Your directors are pleased to present the 94^th Annual Report on the business and operations of The Federal Bank Limited (“the Bank"),
together with the audited accounts for the Financial Year (FY) ended March 31, 2025. It outlines Bank's commitment to stakeholder value
creation and defines the actions it takes and outcome it achieved for its stakeholders.

1. CORPORATE OVERVIEW

Your Bank is driven by the quest to be one of the most admired banking institutions in the country and is the preferred Personal, NRI
and Business banking partner for a growing expanse of customers across India, in both urban and rural areas. Bank's mantra is “Digital
at Fore and Human at the Core"

2. FINANCIAL HIGHLIGHTS

2.1. Consolidated:

2.2. Standalone:

2.3. Key performance indicators

Notes:

* Working Funds represent average of total assets as reported to RBI in Form X under Section 27 of the Banking Regulation Act, 1949 during the year.

** Net Interest Income / Average Earning Assets. (Net Interest Income = Interest Income - Interest Expense).

*** Productivity ratios are based on average number of employees for the year.

^$ Operating profit represents total income as reduced by interest expended and operating expenses.

3. FINANCIAL PERFORMANCE OF THE GROUP

Subsidiaries and the Associate Companies of the Bank continued to deliver steady performance. Consolidated net profit attributable to
the group for FY 2024-25 is H 4158.85 Crore as against H 3,880.43 Crore in FY 2023-24.

4. SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATES

As on March 31, 2025, the Bank has following subsidiaries and associate company:

Note: During the year, the Bank divested stake in Equirus
Capital Private Limited (ECPL) equivalent to 70.50 lakh shares
i.e 9.81% of paid-up equity share capital of ECPL. Following
this stake sale, ECPL ceased to be an Associate Company of
the Bank with effect from November 15, 2024.

4.1. Federal Operations and Services Limited

Federal Operations and Services Limited (FedServ) is a wholly
owned subsidiary company of The Federal Bank Limited (the
Bank) incorporated on October 26, 2018. FedServ received
approval from RBI on November 09, 2018, for commencing
its operations. FedServ started its operations w.e.f.
December 01, 2018.

As on March 31, 2025, FedServ's Board of Directors has
following five members-

• Mr. Sidhartha Sengupta, Chairman & Non¬
Executive Director.

• Mr. Venkatraman Venkateswaran, Non¬
Executive Director.

• Mr. Johnson K Jose, Non- Executive Director.

• Mr. Narayanan Nair Rajanarayanan, Additional Non¬
Executive Director

• Mr. Prashant Preman, Wholetime Director.

During the year ended on March 31, 2025, FedServ has taken
significant operational activities of the Bank. FedServ is
carrying out 235 operational activities of the Bank as on March
31, 2025. Company does not deal in loans and advances,
neither it accepts deposits. FedServ is operating from Four
locations: - Kochi in Kerala, Visakhapatnam in Andhra Pradesh,
Bengaluru in Karnataka and Indore in Madhya Pradesh.

The total revenue of FedServ for the year ended on March
31, 2025, was H 105.13 Crores. H 102.85 Crores pertains to
services provided by the Company to the Bank and H 2.28
Crores relates to the indirect incomes. The Company had a net
profit before tax of H 8.92 Crores for the year ended on March
31, 2025. The Net worth of FedServ at the beginning of the
year was H 26.18 Crores and closing net worth of FedServ as
on March 31, 2025, was H 33.67 Crores.

FedServ will help the Bank in serving the customers better
and reducing the cost of operations significantly. FedServ
will also help the Bank to improve turnaround time of various
operational processes, improve First Time Right (FTR) rate and
enable the Bank to become FIRST CHOICE Bank of customers.

The Profit after tax of the Company for the year ended March
31, 2025, increased to H 7.91 Crores from H 5.98 Crores for the
year ended March 31, 2024. The total assets of the Company
increased to H 44.06 Crores as on March 31, 2025, from H
35.54 Crores as on March 31, 2024.

4.2. Fedbank Financial Services Limited

Fedbank Financial Services Limited (''Fedfina") is a subsidiary
company of The Federal Bank Limited (the “Bank"), which
was incorporated on April 17, 1995, in Aluva, Kochi, State
of Kerala under the Companies Act, 1956 and was granted
a certificate of incorporation by the Registrar of Companies,
Kochi, Kerala. The Reserve Bank of India had also issued
Certificate of registration dated August 24, 2010, granting
approval to Fedfina to carry on the business of a non-banking
financial institution without accepting public deposits.
Presently, the Registered and Corporate office of Fedfina is
at Mumbai, Maharashtra. Fedfina have a well-tailored suite
of products targeted to match our customers' needs, which
includes mortgage loans, business loans, and gold loans. It
also distributes loan products of the Bank. It has broadened its
geographical presence by establishing new branches across
India providing multiple loan products to various segments of
borrowers. With the opening of 75 branches during the year,
the branch network has now reached to 694 branches as on
March 31, 2025, across 18 states for multiple products.

Fedfina's Board of Directors comprises of the following ten
directors as on March 31, 2025: ¹

• Mr. Maninder Singh Juneja - Non-Executive

Nominee Director

• Mr. Harsh Dugar- Non-Executive Nominee Director

• Mr. Krishnan Venkat Subramanian-Non-Executive
Nominee Director

Fedfina's credit ratings has upgraded to AA /Stable by CARE
ratings, India Ratings and CRISIL, boosting the confidence of
our stakeholders at large.

The Total revenue of the Company for the financial year ended
March 31, 2025, has increased to H 2,07,982 Lakh as against
H 1,62,300 lakhs for the previous year ended March 31, 2024.
Similarly, Net Interest Income (NII) grew by 32% from H 81,212
Lakhs in FY 2024 to H 1,07,081 Lakhs this year. The revenue
increased by 28% on the back of growth of 19% in loan book
during the year. The net profit of the Company decreased by
8% to 22,518 lakhs for the financial year ended March 31,
2025, as against H 24,470 lakhs for the financial year ended
March 31, 2024. The Net worth of Company at the beginning
of the financial year, that is, April 1, 2024, was H 2,26,083
lakhs and closing Net worth of Fedfina as on March 31, 2025,
was H 2,54,736 lakhs.

As of March 31, 2025, the AUM increased by 30% compared to
FY 2023-24, reaching H 15,81,154 lakhs while disbursements
improved by 38% to H 18,78,732 lakhs.

Over the past year, H 113,089 lakhs of the gold loan AUM were
through co-lending, and Fedfina conducted portfolio sell-
down transactions totaling H 2,12,960 lakhs. At the end of the
year, 25.1% of the AUM was off the books.

Note: The figures reported above for Fedfina are as per the
audited IndAS financial statements.

4.3. Associate Companies

As on March 31, 2025, the Bank has one Associate Company
named M/s. Ageas Federal Life Insurance Company Limited
(Formerly known as IDBI Federal Life Insurance Co Ltd.).

The Bank has an investment in the life insurance sector
through a joint venture with Ageas Insurance International
N.V., a leading European Insurance group. The joint venture
entity, Ageas Federal Insurance Company Limited (formerly
IDBI Federal Life Insurance), commenced the operations in
March 2008. As on March 31, 2025, the Bank has a total stake
of H 208 Crores in the equity of the Company holding 26%
of the equity capital. The total premium collected by Ageas
Federal Life Insurance Company Limited during the period
ended March 31, 2025, was H 3,073 Crores.

On the financial front, the company has made a net profit
after tax of H 86 Crores in FY 2024-25. This was the 13^th
consecutive year of profit for the company. The total premium
rose by 14 % to H 3,073 crores in FY 2024-25 from H 2,697
Crores in FY 2023-24.

As on March 31, 2025, Ms. Shalini Warrier, Executive Director
and Mr. Venkataraman Venkateswaran, Group President &

CFO of the Bank are representing as a Non-Executive Directors
in Ageas Federal Life Insurance Company Limited.

The Board of Directors, at its meeting held on March 25,
2025, approved the execution of a binding Memorandum
of Understanding with Ageas Insurance International NV
("Ageas") and Ageas Federal Life Insurance Company Limited
("AFLIC"), for acquisition of 4% equity stake by the Bank
in AFLIC, from Ageas. Reserve Bank of India vide its letter
CO.DoR.RAUG.AUT.No.S8449/24.01.002/2024-25 accorded
its approval to Federal Bank for acquisition of additional 4%
stake in Ageas Federal Life Insurance Company Limited (AFLIC)
for up to H 105 crores. The Bank had subsequently executed (i)
a binding Memorandum of Understanding on March 28, 2025,
with Ageas and AFLIC, for acquisition of 4% equity stake by the
Bank in AFLIC, from Ageas and (ii) a Share Purchase Agreement
on April 30, 2025, with Ageas and AFLIC for acquisition of 4%
equity stake by the Bank in AFLIC, from Ageas.

During the year, the Bank divested stake in Equirus Capital
Private Limited (ECPL) equivalent to 70.50 lakh shares i.e
9.81% of paid-up equity share capital of ECPL. Following this
stake sale, ECPL ceased to be an Associate Company of the
Bank with effect from November 15, 2024.

