4.14 Accounting for Provisions, Contingent Liabilities
and Contingent Assets

The Bank recognises provisions only when it has
a present obligation as a result of a past event, it is
probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation, and when a reliable estimate of the amount
of the obligation can be made. Contingent assets are
not recognised in the financial statements.

Provisions (excluding retirement benefits) are not
discounted to its present value and are determined
based on best estimate required to settle the obligation
at the Balance Sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current
best estimates.

Provisions for onerous contracts are recognised when
the expected benefits to be derived by the Bank from
a contract are lower than the unavoidable costs of
meeting the future obligations under the contract. The
provision is measured at the present value of the lower
of the expected cost of terminating the contract and
the expected net cost of continuing with the contract.
Before a provision is established, the Bank recognises
any impairment loss on the assets associated with
that contract.

A disclosure of contingent liability is made when there
is:

• a possible obligation arising from a past event,
the existence of which will be confirmed by
occurrence or non-occurrence of one or more
uncertain future events not within the control of
the Bank; or

• a present obligation arising from a past event
which is not recognised as it is not probable
that an outflow of resources will be required to
settle the obligation or a reliable estimate of the
amount of the obligation cannot be made.

When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is
made.

4.15 Proposed Dividend

In terms of Accounting Standard (AS) 4 "Contingencies
and Events occurring after the Balance sheet date” as
notified by the Ministry of Corporate affairs through
amendments to Companies (Accounting Standards)
Amendment Rules, 2016 dated March 30, 2016,
Proposed Dividend or Dividend declared after balance
sheet date, if any, are not shown as liability in current
year balance sheet. This is disclosed in the notes to
accounts.

4.16 Corporate Social Responsibility

Expenditure towards corporate social responsibility, in
accordance with Companies Act, 2013 are recognised
in the Profit and Loss Account.

4.17 Input Credit under GST

Goods & Service tax input credit is accounted for in
the books within the time limit prescribed under CGST
Rules, 2017, as amended.

4.18 Priority Sector Lending Certificates (PSLC)

The Bank vide RBI circular FIDD.CO.Plan.BC.23/
04.09.01/2015-16 dated April 07, 2016 trades in
priority sector portfolio by selling or buying PSLC.
In case of a purchase transaction the Bank buys the
fulfilment of priority sector obligation and in case
of a sale transaction, the Bank sells the fulfilment
of priority sector obligation through the RBI trading
platform without any transfer of underlying risk or
loan assets. There is no transfer of risks or loan assets
in these transactions. The fee paid for purchase of the
PSLC is treated as ‘Other expense' in Schedule 16 and
the fee received from the sale of PSLCs is treated as
‘Miscellaneous Income' in Schedule 14 of the Profit and
Loss account in accordance with Master Direction on
Financial Statements - Presentation and Disclosures
2021, as amended from time to time.

4.19 Cash and Cash Equivalents

Cash and cash equivalents include cash in hand,
balances with Reserve Bank of India and Balances
with Other Banks / institutions and money at call
and short notice (including the effect of changes in
exchange rates on cash and cash equivalents in foreign
currency).

b) Reserves and Surplus

I) Draw down from Reserves - The Bank has not
undertaken any draw down from Reserves during
the year ended March 31, 2026 and March 31,
2025.

II) Appropriation to Reserves

i) Statutory Reserve

As mandated by the Banking Regulation Act,
1949, all Banking companies incorporated in
India shall create a reserve fund, out of the
balance of profit of each year as disclosed
in the profit and loss account and before
any dividend is declared and transfer a
sum equivalent to not less than twenty-
five percent of such profit. Accordingly, the
Bank has transferred an amount of ' 158.29
crore from current year Net profit (Previous
Year: ' 148.45 crore).

ii) Investment Fluctuation Reserve (IFR)

As per RBI Direction RBI/DOR/2025-26/162/
D0R.MRG.REC.No.81/00-00-001/2025-
26 dated November 28, 2025, Investment
Fluctuation Reserve (IFR) is to be created
with an amount not less than the lower of net
profit on sale of investments during the year
or net profit for the year less mandatory
appropriations, until the amount of IFR is at
least 2 % of the AFS and FVTPL (including
HFT) portfolio, on a continuing basis. As on
March 31, 2026, the Bank is maintaining an
IFR of ' 170.32 crore (Previous Year ' 170.32
crore) as against the minimum requirement
of ' 150.42 crore (Previous year ' 151.40
crore ) and is considered it as part of Tier II
capital for Capital Adequacy purposes.

iii) Capital Reserve

As per RBI Guidelines, profit/loss on sale
of investments in the ‘Held to Maturity'
(HTM) category is recognised in the Profit
and Loss Account and is thereafter the
profit on sale of an investment in HTM
appropriated (net of applicable taxes and
Statutory Reserve requirements) to Capital
Reserve. Accordingly, an amount of ' Nil
crore (Previous Year: Nil ) net of tax and
appropriation to Statutory Reserves has
been transferred to Capital Reserve. Any
profit/loss on sale of debt instruments
under ‘Available for Sale' (AFS) category is
recognised in the Profit and Loss Account.
During the year, loss of ' 0.01 Crore is
transferred from AFS-Reserve to the Capital
Reserve on sale of equity instruments

designated under AFS at time of initial
recognition.

iv) Special Reserve

As per the provisions under Section 36(1)
(viii) of Income Tax Act, 1961, specified
entities like Banks are allowed deduction in
respect of any special reserve created and
maintained, i.e. an amount not exceeding
twenty percent of the profits derived from
eligible business computed under the head
"Profits and gains of business or profession”
is carried to such reserve account. This
would be applicable till the aggregate of the
amounts carried to such reserve account
from time to time exceeds twice the amount
of the paid up share capital and General
Reserves of the entity. During the year,
the Bank has transferred an amount of
' 5.07 crore, (net of reversal of ' 0.07 crore
excess appropriation made during previous
year) (Previous year ' 4.40 crore) to Special
Reserve.

v) General Reserve

During the year ended March 31, 2026,
an amount of ' 3.00 crore (Previous year
' 2.00 crore) was transferred to the General
Reserve from Revaluation Reserve and
recognised ' 0.06 crore (Previous year
' 0.03 crore) on account of ESOP options
lapsed due to expiry of exercised period.

vi) AFS Reserve

As per RBI Direction RBI/DOR/2025-26/162/
D0R.MRG.REC.No.81/00-00-001/2025-26
dated November 28, 2025, the valuation
gains and losses across all performing
investments, irrespective of classification,
held under AFS is to be aggregated and
the net appreciation or depreciation is
to be directly credited or debited to a
reserve named AFS Reserve without routing
through the Profit & Loss Account. During
the current year the Bank recognised fair
valuation loss of ' 248.09 crore (Previous
year ' 78.92 crore gain) in AFS reserve on
account of revaluation of AFS securities.
Consequent to the transition provisions, the
Bank had recognised fair valuation gain (net
of tax) ' 10.47 crore (Gross amount ' 14.00
crore) in AFS reserve during previous year.

vii) Share Premium

During the year ended March 31,2026, the
Bank recognised ' 2.85 crore (Previous year
' 3.22 crore) on account of ESOP exercised
by employees.

ii) Qualitative disclosures around LCR

(1) Main drivers of LCR and evolution of contribution of inputs

The LCR standard aims to ensure that a Bank maintains an adequate level of unencumbered High Quality
Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time
horizon under a significantly severe liquidity stress scenario specified by supervisors. At a minimum, the stock
of liquid assets should enable the Bank to survive until day 30 of the stress scenario, by which time it is
assumed that appropriate corrective actions can be taken.

