Bank has laid down internal financial controls with
reference to its financial statements. The integrity
and reliability of the internal control systems are
achieved through clear policies and procedures, process
automation, training and development of employees, and
an organisation structure that segregates responsibilities.
These controls are reviewed and tested to ensure the
accuracy and completeness of the accounting records
and the preparation of reliable financial statements. The

internal financial controls of the Bank with respect to
the financial statements are adequate and are operating
effectively.

The Bank is operating in a fully computerised environment
with Core Banking System supported by diverse application
platforms for handling special business such as treasury,
trade finance, retail loans, etc. The process of recording
transactions in each application platform is subject to
various forms of control such as in-built system checks,
maker-checker authorisations and independent post
transaction reviews. The financial statements are prepared
based on computer system outputs. Responsibility of
preparations of financial statements is entrusted to a
dedicated unit which is independent of business.

For mitigating risks and for KYC norms compliance, the
Bank has put in place centralised processing for opening of
CASA accounts and modifications in customer information.
For login to CBS, in addition to login passwords, finger-scan
authentication is implemented and as control measure,
dual custody for cash and gold are in place in all branches.
The Bank has a process in place to continuously monitor the
existing controls and identify gaps, if any, and implement
new and/or improved controls wherever the effect of such
gaps would have a material effect on the Bank's operation.
During the year under review, there are no material or
serious observations of inefficiency or inadequacy of such
controls observed/reported.

CORPORATE GOVERNANCE

The Bank's corporate governance framework is designed
to uphold the highest standards of accountability and
transparency. In addition to complying with all mandatory
requirements under the SEBI Listing Regulations, the Bank
has voluntarily adopted several recommended practices
to further strengthen its governance framework. These
measures, together with the mandatory disclosures
detailed in the Report on Corporate Governance, which
forms part of the Board's Report, reflect the Bank's
commitment to maintaining a robust, ethical, and well-
supervised governance environment.

M/s BNP & Associates, Company Secretaries, Mumbai, the
Secretarial Auditors of the Bank, have issued a certificate
confirming the Bank's compliance with the provisions of
corporate governance for the financial year 2025-26, as
stipulated under Regulations 17 to 27, clauses (b) to (i) of
Regulation 46(2), and paragraphs C, D and E of Schedule V
to the SEBI Listing Regulations. The certificate forms part
of the Report on Corporate Governance.

UPDATE ON IND AS IMPLEMENTATION

Reserve Bank of India (RBI) vide press release RBI/2018-
2019/146 DBR.BP.BC.No.29/21.07.001/ 2018-19, dated

March 22, 2019, advised all scheduled commercial
Banks about deferment of implementation of Ind AS till
further notice in the context of legislative amendments
recommended by RBI on implementation of Ind AS were
under consideration of the Government of India.

The implementation of Ind AS is expected to result in
significant changes to the way the Bank prepares and
presents its financial statements. The key impact areas
during the implementation of Ind AS for the Bank include
impairment requirements of Financial Instruments based on
Expected Credit Loss, interest recognition using effective
interest method and Fair valuation of financial assets.

As directed by Reserve Bank of India, the Bank has
been submitting half-yearly Proforma Ind AS financial
statements within the stipulated timelines.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS BY THE BANK

Pursuant to Section 186 (11) of the Companies Act, 2013, the
provisions of Section 186 of Companies Act, 2013, 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, hence
being excepted from disclosure requirements under Section
134(3)(g) of the said Act. However, the particulars of the
investments made by the Bank are provided in Schedule 8
of the financial statements as required under the Banking
Regulation Act, 1949.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES

The Bank obtained prior approvals of the Audit Committee,
the Board, and the members of the Bank at the annual
general meeting for all related party transactions/ material
related party transactions. Your Bank obtained the omnibus
approval of the Audit Committee for those transactions
with related parties that are repetitive in nature. Further,
the Audit Committee of the Board has reviewed all the
transactions with the related parties on a quarterly basis.
No transactions were entered into with related parties,
which were not in the ordinary course of the business of
the Bank or which were not on an arm's length basis.

During the financial year 2025-26, the Bank has not
entered into any materially significant transactions with
its related parties, which could lead to potential conflict of
interest between the Bank and these parties, other than
transactions entered into with them in the ordinary course
of its business.

The particulars of contracts or arrangements with related
parties entered into during the period under review in terms
of Section 188(1) of the Companies Act, 2013 are provided

in e-Form AOC-2 as Annexure -V in terms of 134(3)(h) of
the Companies Act, 2013.