The Consolidated Financial Statements of the Bank along with
its Subsidiaries and Associate prepared for the year 2024-25
forms part of this Annual Report.

The financial position and performance of its Subsidiaries
& Associate are given in Form AOC-1, the statement
containing salient features of the financial statements of the
subsidiaries/Associate Companies/Joint Venture form part of
the Annual Report.

In accordance with third proviso to Section 136(1) of the
Companies Act, 2013, the Annual Report of the Bank,
containing therein its Standalone and the Consolidated
Financial Statements has been hosted on its website, www.
federalbank.co.in. Further, as per fourth proviso to the said
Section, the Audited Annual Accounts of the said Subsidiary
Companies of the Bank, considered as part of the Consolidated
Financial Statements have also been hosted on the Bank's
website, www.federalbank.co.in. The said documents have
been hosted on the website of the Subsidiary Companies of
the Bank also, in compliance with the said Section.

5. FINANCIAL PERFORMANCE AND STATE OF THE
AFFAIRS OF THE BANK

5.1. Financial performance

During the year under review, some of the significant events
are listed below:

(i) The Total Business (Total Deposit Net Advances)
crossed H 5.18 Lakh Crore

(ii) The Total Deposit & Advances (Net) at H 2.84 Lakh Crore
& H 2.35 Lakh Crore respectively.

(iii) Net Profit Crossed H 4,000 Crores

(iv) Recorded decadal best Asset quality ratios, NNPA at
0.44% & GNPA at 1.84%.

During the year under review, CRAR of the Bank has increased
to 16.40% for the FY 2024-25 as against 16.13% in the previous
year, after considering dividend @ 60% of paid-up capital. Net
worth has improved to H 33,121.64 Crore from H 29,089.41
Crore. Total Debts to Total Assets is at 6.80%.

As on March 31, 2025, Gross Advances increased by 12% to
H 2,38,134.44 Crore as compared to H 2,12,622.66 Crore as
March 31, 2024. Corporate Institutional Banking grew by 8% &
Commercial Banking at 27% on Year-on-Year basis. Retail Book
up by 14% with 10% growth in Core Retail segment, 9% growth
in Agriculture segment, 11% growth in Business Banking
segment, 35% growth in Commercial Vehicle/ Construction
Equipment segment, 21% growth in gold loan segment & 19%
growth in Micro Finance segment on a Year-on-Year basis.
(Credit segments are based on internal classifications and are
realigned at the beginning of every FY. Vertical wise advance
figures do not account for sale via IBPC.)

With the expanding network of banking outlets & customers,
the Total Deposits grew further from H 2,52,534.02 Crore as on
March 31, 2024, to H 2,83,647.47 Crore as on March 31, 2025,
registering a growth of 12%. The Current Account & Savings
Account ('CASA') deposits have recorded an increase of 16%
from H 74,199.74 Crore as on March 31, 2024, to H 85,757.19
Crore as on March 31, 2025. Investments increased by 9% to
H 66,245.61 Crore for FY 2024-25 from H 60,859.53 Crore as
on March 31, 2023.

During the FY under review, the Total Income of the Bank has
increased by 19% to H 30,166.50 Crore as against the total
income of H 25,267.53 Crore for FY 2023-24. The Net Profit of
the Bank grew by 9% to H 4,051.89 Crore as against H 3,720.60
Crore in the previous year. Operating profit for the year ended
increased by 18% to H 6,101.13 Crore from H 5,174.48 Crore.
The profit margin for the year ended decreased to 13.43% as
against 14.72% in the previous year. Consequently, Return on
Average Equity ('ROAE') is at 13.03% for FY 2024-25 & Return
on Average Asset ('ROAA') stood at 1.23% for FY 2024-25.
Correspondingly, Basic earnings per share ('EPS') increased
from H 16.07 in FY 2023-24 to H 16.54 as at the end of FY
2024-25 whereas diluted earnings per share ('DEPS') is up
from H 15.87 to H 16.37.

5.2. Asset Quality

The Gross NPA of the Bank as on March 31, 2025 stood at H
4,375.54 Crore. Gross NPA as a percentage to Gross Advances
is at 1.84%. The Net NPA stood at H 1,040.38 Crore & Net NPA
percentage is at 0.44% as on March 31, 2025. The Provision
Coverage Ratio (excluding technical write offs) stood at 75.37%
as on March 31, 2025.

5.3. Outreach of Bank presence & network

During the FY under review, the Bank has added 85 new
banking outlets taking the total count of banking outlets to
1,589 as on March 31, 2025. Out of the total banking outlets,
274 are in metros, 223 are in rural, 781 in semiurban & 311

in urban centres. Apart from above, the Bank has 2,080
ATMs/ Recyclers as on March 31, 2025. The Bank also has
its Digital Banking Unit at Kolkata, Representative Office at
Abu Dhabi & Dubai & an International Financial Service Centre
(IFSC) Banking unit (IBU) in Gujarat International Finance Tec-
City (GIFT City).

5.4. Change in the nature of business.

There is no change in the nature of business of the Bank
for the year under review. Further information on the
business overview & outlook & state of the affairs of the
Bank is discussed in detail in the Management Discussion &
Analysis Report.

5.5. Material changes and commitments affecting the
financial position of the Bank

No material changes and commitments which could affect
your Bank's financial position have occurred between the end
of the financial year of your Bank and date of this report.

6. DIVIDEND, DIVIDEND DISTRIBUTION POLICY &
TRANSFER TO RESERVE

In accordance with Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (SEBI Listing Regulations) as amended, the Bank
has formulated and adopted a dividend distribution policy,
which was reviewed by the Board. The policy is available on
the website of the Bank at https^www.federalbank.co.in/
our-commitments.

In view of the overall performance of the Bank and while
retaining capital to support future growth, the Board at its
meeting held on April 30, 2025, recommended a final dividend
of H 1.20 (60 %) per equity share of H 2/- each fully paid-up,
subject to the approval of members at the ensuing 94^th
Annual General Meeting (AGM). The record date for payment
of dividend is mentioned in the notice of the ensuing 94^th
AGM of the Bank. In terms of Accounting Standard (AS) - 4
'contingencies and events occurring after the balance sheet
date' as notified by the Ministry of Corporate Affairs (MCA)
under Section 133 of the Companies Act, 2013 (Act) read
together with the Companies (Accounts) Rules, 2014 and
the Companies (Accounting Standards) Rules, 2021, such
proposed dividend has not been recognised as a liability as
on March 31, 2025. Further, shares issued on exercise of
stock options after March 31, 2025, till record date will also
be eligible for such proposed dividend. In terms of the Income
Tax Act, 1961, the dividend income is taxable in the hands
of the members. Therefore, the dividend will be paid to the
members after deduction of applicable tax, if any. For details,
shareholders are requested to refer to the Notice of 94^th
Annual General Meeting of the Bank.

7. CAPITAL STRUCTURE & FUND RAISING

7.1. Share Capital

Consequent to the allotment of equity shares as mentioned
below, the total paid-up equity shares capital of the Bank

increased by H 4.09 Crores to H 491.16 Crores as on March
31, 2025, as compared to H 487.07 Crores, as on March 31,

2024. The equity shares allotted pursuant to exercise of Stock
options under Employee Stock Option Scheme rank pari-passu
with the existing equity shares of the Bank.

7.2. Share Based Employee Benefits

The Bank has instituted Employee Stock Option Schemes,
duly approved by the shareholders of the Bank to enable its
employees including Whole Time Directors to participate
in the future growth and financial success of the Bank. The
Employee Stock Option Schemes are formulated in accordance
with the SEBI guidelines, as amended from time to time. The
eligibility and number of options to be granted to an employee
is determined based on various parameters such as scale,
designation, performance, grades, period of service, Bank's
performance and such other parameters as may be decided
by the Nomination, Remuneration, Ethics and Compensation
Committee of the Board from time to time in its sole discretion.

The Bank's shareholders had approved The Federal Bank
Limited Employee Stock Option Scheme 2010 (ESOS 2010)
on December 24, 2010, The Federal Bank Limited Employee
Stock Option Scheme 2017 (ESOS 2017) on July 14, 2017,
and The Federal Bank Limited Employee Stock Option Scheme
2023 (ESOS 2023) and The Federal Bank Limited Employee
Stock Incentive Scheme 2023 (ESIS 2023) on August 18, 2023.

Whereas the approval for extension of The Federal Bank
Limited Employee Stock Option Scheme 2023 and The
Federal Bank Limited Employee Stock Incentive Scheme
2023 to employees of subsidiary company(ies) / associate
company(ies) was not passed as per the voting results in
the 92^nd AGM held on August 18, 2023, consequently, the
respective clauses/ statements in the Scheme Documents are
deemed non-operational and invalid.