The LCR should be minimum 100% (i.e. the stock of HQLA should at least equal total net cash outflows) on
an ongoing basis because the stock of unencumbered HQLA is intended to serve as a defense against the
potential onset of liquidity stress.

The LCR position depends upon the level of High Quality Liquid Assets (HQLA) and level of inflows and outflows
in 30 days stress horizon computed as per the RBI guidelines in this regard.

(2) The composition of High Quality Liquid Assets (HQLA)

Banks' High Quality Liquid Assets consists of the following

i. Cash including cash reserves in excess of required CRR.

ii. Government Securities in excess of the minimum SLR requirement.

iii. Investments in Government Securities held within the mandatory SLR requirement, to the extent allowed
by RBI under Marginal Standing Facility (MSF) which is at present 2 % of NDTL.

iv. Investment in Government Securities held up to 16 % of Net Demand and Time Liabilities (NDTL)
permissible under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR).

v. Level 2A assets -

a. Corporate bonds, not issued by a bank/financial institution/NBFC or any of its affiliated entities,
which have been rated AA- or above by an Eligible Credit Rating Agency, subject to a minimum
haircut of 15 %.

b. Commercial Papers not issued by a bank/PD/financial institution or any of its affiliated entities,
which have a short-term rating equivalent to the long-term rating of AA- or above by an Eligible
Credit Rating Agency subject to a minimum hair cut of 15 %.

vi. Level 2 B Assets - These are assets as defined in RBI's LCR guidelines.

vii. Cash outflows over the 30 days period - Bank considers Cash outflows from Retail Deposits, secured
and unsecured wholesale funding, undrawn committed credit and liquidity facilities subject to applicable
run-off factors as prescribed by RBI.

viii. Cash Inflows over the 30 days period - Bank is also looking into the cash inflows within 30 days period
arising out of maturing secured lending transactions and other inflows from Retail and small business
counterparties, non-financial wholesale counterparties as well as amounts to be received from financial
institutions and RBI.

ix. LCR is computed as under -

Total stock of High Quality Liquid Assets over Total Net Cash outflows for the next 30 calendar days.

(3) Intra period changes

The intra period changes are mainly on account of changes in unencumbered excess SLR positions, variations
in Level 2A / Level 2B assets, regulatory changes in MSF and FALLCR levels and various components under net
cash outflows over the 30 days period.

Other Regulatory Requirements -

a. Currency Mismatch in LCR - The Bank has aggregate liabilities in denominated foreign currency ($) of
more than 5 % of the Bank's total liabilities and LCR is also computed in $.

b. Centralization of liquidity management - Banks' liquidity management and monitoring is centralised. Bank
has put in place a Board adopted liquidity management policy in line with RBI regulation and guidelines.
Inflows and outflows are comprehensively captured in the automated LCR system (BASEL).

Bank is required to maintain minimum LCR of 100% on an ongoing basis as per RBI guidelines w.e.f
January, 2019. As on March 31, 2026, LCR of the Bank is at 109.27%.

c. Net Stable Funding Ratio

Bank has disclosed NSFR disclosures on its website at the link: https://www.csb.bank.in/basel-2basel-3-
disclosures.

C) Acquisition of shares due to conversion of debt to equity during a restructuring process:

The Bank has not acquired any shares due to conversion of debt to equity during restricting process

2.4.5 Divergence in Asset Classification and Provisioning

In terms of the RBI guidelines, banks are required to disclose the divergence in asset classification and provisioning
consequent to RBI's annual supervisory process in their notes to accounts to the financial statements, wherever the
additional provisioning assessed / additional gross NPAs identified by RBI exceeds the threshold specified by RBI. The
threshold for provisioning is 5 % of the reported profit before provisions and contingencies for the reference period and
that for additional gross NPAs is 5 % of the published incremental Gross NPAs for the reference period.

Based on the above, there was no reportable divergence in asset classification and provisioning for NPAs for the year
ended March 31, 2025.

2.4.6 Disclosure of transfer of loan exposures

Details of loans transferred / acquired during the year ended March 31, 2026 under the RBI Master Direction on Transfer
of Loan Exposures dated September 24, 2021 are given below:

(i) The Bank has not transferred any Non-Performing Assets(NPA), Special Mention Accounts (SMA) and Loans not in
default during year ended March 31, 2026 and March 31, 2025.

(ii) Details of loans not in default acquired through assignment during year ended March 31, 2026 and March 31, 2025:
Nil

(iii) The Bank has not acquired any stressed loans during the year ended March 31, 2026 and March 31, 2025.

(iv) Distribution of Security Receipts held based on ratings assigned by the credit rating agencies:

2.5.7 Unhedged Foreign Currency Exposure

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its
borrowers. The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by
reviewing their foreign currency exposures and encouraging them to hedge the unhedged portion. The policy framework
also articulates the methodologies for ascertaining the amount of unhedged foreign currency exposures, estimating
the extent of likely loss, estimating the riskiness of the unhedged position and making appropriate provisions and capital
charge as per extant RBI guidelines. Further, the Bank reviews the unhedged foreign currency exposure across its
portfolio on a periodic basis. The Bank maintains incremental provisions and additional capital for the unhedged foreign
currency exposures of its borrowers in line with the extant RBI Circular RBI/DOR/2025-26/157 DOR.CRE.REC.76/07-02-
001/2025-26 November 28, 2025 as given below;

2.7.4 Disclosures on risk exposure in derivatives:

Qualitative disclosures:

Derivatives are financial instruments whose characteristics are derived from underlying parameter's like interest rates,
exchange rates or indices. Bank offers derivative products to the customers to enable them to hedge their exposure
within the prevalent regulatory guidelines. The Bank also undertakes transactions in Long Term Forex Contracts (LTFX)
for hedging its Balance Sheet and also offers them to its customers. These transactions expose the Bank to various
risks primarily credit, market, operational, legal and reputational. The Bank has adopted the following mechanism for
managing risks arising out of the derivative transactions. The derivative transactions are governed by the Policy for
Investment, Forex and Derivative Activities and Market Risk Management Policy of the Bank as well as by the extant RBI
guidelines. Various operational/risk limits are set up and actual exposures are monitored vis-i-vis the limits allocated.
These limits are set up taking into account market volatility, risk appetite, business strategy and management experience.
Risk limits are in place for risk parameters viz. Value at Risk (VaR), Net loss, deal size and Price Value of a Basis Point
(PVBP). Actual positions are monitored against these limits on a daily basis and breaches if any are reported promptly.
Risk assessment of the portfolio is periodically. The Treasury front office enters into derivative transaction with
customers and counterparties. The Bank has an independent back office and mid office as per regulatory guidelines.
The MTM position of the derivative portfolio is monitored on a regular basis. The impact on derivative portfolio on
account of the probable market movements are assessed on regular basis. The Bank deals in derivatives for hedging
foreign currency assets/liabilities subject to the prevailing regulatory guidelines. Transactions for hedging and trading
are recorded separately. For hedge transactions the Bank identifies the hedged item (asset or liability) at the inception of
the transaction itself. The effectiveness is ascertained at the time of inception of the hedge and periodically thereafter
Transactions related to foreign exchange forward / Interest rate Swaps , are marked to market daily and the MTM is
accounted in the books. Bank has provided sufficient collateral to central counter parties and exchanges wherever
applicable. In the Interbank Space the Bank deals with other major Banks and the default risk is perceived as low in this
segment.

