New YES
New YES
The
A R T
Alliances Relationships Technology
of Banking
AWARDS &
RECOGNITIONS
Best Mid-Sized Bank, 2016, 2015, Youngest Indian Company to be part Strongest Bank in India by Balance Porter Prize for Leveraging Unique
2013, 2012, 2010, 2009 & 2008 of the Forbes Global 2000 List 2016 Sheet, Switzerland, 2016, Singapore, Activity, 2016
Consistent Performer and Best Asset 2015, Dubai, 2013, Singapore, 2012 Finance, Banking & Insurance, 2013
Quality - Large Sized Banks 2014 Best Managed Bank in India for the
Institute for Competitiveness
3-Year Period (2011-2013), Jakarta,
Business Today - KPMG India’s Best Award
2013
Banks Annual Survey
The Asian Banker Awards
Digital Bank of Distinction Asia’s Best Bank for CSR India’s Best Bank for CSR Best Renewable Energy Deal (Solar)
Corporate/Institutional Bank – Asia, Euromoney Excellence Awards, Asiamoney Excellence Awards, India, 2016
London, 2016 Hong Kong, 2016 Hong Kong, April 2017 Best Green bond Facility Highly
commended India, 2016
Best Information Security Initiatives -
Global Winner, New York - 2015 The Asset Triple A Infrastructure
Global Finance Award. Awards, Hong Kong
AAA rating for Environment, Social Continues to be the First and Only Best Innovation & Sustainable Pioneer in Emerging Markets - India
and Governance Excellence Indian Bank included in Financial Products & Services, 2016 Climate Bonds Initiative London
MSCI ESG October, 2016 DJSI Emerging Markets Index, Outstanding Business Sustainability Stock Exchange (LSE), London 2016
Achievement, 2015 & 2013
New York - 2016, 2015
Karlsruhe Sustainable Finance
Awards, Germany
Payments Winner (Global) Best Bank for Payments and India Domestic Trade Finance Bank of ‘Best Technology Bank of the Year’ -
Transaction Banking Awards, Collections - Asia Pacific the Year, 2016, 2015 Medium Banks
London, 2016, 2014 India Domestic Cash Management Indian Banks’ Association’s (IBA)
Best Treasury & Cash Management Bank of the Year, 2015 Banking Technology Awards,
Banks and Providers Awards Asian Banking & Finance Wholesale Mumbai, 2017
Global Finance Awards, Banking Awards, Singapore
New York, 2017
Best Corporate Payments Project in Only Bank in Private Sector Category India’s Most Admired Brand in Private Brand Excellence (Banking and
India - 2016 Business Superbrands 2016 sector Bank category, 2016 Financial Services) 2016, 2013, 2012,
Best Trade Finance Bank in India - India’s Most Admired Brands 2011 & 2010
2016, 2015 Marketing Campaign of the Year 2013
Best Corporate Trade Finance Deal in Best use of Social Media 2013
India - 2015 Best Corporate Social Responsibility
Best Cash Management Project in Practice (Overall) 2011 & 2010
India - 2015 CMO Asia Awards
The Asian Banker Transaction
Banking Awards
YES BANK LIMITED
ANNUAL REPORT 2016-17
WHAT’S INSIDE
The CORPORATE OVERVIEW
About YES Bank 2
A R T The A.R.T. of Banking 3
Alliances Relationships Technology
Financial Highlights 4
of Banking Message from the Non-Executive Chairman 6
MD & CEO’s Communiqué 8
Digital Banking 12
Human Capital Management 13
View our Annual Report 2016-17 online
Financial Inclusion 14
We provide our annual report online,
which allows us to reduce the amount Robust Risk Management 15
of paper we print and distribute. YES Global Institute 16
https://www.yesbank.in/investor-
relations/annual-reports.html Responsible Banking 18
India bole YES! - Creating a Resonating Brand 20
Leadership in Social Media 21
Non-Executive Chairpersons 22
Board of Directors 23
Management Team 24
SUSTAINABILITY REVIEW
Sustainability Disclosures 34
Annual Business Responsibility Report (ABRR) 80
STATUTORY REPORTS
MESSAGE FROM THE
NON-EXECUTIVE CHAIRMAN Management Discussion and Analysis 94
Page - 6
Directors’ Report 130
Report on Corporate Governance 184
FINANCIAL STATEMENTS
Standalone Financial Statements
Independent Auditors’ Report 230
Balance Sheet 234
Profit and Loss Account 235
Cash Flow Statement 236
Schedules 238
MD & CEO’S COMMUNIQUE
Page - 8 Consolidated Financial Statements
Independent Auditors’ Report 300
Balance Sheet 304
Profit and Loss Account 305
Cash Flow Statement 306
Schedules 308
Form AOC 1 &
Disclosures under Basel III 338
ABOUT
YES BANK
AT YES BANK, OUR DIFFERENTIATION Branch Banking, Business and Transaction Banking,
BEGINS WITH A SINGLE WORD – YES. Digital Banking and Wealth Management business
YES BANK, India’s 4th largest private sector bank is a lines across the country, and is well equipped to offer
high quality, customer centric, service driven, private a range of comprehensive products and services
Indian Bank catering to the Future Businesses to Corporate and Retail customers. YES BANK is
of India. Since inception in 2004, YES BANK has headquartered in the Lower Parel Innovation District
fructified into a ‘Full Service Commercial Bank’ (LPID) of Mumbai, and now has a pan-India presence
that has steadily built Corporate Banking, Financial with a footprint of 1,000 branches and 1,800 ATMs
Markets, Investment Banking, Corporate Finance, across all 29 states and 7 Union Territories in India.
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THE A.R.T. OF
BANKING
ALLIANCES. RELATIONSHIPS. start ups and FinTech companies in an effort to
TECHNOLOGY ‘collaborate and co-create’ solutions that bring
the future of Banking to the present, through
The word ‘ART’ typically invokes
technology led Innovation.
thoughts of brilliant visuals, esoteric
images and aesthetics, the result of Responsible Banking – YES BANK partners
an artist’s labor of love. However, an closely with leading global leaders such as
oft unnoticed and underappreciated UNEP-FI, WBCSD, UNGC as well as stakeholders
in India, to bring in global best practices on CSR
aspect is the underlying technical skill
and Sustainability into the Indian context
and practice required to make ART
come to life. Financial Inclusion – By building strong
relationships with a network of Business
Correspondents and partnering with Cooperative
Banking is no different. For ages, Banking has Banks, YES BANK is providing these institutions
been equated to Branches and ATMs and off late access to its technology infrastructure, with the
to Digital channels, Apps and wallets. However, all aim of enabling Financial Inclusion
of the foregoing function on the bedrock of robust
technology, processes and people. YES Global Institute – A practicing think tank
which is building a global network of relationships
FY 2016-17 was a tipping point of sorts, with to focus on India’s sustainable and inclusive
the half-life of technology innovation reducing socio-economic growth and development
drastically in the Banking and Payments industry
through disruptions from the challengers, as well At YES BANK, it is our strong belief that a
as the incumbents. This disruption presented both Bank should play the role of an ‘enabler’ for the
challenges and inherent opportunities, requiring country’s growth and to serve the varied
rapid transformation and fundamental financial requirements of corporate and retail
re-platforming of the banking bedrock. customers with solutions based on superior
technology and service experience.
At YES BANK, our philosophy to capitalize on
this resulted in adoption of the ART – Alliances, The ART approach allows YES BANK to offer Banking
Relationships and Technology (ART) approach to as a platform and Banking as a Solution, thereby
Banking. not only serving retail customers but also allowing
Corporates and Startups to use the Bank’s expertise
The ART approach manifests itself in different ways to create differentiated path-breaking solutions. The
across the various business verticals and is aimed at Banking bedrock has the potential to create impact
helping us stay ahead of the banking curve: beyond the Banking industry, and YES BANK’s A.R.T
will serve as an engine driving this impact.
Corporate & Retail Banking - The Bank continues
to focus on ‘lifecycle banking’ by building We remain firmly on course to achieve our
strong relationships with our corporate & retail institutional vision of “Building the Finest Quality
clientele and serving their needs using emerging Bank of the World in India by 2025”, and also make
technologies. meaningful contribution to India’s socio economic
development as we move forwards on this path.
Digital Banking - The approach has been to
build Alliances and Relationships with new age
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The A.R.T. of Banking
FINANCIAL HIGHLIGHTS
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27.1% Robust NII Growth supported by 34.8% Continued traction in healthy and
CAGR healthy Advances growth CAGR diversified Non-Interest Income growth
26.5% PAT CAGR at a healthy 26.5% with Improving margins on the back of robust
CAGR improving granularity in earnings CASA growth & improving Retail mix
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The A.R.T. of Banking
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The cumulative result of all these initiatives is opportunity to understand the strength of the Bank’s
accolades from prestigious national and international leadership and guide them to ensure long-term
bodies for its exemplary performance on multiple sustenance of business strategy while keeping in
parameters - Business outcomes, Sustainability, mind customer requirements.
Responsible Banking, Innovation, Technology and
Human Capital. The Board is confident that, with the initiatives taken
during the year, Yes Bank would continue on its
YES BANK has always believed that effective mission and vision of “Building the Finest Quality
Corporate Governance forms the bedrock of Bank of the World in India by 2025”.
Business Excellence in an organization. The
importance of this goes beyond mere adherence to
rules & regulations.
Ashok Chawla,
My colleagues on the Board of Directors of the Bank Non-Executive Independent
are accomplished professionals with a proven track Part-time Chairman
records in diverse fields. During the year, Ms. Radha
Singh, Mr. M.R. Srinivasan, Mr. Ajay Vohra and
Mr. Diwan Arun Nanda retired from the Board.
I would like to thank them for their valuable
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The A.R.T. of Banking
MD & CEO’S
COMMUNIQUE
Dear Shareholders,
The Indian economy has The year 2016-17 was marked by a variety
successfully navigated through of institutional and behavioral reforms
like implementation of the Insolvency and
extant global uncertainties
bankruptcy Code, creation of Monetary Policy
and emerged as a preferred Committee, redesigning of the FRBM framework,
destination for foreign investment passage of GST, and last but not the least,
the policy thrust towards a less-cash formal
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economy. In addition, the trend of benign inflation and We have also made significant investments in
continued improvement in twin deficits further boosted ensuring an omni-channel experience for our retail
the macroeconomic appeal. customers by supplementing our rapidly expanding
branch footprint with a bouquet of offerings across
India’s economic prospects for FY18 appear the Digital value chain.
optimistic with policymakers creating enablers
for strong and sustainable growth in the medium By embracing the A.R.T. - Alliances and
to long-term. Government’s commitment Relationships driven by Technology - philosophy,
towards reforms, implementation of Seventh YES BANK is bringing in the future of Banking to
Pay Commission payout by State Governments, the present by partnering with FinTech start-ups
ongoing quality fiscal consolidation, and marginal and technology innovators from across the globe.
improvement in external demand is expected to Our belief in partnerships to further the ecosystem
boost GDP growth by 20 bps to 7.3%. Growth emanates from the ideology to “Collaborate and
Co-create” to actualize path breaking solutions for
Indian banking.
In March 2017, YES BANK
consummated India’s largest In January 2017, YES BANK along with its partners
private sector Qualified IBM and Cateina Technologies pioneered a unique
Institutional Placement (QIP) in Vendor Financing solution using the Blockchain
INR terms, having raised technology. An industry-first solution, it reduces
the processing time for Supply Chain finance from
` 4,906.65 Cr (USD 750 mn)
4 days to almost real-time. Blockchain, combined
with the power of API Banking has the potential
momentum is likely to accelerate in the second to create a paradigm shift in B2B transactions and
half of 2017-18 amid rapid pace of ongoing revolutionizing the world of Transaction Banking.
re-monetization and trickle-down impact of past
policy reforms. In FY 2016-17, the Bank raised capital across a
wide array of transactions partnering with
FY 2016-17 was a significant year in leading national and international
YES BANK’s lifecycle and we have YES BANK, institutions.
made substantial progress towards raised ` 330 crores
achieving Size and Scale as a BIG (approx. USD 50 millions In March 2017, YES BANK
Bank, with a firmly embedded equivalent) through an issue of consummated India’s largest
Digital Banking ethos, and a focus a 7-year Green Infrastructure private sector Qualified Institutional
on Quality. Bonds to FMO, the Dutch Placement (QIP) in INR terms,
Development Bank, on having raised ` 4,906.65 crores
Since inception, YES BANK has a private placement (USD 750 millions) from marquee
dedicated itself to revolutionizing basis. Institutional Investors from USA,
the ‘Banking Experience’ in our country Canada, Europe, Asia and India. The QIP
India. Our differentiated ‘Knowledge Banking’ has significantly boosted our capital adequacy
philosophy has helped us build long-lasting and ensured that YES BANK is well positioned to
relationships with the top corporate houses, capitalize on the opportunities provided by the re-
emerging corporates and MSMEs, and the use invigorated economic environment in India.
of state-of-the-art technology and innovation
has helped us build comprehensive, customized YES BANK also raised ` 3,000 crores via Basel III
solutions tailored to the unique needs of our clients. Compliant AT-1 Bonds against a base issue size of
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The A.R.T. of Banking
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MSMEs in India’ was highlighted as a Role Model RECOGNITION FOR OUR INITIATIVES
case study by the World Resources Institute, and YES BANK continued to garner multiple recognitions
showcased at the Conference’s India Pavilion. nationally and internationally from prestigious
publications, advisory houses and independent bodies.