7.2.1. The Federal Bank Limited Employee Stock Option
Scheme 2010 (ESOS 2010)

Under ESOS 2010, the Nomination, Remuneration, Ethics
and Compensation Committee granted 3,47,20,200 options
during the year 2011-12, 2,44,84,750 options during the
year 2012-13, 2,60,94,250 options during the year 2013¬
14, 1,11,56,450 options during 2014-15, 10,25,000 options
during the year 2015-16, 9,65,000 options during the
year 2016-17, 1,00,000 options during the year 2017-18,
55,29,550 options during the year 2023-24 and 23,14,750
options during the year 2024-25. The options granted which
are non-transferable, with vesting period of 1 to 5 years
subject to standard vesting conditions, must be exercised
within five years from the date of vesting. During FY 2025,
2,35,000 options had been exercised and as on March 31,

2025, 78,73,800 options were in force.

7.2.2. The Federal Bank Limited Employee Stock Option
Scheme 2017 (ESOS 2017)

Under ESOS 2017, the Nomination, Remuneration, Ethics
and Compensation Committee granted 2,23,18,348 options
during the year 2017-18, 3,72,31,307 options during the

year 2018-19, 3,05,24,986 options during the year 2019¬
20, 1,68,84,159 options during the year 2020-21, 37,33,250
options during the year 2021-22, 45,03,375 options during
the year 2022-23, 1,05,000 options during the year 2023-24
and 49,98,000 options during the year 2024-25. The options
granted which are non-transferable, with vesting period of 1
to 4.25 years subject to standard vesting conditions, must be
exercised within five years from the date of vesting. During
FY 2025, 1,48,51,893 options had been exercised and as on
March 31, 2025 3,80,75,617 options were in force.

7.2.3. The Federal Bank Limited Employee Stock Incentive
Scheme 2023 (ESIS 2023)

Under ESIS 2023, the Nomination, Remuneration, Ethics and
Compensation Committee granted 25,000 options during
the year 2023-24. The options granted which are non¬
transferable, with vesting period of 1 to 3 years subject to
standard vesting conditions, must be exercised within four
years from the date of vesting. As on March 31, 2025, no
option had been exercised and 25,000 options were in force.

7.2.4. The Federal Bank Limited Employee Stock Option
Scheme 2023 (ESOS 2023)

Under ESOS 2023, the Nomination, Remuneration, Ethics
and Compensation Committee granted 16,00,000² options
during the year 2024-25. The options granted which are
non-transferable, with vesting period of 1 to 4 years subject
to standard vesting conditions, must be exercised within five
years from the date of vesting.

Other statutory disclosures as required under Regulation 14 of
Securities and Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 and Rule 12 of
Companies (Share Capital and Debentures) Rules, 2014 on
ESOS are given in website of the Bank in the link: https:,/www.
federalbank.co.in/web/guest/shareholder-information.²

8. TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND (IEPF)

8.1. Transfer of Unpaid/ Unclaimed Dividend to IEPF

Pursuant to Sections 124 and 125 of the Act read with
Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), all
unpaid or unclaimed dividends are required to be transferred
by the Bank to the Investor Education and Protection Fund
(“IEPF" or “Fund") established by the Central Government,
after completion of seven years from the date the dividend is
transferred to unpaid/unclaimed account.

As a result, the unclaimed/ unpaid dividend for the year 2016¬
17 amounting to H 1,02,81,125 which remained unpaid and
unclaimed for a period of 7 years has been already transferred
by your Bank to the IEPF.

Further, the unpaid dividend amount pertaining to the financial
year 2017-18 will be transferred to IEPF during the Financial
Year 2025-26 within statutory timelines. Members are
requested to ensure that they claim the dividends referred
above before they are transferred to the said Fund. The due
dates for transfer of unclaimed dividend to IEPF are provided
in the report on Corporate Governance.

The Bank has uploaded the details of unclaimed/ unpaid dividend
for the financial year 2017-18 onwards on its website viz.,
https:/www.federalbank.co.in/unclaimed-dividend-warrants
and on website of the Ministry of Corporate Affairs viz.,
www.iepf.gov.in and the same gets revised/updated from
time to time pursuant to the provisions of IEPF (Uploading of
Information Regarding Unpaid and Unclaimed Amount lying
with Companies) Rules, 2012.

8.2. Transfer of Shares to IEPF

Pursuant to the provisions of Section 124(6) of the Act and
the Investor Education and Protection Fund (IEPF) Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 notified
by the Ministry of Corporate Affairs on September 7, 2016
and subsequently amended vide notification dated February
28, 2017, all the equity shares of the Bank in respect of
which dividend amounts have not been paid or claimed by the
shareholders for 7 consecutive years or more are required to
be transferred to demat account of IEPF Authority. The said
requirement does not apply to shares in respect of which there
is a specific Order of Court, Tribunal or Statutory Authority,
restraining transfer of the shares.

Upon transfer of such shares, all benefits (like dividend, bonus,
split, consolidation etc.), if any, accruing on such shares shall
also be credited to the Account of IEPF and the voting rights
on such shares shall remain frozen till the rightful owner
claims the shares. Shares which were transferred to the
demat account of IEPF Authority can be claimed back by the
shareholder by following the procedure prescribed under the
aforesaid rules.

Accordingly, 3,66,525 number of equity shares were
transferred to demat account of IEPF Authority. The Bank

had sent individual notice to all the members concerned
and has also published the notice in the leading English and
Malayalam newspapers.

The details of the nodal officer appointed by the Bank under
the provisions of IEPF are disseminated in the website of
the Bank viz., https^www.federalbank.co.in/unclaimed-
dividend-warrants.

9. CAPITAL EXPENDITURE

As on March 31, 2025, the Gross Fixed Assets at cost stood at
H 3,151.11 Crores and net fixed assets (cost less accumulated
depreciation) at H 1,478.27 Crores. Fixed assets additions
during the year amounted to H 721.45 Crores.

10. FUTURE PROSPECTS

Building on a year of numerous milestones, your Bank, under
its new leadership is poised to embark on a new 'Breakthrough
phase'. By reorienting the balance sheet for greater efficiency,
streamlining processes to enhance cost effectiveness and
fostering a results-driven organizational mindset, your Bank
expects to deliver superior outcomes in the years ahead. And
in keeping with the Federal ethos, this growth will be pursued
responsibly - maintaining your Bank's commitment to the
environment and other stakeholders, while simultaneously
enhancing value for its shareholders.

11. AWARDS AND ACCOLADES

The Bank has received several prestigious awards and
recognitions from various revered institutions during the FY
2024-25, some of them are as under: -

• Fortune India ranks Federal Bank among the Top 50
Future Ready Employers of India 2025.

• Federal Bank featured in ET's list of Future Ready
Organisations 2024-25 under the Large-Scale
Enterprises category.

• Federal Bank is in the Top 30 Future Ready
Workplaces of India Inc. by Fortune India, curated in
partnership with CIEL HR.

• Federal Bank receives the prestigious award for "Leader
in Digital Lending Transformation and Documentation"
at the Bharat Collection and Lending Summit 2025
for the Bank's initiatives in digital lending and
digital documentation ³

• Federal Bank won Gold in three categories at the
prestigious Infosys Finacle Innovation Awards 2024,
including Modern Technologies-led Innovation, Product
Innovation & Transformation Excellence reflecting our
commitment to pioneering advancements & excellence
in the banking industry.

• Federal Bank has been recognised as the winner in the
category of "Best in Robotic Process Automation (RPA)
Implementation (Private Sector Banks)" at the 5^th Annual
BFSI Excellence Awards 2024.

• Feddy, the AI chat bot of Federal Bank, wins the SKOCH
Silver Award for its innovative feature - Conversational
Banking at the 100^th SKOCH Summit.

• Federal Bank has been honoured with the award in
the category “Promising - Data Quality Improvement -
Commercial" at the CRIF Data Excellence Awards, 2024,
in recognition of the commendable achievement in data
submission to Credit Information Companies and for
ensuring highest standards of data quality.

• Federal Bank wins DataShield Architect Award at the
Data Innovation Awards 2025. The Data Innovation
Awards 2025 recognized exceptional achievements in
data, AI, cloud, sustainability, and digital transformation.

• Federal Bank has been awarded the Best CSR
Project - Health Sector (Large Enterprises Category)
for 'Sanjeevani' program at the KMA Green Palms
Sustainability Summit 2025.

• Federal Bank wins e4M Real Time Programmatic
Advertising Awards 2024 for the category 'Best Use of
Programmatic for Social Good' for the #EndDependence
Campaign released to celebrate Independence Day.

• Federal Bank bags 3 awards at ASSOCHAM - HR
Trailblazer Awards 2023 in the categories Talent
Acquisition Best Practices Award, Workplace Well¬
being & Mental Health Advocate Award & Learning &
Development Trailblazer Award.

• Federal Bank bags two awards at the ACI South Asia
Converge 2024. Operation Excellence Award among
Private Sector Banks for implementing real-time
blacklisting of merchants using ACI's fraud management
solution PRM (ProActive Risk Manager).

• Best Customer Experience Initiative among Private
Sector Banks for implementing 'ATMLendPro', which
allows instant loan (BYOM) processing for customers
who experience ATM withdrawal declines due to
'Insufficient Funds', based on their eligibility.

• Federal Bank's innovative product Flash Pay Smart
Keychain bagged the Best Payment Experience
Award at the 11^th Edition Payments Reloaded
Industry Awards 2024.