2.7.5 Credit Default Swaps: The Bank has not undertaken any transactions in Credit Default Swaps (CDS) during the years
ended March 31, 2026 and March 31, 2025.

2.8 The Bank has not entered into any transaction related to Securitisation during years ended March 31, 2026 and March
31, 2025.

2.9 There are no Off balance sheet SPVs sponsored by the Bank as on March 31, 2026 and March 31, 2025.

2.10 Transfers to Depositor Education and Awareness Fund (DEA Fund)

In accordance with the guidelines issued by the RBI, the Bank transfers the amount to the credit of any account which
has not been operated upon for a period of ten years or any deposit or any amount remaining unclaimed for more than
ten years to the DEA Fund. Details of amounts transferred to / reimbursed by DEA Fund is disclosed as "Contingent
Liability - Others, items for which the Bank is contingently liable” under Schedule 12 of the Financial Statements. Details
of amounts transferred to / reimbursed by DEA Fund are set out below:

2.13 Disclosure on RemunerationA. Qualitative Disclosures

(a) Bodies that oversee remuneration

(i) Name, composition and mandate of the main body overseeing remuneration.

The Nomination & Remuneration Committee ("NRC/ Committee”) is the body which oversees the entire remuneration
aspects in the Bank.

The constitution of the Committee is as per the extant Reserve Bank of India guidelines/Directions, Section 178
of the Companies Act, 2013 and Regulation 19 of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015. The Committee currently comprises five members. All members of
the Committee are Non Executive Directors, including four Independent Directors. Four members of the Committee
also serve on the Risk Management Committee (RMC) of the Board, thereby facilitating closer alignment between
risk oversight and the governance of the Bank's compensation framework
The functions of the Committee include;

• recommending appointments of Directors to the Board;

• identifying persons who are qualified to become Directors and who may be appointed in senior management
in accordance with the criteria laid down and recommending to the Board their appointment and removal;

• formulate a criteria for the evaluation of the performance of the whole time/ independent Directors and the
Board and to extend or continue the term of appointment of independent Directors on the basis of the report
of performance evaluation of independent Directors;

• recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel,
Material Risk Takers (MRTs) and other employees;

• recommending to the Board the remuneration (including performance bonus, share-linked instruments
and perquisites) to Part-time Chairperson, Non-executive Directors, wholetime Directors (WTDs) and
senior management, approving the policy for and quantum of variable pay payable to members of the staff
including senior management, key managerial personnel, material risk takers and formulating the criteria for
determining qualifications, positive attributes and independence of a Director; and

• framing policies on Board diversity, framing guidelines for the Employees Stock Option Scheme (Scheme
2019), CSB Cash Settled - Stock Appreciation Rights Scheme 2025 and Long-Term Cash Reward Plan and
deciding on the grant/quantum of the Bank's stock options/units/rights/reward to employees and WTDs of
the Bank.

(ii) External consultants whose advice has been sought, the body by which they were commissioned, and in what
areas of the remuneration process.

During the year ended March 31, 2026, the Bank availed the services of a reputed consulting firm to conduct
market-benchmarking studies in the area of compensation, including executive compensation. The firm engaged
possesses requisite expertise in remuneration benchmarking, including advisory services for banking and financial
sector institutions.

(iii) Scope of the Bank’s remuneration policy (e.g. by regions, business lines), including the extent to which it is
applicable to foreign subsidiaries and branches

The Compensation Policy covers all employees of the Bank working across in the country. The Bank does not
have any foreign subsidiaries or branches. Nomination and Remuneration Committee of the Board monitors
implementation of policy in the Bank on behalf of the Board.

(iv) Type of employees covered and number of such employees.

All employees of the Bank are governed by the Compensation Policy.

(b) Design and structure of remuneration processes

(i) Objectives of the Compensation Policy

The Compensation Policy applies to all employees of the Bank. The Policy is designed to ensure that compensation
practices do not encourage excessive risk-taking that may arise from the structure of compensation scheme.

The Policy covers all components of remuneration, including fixed pay, perquisites, variable pay (cash or non-cash),
share-linked instruments, guaranteed bonus (joining /sign-on bonus), severance package, retirement benefits such
as pension and gratuity, and other eligible benefits. It seeks to ensure that compensation outcomes reflect both
individual contribution and organisational performance, incentivise sustainable growth, and maintain consistency
with the Bank's values and governance standards.

(ii) Key Features of the Policy

The Compensation Policy incorporates robust governance mechanisms and provides for active oversight of
compensation design, implementation, and review. The Committee periodically evaluates the effectiveness of
the compensation framework to ensure that it functions as intended and remains aligned with the Bank's risk
profile and strategic objectives. The Policy mandates independence for employees engaged in control and risk
functions, ensuring that their compensation is not linked to business performance but is commensurate with their
oversight responsibilities. It also emphasises rigorous supervisory review, timely rectification of deficiencies, and
transparent disclosure of compensation practices. Further, the Policy provides for structured processes relating
to performance assessment, risk adjustment, variable-pay determination and administration of share-linked
compensation schemes, thereby supporting sound governance and alignment of compensation outcomes with
sustainable value creation.

(iii) Alignment of compensation philosophy with prudent risk taking:

The Policy seeks to align compensation with prudent risk-taking, individual performance, and the Bank's long-term
objectives. It aims to attract, motivate, and retain talent in a competitive environment, reinforce a culture of
meritocracy, and maintain fairness and transparency in reward practices. In line with regulatory expectations, the
Policy provides for a balanced mix of fixed and variable compensation, both short-term and long-term, cash and
non-cash components in compliance with RBI guidelines, risk-management principles, and the Bank's strategic
priorities/objectives.

(iv) Effective governance of compensation:

The Committee has oversight over the Bank's compensation structure and defines the Key Performance Indicators
(KPIs) for the MD & CEO, Whole Time Directors and equivalent positions. These KPIs include both financial and non
financial parameters, supported by detailed/defined sub measures. The Committee evaluates organisational and
individual performance against these KPIs and, based on its assessment, makes recommendations on variable pay
for employees. It also recommends to the Board the compensation payable to Whole Time Directors, equivalent
positions and senior management, subject to the necessary approvals, wherever applicable.

(v) Changes, if any, made by the remuneration committee in the firm’s remuneration policy during the past
year, and if so, an overview of any changes that were made.