The ‘Policy on materiality of Related Party Transactions
and on dealing with Related Party Transactions' has been
reviewed by the ACB and the Board in the financial year
2025-26 and the same is made available on the website of the
Bank at https://www.csb.bank.in/pdf/Annexure-II__Policy_
on_dealing_with_Related_Party_Transaction_15072024.pdf,
in terms of the SEBI Listing Regulations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Bank recognise society as a primary stakeholder and
consistently prioritise Corporate Social Responsibility
(CSR) activities, embedding CSR into its core business
strategies to address societal needs, foster a culture of
responsibility and ethical conduct, and ensure sustainable
development through well-structured and impactful
initiatives. The Bank's CSR policy is meticulously designed
with the primary objective of integrating CSR as a crucial
business process for the sustainable development of
the society. This policy functions as a guiding document,
assisting in the identification, execution, and monitoring
of CSR projects, ensuring they align with the spirit of the
statutory requirements. The policy outlines clear objectives
and methodologies for CSR initiatives, ensuring that each
project is effectively managed and delivers tangible benefits
to the community. Through this comprehensive approach,
the Bank demonstrates its unwavering commitment to
making a positive impact on society while maintaining
transparency and accountability in all its endeavours.
During the financial year 2025-26, the Bank earmarked
'15.30 crore for Corporate Social Responsibility (CSR)
activities, compared to '13.90 crore in the previous
financial year.

The Bank's Annual Action Plan continues to be focused on
healthcare, education, gender equality, and environmental
sustainability, and the financial year 2025-26 was no
exception. During the financial year, the Bank spent a
significant portion of CSR budget towards initiatives
aligned with these focused areas. In addition to these core
areas, the Bank also extended its CSR initiatives to other
permissible sectors, including the promotion of sports
through training initiatives, environmental conservation
and ecological balance and women's empowerment. In
identifying and implementing CSR projects, the Bank
ensures that the benefits reach a wide base of deserving
beneficiaries, without discrimination on the basis of caste,
creed, or religion.

The Annual Report on Corporate Social Responsibility
Activities of the Bank for the financial year 2025-26, has
been provided in Annexure - VI to this report.

The Corporate Social Responsibility Policy as recommended
by the CSR Committee and as approved by the Board is
made available on the website of the Bank and can be
accessed at https://www.csb.bank.in/sites/default/files/
annexure-IN_3_csr_policy.pdf.

AUDITORS

a) Statutory Auditors

The members of the Bank, at the 102^nd Annual General
Meeting (AGM) of the Bank held on August 08, 2023,
approved the appointment of M/s. Walker Chandiok
& Co LLP, Chartered Accountants, Mumbai as one of
the Joint Statutory Auditors to hold office from the
conclusion of the 102^nd AGM until the conclusion of the
105^th AGM. M/s. Sundaram & Srinivasan, Chartered
Accountants, Chennai, were appointed as the other
Joint Statutory Auditors at the 103^rd AGM held on
August 23, 2024, to hold office from the conclusion of
the 103^rd AGM until the conclusion of the 106^th AGM.
The Bank obtained approval of Reserve Bank of India
under Section 30(1A) of the Banking Regulation Act,
1949 for the appointment of both firms as Joint
Statutory Auditors for FY 2025-26.

As per Reserve Bank of India Guidelines on Appointment
of Statutory Auditors dated April 27, 2021, read with
FAQs dated June 11, 2021, Walker Chandiok & Co LLP,
Chartered Accountants, will complete their continuous
tenure of three years at the conclusion of the 105^th
AGM and are not eligible for re appointment. Based
on the recommendation of the Audit Committee,
the Board recommends the appointment of M/s. M P
Chitale & Co, Chartered Accountants, Mumbai (Firm
Registration Number: 101851W), as one of the Joint
Statutory Auditors, in place of Walker Chandiok & Co
LLP, from the conclusion of the 105^th AGM until the
conclusion of the 108^th AGM, subject to the specific
approval of Reserve Bank of India for each financial
year during their tenure, as required under Section
30(1A) of the Banking Regulation Act, 1949.

The Bank has obtained approval of Reserve Bank of
India for the appointment of Sundaram & Srinivasan,
Chartered Accountants, Chennai, together with M/s.
M P Chitale & Co, Chartered Accountants, Mumbai as
Joint Statutory Auditors for FY 2026-27, being their
third and first year in office, respectively.

Pursuant to the Regulation 33(1) (d) of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Joint Statutory Auditors have
confirmed that they are subjected to the peer review
process of the Institute of Chartered Accountants of

India (ICAI) and that they hold a valid certificate issued
by the Peer Review Board of ICAI.

The Board places on record its sincere appreciation
and gratitude to M/s. Walker Chandiok & Co LLP,
Chartered Accountants, Mumbai, for the valuable
services rendered by them during their tenure as Joint
Statutory Auditors of the Bank.

b) Independent Auditors’ Report

The Joint Statutory Auditors of the Bank viz., M/s.
Walker Chandiok & Co LLP, Chartered Accountants,
Mumbai together with M/s. Sundaram & Srinivasan,
Chartered Accountants, Chennai, have audited the
accounts of the Bank for the FY 2025-26 and their
Report is annexed.

Pursuant to Section 143(3)(i) of the Companies Act,
2013, the Statutory Auditors have also reported on
the adequacy and operating effectiveness of the
internal financial controls system over financial
reporting, which has been enclosed as “Annexure A”
to the Independent Auditor's Report.