The Bank was included in the DJSI Emerging Markets In June 2016, YES BANK became the youngest Indian
Index for the 2nd consecutive year in 2016, and company to be a part of the Forbes Global 2000 List
continues to be the only Indian Bank in the DJSI. In of World’s Top Companies 2016. YES BANK is also one
a significant achievement, the Bank was assigned an of the youngest Banks globally to have become a part
ESG rating of AAA by MSCI ESG Research, assessing of this elite list of global companies.
the Bank on pertinent Environmental, Social and
Corporate Governance parameters. This year, your At the Business Today - KPMG India’s Best Banks, YES
Bank became the first bank globally to migrate to BANK was adjudged India’s Best Mid-Sized Bank for
the latest ISO 14001:2015 certification, which now 2016. This was the 8th year in a row that YES BANK has
covers your Bank’s 444 Metro-Urban branches and 3 been recognized at these marquee awards of the Indian
corporate offices. Banking industry. The Banker, London recognized YES
BANK as the Global Winner in the ‘Payments’ Category
YES BANK’s CSR programs continue to be guided at its Transaction Banking Awards 2016.
at the highest level by its Board approved CSR Policy.
YES COMMUNITY, the Bank’s unique branch-led THE WAY FORWARD
community engagement program, touched 20 lakh I would like to acknowledge and thank Ms. Radha
lives in 2016-17. Its Livelihood and Water Security Singh, Mr. M.R. Srinivasan, Mr. Ravish Chopra and
program provided access to safe and clean drinking Mr. Diwan Arun Nanda for their contributions and
water to more than 3.66 crore lives in Maharashtra, impeccable guidance as part of YES BANK’s board
Delhi and Goa. The bank’s interventions in the MSME over the years.
sector on environmental sustainability impacted 2,229
MSME units and over 10,425 workers in 11 states. As we embark towards the next financial year, YES
BANK is fully equipped to actualize our strategy
I am proud to share that ‘YES! i am the CHANGE’, of building a strong Corporate & Retail Banking
the social film making challenge by YES franchise with Digital presence across the customer
FOUNDATION, has achieved unparalleled success, value chain and at every touch-point.
with participation of over 13 lakh individuals
comprising 3.24 lakh teams, submitting over 29,000 With support from valued shareholders such as
films, and the launch of a new initiative, the yourself and all our stakeholders including clients
YES FOUNDATION Social Film Grant, in FY 2016-17. and partners, YES BANK is committed to ensuring
a culture of Professional Entrepreneurship as we
YES BANK is the first Indian Bank to release move towards our vision of ‘Building the Finest
its Sustainability Report adhering to the newly Quality Bank of the World in India by latest 2025.
released GRI Standards, while continuing to report
as per the Integrated Reporting framework and at Thank you.
the GC Advanced level of the UN Global Compact. Sincerely,
11
The A.R.T. of Banking
DIGITAL
BANKING
The Banking sector is witnessing an CHATBOTS
accelerated pace of innovation and The YES PAY Wallet is the 1st wallet in the country
to be powered by an Artificial Intelligence enabled
technology adoption as well as a spurt
chatbot which allows users to perform transactions
in the banking options available to in an easy, intuitive manner.
corporate and retail customers.
SMART CITIES
YES BANK has launched Nashik and Udaipur City
As a pioneer in employing technology to Prepaid Card Program for facilitation of Digital
revolutionize the Banking experience in India, Payments for Government to Citizen (G2C) services
YES BANK has realized the need to be ahead of the of respective Municipal Corporations. YES BANK
innovation curve in such a dynamic landscape, and will also extend this to other cities shortlisted under
has adopted the A.R.T – Alliances, Relationships and the Government of India’s Smart Cities mission.
Technology approach to achieve this.
YES FINTECH
YES BANK’s Digital Banking strategy YES BANK launched a Fintech focused Business
is geared towards achieving one or Accelerator program - YES FINTECH which
received over 750 applications from 18 countries
more of 4 primary objectives:
including 50 international companies. The 1st Cohort
began with 11 fintech start-ups who will work with
Deepening relationships with our clients YES BANK towards co-creating Banking solutions.
through omni channel offerings.
YES SIMsePAY
Addressing untapped/ new Business Lines/ SIMsePAY is enabling mobile payment services
customer segments without requiring internet or smartphone to over 6
lakh customers in partnership with 35 cooperative
Realizing improved operational efficiencies banks.
and cost reduction
YES TRANSACT
Continuously improve Customer Service and YES BANK has introduced the InvoiceXpress digital
experience, and augment security of the solution for corporate clients to automate order
Bank’s Customers. placement, invoice presentment, collections and
reconciliation. The Bank launched ON-THE-GO,
a new mobile banking solution for corporates to
During FY 2016-17, YES BANK undertook approve and process business payments on mobile
multiple initiatives reinforcing its Digital devices, while away from office.
Banking leadership
UNIFIED PAYMENTS INTERFACE BLOCKCHAIN BASED FINANCING
YES BANK has built a state-of-the-art UPI system YES BANK is the first Indian bank to offer vendor
and partnered with multiple Start-ups to enable financing solution through multi-nodal and digitize
the UPI Ecosystem including PhonePe, Capital client processes for discounting and disbursal of
Float, InstaFeez and Trupay. Over 20 millions funds to its vendors. The Bank plans to extend
YES BANK partner apps have been downloaded, blockchain solutions for Letters of Credit,
resulting in market leadership with a 30% share in Documentary Collections and Foreign Remittances.
UPI transactions.
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HUMAN CAPITAL
MANAGEMENT
At YES BANK, our Human Capital
philosophy focuses on creating the
right mindset to enable business
performance by empowering and
encouraging our executives to
push their boundaries beyond their
comfort zones, embrace challenges
& drive growth, thereby deepening
mind share and growing it into
market share.
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The A.R.T. of Banking
FINANCIAL
INCLUSION
In line with its Responsible Banking vision of
mainstreaming sustainability within its core
business operations and cognizant of the needs
of ‘The Next Billion’ customers, YES BANK has
steadfastly focused on ‘inclusive growth’ of
‘emerging India’.
20 LAKH
Households
transformed through
YES LEAP SHGs
financing program.
4 MN+
Customers served
through 44,000 Business
Correspondent Agents
of YES MONEY
Through a specialized Business Unit – Inclusive offer solutions which also ensure better efficiency,
and Social Banking (ISB) – the Bank has adopted security and viability.
the guiding principle of Frugal Innovations
for Financial Inclusion (FI4FI). The objective Towards creating a multiplier effect, YES BANK
is to systematically leverage Information and seeks to collaborate with technology organizations.
Communication Technologies (ICT) and frugal Such a strategy will unveil new avenues of
business models to offer focused financial extending even more expedient products to
solutions, catering to India’s under-banked and customers.
unbanked population.
The Bank’s flagship group lending program in rural
The Bank is also foraying into a cashless and and semi-urban India is YES LEAP. It has financed
paperless ecosystem. The Bank’s innovative over 2 lakh self-help groups (SHGs) spread in
and sophisticated financial tools and advanced 260 districts and 19 states, thus touching and
technologies are designed in partnership with transforming the lives of over 20 lakh families.
credible technology partners and are used to
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ROBUST RISK
MANAGEMENT
At YES BANK, we realize that we are
in the business of managing risks
for our clients, investors and other
stakeholders. We have leveraged
our Alliances and Relationships with
marquee industry partners and also
pioneered implementation of latest
Technologies to hone our A.R.T of
Risk Management and our ability to
comprehensively manage diverse risks.
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The A.R.T. of Banking
YES GLOBAL
INSTITUTE
About YES Global Institute
Glocalization of Ideas-in-action
YES Global Institute, the practicing think-tank, has
been established as a division of YES BANK to
focus on channelizing private sector capital towards
India’s development. The Institute synergizes all the NATURAL CAPITAL
knowledge verticals within YES BANK, including Natural Heritage, Landscape
the following: Social Impact, Culture, Natural Approaches, Wildlife
Capital, Glocal Forums, Sustainable Investment Conservation, Ecotourism,
Banking, Micro, Small and Medium enterprises, Ecosystem Services and
Food & Agribusiness Strategic Advisory & Research, Urban Ecology
Inclusive & Social Banking, North-East Region
Initiatives, Strategic Government Advisory, Smart
City Advisory, Renewable Energy, Responsible
Banking, Business Economics Banking and
University & School Relationship Management.
YES CULTURE
At YES BANK, we believe that India’s equitable Heritage Tourism, Crafts
economic growth can only be accelerated by Industries, Creative and Cultural
a robust partnership between public sector Economies
governance and private sector innovation and
entrepreneurship. In addition, through leveraging
the strong backbone of the public sector, the
private sector investment frameworks and the
deployment of national innovative financing
instruments, India will be able to achieve an
equitable ecosystem. This Social Impact economy
can further emerge through an inherent focus on SOCIAL IMPACT
India’s untapped Natural Capital, its rich heritage, Design Innovation Creativity led.
handmade crafts, Culture and its important Glocal Entrepreneurship, Social Impact,
position in the global economy. Impact Investing.
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IMPORTANT PROJECTS
YES CULTURE
SOCIAL IMPACT YES Global Institute’s YES Culture arm is working
YES Global Institute’s Social Impact team has towards promoting and conserving India’s heritage in
leveraged the ART approach to catalyze the association with India’s premier heritage conservation
Impact Investing ecosystem in India by harnessing organizations. We are collaborating with the Indian
synergistic relations with global players like Global National Trust for Art and Cultural Heritage (INTACH)
Impact Investing Network (GIIN), Sir Ronald in Delhi/NCR, by conducting over 73 walks in historic
Cohen, Prof. John Hoffmire (University of Oxford), neighborhoods of Delhi/NCR, impacting over
Embassy of Israel and Tata Institute of Social 1500 citizens over the past year. Cycle tours have
Sciences (TISS). Our strategic mindshare initiatives been added to this archetype of community based
to catalyze private capital for development have engagement. Owing to the rapid success of this
yielded in strategic market share with YES Global multi-dimensional program, YES Culture has amplified
Institute being recognized as an integral player the project by conducting walks in Udaipur, along
in developing cantors of innovative financing with the Udaipur Municipal Corporation and the
instruments. Maharana of Mewar Charitable Foundation. YES
Culture endeavors to conduct similar engagements in
other cities nationally through strategic partnerships
to augment efforts towards conserving and
promoting India’s rich cultural heritage.
17
The A.R.T. of Banking
RESPONSIBLE
BANKING
In an increasingly connected world, no business remains
a silo, and the solutions to today’s challenges and ambitions
require a collective, ‘glocalized’ approach. Technology is emerging
as the go-to answer for developmental and market-based solutions,
and is intrinsically linking economies, societies and the environment
into a common pathway of sustainable development.
The massive strides in Information and bring a positive change to the lives of vulnerable
communication technologies offer the corporate or marginalized communities, lend its voice to
sector an unprecedented opportunity to advance policy and regulatory action on pertinent issues,
development towards achieving the world’s drive investments towards the sunrise sectors
socio-economic and environmental goals. of the economy, and innovate to bring India’s
unbanked and under-banked population into the
YES BANK institutionalized Responsible formal economy.