During the year ended March 31, 2026, the Bank's Compensation Policy was amended twice by the NRC and Board
as below:

(vi) Process followed by the Bank to ensure that the risk and compliance employees are remunerated
independently of the businesses they oversee:

Staff engaged in financial and risk-control and compliance functions, including internal audit, are compensated
independently of the business areas they oversee and, in a manner, commensurate with their oversight
responsibilities. Effective independence and appropriate authority of such staff are necessary to preserve the
integrity of financial and risk management's influence on incentive compensation. The Policy provides that the
mix of fixed and variable compensation for such personnel shall be weighted in favour of fixed compensation;
accordingly, the requirement of a minimum 50% variable-pay component is not applicable to this category of staff.
However, a reasonable proportion of variable pay is maintained to ensure that malus and clawback provisions can
be effectively applied where warranted.

(c) Ways in which current and future risks are taken into account in the remuneration processes

(i) Key risks that the Bank takes into account when implementing remuneration measures

The Bank's ICAAP policy defines risk-bearing capacity, risk-appetite statements and limits for key risk categories,
within which all business activities are undertaken. In alignment with the ICAAP, the KPIs for the MD&CEO, Whole-Time
Directors, Material Risk Takers (MRTs) and other relevant employee groups (excluding assurance functions) incorporate
risk-management and other parameters such as regulatory compliance, customer service, stakeholder relationships,
leadership development, in addition to performance indicators in areas such as financial, business and operational
metrics. These risk-aligned KPIs are considered by the NRC when assessing organisational and individual performance
and making compensation recommendations to the Board. Further, the Bank's remuneration framework integrates
current and future risks by adjusting compensation for roles exposed to credit, market, liquidity and operational risks,
linking variable pay to risk-adjusted performance. Malus and clawback provisions allow reduction or recovery of deferred
compensation in cases of negative financial outcomes, misconduct or breaches of risk controls. Variable-pay structures
for Whole-Time Directors and MRTs are risk-aligned, while remuneration for employees in risk-control and compliance
roles is predominantly fixed to preserve independence and ensure sound oversight.

(ii) Nature and type of metrics used to measure the key risks, including risks that are difficult to measure.

The Bank has a robust system for measuring and reviewing risks, and these risk parameters form an integral part of
the performance scorecard used for setting objectives and evaluating performance. The scorecard covers financial
and business metrics as well as qualitative factors such as adherence to internal processes, regulatory compliance,
timely closure of audit issues, customer service, the effectiveness of the risk-management framework, stakeholder
relationships and leadership development. Weightage is assigned not only to quantitative outcomes but also to the
manner in which objectives are achieved, ensuring a balanced and risk-aligned performance assessment.

(iii) Ways in which these measures affect remuneration

Risk-related performance measures are embedded in the scorecards used for evaluating the MD&CEO, Whole¬
Time Directors, Material Risk Takers and other eligible staff. These measures ensure that performance assessments
are aligned with the Bank's risk-management framework. Each year, financial plans and performance targets are
formulated within the approved risk-limit structure, and adherence to this framework is considered by the Committee
while assessing organisational and individual performance. The KPIs applicable to the above categories incorporate
relevant risk-management parameters, regulatory compliance and other qualitative factors in addition to financial and
business metrics. The Committee reviews all these aspects to ensure prudent risk-taking and makes corresponding
compensation recommendations to the Board.

(iv) The nature and type of these measures that have changed over the past year and reasons for the changes, as well
as the impact of changes on remuneration

The nature and type of these measures have not changed over the past year and hence, there is no impact on
remuneration.

(d) Ways in which the Bank seeks to link performance during a performance measurement period with levels of
remuneration

(i) Main performance metrics for Bank, top level business lines and individuals

The main performance indicators for FY 2025-26 covered both financial and non-financial measures, including profit
before tax, regulatory compliance, risk-management standards, customer service quality, stakeholder relationships and
leadership development, to the extent as appliable in respective cases.

(ii) Methodology followed whereby individual remuneration is linked to the Bank-wide and individual performance

The Committee considered above mentioned aspects while assessing performance and made compensation-related
recommendations to the Board for WTDs, MRTs and equivalent and other positions.

(iii) The measures that the Bank will in general implement to adjust remuneration in the event that performance
metrics are weak, including the Bank’s criteria for determining ‘weak’ performance metrics

The Bank's Compensation Policy specifies the measures to be applied when there is reasonable evidence of deterioration
in financial performance. In such circumstances, and in accordance with the policy framework, the Nomination &
Remuneration Committee (NRC) may determine the invocation of malus or clawback on none, part, or all of the relevant
variable compensation. The Bank's criteria for determining ‘weak' performance metrics such as negative financial
outcomes, divergence in provisioning etc. are provided in the Compensation Policy of the Bank

(e) Ways in which the Bank seeks to adjust remuneration to take account of the long term performance

(i) The Bank’s policy on deferral and vesting of variable remuneration and, if the fraction of variable remuneration
that is deferred differs across employees or groups of employees, a description of the factors that determine the
fraction and their relative importance

The Bank's variable compensation comprises cash, share linked instruments, or a mix of both, and is capped as a
proportion of fixed pay in accordance with the Compensation Policy. The proportion of variable pay is higher for senior
roles and lower for junior levels. The quantum of variable pay for an employee does not exceed a certain percentage
(as stipulated in the compensation policy) of the total fixed pay in a year. For the MD&CEO, Whole-Time Directors and
Material Risk Takers (MRTs), at least 50% of total compensation is variable and a minimum of 60% of such variable pay
is subject to deferral for not less than three years, applicable to both cash and non-cash components. Where variable
pay includes cash, at least 50% of the cash component is deferred, except where the cash variable is below ' 25 lakhs.
However, the payment of variable pay, including deferrals are subject to review of performance. For staff in risk-control
and compliance functions, compensation is weighted towards fixed pay to preserve independence from business line
outcomes, and the 50% minimum variable-pay requirement does not apply to this category. Deferral for other officers
(non IBA) is implemented as per the Compensation Policy, including Employees Stock Option Scheme (Scheme 2019),
CSB Cash Settled - Stock Appreciation Rights Scheme 2025 and Long-Term Cash Reward Plan.

(ii) The Bank’s policy and criteria for adjusting deferred remuneration before vesting and (if permitted by national
law) after vesting through claw back arrangements

The Bank's Compensation Policy provides for invocation of both malus and clawback arrangements to deferred
remuneration, based on clearly defined triggers. Deferred variable pay may be reduced or withheld (all/ part) in cases such
as substantial deterioration in profitability, divergence in NPAs beyond the regulatory disclosure threshold, misconduct
involving integrity breaches, or any other event determined by the Committee. Before invoking malus or clawback, the
Committee undertakes a detailed fact finding process, considers macro and internal factors, assesses the degree of
accountability, and follows due process, including principles of natural justice. Malus and clawback provisions continue
to apply throughout the deferral period and may extend beyond the exercise period, including for up to five years post
separation from the Bank. The Committee also has the discretion to extend the clawback period further in those cases
involving misconduct, depending on the severity and associated risk implications. Malus and clawback provisions apply
to the MD & CEO, Whole-Time Directors, Material Risk Takers (MRTs) and Senior Executives (non IBA) as applicable.