There are no qualifications, reservations or adverse
remarks made by the Statutory Auditors in their
report for FY 2025-26.

(c) Secretarial Auditors

Pursuant to the provisions of Section 204 of the
Companies Act, 2013, the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
and Regulation 24A of the SEBI Listing Regulations,
the Board, based on the recommendation of the Audit
Committee of the Board, approved the appointment
of M/s. BNP & Associates, Company Secretaries,
Mumbai (Firm Registration No. P2014MH037400), a
peerreviewed firm of Company Secretaries in Practice,
as the Secretarial Auditors of the Bank for a period of
five years from April 01, 2025 to March 31, 2030. The
shareholders of the Bank approved this appointment
at the 104^th Annual General Meeting held on
August 26, 2025.

(d) Secretarial Audit Report

The Secretarial Audit Report for the financial
year 2025-26, issued by M/s BNP & Associates,
Company Secretaries, is annexed to this Report
as Annexure VII. The Bank provided all requisite
records and information to the Secretarial Auditors to
facilitate the smooth conduct of the audit.

There are no qualifications, reservations or adverse
remarks made by the Secretarial Auditors in their
report for the FY 2025-26.

(e) Secretarial Compliance Report

Pursuant to Regulation 24A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
read with circular No. CIR/CFD/ CMD1/27/2019
dated February 08, 2019 and Master Circular No.
HO/49/14/14(7)2025-CFD-POD2/I/3762/2026
dated January 30, 2026, issued by SEBI, the Bank
has obtained Secretarial Compliance Report for the
financial year ended March 31, 2026, from M/s BNP
& Associates, Company Secretaries, Mumbai, the
Secretarial Auditors of the Bank on compliance of all
applicable SEBI Regulations and circulars/ guidelines
issued thereunder and the copy of the same was
submitted with the Stock Exchanges within the
prescribed timelines.

(f) Certificate in terms of Regulation 34(3) read with
Schedule V of the SEBI Listing Regulations

In terms of Regulation 34(3) read with Schedule V of
the SEBI Listing Regulations, the Bank has obtained
a Certificate from M/s BNP & Associates, Company
Secretaries, Mumbai, confirming that none of the
Directors on the Board of the Bank have been debarred
or disqualified from being appointed or continuing as
Directors of the Bank either by the Securities and
Exchange Board of India or the Ministry of Corporate
Affairs or any other Statutory / Regulatory Authorities.
The said certificate is Annexed to this Report.

(g) Reporting fraud by Auditors

During financial year ended March 31, 2026, pursuant
to Section 143(12) of the Companies Act, 2013, neither
the Statutory Auditors nor the Secretarial Auditor
of the Bank have reported any instances of frauds
committed in the Bank by its officers or its employees,
except the cases as detailed below.

Statutory Auditors

M/s. Walker Chandiok & Co LLP, Chartered Accountants
and M/s. Sundaram & Srinivasan, Chartered Accountants,
Joint statutory auditors of the Bank, reported to the Audit
Committee three frauds, viz (i) involving an amount of
' 2511.58 lakh, reported to the RBI as 3 frauds, (ii) ' 333.55
lakh, reported to the RBI as 3 frauds, and (iii) ' 180.67 lakh,
reported to the RBI as 2 frauds, committed by employees
of the Bank at Mumabi Fort, Davangere and Choondal
branches respectively.

The disclosures as required under Section 143(12) of the
Companies Act, 2013 read with Rule 13 of the Companies
(Audit and Auditors) Rules, 2014 are given below:

1. Mumbai Fort Branch.

3. Choondalbranch.

Secretarial Auditors

During financial year 2025-26, pursuant to Section 143(12)
of the Act, the Secretarial Auditors of the Bank have not
reported any instances of frauds committed in the Bank by
its officers or its employees.

COMPLIANCE TO SECRETARIAL STANDARDS

The Bank is in compliance with the Secretarial Standards
issued by the Institute of Company Secretaries of India
(ICSI) related to the Board Meetings (SS-1) and the General
Meeting (SS-2) during the FY 2025-26. Further, the Bank
has devised proper systems to ensure compliance with the
provisions of all applicable Secretarial Standards issued by
the Institute of Company Secretaries of India and that such
systems are adequate and operating effectively.

TRANSFER OF UN-CLAIMED/UN-PAID DIVIDEND TO
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Dividend transferred to Unpaid Dividend account and
remaining unpaid or unclaimed for a period of seven years
from the date of such transfer, has to be transferred to
Investor Education and Protection Fund as per Section 124
(5) of the Companies Act, 2013.

Since the Bank had not declared any dividends since the
FY 2014-15, no amount were required to be transferred to
the Investor Education and Protection Fund (the "Fund”) by
the Bank for the financial year ended March 31, 2026.

All the unclaimed dividends pertaining to the prior
period/ financial years were transferred to the Fund in
the corresponding previous financial years within the
stipulated time and in the manner as prescribed in Section

124(6) of the Companies Act, 2013, read with the Investor
Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016, as amended from
time to time.

TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION
AND PROTECTION FUND AUTHORITY

Pursuant to Section 124(6) of the Companies Act, 2013,
read with the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules,
2016, as amended and other applicable rules, notifications
and circulars, if any, every company is required to transfer
to the Investor Education and Protection Fund (IEPF) the
shares in respect of which dividends have remained unpaid
or unclaimed for seven consecutive years.

Since the Bank has not declared any dividend since
FY 2014-15, no shares were required to be transferred to
the IEPF during the financial year ended March 31, 2026.
However, the Bank had transferred to the IEPF the shares
in respect of which dividends declared prior to FY 2014-15
had remained unclaimed for a period of seven consecutive
years or more, in compliance with the aforesaid provisions.

UNCLAIMED SHARE APPLICATION MONEY

There is no unclaimed Share application money pending
with the Bank or to be transferred to Investor Education
and Protection Fund.

COMPENSATION/ REMUNERATION POLICY

Since the Bank has formulated and adopted a Compensation
Policy in accordance with the Reserve Bank of India
Circular No. DOR.Appt.BC.No.23/29.67.001/2019-20 dated
November 04, 2019, which has since been repealed and
superseded by the Reserve Bank of India (Commercial
Banks - Governance) Directions, 2025 dated November 28,
2025. The Policy is also aligned with the relevant provisions
of Section 178 of the Companies Act, 2013, the applicable
Rules framed thereunder, and the SEBI Listing Regulations.
The Policy lays down clear criteria for determining
remuneration and governs the compensation and other
benefits applicable to the Non-Executive Chairperson, Non¬
Executive Directors, Managing Director & CEO, Whole-Time
Directors, Material Risk Takers, Control Function Staff, and
all other officials/employees of the Bank.

The details of the Policy are provided in the Report on
Corporate Governance, as required, which forms part of
this Board's Report. The Policy was last reviewed by the
Nomination and Remuneration Committee and the Board at
their respective meetings held on March 25, 2026.

The excerpts from the Compensation Policy are made
available on the website of the Bank.

NOMINATION POLICY

The Bank has formulated and adopted Nomination policy
for appointment and orderly succession of appointment of
Part-time Chairperson, Managing Director & CEO, Whole
time Directors, Non-executive Directors, Key Managerial
Personnel and Senior Management team in the Bank. The
Policy set out the criteria for determining qualifications,
competencies, positive attributes and independence
required for the appointment of directors. The details of the
Policy are provided in the Report on Corporate Governance,
as required, which forms part of this Board's Report.

The Nomination Policy was last reviewed by the Nomination
and Remuneration Committee and the Board at their
respective meetings held on November 05, 2025. The
policy is made available on the website of the Bank at:
https://www.csb.bank.in/sites/default/files/annexure-VI_9_
nomination_policy.pdf

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the
Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended, in respect of Directors and
Employees of the Bank, is provided in Annexure - VIII
to this Report.

The statement containing the names of top ten employees
in terms of remuneration drawn and the particulars
of employees as required under Section 197(12) of the
Companies Act, 2013, read with Rule 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, forms part of Annexure - VIII
to this Report. In terms of Section 136(1) of the Companies
Act, 2013, the Annual Report and the Financial Statements
are being sent to the members excluding aforesaid
statement. However, the said statement shall be made
available for inspection by the members at the registered
office of the Bank, in the manner as prescribed in the notice
of the Annual General Meeting. Alternatively, any member
desirous of obtaining a copy of the said statement may write
to the Company Secretary at secretarial@csb.bank.in

BOARD OF DIRECTORS

The Bank has a broadbased Board of Directors constituted
in compliance with the requirements of the Banking
Regulation Act, 1949, the circulars and guidelines/
Directions issued by Reserve Bank of India from time
to time, the Companies Act, 2013, and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015. The composition reflects an appropriate balance of
experience, expertise, and independence, consistent with
the corporate governance principles adopted by the Bank.

The Board structure is designed to ensure strong oversight,
effective decisionmaking, and adherence to the highest
standards of transparency, accountability, and ethical
conduct.

As on the date of this report, the Board comprises of eleven
(11) Directors, out of which Seven (7) are Independent
Directors, two (2) are Non-executive, Non-Independent
Directors and Two (2) are Executive Directors. The Directors
possess rich experience and specialised knowledge in
various areas of relevance to the Bank viz. Agriculture, Rural
Economy, Banking, Accountancy, Co-operation, Economics,
Finance, MSME, Information Technology, Payment &
Settlement Systems, Human Resources, Risk Management
and Business Management, Law, SSI, etc.

The Board functions as the apex governing body of the
Bank and discharges its responsibilities both directly and
through various Committees constituted to oversee specific
areas of operations and governance. Policy formulation,
business strategy, setting up of goals, performance
evaluation, and oversight of control functions vest with
the Board. The Committees provide focused supervision
over the operational, regulatory, and supervisory matters
assigned to them by the Board from time to time, thereby
strengthening the overall governance framework.