• Federal Bank won the award for 'Innovative HR
Initiatives' in the Service Sector from Kerala Management
Association (KMA) Excellence Awards 2024

12. LISTING

The Equity Shares of the Bank continue to remain listed on
BSE Limited and the National Stock Exchange of India Limited.
The global depository receipts of the Bank are listed on the
London Stock Exchange.

13. DEPOSITS

Being a Banking Company, the disclosures relating to deposits
as required under Rule 8(5)(v) & (vi) of the Companies
(Accounts) Rules, 2014, read with Sections 73 and 74 of the
Act, are not applicable to the Bank.

14. CREDIT RATING

The details of Credit Ratings of your Bank as on March 31,
2025, are as follows:

During the year under review, Rating for fixed deposits was
upgraded from AA (Positive) to AAA(Stable).

15. ANNUAL RETURN

The Annual Return for the Financial Year ended March 31,
2025 as required under Section 92 and Section 134 of the
Companies Act, 2013 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014 shall be
posted on the Bank's website, https^www.federalbank.co.in/
shareholder-information.

16. SECRETARIAL STANDARDS

The Bank complies with all applicable Secretarial Standards
issued by the Institute of Company Secretaries of India (ICSI).

17. PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

The provisions of the Section 186 of the Companies Act, except
sub-section (1), do not apply to a loan made, guarantee given,
or security provided by a banking company in the ordinary
course of its business.

18. BOARD OF DIRECTORS

18.1. Appointments/Re-appointment & Cessation of Directors:

During the financial year under review and till the date of
approval of this Directors' Report:

• Mr. Siddhartha Sengupta (DIN: 08467648) and Mr. Manoj
Fadnis (DIN: 01087055) were appointed as Independent
Directors of the Bank for a period of 5 years with effect
from June 13, 2019, to hold office up to June 12, 2024
(both days inclusive). The Board of Directors of the Bank
at its meeting held on March 27, 2024, recommended
the reappointment of both Mr. Siddhartha Sengupta and
Mr. Manoj Fadnis as Independent Directors, not liable
to retire by rotation, for a second term of 3 years with
effect from June 13, 2024, to June 12, 2027, subject
to the approval of the shareholders of the Bank. The
shareholders of the Bank subsequently have given their
approval through Postal Ballot on May 18, 2024, for the
re-appointment of Mr. Siddhartha Sengupta and Mr.
Manoj Fadnis for a period of 3 years w.e.f June 13, 2024,
to June 12, 2027.

• Mr. Shyam Srinivasan (DIN: 02274773) retired from
the office of the Managing Director & CEO of the Bank
at the end of September 22, 2024, on expiry of his
distinguished 14 years tenure.

• Based on the Bank's application on May 06, 2024, for the
appointment of new Managing Director & Chief Executive
Officer of the Bank, the RBI, vide its letter dated July 22,
2024, approved the appointment of Mr. Krishnan Venkat
Subramanian as the Managing Director & Chief Executive
Officer of the Bank under Section 35B of the Banking
Regulation Act, 1949, for a period of 3 (three) years, with
effect from September 23, 2024 after the expiry of the
term of Mr. Shyam Srinivasan as Managing Director &
CEO on September 22, 2024. Accordingly, Mr. Krishnan
Venkat Subramanian (DIN: 00031794) took charge as
the Managing Director & Chief Executive Officer of the
Bank with effect from September 23, 2024.

• The Board of Directors had appointed Mr. Sudarshan Sen
(DIN: 03570051) as an Additional Independent Director
under Section 161 of the Companies Act, 2013 vide
Circular Resolution approved on February 11, 2020. Mr.
Sudarshan Sen was then appointed as an Independent
Director of the Bank pursuant to Section 149 of the
Companies Act, 2013 (“the Act") read with Companies

(Appointment and Qualification of Directors) Rules,
2014, the SEBI Listing Regulations, Section 10A and
other applicable provisions of the Banking Regulation
Act, 1949, by the Shareholders at the 89^th Annual General
Meeting of the Bank held on July 16, 2020 to hold office
for a period of five (5) years with effect from February 11,
2020. Accordingly, the first term of Mr. Sudarshan Sen
was completed on February 10, 2025.

During the year Nomination, Remuneration, Ethics and
Compensation Committee (“the Committee" or “NRC") of
the Board of Directors of the Bank (the “Board") discussed
the performance evaluation of Mr. Sudarshan Sen (DIN:
03570051) and considering his knowledge, acumen,
expertise, experience and substantial contribution
and time commitment, approved and recommended
his reappointment as an Independent Director for the
second term of 3 years effective from February 11, 2025,
to February 10, 2028. Pursuant to the recommendation
of the NRC vide circular resolution dated October 09,
2024, the Board at its meeting held on October 10, 2024,
recommended the re-appointment of Mr. Sudarshan Sen
as an Independent Director of the Bank for the second
term of 3 (Three) years effective from February 11, 2025,
to February 10, 2028 (both days inclusive), subject to the
approval of the members of the Bank.

The shareholders of the Bank subsequently have given
their approval through Postal Ballot on November 30,
2024, for the re-appointment of Mr. Sudarshan Sen for
a period of 3 years effective from February 11, 2025, to
February 10, 2028.

• The Board at its meeting held on April 4, 2025, inter
alia, considered, noted, and accepted the resignation
of Ms. Shalini Warrier (DIN: 08257526). Subsequently,
Ms. Shalini Warrier, Executive Director was relieved from
her services as an Executive Director with effect from
the closing business hours on May 23, 2025.

• Mr. Venkatraman Venkateswaran was appointed as the
Executive Director on the Board of the Bank with effect
from July 10, 2025 as per RBI approval letter DoR.GOV.
No. 2798/08.38.001/2025-26 dated July 09, 2025.
The appointment of Mr. Venkatraman Venkateswaran
is subject to approval of shareholders at the ensuing
Annual General Meeting.

In accordance with the provisions of the Act and the Articles
of Association of the Bank, Mr. Harsh Dugar (DIN:00832748)
Executive Director the Bank, is liable to retire by rotation at
the ensuing Annual General Meeting and being eligible have
offered himself for re-appointment.

The Board is of the opinion that the independent directors
appointed on the Board possesses necessary integrity,
expertise and experience (including the proficiency).

Necessary information pursuant to SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, in respect
of directors to be appointed and re-appointed at the ensuing
Annual General Meeting are given in the Annexure to the
Notice convening the 94^th Annual General Meeting.

None of the Directors of your Bank are disqualified for being
appointed as directors, as specified in Section 164(2) and
Rule 14(1) of Companies (Appointment and Qualification of
Directors) Rules, 2014.

18.2. Key Managerial Personnel

The details of the Key Managerial Personnel of the Bank as on
March 31, 2025, is as follows:

• Mr. Krishnan Venkat Subramanian* - Managing Director
& Chief Executive Officer.

• Ms. Shalini Warrier** - Executive Director

• Mr. Harsh Dugar - Executive Director

• Mr. Venkatraman Venkateswaran*** - Chief Financial Officer

• Mr. Samir P Rajdev - Company Secretary

During the year, Mr. Shyam Srinivasan (DIN: 02274773) retired
from the office of the Managing Director & CEO of the Bank
w.e.f. the closing business hours of September 22, 2024, on
expiry of his distinguished 14 years term.

*Mr. Krishnan Venkat Subramanian (DIN: 00031794) was
appointed as the Managing Director & Chief Executive Officer
of the Bank with effect from September 23, 2024.

** Ms. Shalini Warrier, Executive Director, (DIN: 08257526)
resigned as an Executive Director with effect from the closing
business hours on May 23, 2025.

*** Mr. Venkatraman Venkateswaran was appointed as
the Executive Director on the Board of the Bank with
effect from July 10, 2025 as per RBI approval letter DoR.
GOV.No. 2798/08.38.001/2025-26 dated July 09, 2025.
The appointment of Mr. Venkatraman Venkateswaran is
subject to approval of shareholders at the ensuing Annual
General Meeting.

18.3. Declaration by Independent Directors

The Bank has received declaration from all the Independent
Directors that they continue to meet the criteria of
independence as provided under the Companies Act, 2013
(the Act) and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and comply with the Code
for Independent Directors as specified under Schedule IV of
the Act. In terms of the Companies (Creation and Maintenance
of databank of Independent Directors) Rules, 2019 read with
the Companies (Appointment and Qualification of Directors)
Fifth Amendment Rules, 2019, the Independent Directors of
the Bank has enrolled his/ her name in the online databank of
Independent Directors maintained by the Government.

The Independent Directors have also confirmed that they are
not aware of any circumstance or situation, which exists or may
be reasonably anticipated, that could impair or impact their
ability to discharge their duties with an objective independent
judgement and without any external influence.

In the opinion of the Board, the Independent Directors are
persons of high repute, integrity and possess the relevant
expertise and experience in their respective fields. They
fulfil the conditions specified in the Act and the Rules made
thereunder and are independent of the Management.