Banking as a key differentiator and one of its
five strategic pillars since inception, as it
believed that as a financial institution in India, there YES BANK was also the only
was an inherent need to play a central Indian bank to be invited to
role in the economy to have significant social
speak at the G20 ESG Workshop
and environmental impacts.
in Berne, Switzerland and
YES BANK believes that collaborations yield participated in the World Bank
results and, as a public trust institution, play to
Group’s Dialogue for Climate
its strengths. To a large degree, YES BANK’s
success in driving positive impact could be Action in Vienna, in May 2016.
accredited to the opportunities presented
by its stakeholder engagements and
partnerships. With a greater understanding In addition to making its voice heard at the highest
of the needs and issues of its stakeholders, platform such as the United Nations, YES BANK was
YES BANK has been able to establish the also the only Indian bank to be invited to speak at
right alliances and amplify its sustainability the G20 ESG Workshop in Berne, Switzerland and
impact both within and outside the organization, participated in the World Bank Group’s Dialogue for
leading to the realization of first-to-many Climate Action in Vienna, in May 2016.
sustainability initiatives.
As a signatory to key global coalitions and alliances,
BUILDING ALLIANCES FOR YES BANK has emerged as a strong voice on key
GLOCAL IMPACT topics. It is a signatory to UN Environment Programme
Through its proactive approach and extensive Finance Initiative (UNEP FI), UN Global Compact, CDP,
engagements with its stakeholders, YES BANK Natural Capital Finance Alliance (earlier the Natural
has helped cement strong community relations Capital Declaration), and member of national and global
and leveraged its partnerships with national alliances including the India GHG Program, TERI Council
and international institutions, multi-lateral for Business Sustainability, and the World Business
organizations, academia and corporate peers to Council for Sustainable Development.
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The A.R.T. of Banking
Taking forward
the Government of
India’s bold &
revolutionary step of
Demonetization in
November 2016, YES
BANK brand took another
leap - INDIA bole YES!
to a LESS-CASH
Economy.
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LEADERSHIP IN
SOCIAL MEDIA
Social Media Channels have become
a crucial & integral part of our Digital
Transformation Roadmap with global Featured amongst Top 5 Most Social Bank
achievements and recognitions for the Brands* in the world
300,000 +
Followers
YES SME Showcase LinkedIn page, sharing the
global & domestic analysis and news in the SME
industry, is the HIGHEST followed LinkedIn page for
SMEs by any Bank in India.
As per The Financial Brand & Unmetric, YES BANK
is ranked Second amongst Banking Brands in the YES BANK has also created a community of leading
world on Social Media as on the fiscal year ended CFOs in India with a dedicated LinkedIn Showcase
March 31, 2017. YES BANK also continues to be page - CFO Forum.
the highest followed banking brand in India on
Instagram & the second highest liked banking brand All Logos and trademarks used are of respective
owners and used here for representative purpose only.
in the world on Facebook.
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The A.R.T. of Banking
NON-EXECUTIVE
CHAIRPERSONS
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BOARD OF
DIRECTORS
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The A.R.T. of Banking
MANAGEMENT TEAM
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The A.R.T. of Banking
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The A.R.T. of Banking
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The A.R.T. of Banking
Shivanand Shettigar
President and Company
Secretary
ORGANIZATION MANAGEMENT
STRUCTURE (5 LEVELS)
Top
101
Senior: 221
Middle: 2,956
Junior: 9,399
General: 7,448
TOTAL: 20,125*
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The A.R.T. of Banking
In an increasingly connected world, no business communities, lends its voice to policy and regulatory
remains a silo, and the solutions to today’s action on pertinent issues, drives investments
challenges and ambitions require a collective, towards the sunrise sectors of the economy, and
‘glocalized’ approach. Technology is emerging innovates to bring India’s unbanked and under-
as the go-to answer for developmental and banked population into the formal economy. As
market-based solutions, and is intrinsically linking a signatory to key global coalitions and alliances,
economies, societies and the environment into a YES BANK has emerged as a strong voice on key
common pathway of sustainable development. The sustainability topics.
massive strides in technology offer the corporate
sector an unprecedented opportunity to advance DRIVING GLOCAL CLIMATE ACTION
development towards achieving the world’s socio- YES BANK believes that climate change is an
economic and environmental goals. opportunity for the global economy to shift onto
a pathway of low-carbon and inclusive growth.
YES BANK believes that collaborations yield Through its Responsible Banking ethos, YES BANK
results and, as a public trust institution, play to its has been addressing the low carbon transformation
strengths. To a large degree, YES BANK’s success by adopting a 360 degree approach to mainstreaming
in driving positive impact could be accredited to climate action.
the opportunities leveraged through stakeholder
engagements and partnerships. With a greater PARTNERING FOR POSITIVE
understanding of the needs and issues of its COMMUNITY IMPACT
stakeholders, YES BANK has been able to establish The magnitude of developmental challenges in
the right alliances and amplify its sustainability impact India covering 1.3 billion people is significant, and
both within and outside the organization, leading would require breakthrough innovative thinking and
to the realization of first-to-many sustainability developing large scale solutions that are sustainable
initiatives. and scalable. YES BANK believes that participatory
approaches enable the power of coalition and drive
BUILDING ALLIANCES FOR GLOCAL accelerated social impact that can secure the most
IMPACT basic needs for the vast majority of the population.
Through its proactive approach and extensive
engagements with its stakeholders, YES BANK, Through its Responsible Banking ethos, YES
has helped cement strong community relations BANK focuses on creating shared value for its
and leveraged its partnerships with national and stakeholder spectrum through social, economic
international institutions, multilateral organizations, and environmental interventions, guided by its four
academia and corporate peers to bring a positive pronged approach framework to ‘Promote, Invest,
change to the lives of vulnerable or marginalized Engage, and Collaborate & Monitor’.
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FINANCIAL CAPITAL
Financial Capital is the value of money that the Bank obtains from providers
of capital, that is used to support business activities and profits generated
thereof, distributes amongst its stakeholders as well as retains to fund
business activities.
YES BANK has been creating value for its Through YES LEAP, the Bank’s flagship lending
stakeholders in multiple ways. While some may program and YES JLG program, it has financed over
manifest in financial value, others bring about more 230,000 SHGs spread in 260 districts, thus directly
intangible benefits and value creation in terms of reaching over 20 lakhs families. YES SAHAJ, the
natural, human, social, or intellectual capital. Bank’s award winning technology solution platform
based on the RBI’s Business Correspondent (BC)
INCLUSIVE & SOCIAL BANKING model offers safe and secure, doorstep banking
YES BANK firmly believes that greater participation services using low cost technology. Through these
of the unbanked and under-banked Indians in the programs, YES BANK has cumulatively financed over
economy would not only lead to inclusive growth but ` 5,200 crores.
also achieve greater social justice. The Bank, since
its inception, has been focusing on ‘inclusive growth’ Towards creating a multiplier effect through larger
of ‘emerging India’ through innovative products and collaborations, YES BANK appoints business
services for rural and urban India and is forging key correspondents (BC) such as NBFCs, allowing the
partnerships to amplify its impact. Bank to scale up its product and service offerings
for the Bottom of the Pyramid (BOP). ISB currently
The Bank, through Inclusive and Social Banking works with 31 Business Correspondent partners,
(ISB), its specialized Business Unit, has adopted present in 17 states in India.
the guiding principle of Frugal Innovations for
Financial Inclusion (FI4FI) to systematically leverage
ICT and frugal business models to offer focused YES LEAP
financial solutions catering to the under-banked and Innovating on the RBI’s BC model, YES LEAP
unbanked population in India. (Livelihood Enhancement Action Program) is the
Bank’s innovative version of the Self Help Group
ISB is working under the ambit of financial inclusion (SHG) Banking Linkage program. YES BANK
to reach out to the financially marginalized by has been partnering with credible NGOs/private
leveraging the Bank’s extensive branch network, institutions and appoints them as BCs and provides
technology edge and relationship capital in the banking services through them, allowing the Bank
Public, Private and Social sectors. to scale up its product and service offerings for the
Bottom of the Pyramid (BOP).
Using sophisticated financial tools and advanced
technologies, the Unit offers solutions that include YES LEAP is currently partnering with 31 BC partners,
direct micro-credit, micro saving and micro insurance including Self Help Promoting Institutions and NBFCs,
and remittance services across various geographical to provide comprehensive financial services to SHGs
and socio-economic contexts in India. in 260 districts in India, and reaching out to over 20
lakhs predominantly rural households.
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The A.R.T. of Banking
As the majority of the SHGs linked to YES LEAP YES SAHAJ is an innovative, low-cost, micro-ATM
program are women-centric, YES LEAP has been leveraging technological innovations within existing
able to contribute towards strengthening women principles of mobile banking, India’s strong mobile
entrepreneurship and financial empowerment in penetration and the RBI’s BC Model, to offer basic
rural India. banking to India’s rural hinterland. It is a cost-efficient
alternative to Hand-held Devices which allows real
time, on-field reporting of repayment collection and
YES JOINT LIABILITY GROUP savings amount of SHG and JLG members, enabling
The YES Joint Liability Group (JLG) is an initiative centralized monitoring. It also acts as a key platform
to provide banking services to the BOP in rural, for remittance operations of two key YES BANK
semi-urban and urban India, based on the Joint products - YES LEAP and YES MONEY.
Liability Group methodology wherein, term loans are
provided to individual members of a JLG focusing on MICROFINANCE INSTITUTIONS GROUP
income generation. YES BANK promotes microfinance as a new asset
class, widening access to capital through a two-
Through YES JLG, the Bank provides direct financing, pronged strategy involving the Microfinance
through its partners, which include NBFCs and MFIs, Institutions Group (MFIG), and mainstreaming
with a wide network in India to be able to reach the Bottom of the Pyramid clients through ISB. MFIG’s
most needy and financially excluded segments. product suite includes Term Loan Facilities, loan
syndications and, rated capital market loan products
The program, launched in March 2015, reached like pool securitization, bonds, commercial paper
153,717 Joint Liability Group members via a network and pass through certificates.
of 16 Business Correspondents as on March 31, 2017.
AGRIBUSINESS PRODUCT
MANAGEMENT
YES KISAN DAIRY PLUS The Agribusiness Product Management (ABPM) unit
YES BANK’s YES Kisan Dairy Plus, a comprehensive at the Bank has experienced banking and industry
suite of financial products in the organized dairy professionals with in-depth knowledge of the Priority
sector, continues to benefit both small milk Sector to deliver efficient and customized banking
producers as well as the large dairy buyer. As the solutions to the core agri sectors.
bank accounts of both the buyer and the seller are
linked to the Bank’s banking network, small milk DIGITAL BANKING
producers can get paid immediately for their sale, Innovation and Technology are key brand pillars at
which may take many days without such a system. YES BANK, which continues to maintain its focus
With an account at YES BANK, the small dairy seller on leveraging state-of-the-art technology and
can continue to earn interest, or use its bouquet of introducing innovative practices towards its vision
financial services to utilize their income. of building the ‘Finest Quality Bank of the World in
India.” The Bank has adopted a holistic approach
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towards going digital and has integrated that of over 1400%, with over 2.58 lakhs active Mobile
strategy across the entire Traditional and Digital Banking users in the reporting period. Similarly, the
banking ecosystem. number of transactions on the Bank’s Retail Net
Banking channel rose to almost 1.25 crores from 48
As the new-age digital customers migrate away lakhs in the previous year, a growth of over 150%.
from the traditional banking channels and adopt Similarly, the number of active net banking users in
digital banking, YES BANK’s digital focus would the reporting period almost doubled to 3.04 lakhs.
be on ensuring ease of transaction, and winning
and retaining customers by creating value for YES MONEY
them that enhances the convenience and quality Since its launch in 2011, YES MONEY, the Bank’s
of their everyday lives beyond mere transactions. award-winning, innovative domestic remittance
YES BANK has significantly expanded its bouquet platform has cumulatively remitted close to USD 2.5
of digital products that cater to varied segments billion in domestic remittances.
of population and use cases, riding the waves of
technological advancements to provide a seamless YES MONEY operates on the custom-built multi-
customer experience. platform Remittance Knowledge Bridge which
synergizes India’s vast spread of hyper-local family
The Reserve Bank of India (RBI) has released its owned stores into being full-fledged, secure BC
Vision 2018 document, aimed at encouraging partners of the Bank towards meeting the remittance
greater use of electronic payments by all sections of needs of millions of unbanked and under-banked
society by bringing down paper-based transactions, population in India.
increasing the usage of digital channels, and
boosting the use of mobile banking. The Government
of India’s demonetization move and promotion of YES MONEY FY 2016-17 FY 2015-16
digital banking services have also encouraged and
supported the use and acceptance of the Digital Number of Business
38 27
technologies to carry out day to day transactions. Correspondents1
Number of transactions
124.72 95.67
The Bank has been working on disruptive done (lakhs)2
technologies and frugal innovations to ensure Total value of
4,558.59 4,080.52
inclusion of feature phone users and change transactions (` in crores)2
the way customers make payments. YES BANK Number of Unique
17.18 14.98
has created a unique, sustainable and growing senders (lakhs)2
business model with SIMsePAY, a breakthrough,
yet simple, innovation that was conceptualized 1
Cumulative as on March 31, 2017
and developed under the Bank’s Vision to provide 2
For FY 2016 - 17
simple, easy to use, convenient and 24X7 banking
services on the go.