(f) Different forms of variable remuneration that the Bank utilises and the rationale for using these different forms

(i) Forms of variable remuneration offered and a discussion of the use of different forms of variable remuneration

and, if the mix of different forms of variable remuneration differs across employees or group of employees, a
description of the factors that determine the mix and their relative importance

The Bank uses an optimal mix of cash and share linked instruments to structure variable compensation for the MD
& CEO, Whole-Time Directors, Material Risk Takers (MRTs), and select senior and other executives/officers on the
Non IBA Scheme, ensuring alignment with individual performance, role responsibility and risk exposure. Variable pay
comprises cash (including CSARs/ Long-Term Cash Reward Plan) and/or non-cash instruments such as ESOPs, with the
proportion of non-cash components typically higher at senior levels compared to frontline staff and junior management
levels. For the MD & CEO, WTDs and MRTs, the Compensation Policy requires a balanced composition of variable pay,
mandating that at least 50% of variable pay be awarded through non-cash instruments and the same is at least 67%
where variable pay exceeds 200% of fixed pay. Where share-linked instruments are not permitted by law or regulation,

variable pay may be paid entirely in cash, within the limits prescribed under the Policy. Variable pay for other eligible
employees is determined in accordance with the Policy, with staff engaged in risk-control and compliance functions
receiving predominantly fixed compensation to preserve independence. Total variable pay is determined using the
balanced-scorecard framework, incorporating individual, business-unit and organisational performance. For employees
under the IBA Scheme, Performance Linked Variable Pay (PLVP) may be granted to select categories based on defined
performance metrics.

Grants of ESOPs/CSARs/ Reward Plan form part of the Bank's overall performance and retention framework and are
made in accordance with the Employees Stock Option Scheme (Scheme 2019), CSB Cash Settled - Stock Appreciation
Rights Scheme 2025 and Long-Term Cash Reward Plan, subject to the approval of the NRC and the Board.

(B) Quantitative Disclosures

(1) Whole-Time Directors and Material Risk Takers.

The quantitative disclosures for the financial year ended March 31, 2026 cover the Bank's Whole-Time Directors
and Material Risk Takers. The Material Risk Takers have been identified in accordance with the guidelines on
"Compensation of Whole-Time Directors/Chief Executive Officers/Material Risk Takers and Control Function Staff,
etc.” issued by Reserve Bank of India on November 04, 2019, which have since been repealed and superseded by
Reserve Bank of India (Commercial Banks - Governance) Directions, 2025, dated November 28, 2025

Notes pertaining to financial year ended March 31, 2026

1. Fixed remuneration includes salary, consolidated benefit allowance, gratuity, residential accommodation
and Bank's contributions towards National Pension Scheme/Provident Fund etc. The value of perquisite is
calculated as cost to the Bank. The Fixed Pay of separated MRTs have been considered for the period they
were in service with the Bank.

2. Employees received variable pay includes MD & CEO (past and present), WTDs and other Material Risk Takers
(MRTs) as per the RBI Directions dated November 28, 2025 and variable pay includes cash bonus paid and
stock options granted/ vested/ exercised during the year. Deferred remuneration (both cash and stock
options) reported here includes deferred remuneration paid out in the financial year/outstanding at the end
of the financial year in the case of cash bonus and vested/unvested/exercised in the case of stock options
w.r.t. the said MRTs.

As per the Compensation Policy of the Bank read with the Directions, MRTS who had resigned are not eligible
for deferred remuneration (cash bonus and unvested stock options) but are eligible to exercise vested options
within prescribed time as per CSB Employee Stock Option Scheme 2019. Hence, the deferred remuneration
reported (outstanding/ paid out) in the financial year did not include the deferred remuneration of resigned
MRTs but include vested options exercised by them within the prescribed time as per CSB Employee Stock

Option Scheme 2019 and deferred portion of cash component paid out before resignation . The unvested
options of resigned MRTs stands lapsed as per the scheme, hence excluded from the unvested/vested options
reported. A similar approach has been followed for deferred remuneration in the case of employees who
resigned in the same year of grant. All such deferred components stand lapsed from the date of resignation.

3. Fair value is the weighted average fair value of stock options computed using Black-Scholes options pricing
model as on the grant date.

4. i The Bank, on November 27, 2025, received approval of Reserve Bank of India in terms of Section 35B of

the Banking Regulation Act, 1949, for revision of the fixed pay of Mr. Pralay Mondal, Managing Director
& CEO, from ' 2.54 crore p.a. to ' 2.79 crore p.a., with effect from April 01, 2025.

4. ii. The Bank, on November 27, 2025, received approval of Reserve Bank of India in terms of Section 35B of

the Banking Regulation Act, 1949, for grant/ payment of variable pay of ' 2.78 crore to Mr. Pralay Mondal,
Managing Director & CEO, for the performance period from April 01, 2024 to March 31, 2025, out of
which ' 1.39 crore shall be in non-cash form (stock options) and the balance in cash.

5. i. The Bank, on November 27, 2025, received approval of Reserve Bank of India in terms of Section 35B of

the Banking Regulation Act, 1949, for revision of the fixed pay of Mr. B K Divakara, Executive Director,
from ' 0.80 crore p.a. to ' 0.88 crore p.a., with effect from April 01, 2025.

5. ii. The Bank, on November 27, 2025, received approval of Reserve Bank of India in terms of Section 35B of

the Banking Regulation Act, 1949, for grant/ payment of variable pay of ' 0.80 crore to Mr. B K Divakara,
Executive Director, for the performance period from April 01, 2024 to March 31, 2025, out of which
' 0.40 crore shall be in non-cash form (stock options) and the balance in cash.

6. Payments of deferred portion of variable pay (Cash) made to Mr. C. VR. Rajendran, ex-Managing Director &
CEO of the Bank, during the financial year 2025-26 were also included as part of the total payments made to
WTDs/MRTs and accordingly, reporting was made at respective places.

7. No remuneration/sitting fee was paid to the Non-Executive Non-Independent Directors.

8. Payment of sitting fee to Non-Executive Independent Directors was made within the limits as prescribed in
Section 197(5) of the Companies Act, 2013 read with rule 4 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.

9. The remuneration figures reported herein are on a payment basis and represent the actual amounts paid
during the reporting period.

Notes pertaining to financial year ended March 31, 2025

1. Fixed remuneration includes salary, consolidated benefit allowance, gratuity, residential accommodation
and Bank's contributions towards National Pension Scheme/Provident Fund etc. The value of perquisite is
calculated as cost to the Bank. The salaries of separated MRTs have been considered for the period they were
in service with the Bank.

2. Employees received variable pay includes MD & CEO (past and present), WTDs and other Material Risk Takers
(MRTs) based on the revised criteria given by RBI in its guidelines dated November 04, 2019 and variable pay
includes cash bonus paid and stock options granted/ vested/ exercised during the year. Deferred remuneration
(both cash and stock options) reported here includes deferred remuneration paid out in the financial year/
outstanding at the end of the financial year in the case of cash bonus and vested/unvested/exercised in the
case of stock options w.r.t. the said MRTs.

As per the Compensation Policy of the Bank read with the guidelines, MRTS who had resigned are not eligible
for deferred remuneration (cash bonus and unvested stock options) but are eligible to exercise vested options
within prescribed time as per CSB Employee Stock Option Scheme 2019. Hence, the deferred remuneration
reported (outstanding/ paid out) in the financial year did not include the deferred remuneration of resigned
MRTs but include vested options exercised by them within the prescribed time as per CSB Employee Stock
Option Scheme 2019. The unvested options of resigned MRTs stands lapsed as per the scheme, hence excluded
from the unvested/vested options reported.