None of the Bank's directors are disqualified from being
appointed as a director as specified in Section 164 of the
Companies Act, 2013. All Directors have further confirmed
that they are not debarred from holding the office of a director
under any order from SEBI or any other such authority.
Appointment/changes in the Board Directors of the Bank
since the last Board's Report dated June 24, 2025, and up
to the date of the Report is as given under:

APPOINTMENT OF PART-TIME CHAIRPERSON

Pursuant to the receipt of approval from Reserve Bank of
India, vide letter no. DoR.G0V.No.1059/08.36.001/2025-
26 dated May 09, 2025, the members of the Bank at
the 104^th Annual General Meeting of the Bank held on August
26, 2025, approved the appointment of Mr. Biswamohan
Mahapatra (DIN: 06990345) as the Part-time Chairperson
of the Bank for a period of three years, starting from May
09, 2025 and up to May 08, 2028.

RE-APPOINTMENT OF MANAGING DIRECTOR & CEO

Pursuant to the receipt of approval from Reserve Bank of
India, vide letter no. DoR.G0V.No.2031/08.36.001/2025- 26
dated June 12, 2025, the members of the Bank at the 104^th
Annual General Meeting of the Bank held on August 26,
2025, approved the re-appointment of Mr. Pralay Mondal
as Managing Director & CEO of the Bank for a period of

three years with effect from September 15, 2025 and upto
September 14, 2028.

COMPLETION OF TENURE OF APPOINTMENT

Mr. Madhavan Menon (DIN: 00008542), Non-Executive,
Non-Independent Director, who was liable to retire by
rotation, was re-appointed at the Annual General Meeting
held on August 26, 2025. He subsequently ceased to be a
Director of the Bank with effect from October 20, 2025,
upon completion of his eight-year tenure, in accordance
with Section 10A(2A)(i) of the Banking Regulation Act, 1949.
The Board places on record its appreciation for the valuable
contributions made by Mr. Madhavan Menon to the Bank
and also for the support and cooperation extended during
his tenure. The Board also expresses its gratitude for
the professional, unbiased, and constructive approach
consistently demonstrated by him at the meetings of
the Board and its Committees. The Board specially noted
that, during his tenure as Part-time Chairperson, the
Bank successfully completed its initial public offering,
followed by the listing of its shares on BSE and NSE on
December 04, 2019.

APPOINTMENT OF DIRECTOR

Pursuant to the recommendation of the Nomination and
Remuneration Committee, the Board of Directors of the
Bank, at its meeting held on November 5, 2025, appointed
Ms. Sheetal Rupesh Sancheti (DIN: 10119781) as an
Additional Director (Non-Executive, Non-Independent) of
the Bank, with effect from the same date, liable to retire by
rotation. The said appointment was subject to the approval
of the Shareholders of the Bank, and the requisite approval
was obtained on January 21, 2026, through a resolution
passed by way of postal ballot on that date.

Ms. Sheetal Rupesh Sancheti represents the sector-
Accountancy, Banking, Finance & Economics' on the Board
of the Bank.

WOMAN DIRECTOR

In terms of the provisions of Section 149(1) of the Companies
Act, 2013 and Regulation 17 of the SEBI Listing Regulations,
the Bank is required to have at least one independent
woman director on the Board. Currently, there are two
independent women directors and one Non-Executive, Non¬
Independent woman director on the Board of the Bank. Ms.
Sharmila Abhay Karve (DIN: 05018751) since July 20, 2020,
Ms. Renu Kohli (DIN: 07981627) since December 14, 2023,
and Non-Executive, Non-Independent Director Ms. Sheetal
Rupesh Sancheti (DIN: 10119781) since November 05, 2025,
on the Board of the Bank.

DIRECTORS RETIRING BY ROTATION

In terms of Section 152 of the Companies Act, 2013 and
as per the terms of the appointment, Executive Director,
Mr. B.K.Divakara (DIN: 06439053) shall retire by rotation
and being eligible, offers himself for re-appointment at the
ensuing Annual General Meeting (AGM).

Approval of the members of the Bank is being requested for
re-appointment of Mr. B.K.Divakara at the ensuing AGM.
The detailed profile of Mr. B.K. Divakara (DIN: 06439053)
recommended for reappointment in the ensuing Annual
General Meeting will be provided in the Notice of the Annual
General Meeting for the benefit of shareholders as per
the provisions of the Companies Act, 2013, SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 and the Secretarial Standard on General Meetings
(SS-2).

INDEPENDENT DIRECTORS - COMPLIANCE STATUS

The Bank fully satisfies the requirements of Section 149
of the Companies Act, 2013 and Regulation 17 of the SEBI
Listing Regulations in connection with the appointment/
re-appointment of Independent Directors and the following
are the Independent Directors of the Bank as on the date
of this report.

The performance of the Independent Directors is subject
to evaluation as per Section 149(8) of the Companies Act,
2013 and read with Schedule IV to the said Act.