19. BOARD COMMITTEES

Detailed composition of the mandatory Board committees
namely Audit Committee, Credit Investment & Raising Capital
Committee, Risk Management Committee, Nomination
Remuneration, Ethics & Compensation Committee,
Stakeholders Relationship Committee, Customer Service,
Marketing Strategy and Digital Banking Committee, Special
Committee of the Board for monitoring and follow up of cases
of frauds, Information Technology & Operations Committee,
HR Committee, CSR Committee and the Review Committee of
the Board on identification of Wilful Defaulters, its number of
meetings held during the year under review and other related
details are set out in the Corporate Governance Report which
forms part of this Report. There have been no situations
where the Board has not accepted any recommendation of
the Audit Committee.

20. POLICY ON APPOINTMENT AND REMUNERATION
OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Bank has formulated and adopted a comprehensive
'Compensation Policy' for its Directors, Key Managerial
Personnel and Employees, in terms of relevant provisions
of the Companies Act, 2013 read with the rules made
thereunder, SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and the guidelines/
circulars issued by the RBI, in this regard, from time to time.
The Compensation Policy is reviewed annually. In line with this
practice, the Policy was reviewed by the Board based on the
recommendation of the Nomination, Remuneration, Ethics,
and Compensation Committee to ensure alignment with
applicable regulatory requirements.

The criteria for making payments to Independent Directors/
Non-executive Directors of the Bank are contained in the
Comprehensive Compensation Policy for Non-Executive
Directors and is available on the website at https:/¹ www.
federalbank.co.in/shareholder-information.

The Bank affirms that the remuneration paid to its directors is
in accordance with the provisions of the aforementioned Policy
and is fully compliant with the relevant regulatory guidelines.

21. BOARD EVALUATION

In accordance with relevant provisions of the Companies Act,
2013, SEBI (Listing Obligations and Disclosure Requirements),
Regulations, 2015 and SEBI Guidance Note on Board
Evaluation, the Board has carried out an annual performance
evaluation of its own performance and of the directors
individually, as well as the evaluation of the working of its
various Committees for the year under consideration.

The evaluation process was initiated by putting in place, a
structured questionnaire after taking into consideration inputs
received from the Directors, covering various aspects of the
Board's functioning, such as adequacy of the composition of
the Board and its Committees, Board culture, execution and
performance of specific duties, obligations, and governance.

Thereafter a separate exercise was carried out in digital
mode using a board evaluation software to evaluate the
performance of individual Directors, including the Chairman
of the Board, who were evaluated on specified parameters.
The performance evaluation of the Independent Directors was
carried out by the entire Board, other than the Independent
Director concerned. The performance evaluation of the
Chairman and the Non-Independent Directors were carried
out by the Independent Directors. The Directors expressed
their overall satisfaction with the evaluation process.

21.1. Parameters for the evaluation of the Board and Board
Committees include various aspects, such as

21.1.1. Board

• If Board is of appropriate size and has the appropriate
balance and diversity of background, business experience,
industry knowledge, skills and expertise in areas vital to
the Bank's success, representing sectors laid down by
the regulators, given its current and future position.

• New Board members participate in an orientation
program to educate them on the organization, their
responsibilities, and the organization's activities, the
Board encourages a culture that promotes candid
communication.

• The Board oversees management's procedures for
enforcing the organization's code of conduct, Action
Taken Reports on the discussion/directions of the Board
are submitted at regular intervals to the Board.

• The Board oversees risk management through inputs
from the Risk Management Committee

• The Board considers the quality and appropriateness
of financial reporting, including the transparency
of disclosures.

• The Board ensures compliance with the relevant

provisions of the Companies Act and other regulatory
provisions as applicable to the Bank.

• The Board oversees the compliance processes.

• The Board views the organization's performance from
the competitive perspective - industry and peers'
performance, industry trends and budget analysis and
with reference to areas where significant differences
are apparent etc.

• The Board ensures compliance with the relevant

provisions of the Companies Act and other regulatory
provisions as applicable to the Company.

• The Board has defined an effective Code of Conduct for
the Board and Senior Management

• Whether the Board monitors and manages potential
conflicts of interest of management, members of the
board of directors and shareholders, including misuse of
corporate assets and abuse in related party transactions.

21.1.2. Board Committee

• The Committee Terms of Reference and composition
continue to be appropriate.

• The mandate, composition and working procedures
of committees of the Board of Directors is clearly
defined and disclosed.

• Committee meetings are organized properly in number,
timing and location.

• The Committee is effective in carrying out its mandate.

• The Committee members receive adequate material in
advance of Committee meetings, in sufficient time and
detail to permit members to effectively consider issues
to be dealt with

• The Committee allocates the right amount of
time for its work.

• Whether the Committee has fulfilled its functions as
assigned by the Board and laws as may be applicable.

• Whether adequate independence of the Committee is
ensured from the Board.

• Whether the Committee's recommendations contribute
effectively to decisions of the Board.

21.2. Parameters for the evaluation of Directors include

various aspects, such as,

21.2.1. Independent Directors

• Attendance at the Board and Committee meetings

• Study of agenda in depth prior to meeting and active
participation at the meeting

• Contributes to discussions on strategy as opposed to
focus only on agenda.

• Participate constructively and actively in the Committees
of the Board in which they are Chairpersons or Members

• Exercises his skills and diligence with due and reasonable
care and brings an independent judgement to the Board.

• Knowledge and Competency: i) How the person fares
across different competencies as identified for effective
functioning of the entity and the Board ii) Whether the
person has sufficient understanding and knowledge of
the entity and the sector in which it operates.

• The Director remains abreast of developments affecting
the company and external environment in which it
operates independent of his being apprised at meetings.

• Whether person is independent from the entity and the
other directors and there are no conflict of interest

• Whether the person demonstrates highest level of
integrity (including conflict of interest disclosures,
maintenance of confidentiality, etc.)

21.2.2. Chairperson

• Works effectively with the Board as a whole.

• Ability to elicit inputs from all Board Members and steer
the discussions to a logical conclusion.

• Works with the Board and directs the management for
creating an effective process for long-range or strategic
planning for the Company.

• Whether the Chairperson displays efficient leadership,
is open-minded, decisive, courteous, displays
professionalism, able to coordinate the discussion, etc.
and is overall able to steer the meeting effectively.

• Whether the Chairperson is able to keep shareholders'
interest in mind during discussions and decisions.

• Whether the Chairperson is impartial in conducting
discussions, seeking views and dealing with dissent, etc.

• Handling of critical situations concerning the Bank.

• Thinks strategically to promote growth, improve financial
performance and gain competitive advantage.

• Understands financial planning, budgeting and

management of the organization's investments and
overall organization financial perspective.

21.2.3. MD & CEO and Executive Directors

a. Quantitative Targets:

• Achievements of performance against targets set.

b. Qualitative Targets:

• Apprises the Board regarding the organization's financial
position and operational budget so as to enable the
Board to make informed financial decisions.

• Provides Leadership in developing strategies and

organizational plans with the management and the
Board of Directors

• Ensures that the Board is kept informed about all issues
concerning the Bank.

• Media interaction and ability to project positive image
of the Company.

• Effectively pursues the performance goals in relation to
mission and objective of the organization.

• Motivating employees, providing assistance & directions
and supervising & safeguard of confidential information.

• Establishment of internal control processes, monitoring
policies and encouraging suggestions.

• Cultivates effective Relationship with Industry Foras,
Community and business leaders and Regulatory Bodies
and Public Officials.

• Ensures compliance with all legal and
regulatory requirements.

• Undertaking of various Developmental initiatives within
the organisation.

• Compliance with ethical standards & code of conduct
and exercising duties diligently.

21.3. Assessment of Flow of Information

The agenda and related information are circulated in advance
of meetings to allow board members sufficient time to
study and understand the information, Information on the
annual operating plans and budgets and other updates are
provided to the Board; Updates on operating results of the
Bank is furnished to the Board, periodically etc. Update
on the compliance with the regulatory, statutory or listing
requirements are placed before the Board.

22. FAMILIARIZATION PROGRAMMES FOR
INDEPENDENT DIRECTORS

The details of familiarization programmes are disclosed
on the Bank's website, www.federalbank.co.in/
shareholder-information.

23. ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
PRACTICES

The Bank recognizes the growing importance stakeholders
assign to ESG practices and is always in the forefront to adopt
the best practices. Details of the ESG initiatives undertaken by
the Bank during the Financial Year is included in the Annual
report as part of the ESG section/ Business Responsibility and
Sustainability Report.

24. CORPORATE SOCIAL RESPONSIBILITY

The Bank has been formally undertaking Corporate Social
Responsibility (CSR) activities well before the introduction
of provisions related to CSR under Companies Act, 2013.
With the introduction of Section 135 of the Act making CSR
mandatory, the Bank extended its ambit of activities to
undertake interventions in identified areas by the Bank or
indirectly through its trust. Our founder's values & ethos based
on trust got embedded in the Bank's policies & principles. CSR
in the Bank began with the first act of cultivating banking
habits in the agrarian society to effectively utilize idle money
for productive purposes.