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Social & Relationship Capital refers to the relationships the Bank creates
with its customers, investors, regulators, suppliers and community at large
to create societal value as a responsible corporate
FY16 807,500
FY15 506,745
FY14 328,000
YES COMMUNITY, YES BANK’s innovative branch-
led community engagement and impact model,
continues its focus on pertinent social and
environmental issues of local and global significance. The Ministry of Road Transport and Highways
During the reporting period, the Bank enhanced its (MoRTH) of the Government of India promulgated
partnerships with non-profit organizations, local the Green Highways (Plantations, Transplantations,
and state governments, and its corporate peers to Beautification and Maintenance) Policy – 2015, to
deliver and scale up impact on the ground. develop green corridors along National Highways,
envisioning the development of eco-friendly national
In FY 2016-17, YES COMMUNITY witnessed strong highways with participation from communities,
growth, and impacted 20,19,900 lives through 6,156 farmers, NGOs, the private sector, financial
activities, thus convincingly surpassing its target institutions, government agencies and the Forest
of touching 8 lakhs lives in the year. Key programs Departments.
initiated under YES COMMUNITY included:
The National Green Highways Mission (NGHM)
GREENING INDIA’S NATIONAL HIGHWAYS under National Highways Authority of India (NHAI),
One of India’s commitments under its Nationally has been entrusted with the task of implementing
Determined Contributions (NDC) is to create roadside plantations, which is expected to generate
additional carbon sink of 2.5 to 3 billion tons of CO2 one lakh direct employment opportunities in the
Equivalent through additional forest and tree cover plantations sector in next ten years.
by 2030. Towards this commitment, enhancing the
tree cover around India’s rapidly expanding national In 2016, YES BANK became the first private institution
highways has an immense potential to expand the to undertake a CSR commitment to ‘Adopt a Green
country’s green cover and generating employment Highway’, under the NGHM initiative. The Bank
opportunities for the rural community. would develop green corridors along the Mumbai-
Nashik-Pimpalgaon Highway.
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WASTE MANAGEMENT
The Prime Minister launched the ‘Swachh Bharat
Abhiyan’ with a clarion call to all citizens by
proclaiming – “A clean India would be the best tribute
India could pay to Mahatma Gandhi on his 150 birth
anniversary in 2019”. Waste management being a
critical element of public health and safety, the national
cleanliness campaign identified Solid and Liquid Waste
Management (SLWM) as one of its key focus areas.
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The A.R.T. of Banking
FINANCIAL LITERACY
The Government of India’s move on demonetization
Nagpur Branch conducting the tree plantation and its promotion of various digital financial transaction
drive with the Indian Army methods have prompted millions of Indians to adopt
digital banking platforms in an unprecedented way.
Towards supporting the government’s vision, YES
BANK, is converting its branches into Digital Banking
key Nationally Determined Contributions (NDC) is to Literacy Centers and conducting sensitization sessions
create an additional carbon sink of 2.5 to 3 billion for its customers and the community at large on
tons of CO2 Equivalent through additional forest and harnessing the power of digital banking.
tree cover by 2030.
The broad objective of the initiative was to spread
At the COP21 in 2015, YES BANK undertook a awareness on financial transactions through all available
climate commitment to increase India’s green digital banking platforms, essentials for a secure digital
cover by contributing to a carbon sink and planting banking transaction and to mobilize volunteers to bring
2 million saplings by the year 2020. YES BANK an enormous change by participating in the “Each one
branches addressed this challenge with a massive Enrich one” campaign and to support Government of
campaign that witnessed the full participation India’s GO CASHLESS approach.
of local community members. 525 YES BANK
branches collaborated with citizens across the The branches also conducted financial literacy
board to plant 105,000 saplings in public spaces and camps with sessions on ‘fake note detection’ for
neighbourhoods. relevant stakeholders. An elementary quiz on
financial literacy was also conducted and winners
were given certificates of appreciation.
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The A.R.T. of Banking
In addition to focusing on the availability of clean for MSME Clusters (FMC) and Entrepreneurship
water, the initiatives also focus on sensitization of Development Institute of India (EDII).
communities in health, supplementary education,
sanitation and overall social welfare. In 2016-17, the initiative impacted 2,229 MSMEs on
Energy Efficiency and OHS through sensitization
SKILL DEVELOPMENT THROUGH workshops, safety trainings, first-aid trainings, and
YES STEADY health camps, benefitting 10,425 workers across 11
YES STEADY (Skills Training and Enhancement states, 18 locations and 13 sectors including Foundry,
for Development of Youth) was launched by YES Dyeing, Rubber, Plastic, General Engineering,
BANK in 2014, to provide employability training to Textile, Rice Mills, Auto ancillaries, Industrial tools
youth through targeted skill building initiatives. For and pumps, Sports goods, Handicrafts and Railway
the initiative, the Bank partnered with Deshpande vendors. Since its inception, the project has already
Foundation to provide employability training to impacted over 3,000 MSMEs, benefitted more than
youth in Karnataka and Telangana states in the first 22,000 workers and helped reduce an estimated
phase, inducting 1,200 students. 6,000 metric tons of CO2 emissions.
In the reporting period, 1,382 students were inducted Continuing its focus on providing path-breaking
and have undergone skill training under various focus solutions, the bank on-boarded Small Industries
sectors such as agriculture, accountancy, electrical Development Bank of India (SIDBI) to extend an all-
works, BPO & soft skills and primary teachers training. inclusive solution for increasing the energy efficiency
The students are provided with employment linkages of this sector, becoming a one-stop solution provider
through a formal placement cell and are connected to the OHS and Energy Efficiency (EE) requirements
with an alumni network of Deshpande Foundation’s of the MSMEs.
existing programs.
As a best practice, YES BANK has attempted to
In addition, YES BANK supports four NGO partners calculate the project’s evaluative Social Return On
in running Community Knowledge Centers in Investment (SROI) for the financial year 2015–16.
Maharashtra, Tamil Nadu and Kerala, with 4,055 SROI is a principle-based method for measuring the
students completing their training in 2016-17. extra-financial value of an initiative relative to the
inputs invested.
SAY YES TO SUSTAINABLE MSMES
IN INDIA To calculate the SROI, the Bank conducted a
The MSME sector in India has shown admirable thorough analysis of inputs from the stakeholders
innovativeness and resilience towards economic for the initiative, the outputs achieved and
shocks. Responsible for generating around 100 million the corresponding outcomes. The inputs were
jobs throughout the country’s geographical expanse, based on data collected from beneficiary MSME
this sector is known for employment generation units and implementation partners through
caliber, low capital and technological requirement, questionnaires.
promotion of inherent skills, use of local resources
and exportability of products. The Net SROI achieved was 6.98, or in other words,
the social impact generated by the project is almost
In 2014-15, YES BANK launched the first-of-its-kind 7 times the value of the inputs invested by the
MSME CSR project ‘Say YES to Sustainable MSMEs stakeholders.
in India’, to promote environmental sustainability and
Occupational Health and Safety (OHS) within the In the process of measuring the SROI, the following
Indian MSME sector in partnership with Foundation key findings emerged:
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EMPLOYEE PAYROLL GIVING The topics are socially relevant such as child rights
YES BANK continues to partner with GiveIndia for the and education, environment, women empowerment,
payroll giving initiative for its employees. Employees and livelihood and employment and aligned with the
registered under the programme contribute a certain UN Sustainable Development Goals. This enables the
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YIAC films to form an open repository of invaluable winner of each of the Judging Criteria – Impact,
communication resources with an Indian context for Innovation and Inspiration
the use of NGOs and yet maintain an international
social alignment. The immersive process of YIAC won Gold in the 6th Asia Pacific Customer
participation leads to experiential learning and in the Engagement Forum & Awards (ACEF) for
process, advocates and volunteers are created for Successful Use of CSR Activity in the Online
causes and NGOs. Media category
In 2015, YIAC had emerged as the World’s Largest In February 2017, stalwarts of India’s film, government,
Social Filmmaking Movement with 500,000 youth corporate and development sectors celebrated the
participants from 2,500 cities and towns pan India. best social films by 1.3 million youth across 2,500 cities
and towns pan-India at YES FOUNDATION’s YES! i
YIAC highlights for the fourth edition in 2016-17 am the CHANGE Awards ceremony. Chief Guests,
include: G.M. Rao, Founder Chairman, GMR Group, Shaina
NC, National Spokesperson, Bharatiya Janata Party
In 2016, YIAC received an unprecedented and Piyush Pandey, Executive Chairman and Creative
response of over 1.3 million participants and over Director, Ogilvy & Mather India felicitated the top films.
29,500 films (~1000% increase over previous
year) The top YES! i am the CHANGE films were
selected by a 19-member eminent jury, including
Over 34,000 films on Sustainable Development celebrated actor Shabana Azmi, Ashu Suyash, MD
Goals (SDGs) accumulated over four years in a & CEO, CRISIL, Magsaysay award winner Anshu
variety of national and regional languages that Gupta, Zahabiya Khorakiwala, Managing Director,
are available for free use to NGOs to further their Wockhardt Hospitals, Rebecca Tavares, UN Women’s
causes. These films are also showcased by YES Representative for India, Bhutan, Maldives and Sri
FOUNDATION on various platforms to sensitize Lanka, amongst others.
youth and promote responsible youth citizenship
The awards ceremony was followed by a
Students across 5,000 schools and colleges two-day YES! i am the CHANGE Social Film Festival
in India engaged through various on-ground showcasing the top YIAC films. The Festival was
activities, digital engagement, workshops, social inaugurated by the doyen of Indian innovation
film festivals and screenings to bring awareness Dr. R. A. Mashelkar and included interactive sessions
about pertinent social causes. Youth are also with eminent individuals such as celebrated Film
sensitized on responsible consumption of media Director Shyam Benegal, Magsaysay Award Winner
Anshu Gupta among others.
Training provided to 800 NGO professionals on
zero budget filmmaking and using the films for YES FOUNDATION CHANGEMAKER
advocacy, resource mobilization and volunteer INITIATIVE
mobilization YES FOUNDATION Changemaker Initiative was
launched in 2015 to honour and support the projects
YES! i am the CHANGE (YIAC) 2014 and 2015 of past participants of YIAC who have gone beyond
entered the Limca Book of Records as the Largest filmmaking, are focused on developing innovative
Social Filmmaking Challenge in India solutions and consistently contributing towards
social causes.
YIAC was the overall winner of the 2016-17
Peer Awards for Excellence, UK. It was also the The first initiative mentored by YES FOUNDATION was
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‘Missing’, a unique international awareness campaign The objective of the Fellowship is to develop
on human trafficking by Leena Kejriwal, public artist & socially conscious youth leadership through
YES! i am the Changemaker Awardee 2015. exposure to social issues and credible NGOs,
along with strengthen the communication efforts
This year, the Changemaker Award was conferred of NGOs and maximize their social impact.
on Ravi Iyer, Amar Ramesh and Meghatithi Kabeer.
The 2-month Fellowship provides high potential
The Foundation also launched the Everyday Hero youth (18-25 years) an opportunity for intensive and
Award to recognize individuals doing exceptional sustained engagement with social issues through
community service. Roxanne Davur, Joseph Sekar and regular capacity building trainings and structured
Sanjay Kumar were the award recipients. placement with credible NGOs. The Fellows are
trained by industry leaders in a 1-week intensive,
YES FOUNDATION MEDIA FOR SOCIAL Induction training on marketing, communications,
CHANGE FELLOWSHIP digital and social media. This is followed by a 7-week,
To further enable and deepen youth social full-time placement in NGOs where Fellows lead well-
engagement, YES FOUNDATION launched the defined communication projects such as developing
YES FOUNDATION Media for Social Change films, websites, social media campaigns, case studies
Fellowship in 2016, a high impact program to develop etc. for NGOs with guidance from industry leaders.
socially conscious youth leadership in association
with ISDI-WPP School of Communication and Participation in the Fellowship hones the leadership
supported by International Advertising Association, skills of the youth and is a stepping stone towards
India Chapter and YES BANK. their professional careers. Most importantly,
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Research report on ‘Re-imagining Higher
Education in India’ aimed at structural challenges
in the Indian higher education system including
The Institute, through its YES Culture initiative is internationalization.
dedicated towards the promotion, development and
conservation of India’s cultural heritage. YES Culture
is positioned to drive financing and inclusive socio-
economic development through the promotion of
creativity and innovative Indian arts. The Institute
engage with the government, industry and academia
to foster synergies between stakeholders.