The Board is confident about their integrity, expertise and
experience in the relevant functional areas.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have confirmed of having
complied with the criteria of independence as provided in
Section 149(6) of the Companies Act, 2013 and Regulation
16(1) (b) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 read with 25(8) of the
Regulations that they meet the criteria of independence
laid down thereunder. Further, they have also confirmed of
having complied with the Code for Independent Directors
prescribed in Schedule IV to the Companies Act, 2013 and
the Code of Conduct and Ethics for Board of Directors and
Senior Management Personnel of the Bank.

Based on the declarations submitted by the Independent
Directors, the Board is of the opinion that they fulfil the
conditions specified in the Act and SEBI LODR and are
independent of the Management. There has been no change
in the circumstances affecting their status as independent
directors of the Bank.

Further, pursuant to regulation 5 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, all Independent Directors
have confirmed that while dealing with the Bank, they shall
comply with responsibilities or obligations, if any, assigned
to them under the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

Pursuant to rule 6(3) of the Companies (Appointment and
Qualifications of Directors) Rules, 2014, the Independent
Directors of the Bank have affirmed that, they had
registered as an Independent Director in the Independent
Directors Data Bank as required under rule 6(1) and 6(2)
of the Companies (Appointment and Qualifications of
Directors) Rules, 2014 and had also complied with the
requirements of passing the online proficiency self¬
assessment test/ exempted from online proficiency self¬
assessment test in terms of Rule 6(4) of the Companies
(Appointment and Qualifications of Directors) Rules, 2014,
as amended.

The Bank has not appointed any Independent Director since
the date of the last Board's Report and up to the date of
this Report. Accordingly, the disclosure under Rule 8(5)(iiiA)
of the Companies (Accounts) Rules, 2014, in respect of the
Board's opinion on the integrity, expertise, and experience
(including the proficiency) of Independent Directors
appointed during the said period, is not applicable.

FAMILIARISATION PROGRAMMES OF INDEPENDENT
DIRECTORS

All Directors, including Independent Directors, are
familiarised with their roles, rights, and responsibilities at
the time of their appointment and on an ongoing basis.

The Bank conducts structured familiarisation programmes
and facilitates various learning initiatives, including
certification programmes on IT and Cyber Security, along
with other topics relevant to the Bank's operations, to
ensure that Directors remain well-informed and effectively
equipped to discharge their duties.

The details of various programmes undertaken/arranged
for familiarizing the Independent Directors and other
programmes arranged for the directors are disclosed in the
Report on Corporate Governance, which forms part of this
Report.

Details of familiarisation programmes attended by
all Directors including Independent Directors are
provided at https://www.csb.bank.in/pdf/Directors_
Training_27052025.pdf, pursuant to regulation 46 of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

KEY MANAGERIAL PERSONNEL

During the Financial year, there was no change in the Key
Managerial Personnel (“KMP”) of the Bank. As on the date
of this report, the following are the KMP's as per Section
203(1) read with Section 2(51) of the Act and Rule 8 of the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.

BOARD AND ITS COMMITTEES
Board and Number of Meetings

Regular meetings of the Board are convened to deliberate
on business policies, strategic matters, and other important
aspects of the Bank's operations. In situations requiring
urgent decisions, the Board also passes resolutions by
circulation, in accordance with applicable provisions.

The annual schedule of Board and Committee Meetings is
finalised in advance and circulated to all Directors for their
planning and convenience.

The Board met ten (10) times during the financial year
2025-26, and the interval between any two consecutive
meetings did not exceed the statutory limit of 120 days.
Detailed information on the meetings of the Board is
provided in the report on Corporate Governance, which
forms part of this Report.

Committees of the Board

The Bank has eleven sub-committees of the Board,
constituted in accordance with applicable laws, regulatory

requirements, and the Bank's commitment to bestinclass
corporate governance practices. These Committees
provide focused oversight in their respective domains
and support the Board in discharging its supervisory and
strategic responsibilities effectively.

The composition, powers, roles, and terms of reference of
these Committees are provided in detail in the Report on
Corporate Governance, which forms part of this Board's
Report.

AUDIT COMMITTEE OF THE BOARD

The Bank has constituted the Audit Committee of the
Board (“ACB”) in accordance with the extant guidelines
of Reserve Bank of India, the provisions of the Companies
Act, 2013, and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

The Committee discharges the functions prescribed under
the Companies Act, 2013, as well as those mandated by
the Reserve Bank of India and the SEBI Listing Regulations.
In addition, the ACB discharges such responsibilities/
functions as may be delegated by the Board from time to
time. The Audit Committee serves as an effective oversight
layer for the Board in matters relating to inspection,
audit, financial reporting, and the Bank's internal control
framework.

The Board has accepted all the recommendations of the
Audit Committee. The composition, role and functions
of Committee, are provided in the Report on Corporate
Governance, which forms part of this annual report.

ANNUAL EVALUATION OF PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013,
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and also in line with Board Evaluation
Policy, the Bank has put in place criteria for annual
evaluation of performance of Chairperson, Managing
Director & CEO, Executive Directors, Non-executive
Directors, Independent Directors, Board Level Committees
and the Board as a whole.