Pursuant to the provisions of Section 135 of the Act, read with
the Companies (Corporate Social Responsibility Policy) Rules,
2014 (CSR Rules), as amended, the Bank has constituted the
CSR Committee of the Board.

The Bank has constituted and adopted a CSR policy which
provides the focus areas (in accordance with Schedule VII
of the Act) under which various developmental initiatives
are undertaken.

The details of the CSR initiatives undertaken during the
financial year ended March 31, 2025, and other details
required to be given under section 135 of the Companies Act,
2013 read with rule 8(1) of the Companies (Corporate Social
Responsibility Policy) Rules, 2014 are given in Annexure A
forming part of this Report.

25. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

In compliance with Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulation, 2015,
separate Section on Management Discussion and Analysis, as
approved by the Board, which includes details on the state of
affairs of the Bank, forms part of this Annual Report.

26. BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT

In terms of Regulation 34(2)(f) of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, Business Responsibility and Sustainability
Report (BRSR) is mandatory for the top 1000 listed companies,
based on market capitalization. The disclosure requirement in
BRSR is based on National Guidelines on Responsible Business
Conduct Principles, which is divided into 2 (two) parts i.e.
Essential Indicators (to be reported on a mandatory basis) and
Leadership Indicators (to be reported on a voluntary basis).

Further, Securities and Exchange Board of India vide Circular
with ref no. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122
dated 12^th July, 2023, based on the recommendations of the
ESG Advisory Committee and pursuant to public consultation,
introduced the BRSR Core which is a sub-set of the BRSR,
consisting of a set of Key Performance Indicators (KPIs) /
metrics under 9 ESG attributes.

The Bank has provided BRSR, which indicates the Bank's
performance against the principles of the 'National Guidelines
on Responsible Business Conduct'. This would enable the
Members to have an insight into environmental, social and
governance initiatives of the Bank.

27. CORPORATE GOVERNANCE

The Bank believes that Corporate Governance derives from
value system, best management practices, adherence of
ethical standard, encompassing its culture, its policies,
and its relationships with the stakeholders. Your Bank is
committed to achieving and adhering to the highest Corporate
Governance standards and has been an integral part of its
business. Integrity, transparency, and accountability are the
important ingredients of Corporate Governance. The Bank
gives importance to uphold the integrity of every transaction
which it enters into and the honesty in its internal conduct
would be evaluated by stakeholders.

Pursuant to Regulation 34 of the SEBI Listing Regulations, a
separate section i.e., 'Report on Corporate Governance' has
been annexed to this Annual Report along with the certificate
issued by the Secretarial Auditor of the Bank confirming
compliance with the mandatory requirements relating to
Corporate Governance under the SEBI Listing Regulations. The
corporate governance framework of the Bank incorporates
all the mandatory requirements as prescribed in the SEBI
Listing Regulations.

The Bank also submits with the Stock Exchanges, the quarterly
Report on Corporate Governance in terms of Regulation 27(2)
of the SEBI Listing Regulations. The said Reports are available
on the Bank's website viz., URL: https:/www.federalbank.
co.in/shareholder-information

28. RELATED PARTY TRANSACTIONS

Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of
the Companies (Accounts) Rules, 2014, there are no related
party transactions to be reported under Section 188(1) of the
Act and Form AOC-2 is not applicable to the Bank. During the
year under review, your Bank has not entered any materially
significant transaction with its related parties, which could
lead to a potential conflict of interest between the Bank and
these parties.

Prior omnibus approval for transactions which are of repetitive
nature is obtained from the Audit Committee and accordingly
the required disclosures are made to the Committee on
quarterly basis in terms of the approval of the Committee.

The policy on Related Party Transactions as approved by the
Audit Committee and the Board of Directors is uploaded on
the website of the Bank and the link for the same is www.
federalbank.co.in/our-commitments.

The details of related party transactions are provided in the
notes forming part of the standalone financial statements and
the consolidated financial statements.

29. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Bank has through the years developed and stabilized
an effective internal control system calibrated to the risk
appetite of the Bank and aligned to the scale, size and
complexity of its operations. The scope and authority of the
internal audit function is defined in the Audit and Inspection
Policy of the Bank, duly approved by the Board of Directors.
In order to help Bank in achieving its mission of adopting the
best professional practices prevailing in the industry, while
framing the policy, substantial inputs are taken from - RBI
guidance note on Risk Based Internal Audit, 'The internal audit
function in banks' published by Basel Committee on Banking
Supervision and RBI Circular on 'Concurrent Audit System'.
Audit and Inspection Policy is reviewed annually. Policy is
reviewed considering changes in the guidelines of RBI, Basel
Committee recommendations, ICAI guidelines, other statutory
/ regulatory guidelines, directions of Board/ Audit Committee

of the Board issued from time to time and periodic internal
guidelines/ instructions issued by the Bank. Risk based Audit
framework is reviewed in line with the present business
model and industry best practices. At the enterprise level, the
Internal Audit Department, on a continuous basis, assesses
and monitors the effectiveness of the control systems and its
adequacy to meet the growing complexities. The audit function
essentially validates the compliance of Bank's processes and
operations with regulatory guidelines, accounting procedures
and Bank's own internal rules and guidelines. A department
level group meets on periodical intervals to discuss latest
internal/ RBI/ regulatory guidelines for ensuring that the
required changes are implemented for making the audit
function updated and dynamic.

The Bank has a robust system towards escalating the audit
findings to appropriate levels in the hierarchy of Management
and discussions in various committees towards suggesting
corrective action and its follow up. The Bank in compliance
of the requirements of Section 138 of the Companies Act,
2013, has designated the Head of Internal Audit Department
as Chief Internal Auditor of the Bank. Chief Internal Auditor of
the Bank directly reports to the Managing Director & CEO of
the Bank. Audit Committee of the Board reviews the adequacy
and effectiveness of the Internal Audit Function. The Bank has
various types of audits which inter-alia include Risk Based
Internal Audit, Information System Audit, Third Party Risk
Audit, Offsite Audit (audit through use of technology and data
analysis), Concurrent Audit, Gold Loan Audit and Management
Audit. Branches / Departments are risk rated and the
frequency of Risk Based Internal Audit / Management Audit is
decided based on the Risk Rating of the unit. Significant Audit
findings and observations are presented to Internal Audit
Review Committee of Executives and a report on the meetings
of Internal Audit Review Committee of Executives along with
significant audit findings, directions / suggestions of the
Committee and action taken in such cases are placed to the
Audit Committee of the Board for review periodically. Other
findings are placed before a department level committee
called the 'Internal Audit Department Review Committee' for
review and its observations are placed before Internal Audit
Review Committee of Executives.

As per the requirement of Companies Act, 2013, Bank has
formulated Internal Financial Controls framework. Risk
and Controls associated with each process in the Bank are
documented under the Internal Financial Controls Framework.
Internal Audit Department plays a significant role in testing the
control effectiveness for each process under the framework.

The Internal Audit function provides independent assurance
to the Board of Directors and Senior Management on the
quality and effectiveness of the bank's internal control, risk
management and governance systems and processes, thereby
helping the Board and Senior Management protect the bank
and its reputation.

30. ENERGY CONSERVATION, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO

The information on conservation of energy and technology
absorption pursuant to Section 134 (3) (m) of the Companies
Act, 2013 read with the Rule 8 (3) of the Companies (Accounts)
Rules, 2014, is mentioned below.

Your Bank has undertaken various initiatives for the
conservation of energy and have taken efforts to contribute
to low carbon economy. Details of the same are available in
the Business Responsibility and Sustainability Report of the
Bank which is part of the Annual Report of the Bank and is
also available on the Bank's website https^www.federalbank.
co.in/shareholder-information

Your Bank is also using better technology to improve energy
efficiency, recycling and generating energy from renewable
sources. Details of the same are available in the Business
Responsibility and Sustainability Report of the Bank which
is part of the Annual Report of the Bank and is also available
on the Bank's website https:/www.federalbank.co.in/
shareholder-information

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

31. TECHNOLOGY AND DIGITAL UPDATES AND
MEASURES TAKEN IN IT GOVERNANCE,
INFORMATION SECURITY, IT AUDIT, IT OPERATIONS,
IT SERVICES OUTSOURCING

31.1. Technology and Digital updates

IT provides the strong foundation that enables your Bank
to grow extensively and gain market share. In the following
paragraphs, we provide more details of the entire governance
structure over IT, with focus on information security.

IT governance comprise processes that ensure the effective
and efficient use of IT in enabling our organization to achieve
its goals. It is an integral part of corporate governance and
consists of the organizational structures, leadership and
process that ensure IT sustains and extends the organization's
strategy and objectives.

The governance of IT is effectively supervised by the Board
of Directors through the IT & Operations Sub-Committee
consisting of minimum three Directors with at least one
Independent Director. All members of the Committee have
extensive experience in IT & Operations and are able to provide
effective guidance and direction to the management team.

Executive Level Committee which oversees the IT governance
function include the Operations Risk Management Committee
(ORMC), the Information Security Committee (ISC), the
IT Steering Committee (ITSC) and the Project Steering
Committee (PSC).