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INTELLECTUAL CAPITAL
Life sciences and Healthcare During the year, the Bank spoke at the UN High-
Level Thematic Debate, at the UN in New York in
Information Technology April 2016. The Bank was also invited as the Lead
Discussant to the UN Private Sector Forum at the UN
E-commerce General Assembly in September 2016.
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Significantly, at the COP22 in Marrakech, Morocco, define and carry out the activities necessary towards
the Bank’s CSR project, ‘Say YES to Sustainable Positive Impact Finance (PIF). The Principles for
MSMEs in India’ was highlighted as a Role Model Positive Impact Finance were launched in Paris on
case study by the World Resources Institute, and January 30, 2017 by 19 leading banks and investors
showcased at the Conference’s India Pavilion. including YES BANK, totaling $6.6 trillion in assets.
The Principles provide guidance for financiers and
NATURAL CAPITAL FINANCE ALLIANCE investors to analyze, monitor and disclose the social,
YES BANK, in 2013, had become the first Indian environmental and economic impacts of the financial
signatory to the Natural Capital Declaration, now a products and services they deliver. YES BANK was
part of the Natural Capital Finance Alliance (NCFA), one of the key members involved in the development
a joint initiative of the UNEP of the principles and going forward the Bank will be
FI and Global Canopy considering piloting the Principles on a part of its
Programme. As a signatory, portfolio. YES BANK’s deep engagement with UNEP
the Bank remains committed FI has also provided it the opportunity to be a part of
to bringing together an climate finance discourse under the aegis of the UN
ecosystem that would help Secretary General’s team on Climate Change.
develop an appropriate
regulatory framework, DEVELOPING VOLUNTARY GUIDELINES
disclosure mechanisms and reporting measures to ON RESPONSIBLE FINANCING FOR INDIA
integrate, value, and account for natural capital. YES BANK continues to partner with the Indian
Banks Association (IBA), and GIZ to develop the
YES BANK has been re-elected unanimously to be National Voluntary Guidelines on Responsible
the Chair of the Steering Committee of NCFA for Financing. The Guidelines aims to promote financial
2018, overseeing NCFA’s strategy and providing institutions to adopt eight principles, which include
direction/oversight for the Working Groups and Guidance on ethical conduct and Environmental &
the Secretariat. The Bank’s activities at the NCFA is Social (E&S) governance, E&S risk management,
reported in the Natural Capital section of this Report. Minimizing environmental footprint in internal
operations, Environmentally friendly products,
PARTNERSHIP WITH UNITED NATIONS services and investment, Enabling inclusive human
ENVIRONMENT PROGRAMME FINANCE and social development, Stakeholder engagement,
INITIATIVE (UNEP FI) Commitment to human rights, and Disclosure.
YES BANK, as the first Indian signatory to the UNEP
FI, a global partnership between the UNEP and E&S RISK ASSESSMENT FOR SME LENDING
financial sector, continues to play a leadership role In the reporting period, the Bank, jointly with KPMG
at the platform. International and GIZ, conducted workshops on E&S
Risk Assessment for SME Lending. The trainings were
Namita Vikas, Group President & Global Head conducted in Mumbai and Delhi, for the Emerging
– Climate Strategy & Responsible Banking, YES Business Banking (EBB) and Small Business Banking
BANK, was the Asia-Pacific Chair of the UNEP FI for (SBB) teams with the objective of improving
2016 and the Bank is elected to its Global Steering their understanding of the MSME sector through
Committee. As a part of the Board of the Banking environmental and social lens, and to expand the
Commission of UNEP FI, the Bank is actively engaged scope of risk management to include non-financial
in its primary work streams such as the Positive risks. The workshops were successfully concluded
Impact Working Group (PIWG), whose role is to with participation of over 50 YES BANK leaders.
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KNOWLEDGE REPORTS
FINANCIAL STRUCTURES FOR SOLAR
ENERGY
International Solar
E&S Risk Assessment for SME Lending workshop
in Mumbai Alliance (ISA) was
launched at COP21,
as a coalition of 121
solar resource rich
countries, to accelerate
CARBON PRICING LEADERSHIP investments in solar
COALITION through development
In May 2016, YES BANK became the First Indian of innovative financial
Bank to join the Carbon Pricing Leadership Coalition mechanisms for
(CPLC), a first-of-its-kind voluntary partnership of reducing cost of
national and sub-national governments, businesses, capital and enhancing
and civil society organizations, led by the World investor confidence and
Bank Group. commitment to the sector. ISA aims to achieve 1,000
GW of deployed solar capacity by 2030 across its
Following the increased emphasis on “putting a price member countries, which is expected to require
on carbon”, corporate sector and governments have investments to the tune of at least USD 1 trillion.
been initiating conversations to address climate
change and transition from ‘concern’ to ‘action’. This report is an attempt to address the need for
Towards the same, The World Bank Group, business enhancing investment and availability of funds
groups, and investors have called on governments for solar energy through financial & non-financial
and corporations around the world to support mechanisms and structures and encouraging policy
carbon pricing to bring down emissions and drive makers and financial institutions to think beyond
investment into cleaner options. the ‘notions’ for developing innovative approaches
towards this global endeavor. The report was placed
Launched in December 2015, during the COP21 at the 3rd meeting of International Solar Alliance at
climate negotiations in Paris by World Bank and New York on April 22, 2016.
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FASAR
In line with YES BANK’s approach
of being a knowledge-driven
organization, a specialized Food &
Agribusiness Strategic Advisory &
Research group (FASAR) has been
domiciled within the Bank. The
group houses industry specialists
with immense sectoral knowledge
and relevant experience and
expertise in the conceptualization
and implementation of food & agri
initiatives.
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YES BANK as Knowledge Partner to the Incredible Nikhil Sahni (Group President, Government
India Tourism Investors Summit 2016 has Banking and National Head, Branch Banking,
supported State Governments in showcasing YES BANK) moderating a session during the
their tourism investment opportunities. Nikhil Global Rajasthan Agritech Meet on 11 November,
Sahni (Group President, Government Banking 2016 at Jaipur
and National Head, Branch Banking, YES BANK)
addressing the delegates of the event.
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The A.R.T. of Banking
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The A.R.T. of Banking
NATURAL CAPITAL
Natural Capital refers to the natural resources that the Bank uses to create
value for its stakeholders, as well as climate finance it mobilizes to promote
natural resource preservation and environmental mitigation.
YES BANK, in its 13 years since inception, has firmly outlines the Bank’s commitment to achieve a minimum
placed Natural Capital as one of its key focus areas. The of 10% reduction in its carbon emissions intensity
Bank has one of the largest Renewable Energy lending through broad-level actions. The new Policy highlights
portfolios among private sector banks, is the first greater commitments to environment protection and
Indian bank to be ISO 14001 certified for Environmental commitment to source renewable energy for the
Management System, the first Indian signatory to greening the Bank’s operations.
the Natural Capital Declaration, is recognized as a
Climate Disclosure Leader, and drives environmental
sustainability initiatives as its CSR focus.
The recertification to the new standard is based on Extensive awareness campaigns and training
the Bank’s new Environmental Management Policy programs were conducted throughout the year,
released in 2016 which entails achieving internal which helped the Bank in involving all employees
natural resource consumption efficiencies and firmly to collaboratively work towards reaching higher
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environmental performance standards. The Bank size sheets (as on March 31, 2017). This saving
trained all its employees on the Environmental consists of avoiding 36,311 Employee Mobile
Management System through a comprehensive expense claims of an estimated average 3
E-Learning module, leading to greater employee sheets per claim, and 38,974 Local Conveyance
awareness and participation. The Bank also circulated expense claims of an estimated average 2
resource conservation mailers, signage and posters sheets per claim.
widely, internally.
REDUCE, REUSE AND RECYCLE
DIGITAL & PAPERLESS BANKING During the year, the Bank continued its focused
The Bank continued its efforts to gradually move efforts in resource consumption reduction through
towards paperless banking, by digitizing paper- various initiatives. Key initiatives include:
based products and processes, wherever possible.
A partnership has been initiated with a waste
Its key initiatives during the year included: aggregator
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The A.R.T. of Banking
Similarly Power factors at branches are being
monitored above 0.9 with the help of capacitor
bank and monitoring panels are installed and
reduce risk of penalty levied by DISCOMs YES BANK was the first Indian banking signatory to
the CDP and has been reporting its carbon emissions
The air conditioning replacement model has since 2009. Backed by its enhanced disclosures on
been developed with a criteria for replacing old emissions and a clear climate action strategy, the Bank
models with an energy consumption of 1.6-1.8 has been recognized as a Climate Disclosures Leader
times of peak load and temperature control with consistently. The Bank’s responses for FY 2016-17 to
dedicated AHU units for centralized AC systems the CDP would be submitted by its annual deadline of
are being carried out June 29, 2017.
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# Grid Electricity Consumed has been calculated from the electricity bills for all locations, hence a 15% reduction in the calculation
has been considered to account for Government taxes and overheads
## Scope 1 emissions include CO2, N2O and CH4 emissions from YES BANK’s diesel usage and 10% refrigerant leakage from the AC
systems. The emission factors and GWP (Global Warming Potential) values have been taken from GHG protocol. The cost of diesel
consumed pan bank is converted in quantities consumed by using state level diesel prices. Like 2012-13 (base year), we have used
operational control approach for measuring and managing these emissions.
Note: Scope 2 emissions include CO2 emissions from electricity consumed by YES BANK. The emission factors have been taken
from CEA’s (Central Electrical Authority) CO2 database, version 10. The cost of electricity consumed pan bank is converted in
quantities of electricity consumed by using state level tariffs. Like 2012-13 (base year), we have used operational control approach
for measuring and managing these emissions.
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INITIATIVE
STAKEHOLDERS
Is responsible for ensuring that all working
Works with the Secretariat to ensure that
groups deliver effective and complementary Working Groups establish adequate third-party
outputs to support implementation of the NCFA independent peer review processes to help
commitments ensure the quality and credibility of outputs.
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SAY YES TO GREEN HIGHWAYS Natural Capital Awareness Videos: Working with
India has committed to creating an additional Tittar Lodge Productions and actor Gul Panag,
carbon sink of 2.5 to 3 billion Tons of CO2 Equivalent the Institute is creating a unique awareness video
through additional forest and tree cover by 2030, on Organic Food Cultures in India. The ‘Organic
as part of its Nationally Determined Contributions Langar’ in Golden Temple in Amritsar and ‘Urban
(NDC). Enhancing the tree cover around India’s Organic Farming’ in Mumbai are key case studies
rapidly expanding national highways has a
potential to not only expand the country’s green Natural Capital Advocacy: The Institute has
cover but also generate employment opportunities been instrumental in drafting a policy motion on
for the rural community, and is being driven by ‘Protection, restoration and sustainable use of
the National Green Highways Mission (NGHM), urban water bodies in India’ at the IUCN’s World
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Refinancing of Term Debt of ` 0.10 billion for Refinancing of Term Debt of ` 1.72 billion for
5 MW Small Hydro Project in Himachal Pradesh 20 MW PV Solar Power Project in Rajasthan
under NVVN
Underwriter of Term Debt of ` 0.17 billion for
2 MW Small Hydro Project in Himachal Pradesh
Underwriter of Term Debt of ` 2.52 billion for
50 MW PV Solar Power Project in Rajasthan
Participated through Term Debt of ` 0.60 billion under NVVN
for 30 MW Solar Power Project in Madhya Pradesh
Underwriter of Term Debt of ` 2.72 billion for 40 MW
Underwriter of Term Debt of ` 1.76 billion for PV Solar Power Project in Karnataka (SECI)
30 MW Solar power project in Telangana
Underwriting of Term Debt of ` 2.60 billion for
Underwriter of Term Debt of ` 2.53 billion for 60 MW Solar PV Power Project in Karnataka
48 MW Solar power project in Telangana
SUSTAINABLE INVESTMENT BANKING
Underwriter of Term Debt of ` 1.17 billion for Sustainable Investment Banking (SIB) is a knowledge
24 MW Wind power project in Gujarat focused initiative of YES BANK providing investment
banking and advisory services to company’s
Underwriter of Term Debt of ` 32.45 billion for operating in the sustainability space including
500 MW PV Solar Power Project in Andhra Renewable Energy, Environment & Education. It is
Pradesh (NTPC) the first investment bank in India with a dedicated
team of experienced professionals for clean energy
Underwriter of Term Debt of ` 1.95 billion for the and sustainable sectors.