3. Fair value is the weighted average fair value of stock options computed using Black-Scholes options pricing
model as on the grant date.

4. i The Bank, on October 22, 2024, received approval of Reserve Bank of India in terms of Section 35B of
the Banking Regulation Act, 1949, for revision of the fixed pay of Mr. Pralay Mondal, Managing Director
& CEO, from ' 2.42 crore p.a. to ' 2.54 crore p.a., with effect from April 01, 2024.

4. ii. The Bank, on October 22, 2024, received approval of Reserve Bank of India in terms of Section 35B

of the Banking Regulation Act, 1949, for grant/ payment of variable pay of ' 2.42 crore to Mr. Pralay
Mondal, Managing Director & CEO, for the performance period from April 01, 2023 to March 31, 2024,
out of which ' 1.62 crore shall be in non-cash form (stock options) and the balance in cash.

5. Payments of deferred portion of variable pay (Cash) made to Mr. C. VR. Rajendran, ex-Managing Director &
CEO of the Bank, during the financial year 2024-25 were also included as part of the total payments made to
WTDs/MRTs and accordingly, reporting was made at respective places. A similar approach has been followed
in the case of the options granted to him in the previous financial year(s) and vested/exercised in the year.

6. No remuneration/sitting fee was paid to the Non-Executive Non-Independent Directors.

7. Payment of sitting fee to Non-Executive Independent Directors was made within the limits as prescribed in
Section 197(5) of the Companies Act, 2013 read with rule 4 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.

8. Remuneration paid to Mr. B K Divakara, Executive Director, also includes the arrears paid to him for the period
from March 15, 2024 to March 31, 2024 for the said position.

the implementation of Ind AS by a year. The legislative amendments recommended by the Reserve Bank are under
consideration of the Government of India. Accordingly, RBI through its notification dated March 22, 2019 deferred the
implementation of Ind AS till further notice.

Even though RBI has deferred the implementation , the Bank is gearing itself to bring the necessary systems and
processes in place to facilitate the Proforma submission to RBI and seamless transition to Ind AS. With respect to the
various instructions from Ministry of Corporate Affairs and Reserve Bank of India (RBI), the actions taken by the Bank
are summarised as follows:

• Bank is in the process of implementing changes required in existing IT architecture and other processes to enable
smooth transition to Ind AS

• As directed by the RBI, the Bank is submitting half yearly Proforma Ind AS financial statements to the RBI within
the stipulated timeline

• Training to the employees is imparted in a phased manner

• The Bank will continue its preparedness towards adoption of Ind AS as per regulatory requirement and to liaise with
RBI and industry bodies on various aspects pertaining to Ind AS implementation.

2.19 Credit exposure to Single Borrower and Group Borrower

During the years ended March 31, 2026, the Bank's credit exposure to single borrower and group borrowers was within
the prudential exposure limits prescribed by RBI. Exposure is computed as per RBI (Commercial Banks - Concentration
Risk Management) Directions, 2025 dated November 28, 2025 as amended from time to time.

(d) The extent to which fair values of the items were determined directly by reference to observable prices in an
active market or recent market transactions on arm's length terms or were estimated using other valuation
techniques - Fair value as explained in item (c) above

(e) The revaluation surplus, indicating the change for the period and any restrictions on the distribution of the
balance to shareholders

Revaluation surplus as on 31.03.2026: '170.83 crore (Previous Year '173.83 crore)

Change for the period: During the year Bank has not revalued the assets held under the category premises. An
amount of '1.66 crore (Previous Year '1.75 crore) has been transferred from Revaluation Reserve to General
Reserves being depreciation based on the revalued carried amount.

As per para 44 of AS 10 - Property, Plant & Equipment, revaluation surplus of '1.34 crore (Previous Year '0.25
crore) is transferred to the General Reserve relating to asset derecognised during the year.

3.2 Employee Benefits

3.2.1 Disclosures for Provident Fund & New Pension Scheme

Contributions to employee provident fund and new pension scheme (contributory), debited to Profit & Loss Account
during the year amounts to ' 46.56 crore (Previous Year ' 29.43 crore).

B. Impact of change in Labour Codes:

On November 21, 2025, the Government of India notified four Labour Codes- the Code on Wages, 2019, the
Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and
Working Conditions Code, 2020, collectively referred to as the ‘New Labour Codes', consolidating 29 existing
labour laws. The Ministry of Labour & Employment has published draft Central Rules and FAQs on December 30,
2025, to facilitate assessment of the financial impact arising from these regulatory changes. Accordingly, the
Bank has recognised an estimated incremental impact of ' 5.22 crore under ‘Employees cost' in the Profit and
Loss Account during the year ended March 31, 2026, considering best information available. The Bank continues
to monitor the finalisation of Central and State Rules and clarifications from the Government on the New Labour
Codes and would provide appropriate accounting effect on the basis of such developments, as needed.

3.2.3 Other Compensated Absence

As on March 31, 2026, the Bank holds provision of ' 4.22 crore (Previous Year '4.22 crore) towards provision for Sick
Leave and Leave Fare Concession based on actuarial valuation.

The Actuarial liability of compensated absences of accumulated sick and leave travel concession of the employees of
the Bank is given below:

3.2.4 CSB Employee Stock Option Scheme

i. Equity-settled options

Pursuant to the requisite approval of the members on May 04, 2019, the Bank has formulated a stock option
scheme called "CSB Employees Stock Option Scheme2019” ("ESOS 2019” or "Scheme”). The scheme is intended
to promote the culture of employee ownership and as well as to attract, retain, motivate and incentivize talents in
the Bank. The Scheme shall be administered through an employee stock option trust viz., CSB ESOS Trust ("ESOS
Trust”/"Trust”) in the nature of an irrevocable employee welfare trust in due compliance with the applicable laws.
Under the Scheme, the Bank can allot a maximum of 50 lakh shares to the Trust, over a period of time. Under the
trust route, the Bank allots shares to the trust and trust will transfer the shares to the eligible employees at the
time of exercise of option by eligible employees on meeting terms of grant fixed by the Nomination &Remuneration
Committee.

Being a Pre-IPO Scheme, in terms of Regulation 12(1) of the erstwhile Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations”), any fresh grant of Options can be made
under ESOS 2019 in case such ESOS 2019 is in compliance with the SEBI SBEB Regulations and ratified by the
members of the Bank post IPO. Accordingly, the ESOS 2019 was placed before the members at the Annual General
Meeting held on July 20, 2020, post listing of shares on December 04, 2019, for ratification though the ESOS 2019
and as well as the Trust as originally introduced were already in conformity with the SEBI SBEB Regulations and
ratification obtained. No options were granted prior to the amendment/ratification of the scheme/listing of shares
of the Bank.

The first amendment was made in the Scheme at the Annual General Meeting of the Bank held on July 20, 2020,
inter alia, to increase the Options Reserve by an additional quantum of 1,16,72,791. The source of corresponding
number of shares equivalent to 1,16,72,791 options shall be in the form of (i) fresh issue of shares up to 30,00,000
shares and (ii) secondary acquisition by the Trust up to 86,72,791 shares. With this, the total Options Reserve
under ESOS 2019 stood at 1,66,72,791 options. A few other modifications were also made in the scheme as per the
prevailing regulations and also to effect change of name of the Bank in the Scheme document.