Your Bank has a well-defined Information System Security
Policy and a Cyber Security Policy. The effective implementation

of these policies is supervised by the Information Security
Committee and by the IT & Operations Committee of the Board.

Your Bank keeps updating the technology infrastructure and
software to stay current in the market. These upgrades are
done after proper testing and trials. Increasingly, Artificial
Intelligence (AI) and Machine Learning (ML) are being
integrated to personalize customer experience, detect fraud,
automate routine processes and provide predictive insights
for better decision making.

In recognition of the need for enhanced systems security, your
Bank conducts a wide range of system audits, using internal and
external auditors. These range from the quarterly Vulnerability
Assessments (VA) and Penetration Testing (PT) to concurrent
audits to an annual end to end audit of IT infrastructure. All the
applications, both web based, and mobile based apps exposed
to internet are subjected to external penetration testing (PT)
before releasing to use.

Bank has deployed best in the class infrastructure to provide
availability of service to users and customers without fail.
The installed infrastructure is tested for its reliability and
robustness by periodic audits. In addition, periodic Disaster
Recovery Tests are conducted to ensure the ability to move to
the Disaster Recovery infrastructure in the event of downtime
in the main production capability.

More details on digital initiatives of the Bank are available in
the Management Discussion and Analysis Report, forming
part of this Annual Report.

32. BUSINESS RISK MANAGEMENT

The Bank's Risk Management framework is based on a
clear understanding of various risks, robust risk assessment
and measurement procedures and constant monitoring.
The Board of Directors oversees all the risks assumed by
the Bank. Specific Committees are constituted to facilitate
focused oversight of various functions. The Risk Management
Committee of the Board sets the standards and governs the
risk management functions, thereby bringing in a top to down
focus on risk management. The Risk Management Committee
of the Board reviews all risk management policies of the Bank.
The Committee reviews the Risk Appetite framework, Internal
Capital Adequacy Assessment Process (ICAAP) and Stress
testing. The Committee oversees setting up of risk limits
and exposure ceilings, implementation of Basel III guidelines
and the activities of the executive level risk management
committees. The Committee assesses the level and direction
of major risks pertaining to credit, market, liquidity, operational,
reputation, technology, information security, compliance
and capital as a part of the risk dashboard. In addition, the
Committee oversees risks of subsidiaries covered under the
Group Risk Management Framework.

The Risk Management Policies approved by the Board of
Directors and reviewed from time to time with updated
regulatory and internal guidelines form the governing
framework for each type of risk.

The Integrated Risk Management Department of the Bank
co-ordinates and administers the risk management functions
in the Bank. The Department has four divisions for managing
the main risk streams, Credit risk, Market risk, Operational risk
and Information Security Division. Dedicated teams within
the divisions are responsible for assessment, monitoring
and reporting of various material risks. Default risk and asset
quality of loan portfolio are monitored and managed by the
Credit Risk Division. Market Intelligence Unit (MIU) formed for
the purpose of monitoring large value accounts is linked to
Credit Risk Division. The Bank has established an independent
Mid Office as part of Market Risk Division for monitoring and
management of risks in Bank's Treasury portfolios. A dedicated
ALM team manages the liquidity risk and interest rate risk. A
dedicated E&S/ESG team is also established as part of the
Integrated Risk Management Department. Operational Risk
Management, Business Continuity Management, Third Party
Risk Management are taken care by Operational Risk Division.
Governance, Risk and Compliance related to Information
Security and Security Event Management is handled by
Information Security Division. All the divisions are independent
of business operations and coordinate with representatives of
the business units to implement the Bank's risk management
Policies and frameworks. Executive level risk management
Committees namely, Credit Risk Management Committee,
Asset Liability Management Committee, E&S Committee,
Operational Risk Management Committee and Information
Security Committee regularly assess the respective risks
and direct corrective actions wherever required. The risk
management functions are coordinated by a Senior Executive
designated as Chief Risk Officer who reports directly to
the Managing Director & CEO. All material risks of the Bank
emerging in the course of its business are identified, assessed
and monitored in the Internal Capital Adequacy Assessment
Process (ICAAP). In our view, all the material risks of the Bank
are identified, assessed and managed adequately.

33. AUDITORS

33.1. STATUTORY AUDITORS

As mandated by RBI guidelines for Entities with asset size of
H 15,000 crore and above as at the end of the previous year,
the Statutory Audit of the Bank shall be conducted under joint
audit of a minimum of two audit firms (Partnership firms /
Limited Liability Partnerships (LLPs)).

The Shareholders in the 92^nd Annual General Meeting held
on August 18, 2023, approved the appointment M/s. Suri
& Co, Chartered Accountants (Registration No. 004283S),
Chennai, together with M/s. MSKA & Associates, Chartered
Accountants (Registration No. 105047W), Mumbai for a
period of three (3) years as Joint Statutory Auditors of the
Bank from the conclusion of 92^nd AGM till the conclusion of
95^th AGM respectively.

As per the requirement of the Companies Act, 2013, M/s. Suri
& Co, Chartered Accountants and M/s. MSKA & Associates,

Chartered Accountants have confirmed that their appointment
if made would be within the limits specified under Section
141(3) (g) of the Act and they are not disqualified to be
appointed as statutory auditor/s in terms of the provisions
of the proviso to Section 139(1), Section 141(2) and Section
141(3) of the Act and the provisions of the Companies (Audit
and Auditors) Rules, 2014.

RBI vide letter Ref CO. DOS. RPO. No. S4045/08.09.005/2024-
25 dated August 27, 2024, had granted approval for
appointment of M/s Suri & Co, Chartered Accountants
(FRN 004283S) and M/s. MSKA & Associates, Chartered
Accountants (FRN 105047W) as the Joint Statutory Auditors
of the Bank, for the FY 2024-25 for their second year.

As required under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, M/s. Suri & Co, Chartered
Accountants (Registration No. 004283S), Chennai, and M/s.
MSKA & Associates, Chartered Accountants (Registration No.
105047W), Mumbai have confirmed that they hold a valid
certificate issued by the Peer Review Board of ICAI.

There is no qualification or adverse remark in Auditors' Report.
There were some incidents of fraud requiring reporting by the
Auditors under Section 143(12) of the Act.

33.2. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of The Companies
Act, 2013, your Bank has appointed M/s. M Damodaran &
Associates LLP, Company Secretaries, Chennai as Secretarial
Auditor to conduct Secretarial Audit of the Bank for the FY
2024-25. Accordingly, the Secretarial Audit Report for FY
2024-25 is annexed to this report as Annexure B. The Audit
Report issued by the Secretarial Auditors for the said FY form
part of this Report which is self-explanatory.

No offence of fraud was reported by the Secretarial
Auditor of the Bank.

Pursuant to Regulation 24A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 read with SEBI
Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/120
dated July 11, 2023, the Bank has obtained Secretarial
Compliance Report, certified by CS M. Damodaran, M/s M
Damodaran & Associates LLP for Financial Year ended March
31, 2025, on compliance of all applicable SEBI Regulations and
circulars/ guidelines issued thereunder and the copy of the
same was submitted with the Stock Exchanges.

Further as per Regulation 24A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Bank
at its ensuing AGM proposes the appointment of M/s SEP &
Associates, Kochi (ICSI Unique Code:P2019KE075600). Peer
Reviewed Practising Company Secretaries, as the Secretarial
Auditor of the Bank for a period of 5 years (First Term) with
effect from FY 25-26 to FY 29-30.

34. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Bank has a robust Fraud Risk Management Framework
which provides guidance on managing the Fraud Risk. Cases
detected / reported are investigated and appropriate process
refinements and systemic corrections are implemented to
avert similar incidents in future.

Various mitigation measures and surveillance mechanisms
are employed to combat both internal and external frauds.
Regular sensitization programs for employees and the
public on various frauds and prevention techniques foster an
atmosphere of vigilance.

The Preventive Vigilance Workshop, curated by the Vigilance
Department, elucidates the gaps exploited by fraudsters to
perpetrate frauds against Banks. This program also imparts
strategies to avert such frauds. Additionally, Fraud Prevention
Committee meetings are regularly conducted at branches
to familiarize employees with the various modus operandi
of trending frauds and their preventive measures. Annual
Preventive Vigilance Audits are conducted in identified
branches based on risk rating.

The Bank is committed to raising public awareness about
financial frauds through multiple communication channels,
including SMS, emails, posters at branches, ribbon messages
on the Bank's website, and the internet banking webpage.
Special emphasis is placed on cyber fraud awareness. The
“Twice is Wise" cybersecurity campaign, launched in 2020,
serves as a friendly reminder to remain vigilant against cyber
frauds. This nationwide initiative educates citizens about
cyber safety and underscores the importance of staying smart
to combat financial crimes. Posters and videos cautioning the
public about novel fraud incidents are disseminated through
social media handles, TV channels, web channels, and more.