34 MW Wind Power Project in Gujarat
SIB specializes in private equity fund raising,
Underwriter of Term Debt of ` 1.71 billion for the merger & acquisition, technology transfer,
34 MW Wind Power Project in Gujarat business advisory, corporate restructuring. It has
successfully completed 34 transactions in the
Underwriter of Term Debt of ` 2.05 billion for sustainability space cumulating to a transaction
34 MW PV Solar Power Project in Telangana value of USD 7.5 billions.
Underwriter of Term Debt of ` 3.23 billion for During the reporting period, SIB successfully closed
50 MW PV Solar Power Projects in Telangana the following transactions:
Underwriter of Term Debt of ` 2.69 billion for Acted as an exclusive advisor to Atria Power for
42 MW PV Solar Power Projects in Telangana raising ` 7,500 millions Mezzanine capital from
Piramal Group
Underwriting cum Refinancing of Term Debt of
` 3.51 billion for 51 MW Wind Power Project in
Acted as an exclusive advisor to Fonroche
Karnataka Energie SAS for sale of 22.3 MW operating solar
projects to Hinduja Group
Refinancing of Term Debt of ` 250 million for
8.25 MW Wind Power Project in Maharashtra
Acted as an exclusive advisor to Indo Rama
Renewables for sale of 30 MW operating wind
Underwriter of Term Debt of ` 3.33 billion for 50 MW assets to Tata Power Renewable Energy
PV Solar Power Project in Telangana (NTPC)
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YES BANK ISSUES ITS THIRD GREEN YES BANK SIGNS MOU WITH SIDBI FOR
BOND TO FMO ENERGY EFFICIENCY OF MSMES
Green bonds (bonds to fund climate adaptation With over 51 million MSME units in India, which
and mitigation projects) have emerged as a key account for 40% of the total exports and contribute
financing mechanism driving the national economy’s to 38% of the GDP, the sector is emerging as a
transition to a greener future. The green bond power house for growth in India. Identifying the
space in India has grown to over ` 19,500 crores energy saving potential of MSMEs, Small Industries
(equivalent to USD 2.7 billions) since India’s maiden Development Bank of India (SIDBI) launched a Partial
issuance of ` 1,000 crores in Feb 2015 by YES BANK. Risk Sharing Facility (PRSF) scheme under World
In August 2015, YES BANK further strengthened Bank initiative for promoting energy efficiency by
the green bond market with issuance of ` 315 providing partial guarantee of 75% of the loans up to
crores (USD 50 millions equivalent) to International ` 15 crores for energy efficiency projects.
Finance Corporation (IFC) on private placement
basis, with culmination of the first offshore rupee In July 2016, YES BANK became the first Financial
dominated bond or “green masala bond”. Institution to sign an MoU with SIDBI to implement
this scheme. Committed to enhancing the overall
In September 2016, YES BANK issued its third competitiveness and sustainability of this agile
green bond, ` 330 crores (approx. USD 50 millions sector, YES BANK strongly believes that financial
equivalent) to FMO the Dutch Development Bank, institutions need to play the role of sustainability
on a private placement basis with a 7-year tenure. catalysts and transform their financial systems
This is FMO’s first Investment in a Green Bond to become more inclusive and make MSMEs and
issued in India. climate finance a part of their core business strategy.
FMO is investing in YES BANK’s bonds through REVIEW OF YES BANK’S PRACTICES IN
FMO’s own sustainability bonds. The amount raised ENVIRONMENTAL RISK ANALYSIS
is going to be used by YES BANK to finance Green Under its first Presidency
Infrastructure including solar and wind projects of the G20, China
in the renewable energy space. This issuance has established a Green
received a third-party pre-assurance by KPMG. Finance Study Group
Following the internal guidelines for adherence to (GFSG), reporting to
Green Bond Principles instated by YES BANK, this Finance Ministers and
green bond issue is in line with the Green Bond Central Bank Governors.
Principles 2016. The GFSG’s objective
has been to identify
One of the unique features of the transaction lies in institutional and market
its innovative financing structure. FMO has used the barriers to green finance
proceeds of sustainability bonds raised by them to and, based on country
invest in this third green bond issued by YES BANK. experiences and best
Following a similar structure by IFC last year, this practices, analyze options on how to enhance the
provides an effective mechanism to channelize funds ability of the financial system to mobilize private
for green financing from foreign green investors to green investment, thereby facilitating the green
emerging nations like India. transformation of the global economy.
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focus (‘greening the banking system’, ‘greening the YES BANK’S ENGAGEMENTS WITH THE
bond market’, ‘greening institutional investment’) MINISTRY OF NEW AND RENEWABLE
and two of which are cross-cutting (‘risk analysis’ ENERGY (MNRE)
and ‘measuring progress’). YES BANK continues to work with Ministry of New
and Renewable Energy (MNRE), Government of
The GFSC, in knowledge partnership with the India, on all key initiatives including as Knowledge
Cambridge Center for Sustainable Finance, Cambridge Partner for International Solar Alliance (ISA)
Institute for Sustainability Leadership (CISL) presented launched at COP 21 summit in December, 2015
a compendium of the tools and techniques that financial by Indian Prime Minister Narendra Modi and
institutions are developing to analyze environmental French President Francois Hollande. The Bank has
risks so as to mainstream financial decision-making, delivered multiple presentations/reports on the ISA
also featuring YES BANK’ approach measuring and arena including presentation on “Mobilizing USD 1
managing its exposure to natural capital risks. Trillion for ISA Solar Projects” during 2nd meeting
of International Steering Committee of ISA in Abu
In the context of a study commissioned by GIZ Dhabi in January, 2016. YES BANK also released
on behalf of the German Ministry for Economic a Knowledge Report on “Financial Structures
Cooperation and Development (BMZ), the Bank for Solar Energy” during ISA’s 3rd meeting in
engaged Trucost to understand these risks and April, 2016 in New York. As a member to the US-
potential opportunities. The recommendations India Clean Energy Task force, the Bank has also
suggest a need for more data on natural capital risk provided valuable inputs regularly on renewable
exposure and working with clients to address these energy policy recommendations, including PPA
risks, amongst others. standardization and innovative financing market
instruments including warehousing.
YES BANK RAISES MONEY THROUGH
ITS LARGEST INFRASTRUCTURE BONDS
ISSUANCE
YES BANK successfully raised ` 21.35 Bn in Senior
Long-term Infrastructure Bonds (in September, 2016.
The issue garnered huge demand from diverse set of
domestic investors including Insurance companies,
Asset Management Companies (AMC’s), Pension
Funds, Provident Funds, corporates etc. Against base
issue size of ` 10 billions, another ` 11.35 billion were
raised using of the Green shoe exercisable option.
This multifold subscription depicts the enormous
belief of these diverse set of investors in the Bank’s
development ethos. The proceeds from these bonds
shall be used to finance long-term infrastructure
projects including its associated sub-sectors along-
with the affordable housing sector as a part of YBL’s
overall retail strategy.
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HUMAN CAPITAL
YES BANK’s Human Capital philosophy focuses In line with creating competitive advantage through
on creating the right mindset to enable business HR Digitization characterized by big data, integration,
performance by empowering and encouraging its mobility, social media, gamification, and cloud
executives to push their boundaries beyond their computing, the Bank is in the process of completing
comfort zones, embrace challenges and drive growth, the adoption of its new HRIT system. It will enhance
thereby deepening mind share and growing it into its ability to manage employees in a more flexible,
market share. agile and customized manner, by integration of talent
management into the fabric of everyday business
The Bank engages with and develops its Human and by becoming a vital component of YES BANK’s
Capital by creating a ‘YES BANK culture’, performance to re-affirm its commitment towards
encouraging open & honest Communication, becoming ‘The Finest Quality Bank of the World by
strengthening Connect among employees and 2020’.
community, supporting Career development and
showing that it Care as an organization. All of these HEALTH AND WELLNESS
are underpinned by YES BANK’s integrated Vision YES CLUB FIT – A WELLNESS INITIATIVE
and Values framework. YES BANK has always YES BANK launched an innovative pedometer-based
emphasized on ‘Knowledge’ as a key differentiator, WELLNESS initiative called ‘YES CLUB FIT’ to help
wherein it continuously enhances the capability further augment the health quotient of YES BANK
and capacity of its Human Capital by creating an executives. YES CLUB FIT was designed to help YES
environment of continuous learning which equips BANKers become more active, within the time and
its employees with knowledge and skills aligned to space constraints of modern life, via a format that
the Bank’s strategic objectives, business goals, job is fun, team oriented and relevant to them. This was
and regulatory requirements. complemented with regular sessions on ergonomics,
meditation, zumba and lifestyle management. This
The Bank’s University & School Relationship initiative attracted participation from all executives
Management (USRM) program is a structured, irrespective of age, gender, physical ability and
sustainable and scalable engagement process, fitness levels.
which creates and maintains the maximum
mindshare for YES BANK among the students SAY YES TO G.R.A.C.E
of Top B schools in India, thereby positioning it Through ‘Say YES to G.R.A.C.E’ (Gender
as a preferred Employer of Choice. Hiring of 100 Respect And Commitment to Equality), a robust
management graduates from premier B-Schools framework, the Bank creates awareness and
in FY 2016-17 through the Y-PEP (YES Professional periodic dissemination and reiteration of the
Entrepreneurship Program), the flagship program Bank’s revised Policy for Prevention of Sexual
for campus recruitment is testimony to the success Harassment, in line with ‘The Sexual Harassment
of the USRM program. of Women at Workplace (Prevention, Prohibition
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and Redressal) Act & Rules, 2013.’ The Bank has an the time) started leveraging this platform to share,
Internal Committee to investigate and inquire into collaborate, and ideate. A highly engaging platform,
sexual harassment complaints. Facebook At Work (now renamed as Workplace by
Facebook), is built with same intuitive architecture
EMPLOYEE ENGAGEMENT as Facebook but has additional streamlined features
To engage its growing workforce, YES BANK follows that are focused on improving team collaboration,
the 5C’s Engagement Model comprising Culture motivation and efficiency. The Bank’s goal is to
Communication, Career, Connect, and Care. It engages improve collaboration and knowledge sharing within
and develops Human Capital by disseminating and and between its teams.
reconnecting YES BANKers with the Bank’s core
values, by creating an intentional culture, encouraging YES LEAGUE OF EXCELLENCE
open and honest communication, strengthening YES BANK launched its revamped Rewards &
connect with employees and community, supporting Recognition online portal called the ‘YES LEAGUE
career development and showing their care as an OF EXCELLENCE’ to provide a formal recognition
organization. platform to recognize and reward Excellence
at YES BANK and in turn create a ‘Culture
YES CLUB of Appreciation’. All YES BANKers have the
With the objective of encouraging an atmosphere option to Appreciate & Wish their colleagues on
of fun, camaraderie, and to provide YES BANKers achievements or occasions. Reporting Managers
a platform to showcase their talent and creativity, can Nominate colleagues for Employee of the
YES CLUB was launched across 180+ Hub Branches. Month and similar other rewards.
‘YES CLUB’ facilitates participation activities
around three broad themes: Social, Culture and EMPLOYEE ENGAGEMENT
Sports. Since its launch, YES BANKers across YES BANK strongly believes that an engaged
Hub branches have organized and participated in team is critical in achieving its business goals and
activities such as Sports tournaments, adventure building a sustainable organization. In an effort to
& trekking trips, arts and crafts exhibitions, make YES BANK a ‘Great Place to Work’, the Bank
photography contests, blood donation camps, and has been partnering with the Great Place to Work®
employee volunteering activities. Institute, India for the last 5 years to undertake an
independent ‘Executive Engagement Survey’ and
WORKPLACE BY FACEBOOK assessment of its workplace cultural practices.
Great Place to Work® Institute, India conducts
this survey annually across various organizations
in India as a part of the ‘India’s Best Companies to
Work For’ – Survey.