The performance of the members of the Board other than
Independent Directors and the Board as a whole has been
evaluated separately at the meeting of the Independent
Directors.

The performance of the Independent Directors has been
reviewed by the Board as provided for under Section 149(8)
read with Schedule IV of the Companies Act, 2013.

The Statement indicating the manner in which formal annual
evaluation of the Directors, Committees of the Board and
the Board are given in detail in the report on Corporate
Governance, which forms part of the Annual Report.

The Nomination & Remuneration Committee of the
Board annually reviews and approves the criteria and the
mechanism for carrying out the said exercise effectively.
The Board Evaluation Policy is displayed on the website
of the Bank at: https://www.csb.bank.in/pdf/Annexure-III_
Board_Evaluation_PolicY_15072024.pdf

PARTICULARS REGARDING CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO

Considering the nature of activities of the Bank, with respect
to the provisions of Section 134(3)(m) of the Companies
Act, 2013 relating to conservation of energy and technology
adoption, the Bank continues to make sustained efforts to
enhance operational efficiency through the adoption of
appropriate technologies. The Bank remains committed to
pursuing improvements in systems, processes, and energy-
efficient practices, consistent with the objectives of the
Act and in support of longterm business requirements.

In accordance with Section 134(3)(m) of the Companies Act,
2013 read with Rule 8(3) of the Companies (Accounts) Rules,
2014, the relevant disclosures are provided hereunder:

(a) Conservation of Energy

The Bank continues to take a structured and responsible
approach towards reducing energy consumption
across its operations. In line with its environmental
commitments and sustainability objectives, the Bank
has initiated multiple measures to improve energy
efficiency at branches, ATMs, and administrative
offices. These include the phased installation of LED
lighting, energy-efficient air-conditioning systems, and
other low-power electrical equipment to replace legacy
fixtures. The Bank also promotes optimal utilisation of
lighting and electrical appliances, adopts automated
controls and timers where feasible, and encourages
energy-conscious practices among employees.
In addition, energy-efficient upgrades are being
incorporated into all new branches and renovation
projects to ensure long-term sustainability. Through
these initiatives, the Bank aims to progressively lower
its energy footprint and contribute to environmentally
responsible operations.

(b) Technology Absorption

In line with the nature of operations and the longterm
digital strategy, the continuous efforts are made to
evaluate, adopt, and integrate suitable technologies
across business and support functions. The Bank's
technology adoption initiatives are focused on
improving operational efficiency, strengthening risk
management, enhancing customer experience, and
ensuring regulatory compliance.

During the year, the Bank continued to invest in
modernising its core systems and strengthening its
digital capabilities. Upgrades were carried out in
core transaction platforms, cybersecurity systems,
and digital delivery channels to support scalability,
resilience, and faster service delivery. The Bank
has also been deploying advanced analytics tools,
workflow automation solutions, and straight-through
processing capabilities to streamline operations and
reduce manual interventions.

In addition, the Bank has expanded the use of customer¬
facing technologies, including enhancements in mobile
and internet banking platforms, digital onboarding
modules, cardless ATM features, and accessibility-
enabled interfaces. The Bank's emphasis on adopting
industry-standard security frameworks, improved
data-protection tools, and advanced monitoring
systems further reflects its commitment to
responsible technology implementation.

(c) Foreign Exchange Earnings and Outgo

Foreign exchange earnings and outgo form an integral
part of the Bank's normal banking operations. As an
Authorised Dealer (Category - I) in foreign exchange, the
Bank undertakes various activities such as remittances,
trade finance, export credit, and other treasury
operations that contribute to its foreign exchange
business. The Bank continues to take all necessary
steps to support and promote export-related activities
through timely sanction and disbursement of export
credit, efficient handling of trade transactions, and
customercentric forex services.

The particulars of foreign exchange earnings and
outgo for the year, as required under the Companies
Act, 2013, are provided in the financial statements
forming part of this Annual Report.

ACCESSIBILITY FOR PERSONS WITH DISABILITIES

The Bank in line with the ‘Rights of Persons with Disabilities
Act, 2016' and regulatory guidelines issued by the RBI and
SEBI in this regard, has ensured and implemented several
accessibility measures across its branches, offices, ATMs
and digital channels for an inclusive and accessible banking
environment for customers with disabilities. Ramps have
been provided at branches, offices and ATMs, wherever
feasible, to facilitate ease of access for persons with
disabilities and senior citizens. Branches are also equipped
with inclusive features such as designated seating facilities
and lower-height counters to support convenient access
to banking services. ATMs are enabled with accessibility
features including Braille keypads and voice assistance to
assist visually impaired customers.

The Bank's digital channels, including its Internet Banking
and Mobile Banking applications powered by Oracle Digital
Banking Experience (DBX), are designed and evaluated in
alignment with the Web Content Accessibility Guidelines
(WCAG) issued by the World Wide Web Consortium (W3C),
covering Versions 2.0, 2.1 and 2.2 at Levels A and AA. In
addition, the Bank is undertaking a comprehensive revamp
of its website to further enhance accessibility and align
with evolving regulatory and industry standards.