The Bank has implemented a robust Whistle Blower Policy,
known as the Protected Disclosure Scheme (PDS). This policy
underscores our commitment to maintaining the highest
standards of ethics and integrity in all our operations and
aims to establish an effective vigil mechanism within the
Bank to identify and address aberrations at the earliest.
It serves as a robust mechanism through which directors,
employees, employee representative bodies, customers, other
stakeholders, non-governmental organizations (NGOs), and
members of the public can report any unethical practices or
concerns. The policy guarantees confidentiality and protection
to the whistleblower against any personal vindictive actions
such as humiliation, retaliation, harassment, or any other
form of unfair treatment. A dedicated email ID is provided
for sending complaints or disclosures under PDS. The PDS
policy is available on the Bank's website and Intranet -
https://www.federalbank.co.in/documents/10180/45777/
Whistle Blower policy or PDS.pdf/558aea51-1335-4546-
9c9a-28c5030377a1?t=1719555373881

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY
THE REGULATORS OR COURTS OR TRIBUNALS

During the financial year under review, the Bank has not
received any significant or material orders passed by any
Regulatory Authority, Court or Tribunal which shall impact the
going concern status and Bank's operations in future.

36. PARTICULARS OF EMPLOYEES

In terms of Section 136 of the Companies Act, 2013, the
copy of the financial statements of the Bank, including the
consolidated financial statements, the auditor's report and
relevant annexures to the said financial statements and
reports are being sent to the Members and other persons
entitled thereto, excluding the information in respect of the
employees of the Bank containing the particulars as specified
in Rule 5(2) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014. The statement
containing particulars of employees as required under Section
197(12) of the Act read with Rule 5 (2) of the said Rules is
available on the website: https:Zwww.federalbank.co.in/
shareholder-information.

The ratio of the remuneration of each Director to the median
remuneration of the employees of the Bank and other details
in terms of Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are
forming part of this report as Annexure C.

37. INTERNAL COMPLAINTS COMMITTEES
[INFORMATION UNDER THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013]

The Bank had constituted Internal Complaints Committee,
as per letter and spirit contained in the provisions of “The
Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013", at 9 Zones and Head
Office to prevent and redress the complaints relating to
sexual harassment and to organize workshops/ awareness
programs to empower women employees while handling
cases relating to sexual harassment. Workshops/ awareness
programs regarding women empowerment were conducted
at various locations pan India. The data with regard to the
redressal of complaints by the Internal Complaints Committee
are as follows:

38. COMPLIANCE WITH RESPECT TO THE PROVISIONS
OF MATERNITY BENEFIT ACT,1961

The Bank is in compliance with the provisions of Maternity
Benefit Act,1961. More details are available in the Business
Responsibility and Sustainability Report of the Bank which
is part of the Annual Report of the Bank and is also available
on the Bank's website https^www.federalbank.co.in/
shareholder-information.

39. THE DETAILS OF APPLICATION MADE OR ANY
PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016 (31 OF 2016)

As per section 3(7) of The Insolvency and Bankruptcy Code,
2016, Corporate person does not include any financial service
provider, thereby the Bank is excluded from the purview of
the Code. There have been several applications made or are
pending in the name of the Bank as a Financial creditor against
any default occurred as part of the course of business. The
particulars of the corporate debtor and claim value is annexed
to this report as Annexure D.

40. POLICY ON BOARD DIVERSITY

Policy on Board Diversity of the Bank mainly depends on the
qualifications for appointment of Directors of the Bank as
contained in the Banking Regulation Act, 1949 and satisfying
the Fit and Proper Criteria for directors as per the regulatory
requirement of RBI.

The Bank continuously seeks to enhance the effectiveness of
its Board and to maintain the highest standards of corporate
governance and recognizes and embraces the benefits of
diversity in the boardroom. Diversity is ensured through
consideration of a number of factors, including but not limited
to skills, regional and industry experience, background and
other qualities. In forming its perspective on diversity, the
Bank also takes into account factors based on its own business
model and specific needs from time to time.

Board Diversity enhances the quality of performance of the
Board; ushers in independence in the performance of the
Board; eradicates the gender bias in the Board; achieves
sustainable and balanced performance and development;
supports the attainment of strategic objectives & also ensures
compliance of applicable law/s and good corporate practices.

Nomination, Remuneration, Ethics and Compensation
Committee has the responsibility for leading the process
for Board appointments and for identifying and nominating,
for approval by the Board, candidates for appointment to
the Board. The benefits of diversity continue to influence
succession planning and continue to be the key criteria for
the search and nomination of directors to the Board. Board
appointments will be based on merit and candidates will be
considered against objective criteria, having due regard for
the benefits of diversity on the Board, including gender. While
making Board appointments, the regulatory requirements for
appointment of at least one-Woman Independent Director on
the Board of the Bank is also considered.

41. DIRECTOR'S RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the
information and explanations obtained to us, the Directors
make the following statements in terms of Section 134 (3) (c)
of the Companies Act, 2013:

i. that in the preparation of the annual financial statements
for the year ended March 31, 2025, the applicable
accounting standards have been followed along with
proper explanation relating to material departures, if any;

ii. that such accounting policies as mentioned in the Notes
to the Financial Statements have been selected and
applied consistently and judgment and estimates have
been made that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Bank as
at March 31, 2025, and of the profit of the Bank for the
year ended on that date;

iii. that proper and sufficient care has been taken 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;

iv. that the annual financial statements have been prepared
on a going concern basis;

v. that proper internal financial controls were in place and
that the financial controls were adequate and were
operating effectively;

vi. that systems to ensure compliance with the provisions
of all applicable laws were in place and were adequate
and operating effectively;

42. GENERAL

Your directors state that no disclosure or reporting is required

in respect of the following items as there were no transactions

on these items during the year under review:

• Neither the Managing Director nor the Whole-time
Directors of the Bank received any remuneration or
commission from any of its subsidiaries.

• Issue of equity shares with differential rights as to
dividend, voting or otherwise.

• There were no revisions in the financial statements.

• Issue of share (including sweat equity shares) to
employees of the Company under any scheme as
permitted under any provision of Companies Act, 2013
except Employee Stock Option Scheme (ESOS) as
mentioned elsewhere in the Directors' Report.

• The Bank is not required to maintain cost records as
specified by the Central Government under section
148(1) of the Companies Act, 2013.

• The requirement to disclose the details of difference
between amount of the valuation done at the time of
onetime settlement and the valuation done while taking
loan from the Banks or Financial Institutions along with
the reasons thereof, is not applicable.

43. ACKNOWLEDGEMENT

The Board of Directors extends its heartfelt appreciation
to every member of the Federal family for their unwavering
dedication, hard work, and commitment. The Bank's
accomplishments this year underscore the collective dedication
and high standards consistently demonstrated by its people.

The Board also takes this opportunity to express its sincere
gratitude to the Government of India, the Reserve Bank of
India, various State Governments, and regulatory authorities
both in India and abroad for their continued guidance, support,
and cooperation. We are equally thankful to Investment
Banks, Rating Agencies, and Stock Exchanges for their
steadfast support.

We remain deeply grateful to our esteemed customers and all
well-wishers for their continued trust and patronage.

Above all, to you—our valued shareholders—we express our
profound gratitude for the enduring confidence and faith you
have placed in us.

For and on behalf of the Board of Directors of
The Federal Bank Limited

Sd/-

Mr. Abhaya Prasad Hota

Date: 30.07.2025 Chairman of the Board

Place: Aluva (DIN - 02593219)

1

Mr. Shyam Srinivasan- Non-Executive Chairman & Non¬
Executive Director

• Mr. Parvez Kasim Mulla - Managing Director and Chief
Executive Officer

• Mr. Ramesh Sundararajan - Non-Executive -

Independent Director

• Mr. Sunil Satyapal Gulati - Non-Executive -

Independent Director

• Ms. Sonal Nitin Dave- Non-Executive -
Independent Director

• Ms. Mona Mukund Bhide - Non-Executive -

Independent Director

• Mr. Muralidharan Rajamani- Non-Executive -
Independent Director

2

Stock Options granted to Mr. Krishnan Venkat Subramanian on
24/09/2024 was split into 2 tranches with the first being 12,00,000 Stock

Option pursuant to NRCmeeting dated 28/06/2025.

7.3 Debt capital

As of March 31, 2025, the Bank has a total outstanding issued
debt capital of H3,195 crores. This includes H1,695 crores
in rated, unsecured, redeemable, non-convertible, Basel III
compliant Tier II subordinated bonds. During the year, the Bank
issued 1,50,000 units of listed, unsecured, rated, redeemable,
non-convertible securities amounting to H1,500 crores. Also,
the Bank redeemed H300 crores worth of Basel III compliant
subordinated bonds by exercising a call option.

7.4. Capital Adequacy Ratio

The Bank's overall Capital Adequacy Ratio (CAR) under Basel
III stood at 16.40 % at the end of fiscal 2025, well above the
benchmark requirement stipulated by the RBI. Of this, the
common equity tier I (CET I) CAR was 15.04% and tier II CAR
under Basel III stood at 1.36%

3

Federal Bank wins the 'Best Bank in AI & ML Adoption'
and the 'Best Bank for Financial Inclusion' at the 20^th
Annual IBA Technology Awards 2024. The Bank is also
a runner-up in the category 'Digital Sales, Payments
and Engagement'.