The second amendment was made in the Scheme at the Annual General Meeting of the Bank held on August 12,
2021, permitting vesting of unvested employee stock options after the date of retirement/early retirement as per
original Vesting schedule as specified in the Grant Letter, subject to the provision of the applicable laws and at the
discretion of the Nomination and Remuneration Committee of the Board.

Post amendments, under the Scheme, (i) the quantum of secondary acquisition is capped at 5 % (Five percent) of
the paid-up equity share capital of the Bank as on March 31, 2020, which is line with the statutory ceiling prescribed
under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and (ii) Acquisition of shares
by the Trust in any financial year shall not exceed the ceilings, which is currently 2% of the paid up equity capital
as at the end of the previous financial year, prescribed in SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 as amended from time to time.

Vesting Period for any Options granted under this Scheme shall be subject to statutory minimum period of 1 (One)
year from the date of Grant during which no Vesting shall be allowed. Subject to this statutory minimum period,
any staggered Vesting prescribed for any Grant shall be over a Vesting schedule of minimum of 3 (Three) years
and maximum of 10 (Ten) years from the date of Grant. The exercise period in respect of a vested option shall be a
period commencing from the relevant vesting date of such option and shall end with the expiry of 10 (Ten) years or
such other shorter period as approved by the Committee from the date of grant of such option.

In case of trust route of issuance of ESOPs, the trust on its own will not have funds to be able to acquire the
shares from the Bank as the trust is not a business trust and is specifically created with the objective of issuance
of ESOPs to the employees. Trust has to find out other avenues for sourcing of fund for purchasing shares from
the Bank. In terms of Section 20 of the Banking Regulation Act, 1949, the Bank cannot lend to trust to purchase
its own shares. Trust shall not deal in derivatives, and shall undertake only delivery based transactions for the
purposes of secondary acquisition and for the purpose of the Plan.

As on March 31, 2026, 40,08,240 shares of the Bank were held by CSB ESOS Trust as per the scheme which were
allotted to the trust on July 12, 2019. No shares were allotted to the trust in the financial year 2025-26 (Previous
year: Nil)

Stock option activity under the scheme during the financial year ended March 31, 2026 and March 31, 2025 is set
out below:

The weighted average fair value, based on Black-Scholes model, of options granted during the financial year ended
March 31, 2026, was ' 141.02 (Financial year ended March 31, 2025 was ' 135.74).

Bank uses Intrinsic Value Method for accounting the value of Options granted under the Scheme up to and including
March 31, 2021 and thereafter Fair Value method by using Black-Scholes Model, for accounting the value of Options
granted. For accounting the value of Options granted under the Scheme by using Intrinsic Value Method, the difference
between the market price and exercise price is considered as the value of an Employee Stock Option and expensed
over the period of vesting. The market price for this purpose is the latest available closing price on a recognised stock
exchange on which the shares of the company are listed on the date immediately prior to the relevant date. If such
shares are listed on more than one recognised stock exchange, then the closing price on the recognised stock exchange
having higher trading volume shall be considered as the market price which is in line with Securities and Exchange Board
of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. In case of valuation of options is done by
using fair value method by using Black- Scholes Model, the fair value thus arrived at should be recognised as expense
beginning with the accounting period for which the approval has been granted and accounting of the options granted
shall be made for, accordingly.

The value of option arrived at will be amortised over the period of vesting/ expensed beginning with the accounting
period for which approval has been granted, in line with para 42 of GN (A) 18 (Issued 2005) Guidance Note on Accounting
for Employee Share-based Payments and Reserve Bank of India (Commercial Banks - Governance) Directions, 2025,
dated November 28, 2025. In case, the options granted under the Scheme do not vest on one date but have graded
vesting schedule, total options granted shall be segregated into different groups, depending upon the vesting dates and
each vesting date should be considered as a separate option grant, and evaluated and accounted for, accordingly.

On applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments' for the
options granted up to and including March 31, 2025, the impact on reported net profit and EPS in the financial year
ended March 31, 2026 would be as follows:

The weighted average share price at the date of exercise for stock options exercised during the FY 2025-26 was ' 401.79
(Previous year ' 313.93)

Out of the 6,53,176 options granted in the financial year 2025-26, 5,19,345 options were granted on August 13, 2025 at
an exercise price of ' 406.15 and 1,33,831 options were granted on December 12, 2025, at an exercise price of ' 388.70
per option. All the options were granted at market price, 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.

intended for employees at senior levels, specifically senior level/ Senior Management Personnel who are non MRTs and
Control Function Heads, in Grade 6B and above, and are offered in lieu of Employee Stock Options (ESOPs).

Bank uses Fair Value method by using Black-Scholes Model, for accounting the value of CSARs granted. The value of
option arrived at will be amortised over the period of vesting/ expensed beginning with the accounting period for which
approval has been granted, in line with para 42 of GN (A) 18 (Issued 2005) Guidance Note on Accounting for Employee
Share-based Payments and Reserve Bank of India (Commercial Banks - Governance) Directions, 2025, dated November
28, 2025. The accounting treatment for SARs that do not vest due to failure to meet vesting conditions is consistent/
similar with the treatment applied to stock options granted by the Bank.

CSARs activity under the scheme during the financial year ended March 31, 2026 and March 31, 2025 is set out below:

Assumptions

The risk-free interest rate being considered for the calculation is the interest rate applicable for maturity equal to the
expected life of the options based on the zero-yield curve for Government Securities. Expected Life of options is the period
for which the Bank expects the options to be live. The minimum life of a stock option is the minimum period before which
the options cannot be exercised, and the maximum life is the period after which the options cannot be exercised. Expected
dividends during the estimated expected term of the option are based on recent dividend activity. Expected forfeiture is
based on expected exercise behaviour which is based on the historical stock option exercise pattern of the Bank.

Expected volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during a period.
The measure of volatility used in the Black-Scholes option pricing model is the annualized standard deviation of the
continuously compounded rates of return on the stock over a period of time. Volatility has been calculated based on the
daily closing stock price of the Bank's closing stock price on NSE over these years.

ii. 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 long term performance,
value creation and a co ownership mindset. Under the Scheme, employees are granted Cash Settled Stock Appreciation
Rights (SARs), which are equity linked 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 Periods 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. The CSARs are

Assumptions

The risk-free interest rate being considered for the calculation is the interest rate applicable for maturity equal to the
expected life of the options based on the zero-yield curve for Government Securities. Expected Life of options is the
period for which the Bank expects the options to be live. The minimum life of a CSARs is the minimum period before
which the CSARs cannot be exercised, and the maximum life is the period after which the CSARs cannot be exercised.
Expected dividends during the estimated expected term of the option are based on recent dividend activity. Expected
forfeiture is based on expected exercise behaviour which is based on the historical stock option exercise pattern of the
Bank.