To strengthen governance and customer support, the
Bank has designated nodal officers at branch and Head
Office levels to address issues relating to persons with
disabilities and has established a dedicated grievance
redressal mechanism for such customers. The Bank also
conducts regular sensitisation programmes, workshops
and induction training programmes to equip its employees
with the knowledge and skills required to effectively assist
customers with disabilities.

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

A STATEMENT BY THE BANK WITH RESPECT TO THE
COMPLIANCE OF THE PROVISIONS RELATING TO THE
MATERNITY BENEFIT ACT, 1961

During FY 2025-26, the Bank has complied with all the
applicable provisions relating to the Maternity Benefit Act,
1961.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY
REGULATORS

During the FY 2025-26, no significant and material orders
were passed by the regulators or courts or tribunals
impacting the going concern status and the Bank's
operations in future.

MAINTENANCE OF COST RECORDS

Being a banking company, the Bank is not required to make
and maintain such accounts and cost records as specified
by the Central Government under sub-section (1) of Section
148 of the Companies Act, 2013 read with the Companies
(Accounts) Rules, 2014.

CEO & CFO CERTIFICATION

Pursuant to Regulation 17(8) of the SEBI Listing Regulations,
the Certificate issued by Mr. Pralay Mondal, Managing Director
& CEO and Mr. Satish Gundewar, Chief Financial Officer of the

Bank, for the financial year ended March 31, 2026, was placed
before the Board at its meeting held on May 04, 2026.

INFORMATION UNDER THE SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013

The Bank has formulated and adopted a Policy on
Prevention of Sexual Harassment of Women at workplace.
The Bank has complied with the provisions relating to the
constitution of Internal Complaints Committee under the
Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. The information
relating to complaints received and redressed during
the FY 2025-26 is disclosed in the Report on Corporate
Governance, which forms part of the Board's report.

STRICTURES AND PENALTIES

There are no instances of non-compliance by the Bank and
no penalties or strictures have been imposed on the Bank
by the Stock Exchange(s) and/or SEBI and/or any other
statutory authorities on matters relating to capital market
activities, during the last three years.

DISCLOSURE UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016

Being a banking company, the disclosures required as
per Rule 8(5)(xi)&(xii) of the Companies (Accounts) Rules,
2014, on the details of application made or any proceeding
pending under the Insolvency and Bankruptcy Code, 2016
(31 of 2016) during the year along with their status as at
the end of the financial year and the details of difference
between amount of the valuation done at the time of one
time settlement and the valuation done while taking loan
from the Banks or Financial Institutions along with the
reasons thereof, are not applicable to the Bank.

However, being a banking company, during the period
under review, the Bank was part of the Corporate
Insolvency Resolution Process (CIRP) initiated against nine
corporate debtors before NCLT for a total book value of
' 182.07 crore.

ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and
sub- section (3) of Section 92 of the Companies Act,
2013, read with Rule 11 of the Companies (Management
and Administration) Rules, 2014, as amended, the Annual
Return (MGT-7) as on March 31, 2026, will be displayed
on the website of the Bank at: https://www.csb.bank.in/
generalmeetings > Annual General Meeting - 2026.

ANNEXURES FORMING A PART OF THIS REPORT

The following Annexures as referred to in this Report form Dart of the Board's Report:

ACKNOWLEDGEMENTS AND APPRECIATIONS

The Board expresses its deep gratitude to the Government
of India, Reserve Bank of India, the Securities and Exchange
Board of India, the Ministry of Corporate Affairs, the Stock
Exchanges, the Insurance Regulatory and Development
Authority of India, the domestic banking fraternity, the
Depositories and the Rating Agencies, for their continued
guidance, support and cooperation extended to the
Bank throughout the year. The Board also expresses its
deep gratitude to the Bank's valued customers for their
unwavering trust and enduring patronage.

The Board extends its deep appreciation to every
member of the CSB family for their dedication, integrity,
professionalism, teamwork and sustained performance.
Their collective efforts have played a pivotal role in
strengthening the Bank's customercentric ethos and
enabling the Bank to deliver commendable progress in an
increasingly competitive environment. The Board looks
forward to their continued commitment as the Bank

advances towards its aspiration of becoming a midsized
bank by 2030, guided by Vision ‘SBS 2030'- ‘Sustain,
Build, Scale', which reflects the Bank's resolve to pursue
excellence and purposeful growth.

The Board expresses its profound gratitude to all
shareholders and the wider stakeholder community for their
steadfast support, confidence, and continued engagement
with the Bank. The Board remains committed to nurturing
this strong and mutually beneficial relationship as the Bank
progresses into the scale phase of its Vision, SBS 2030.

By Order of the Board
Sd/-

Biswamohan Mahapatra

Place: Thrissur Chairperson

Date: June 25, 2026 (DIN: 06990345)