YES BANK strongly believes that an engaged team is The Trust Index Score for YES BANK increased over
critical in achieving its business goals. In its determined the last 5 years across all dimensions viz. Credibility,
effort to make the Bank a Great Place to Work, YES Pride, Respect, Fairness and Camaraderie. The score
BANK partnered with global social networking leader has consistently gone up from 70 in 2013 to 72 in
Facebook to launch ‘Facebook At Work’. YES BANK 2014 to 74 both in 2015 and 2016.
was the first and only bank in India as well as one of
the first 5 companies in India to launch Facebook At In 2017 study, 13,658 YES Bankers i.e. 85% of the
Work. On May 09, 2016, this platform was launched workforce at that time participated in the survey. As
to all YES BANKers and within 45 days of its launch, per the preliminary report, the Trust Index score has
15,000 YES BANKers (100% of the workforce at improved to be at 75 for 2017.
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YES SCHOOL OF
BANKING IS THE FIRST
AND ONLY LEARNING & DEVELOPMENT
FUNCTION IN THE INDIAN BANKING INDUSTRY
TO ACHIEVE ‘DUAL INTERNATIONAL
CERTIFICATION’ - ISO 9001:2008 AND
ISO 29990:2010
The dual certifications from Bureau Veritas for quality management
reflect YSB’s robust L&D processes including conceptualization
of learning solutions and effective deployment of developmental
activities across the organization to meet business requirements
while continuously improving employee behavior, systems and
service quality. The key parameters taken into consideration
were: Customer Focus, Leadership, Involvement of People,
Process Approach, Continual Improvement, Fact
based Decision making & Creating Value for
customers.
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YES BANK employees participating in a YES BANK employees in a group discussion during
YESsentials Induction Program in Mumbai a YESsentials Induction Program in Mumbai
(KYC) and Anti-Money Laundering (AML) guidelines, India’s Ministry of Home Affairs and the National
information security, products and processes and Skill Development Corporation (NSDC), to provide
Human Capital Management policies and procedures. training and employment opportunities to Jammu &
Kashmir’s youth. The Bank launched the 4th edition
During the reporting period, 419 induction programs of YES UDAAN, offering Certification in Banking
were conducted for 9,131 executives, and 15,375 Fundamentals program. The program received
executives were inducted through the E-Learning over 280 applications, out of which 23 youths, 12
Module. male and 11 female candidates, were screened and
selected through an online aptitude test, followed
YES UDAAN by a selection interview.
YES BANK has been associated with Project Udaan,
an ambitious project undertaken in partnership with
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TRAINING HOURS
TRAINING TARGETS/PLANS FOR NEXT Leadership Training Programs for Top, Senior &
YEAR: Middle Management Leaders across BU’s
Mandatory certifications for select roles in Retail,
Corporate and Support BU’s Deployment of a mix of experiential, social and
formal learning techniques
Significantly higher ‘Digitized’ Content:
E-Learning, Gamification, AV and Mobile App
Focus on Business Priorities i.e. Productivity,
based learning/assessments Cross Sell, Service Culture, Go Digital
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WOMEN-CENTRIC INITIATIVES
In view of the rise in societal awareness and action towards women’s safety in India, YES BANK organizes
awareness and training workshops for its female executives on basic preparedness and response measures,
which are designed to sensitize, empower and support them in untoward situations. These guidelines
were aimed at increasing safety awareness, and providing practical tips and tools that would help female
executives avoid potentially hostile situations in the most practical manner. Another key initiative that
was implemented was the 24X7 Helpline Number for SOS situations for all YBL executives. A List of Next
of Kin, along with phone numbers is made available with the 24X7 call center, to inform them should any
such necessity arise.
FY 2015-16
Particulars Under 30 30-50 Above 50 Total
Male Female Male Female Male Female
FY 2014-15
Particulars Under 30 30-50 Above 50 Total
Male Female Male Female Male Female
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FY 2015-16
Particulars Under 30 30-50 Above 50 Attrition
Male Female Male Female Male Female Rates
FY 2014-15
Particulars Under 30 30-50 Above 50 Attrition
Male Female Male Female Male Female Rates
The entire sales and operations force of YES BANK is on payroll. Some industry participants have separate
entities that employ the direct sales force.
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The A.R.T. of Banking
FY 2015–16
Particulars Under 30 30-50 Above 50
Hire Rates
Male Female Male Female Male Female
FY 2014-15
Particulars Under 30 30-50 Above 50
Hire Rates
Male Female Male Female Male Female
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MANUFACTURED CAPITAL
Through its pan-India network of branches, ATMs, Center is an extension of branches to serve
regional offices and customer touch points based customers, with a focus to engage and involve
by a robust ‘digical’ infrastructure, YES BANK is customers by delivering banking services on
in a position to provide a comprehensive range of phone. The Bank has also its single largest National
banking products and services to its entire spectrum Centralized Operations Management and Services
of customers. Manufactured Capital thus, becomes a Delivery facility in Chennai.
critical enabler for the Bank.
GREEN BUILDING CERTIFICATIONS
GEOGRAPHIC FOOTPRINT With a belief that even workspaces can be green
YES BANK is headquartered in the Lower Parel and high-performing, from a sustainability point
Innovation District (LPID) of Mumbai, and provides of view, YES BANK is considering ‘Green Building’
a seamless banking experience at its 1,000 branches certification for YES BANK Tower, the Bank’s
and 1,785 ATMs across 29 States and 7 Union corporate headquarters. A training was organized in
Territories of India, through its leveraged quality, consultation with Godrej Green Building Consultancy
state-of-the-art branch infrastructure, cutting-edge
technology and a customer-centric approach.
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Initiated strategic contracts with key vendors TECHNOLOGY & WORKPLACE
with standard terms for year round purchases for MOBILITY
complex items YES BANK has invested in and implemented state-
of-the-art technology initiatives since its inception,
SUPPLY CHAIN SUSTAINABILITY and has successfully implemented them. The Bank’s
As the first Indian banking signatory to the UN philosophy is to engage with key partner companies
Global Compact, YES BANK continues to abide by who are acknowledged leaders in their products or
the 10 Principles of the Compact covering four major businesses to develop specific solutions for YES
dimensions — human rights, labor, environment and BANK that become differentiators in the marketplace.
anti-corruption, and uses them as the foundation
for building its sustainable supply chain practices. Optimizing IT asset use in service organizations
is emerging as a global best practice to reduce
The Bank believes that its suppliers are an integral part generation of E-waste and lower operational costs.
of its ecosystem and strives to connect its strengths As on March 31, 2017, the Bank had an IT asset to
with its supply chain partners’ competencies to make employee ratio of 1.34. In FY 2016-17, the Bank has
optimum use of the opportunities for sustainable responsibly disposed 8,985 kgs of E-waste through
development. In line with its belief, and as a part of authorized empanelled recyclers.
the ESG operationalization plan, the Bank released a
Supplier Code of Conduct based on Environmental, As reported last year, the Bank had adopted Citrix
Social and Governance (ESG) parameters, which Workplace Cloud and Netscaler ADC solutions to
defines the Bank’s commitment to human rights, empower workforce mobility and ensure faster rollout
fair labour practices, environmental progress and of new branches. The Bank has facilitated a unified
anti-corruption policies. approach to creating, publishing and delivering
complete workspaces through Citrix Workspace
Through this initiative, the Bank is encouraging Cloud solution. As a result of these initiatives,
its suppliers to support its Sustainability agenda, employees continue to have secure access to apps,
and expects its supply chain partners to comply desktops, data and services from any device over
with the applicable laws of the land and adhere to any network, to empower mobile employees with the
internationally recognized ESG standards. freedom and flexibility to choose how they work.
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ANNUAL BUSINESS
RESPONSIBILITY REPORT (ABBR)
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY
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SECTION D: BR INFORMATION
1. DETAILS OF DIRECTOR/DIRECTORS
RESPONSIBLE FOR BR
A) DETAILS OF THE DIRECTOR/DIRECTOR
RESPONSIBLE FOR IMPLEMENTATION OF
THE BR POLICY/POLICIES
1. DIN Number: 00320702
2. Name: Mr. Rana Kapoor
3. Designation: Managing Director & CEO
Sr.
Particulars Details
No.
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The A.R.T. of Banking
ANNUAL BUSINESS
RESPONSIBILITY REPORT (ABBR) (CONTD.)
1. The Code of Ethics for employees and the top Policy is accessible at https://www.yesbank.in/
management is confidential and accessible only regulatory_policies.
to employees. Certain policies, including the
Citizen’s Charter, Charter of Customer Rights, 4.
Employee focused policies are accessible only
Grievance Redressal and Banking Practice Code by employees and are not shared in the public
are available on the website at https://www. domain. The bank’s Human Capital Management
yesbank.in/regulatory_policies. practices and activities can be accessed at
https://www.yesbank.in/work-with-us.
2. Yes, for certain policies and procedures.
5.
YES BANK views the unbanked and under-
3. The Bank has in place the Environment & Social banked population in rural and urban India as
Policy, which integrates environmental and a primary stakeholder for financial inclusion.
social risks into its overall credit risk assessment Through its products and services focused at the
framework. The Policy is confidential and is Base of the Pyramid, the Bank aims to positively
not in the public domain. The Bank has the impact this marginalized and disadvantaged
Environmental Management Policy which stakeholder group. The Bank has policies in
focuses on achieving greater environmental place, and adheres to regulatory guidelines, to
sustainability within the Bank’s operations. The drive its business practices. The Bank has a Code
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2A. I F ANSWER TO SR. NO. 1 AGAINST ANY PRINCIPLE, IS ‘NO’, PLEASE EXPLAIN WHY:
(TICK UP TO 2 OPTIONS) – Not applicable
Sr.
Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
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2. FOR EACH SUCH PRODUCT, PROVIDE THE consumption during usage by consumers
FOLLOWING DETAILS IN RESPECT OF is not a significant material issue for the
RESOURCE USE (ENERGY, WATER, RAW banking sector in general. During the year,
MATERIAL ETC.) PER UNIT OF PRODUCT the Bank’s 444 branch locations and 3
(OPTIONAL): offices were certified as ISO 14001:2015 in
i.
Reduction during sourcing/ production/ Environment Management System, under
distribution achieved since the previous year which the Bank makes maximum effort to
throughout the value chain? raise awareness among its customers on
efficient resource consumption, and on
On account of the nature of its services, broader national agendas, such as Swachh
the major resources consumed at the Bank Bharat Abhiyan, through YES COMMUNITY
are grid electricity and paper. During the and related initiatives.
reporting period, the Bank has launched
several key initiatives and achieved
The Bank is rapidly adopting technology
significant traction on on-going initiatives, to digitize its operations and product
towards achieving internal resource offerings, and has witnessed a strong growth
efficiencies, focused on product and process in adoption of mobile banking, mobile
digitization, greater employee awareness, wallets and internet banking, thus reducing
reduction in waste generation, and improved the incidence of paper usage and travel
waste management. among its customers. The impact achieved
through related initiatives is included in the
In the reporting year, YES BANK has become Sustainability Disclosures, as a part of this
the first bank in the world to migrate to Annual Report.
the new ISO 14001:2015 Environment
Management System, which now covers 3. DOES THE COMPANY HAVE PROCEDURES
444 bank branches and 3 office locations, IN PLACE FOR SUSTAINABLE SOURCING
and has launched a revised Environmental (INCLUDING TRANSPORTATION)?
Management Policy, wherein it has, i.
If yes, what percentage of your inputs was
significantly, doubled its Carbon emissions sourced sustainably? Also, provide details
intensity target to 10% year-on-year. During thereof, in about 50 words or so.
the year, the Bank also launched a Supplier
Code of Conduct based on environmental,
Given that the Banking sector’s primary
social and governance parameters. product offering is financial services, the
Bank does not have any raw material
The key initiatives focusing on achieving requirements. The primary resources
resource consumption efficiency at the Bank, consumed for its day-to-day operations
and the impact achieved, are included in the are paper, grid electricity, water from
Sustainability Disclosures 2016-17 that is a municipal sources, and diesel, for DG
part of this Annual Report. sets in locations with erratic availability
of electricity. Through a centralized
ii.
Reduction during usage by consumers procurement process, led by the Central
(energy, water) has been achieved since the Procurement Unit, the Bank strives to
previous year? achieve greater transparency, compliance
and adoption of environmental and labor
Given that the Bank’s primary product best practices.
offerings are financial services, resource
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4. HAS THE COMPANY TAKEN ANY STEPS TO For e-waste handling, the bank has a national
PROCURE GOODS AND SERVICES FROM authorized vendor for centralized collection
LOCAL & SMALL PRODUCERS, INCLUDING and handling of e-waste to ensure near 100% of
COMMUNITIES SURROUNDING THEIR PLACE e-waste management.