Expected volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during a
period. The measure of volatility used in the Black-Scholes option pricing model is the annualized standard deviation of
the continuously compounded rates of return on the stock over a period of time. Volatility has been calculated based on
the daily closing stock price of the Bank's closing stock price on NSE over these years.

iii. 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 grant date, subject to
continuous service and the prescribed performance rating. The Plan is grade-based and linked to a percentage of

3.3 Segment Reporting

Part A: Business Segments

Business of the Bank is divided into four segments viz. Treasury, Corporate or Wholesale Banking, Retail Banking and
Other Banking Operations. The principal activities of these segments and income and expense structure are as follows:
Treasury

Treasury operations include trading and investments in Government and corporate debt instruments, equity and mutual
funds, derivative trading and foreign exchange operations on proprietary account and for customers. The income of
this segment primarily consists of earnings from the investment portfolio of the Bank, gains and losses on trading
operations. The principal expense of the segment consists of interest expense on funds borrowed/utilised and other
allocated overheads.

Corporate/Wholesale Banking

This segment provides loans and other Banking services to Corporate and other clients where value of individual
exposure to the clients exceeds '7.5 crore as defined by RBI. Revenue of this segment consists of interest and fees
earned on loans to such customers and charges and fees earned from other Banking services. Expenses of this segment
primarily consist of interest expense on funds utilised and allocated overheads.

Retail Banking

Retail Banking constitutes lending and other Banking services to individuals/small business customers, other than
corporate/wholesale Banking customers, identified on the basis of RBI guidelines. Revenue of this segment consists of
interest earned on loans made to such customers and charges /fees carried from other Banking services to them. The
principal expenses of the segment consist of interest expenses on funds borrowed and other expenses.

Additional disclosure of the Digital Banking Segment as a sub-segment within the existing "Retail Banking Segment”-
RBI circular RBI/2022-2023/19 DOR.AUT.REC.12/22.01.001/2022-23 dated April 07, 2022
Other Banking Operations

This segment includes para Banking activities like third party product distribution and other Banking transactions, not
covered under any of the above segments. The income from such services and associated costs are disclosed in this
segment.

The Corporate/wholesale liabilities have been arrived using the definition given as per RBI guidelines.

As per RBI Circular D0R.AUT.REC.12/22.01.001/2022-23 dated April 07, 2022 on establishment of Digital Banking Unit
(DBU), for the purpose of disclosure under ‘Accounting Standard 17 - Segment Reporting'. ‘Digital Banking' has to be
identified as a sub-segment under Retail Banking. Since the Bank has not established DBU, Digital Banking has not been
disclosed as a sub-segment under Retail Banking.

Part B: Geographic segments

The business of the Bank is concentrated in India. Accordingly, geographical segment results have not been reported.

3.4 Related Party disclosures
3.4.1. Related party transaction and balances

The Bank has transactions with its related parties comprising promoter group entities / other related entities forming
part of the promoter group, key management personnel and relatives of key management personnel.

A. Notes pertaining financial year ended March 31, 2026

1. ** represents insignificant amount.

2. Value of the options arrived based on the exercise price of the respective options exercised.

3. ^AThe transactions pertaining to payment of interest to KMP's and related parties are in the nature of
banker and customer relationship only.

4. @The amount reported represents Service charge / Commission received / Profit earned for the foreign
exchange transaction carried out by the Bank.

B. Notes pertaining to financial year ended March 31, 2025

1. ** represents insignificant amount.

2. Value of the options arrived based on the exercise price of the respective options exercised.

3. AThe transactions pertaining to payment of interest to KMP's and related parties are in the nature of
banker and customer relationship only.

4. @The amount reported represents margin amount/service charge collected for the foreign exchange
transaction carried out by the Bank.

(c) Material transactions with related parties

The following table sets out the material transactions between the Bank and its related parties for the periods
indicated. In terms of Regulation 23(1) and Schedule XII of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, read with the Amendment Regulations dated November 18, 2025, a transaction with a related
party of the Bank is considered material if the value of the transaction, either individually or taken together
with previous transactions during the financial year entered/to be entered, exceeds 10% of the Bank's annual
consolidated turnover.

4. ADDITIONAL DISCLOSURES4.1 Disclosure of Letter of Comforts (LOCs) issued by Bank

The Bank has not issued any Letter of Comfort (LoC) during year ended March 31, 2026 and March 31, 2025.

4.2 Proposed Dividend

The Board of Directors have not recommended any dividend for Financial Year 2025-26 (Year ended March 31, 2025: Nil)

4.3 Provision for Long Term Contracts

The Bank has a process whereby periodically all long term contracts (including derivative contracts) are assessed
for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required
under any Law/Accounting Standards for material foreseeable losses on such long term contracts (including derivative
contracts) in the books of account and disclosed the same under the relevant notes in the financial statements.

4.4 Investor education and protection fund

The Bank had not declared any dividends since the financial year 2014-15, no amount was 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, which remained unclaimed for a period of seven (7)
consecutive years or more, 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.

4.5 Corporate Social Responsibility

Pursuant to Section 135 of the Companies Act, 2013 and Schedule VII of the said Act read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014 and further, in accordance with the Corporate Social Responsibility Policy of
the Bank, the amount required to be earmarked by the Bank for CSR activities for the financial year 2025-26 was
' 15.30 crore (Previous year ' 13.90 crore), being two percent of the average net profits of the Bank as per Section
135(5) of the Companies Act, 2013.

The Bank has successfully made use of the whole of the CSR budget earmarked, for the purpose of undertaking
various CSR activities/projects including an ongoing project, in line with the annual action plan as approved by the CSR
Committee and the Board.

*Reason for delay: There are a total of 8 invoices pending for payment. Of these, 7 invoices were received recently and
are within the 45-day TAT; they will be processed shortly. One invoice, dated February 26, has been pending for more
than 45 days, as it was initially not traceable. Subsequently, we received intimation from the vendor, and the invoice is
now under process for payment.

Note: Outstanding dues to those vendors/suppliers who are registered as micro/small enterprise under the Micro,
Small and Medium Enterprises Development Act, (MSMED) 2006 and having an Udyam Registration are only counted as
qualified MSME for the purpose of the reporting.

4.8 Intermediary Transactions

The Bank, as part of its normal Banking business that is conducted ensuring adherence to all regulatory requirements,
grants loans and advances, makes investment, provides guarantees to and accept deposits and borrowings from its
customers, other entities and persons.

a) Funds Given

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Bank to or in any other person(s) or entity(ies), including foreign entities
("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Bank("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Bank
other than those in the ordinary course of Banking business.

b) Funds Taken

The Bank has not received any fund from any person(s) or entity(ies), including foreign entities ("Funding Parties”),
with the understanding, whether recorded in writing or otherwise, that the Bank shall, directly or indirectly, lend
or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries than
those in the ordinary course of Banking business.

4.9 Audit Trail

As per the requirements of Rule 3(1) of the Companies (Accounts) Rules 2014 the Bank uses such accounting software
for maintaining its books of account that have a feature of recording audit trail of each and every transaction creating
an edit log of each change made in the books of account along with the date when such changes were made within such
accounting software. This feature of recording audit trail has enabled throughout the year and was not tampered with
during the year. The Bank has established and maintained an adequate internal control framework and based on its
assessment, believes that this was effective as of March 31, 2026.

Comparative Figures

The previous year's figures have been regrouped and reclassified wherever necessary to conform to current year's
presentation.