OF WORK?
If yes, what steps have been taken to improve
The Bank’s waste management practices are
their capacity and capability of local and small included in the Sustainability Disclosures, which
vendors? is a part of this Annual Report.
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YES BANK is among the leaders in the Indian 4. DOES THE COMPANY HAVE ANY PROJECT
banking sector in driving climate finance. In RELATED TO CLEAN DEVELOPMENT
2015, the Bank had taken a commitment to MECHANISM? IF SO, PROVIDE DETAILS
target mobilizing USD 5 billion up to 2020 THEREOF, IN ABOUT 50 WORDS OR
for climate action, and reports its Renewable SO. ALSO, IF YES, WHETHER ANY
energy funding portfolio annually. In addition, ENVIRONMENTAL COMPLIANCE REPORT IS
through the Environment & Social Policy, FILED?
the Bank incorporates Environmental and YES BANK has a significant portfolio in clean
social risk assessment into its overall credit risk energy, water and waste management, and has
assessment process. taken a public commitment to mobilize funding
of USD 5 Billion towards climate action by
The Bank is the first bank globally to migrate to 2020. The Bank’s portfolio is highlighted in the
the ISO 14001:2015 certification for Environment Sustainability Disclosures in this Annual Report.
Management System. Projects that the Bank has funded or advised may
be linked to CDM.
The details can be accessed in the Bank’s
Sustainability Report at https://www.yesbank. 5. HAS THE COMPANY UNDERTAKEN
in/about-us/investor-relations/yes-bank- ANY OTHER INITIATIVES ON – CLEAN
sustainability-report. TECHNOLOGY, ENERGY EFFICIENCY,
RENEWABLE ENERGY, ETC. Y/N. IF YES,
3. DOES THE COMPANY IDENTIFY AND PLEASE GIVE HYPERLINK FOR WEB PAGE
ASSESS POTENTIAL ENVIRONMENTAL ETC.
RISKS? Y/N YES BANK has one of the largest active debt and
The Bank assesses its environmental risk in advisory portfolios in the Indian banking space,
multiple ways. The Bank’s Environment and in renewable energy, water, waste management,
Social Policy, which is based on international and other climate-linked sectors. In December
best practices such as the Equator Principles 2015, on the occasion of COP21 at Paris, the Bank
and IFC Guidelines, integrates Environmental took a public commitment to mobilize funding of
and Social risks into its overall credit risk USD 5 billion for climate action up to 2020.
assessment mechanism.
The Bank’s clean technology portfolio in debt
YES BANK is the first bank globally to migrate to and advisory is included in the Sustainability
the ISO 14001:2015 certification for Environment Disclosures section of this Annual Report.
Management System, with its 444 branches
and 3 office locations certified. Guided by the Internally, under its ISO 14001:2015 certification
certification and its Environmental Management for Environment Management System, the Bank
Policy, the Bank assesses the environment risks has launched several initiatives to rationalize
of its operations. resource consumption and reduce waste
consumption.
As part of its overall risk management
framework, the Bank has a Reputational Risk
As part of its CSR commitments, the Bank is
Management Committee overseeing its E&S risk driving several initiatives that focus on energy
preparedness across its business operations and efficiency in the MSME sector, provide clean and
community activities. safe drinking water for rural communities, and
support protection of endangered species.
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The Bank’s initiatives and actions are included SECURITY, WATER, FOOD SECURITY,
in the Sustainability Disclosures included in this SUSTAINABLE BUSINESS PRINCIPLES,
Annual Report. OTHERS)
The Bank, through broad level actions and
6. ARE THE EMISSIONS/ WASTE GENERATED initiatives, actively works towards influencing
BY THE COMPANY WITHIN THE national and global policy and industry action on
PERMISSIBLE LIMITS GIVEN BY CPCB/ pertinent causes such as climate action, digital
SPCB FOR THE FINANCIAL YEAR BEING economy, and economic reforms. The Bank is
REPORTED? a member of protocols and alliances in India
Yes. The Bank’s primary wastes – paper and and abroad that bring like-minded stakeholders
electronic waste, are recycled to the maximum together on specific issues.
extent possible through third party vendors.
The Bank’s emissions and waste are within In addition, Board Members and top management
permissible limits of the laws applicable. At the at the Bank, including its Managing Director
branches where the Bank uses Diesel generator & CEO, are members of various committees,
sets due to erratic electricity supply, it ensures industry and trade associations that include
it only uses low noise and low emission sets public policy as a stated goal.
with proper procedures in place to handle the
used oil. PRINCIPLE 8
1. DOES THE COMPANY HAVE SPECIFIED
7. NUMBER OF SHOW CAUSE/ LEGAL PROGRAMMES/ INITIATIVES/ PROJECTS
NOTICES RECEIVED FROM CPCB/ SPCB IN PURSUIT OF THE POLICY RELATED TO
WHICH ARE PENDING (I.E. NOT RESOLVED PRINCIPLE 8? IF YES DETAILS THEREOF.
TO SATISFACTION) AS ON END OF
Yes. The Bank has focused Business Units
FINANCIAL YEAR. whose products and services promote
The Bank has not received any notice during the inclusive growth and equitable development
reporting year. in India. The Inclusive and Social Banking unit
has a range of financial products and services
PRINCIPLE 7 targeting the Bottom of the Pyramid in rural
1. IS YOUR COMPANY A MEMBER OF ANY and urban India.
TRADE AND CHAMBER OR ASSOCIATION?
IF YES, NAME ONLY THOSE MAJOR ONES
Through the Digital Banking unit, the Bank is
THAT YOUR BUSINESS DEALS WITH: driving digital payments across all economic
a. CII sections of the economy and is driving the use
b. FICCI of rising mobile and internet connectivity among
c. ASSOCHAM Indians for banking activities.
d. Indian Banks Association
Through its CSR mandate, the Bank is driving key
2. HAVE YOU ADVOCATED/LOBBIED initiatives in livelihood and water security, skill
THROUGH ABOVE ASSOCIATIONS FOR development, and environmental sustainability,
THE ADVANCEMENT OR IMPROVEMENT among others.
OF PUBLIC GOOD? YES/NO; IF YES
SPECIFY THE BROAD AREAS (DROP BOX:
The details of the Bank’s key programs and
GOVERNANCE AND ADMINISTRATION, initiatives are included in the Sustainability
ECONOMIC REFORMS, INCLUSIVE Disclosures as a part of this Annual Report.
DEVELOPMENT POLICIES, ENERGY
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A comprehensive list of Regulatory Policies 4. DID YOUR COMPANY CARRY OUT
can be accessed on the Bank’s website at ANY CONSUMER SURVEY/ CONSUMER
https://www.yesbank.in/regulatory_policies. SATISFACTION TRENDS?
Yes. As the Bank operates in the highly
3. IS THERE ANY CASE FILED BY ANY customer-centric banking sector, customer
STAKEHOLDER AGAINST THE COMPANY satisfaction and service quality are of critical
REGARDING UNFAIR TRADE PRACTICES, importance. Guided by the Service Excellence,
IRRESPONSIBLE ADVERTISING AND/OR Branding and Marketing Committee of the
ANTI-COMPETITIVE BEHAVIOUR DURING Board, the Bank has the systems in place to
THE LAST FIVE YEARS AND PENDING measure Service Excellence and drive Retail
AS ON END OF FINANCIAL YEAR. IF SO, Quality Assurance. The Bank conducts periodic
PROVIDE DETAILS THEREOF, IN ABOUT 50 customer satisfaction surveys, and in addition,
WORDS OR SO. there are strong systems in place for internal
Please refer to page 277 of this Annual Report for checks of branch quality and physical safety.
Section 18.6.2 - Disclosure of Penalties imposed The Bank’s Complaints Management System is
by RBI. ISO 10002:2004 certified.
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STATUTORY REPORTS
Management Discussion and Analysis 94
MANAGEMENT DISCUSSION
AND ANALYSIS
EXECUTIVE OVERVIEW transient loss in growth momentum for few high cash
MACRO-ECONOMIC AND INDUSTRY dependent sectors. While private consumption growth
OVERVIEW is expected to maintain its above 7% growth rate in
For major part of calendar year 2016, the global FY 2016-17 along with export performance turning
economic scenario was characterized by subdued positive, gross fixed capital formation is projected to
cross border trade, weak investment activity, sluggish witness a marked slowdown. On the sectoral front,
productivity growth, and heightened political and while manufacturing and trade, financial, and real estate
policy uncertainty. As per the International Monetary services is projected to see a deceleration in growth
Fund (January 2017), World GDP growth moderated to momentum in FY 2016-17 an upturn in agriculture and
3.1% in 2016 from 3.3% in 2015. allied sector along with public services is expected to
provide an offsetting impact. Over the medium term,
Global commodity prices strengthened during the positive impact of demonetization is likely to
the course of 2016 amidst expectation of strong emerge strongly with a behavioural shift in conducting
infrastructure investment in China, fiscal easing in the economic transactions via formal financial channels.
US, and agreement by major oil producers to trim This could boost economic efficiency and boost the
supply. Price of crude oil (Brent), industrial metals, gold, propensity for financial savings.
and agricultural commodities rose by approximately
55%, 20%, 9% and 7% respectively in 2016. Meanwhile, domestic retail inflation continued to
moderate despite an increase in global commodity
Meanwhile, growth in global trade volume continued to prices. Average CPI inflation in FY 2016-17 decelerated
remain subdued with estimated growth of 2.2% in 2016 to 4.5% from 4.9% in FY 2015-16. A favourable
(by IMF) vis-a-vis 2.7% in 2015. The ongoing slowdown monsoon out-turn after two consecutive years of
and rebalancing in China (with more than 10% share deficiency helped to lower food inflation, which also
in global trade), declining investments by commodity benefitted from continued rationalization in Minimum
exporters like Brazil, Russia, etc., and significant Support Prices (MSPs) announced by the government
exchange rate depreciation in many EMs resulted in and timely offloading of surplus food stocks. The
weakening of global trade activity. central bank’s anti-inflationary stance and quality fiscal
consolidation over the last 2-3 years has resulted in a
Nevertheless, the increase in global commodity prices successful gradual disinflation for the Indian economy.
towards the end of 2016 after the slump in 2015 resulted
in an end to deflationary conditions worldwide. Even Even as retail inflation declined, wholesale rate of
as core inflation rates have remained broadly stable, inflation, as measured by the WPI, increased to 3.7%
headline inflation rates have recovered globally. This in FY 2016-17 from -2.5% in FY 2015-16. The increase in
resulted in an increase in interest rates in most of the WPI inflation was predominantly driven by the rise in
advanced economies with US Federal Reserve backed global commodity prices, especially crude oil, whose
by improved growth prospects, raising its monetary average price rose by 6.1% during FY 2016-17 Despite
policy rate by 50 bps during December 2016 and the increase, WPI inflation remained comfortably lower
March 2017. than its long term average of around 5.5%.
In line with the mild deceleration in global economic India’s external position strengthened further in
activity, the Indian economy during the course of FY 2016-17 For the first three quarters (Apr-Dec), the
2016-17, is projected by the Central Statistical current account moderated to 0.7% of GDP in FY 2016-
Organization to see a moderation in GDP growth to 17 from 1.4% in the corresponding period in FY 2015-16
7.1% vis-a-vis 7.9% in FY 2015-16. The withdrawal of legal Foreign exchange reserves of USD 370 billions (as of
tender character of specified bank notes (SBNs) by the March 31, 2017) and robust net FDI inflows (USD 35.2
Reserve Bank of India in November 2016 provided a billions between Apr-Feb FY 2016-17) were noteworthy
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developments against the background of global Over the course of FY 2016-17 the Indian rupee traded
uncertainties. in a band of 64.85-68.77 vis-a-vis the US dollar. Rupee
largely traded with a moderate weakening bias during
On the fiscal front, the government stuck to its the months of Apr-Dec 2016 with factors like increase
FY 2016-17 fiscal deficit target of 3.5% of GDP in global commodity prices, global uncertainty post
accompanied by moderate improvement in quality UK’s political decision to exit Eurozone, and likelihood
of adjustment. While the capital expenditure is slated of faster pace of increase in US interest rates weighing
for a 10.6% growth in FY 2016-17 the subsidy bill is on sentiment in the global foreign exchange markets.
expected to contract by 1.4%. However, the Indian rupee appreciated by 4.45%
during Jan-Mar 2017, supported by a weaker dollar,
On the monetary policy front, the RBI reduced the and improved prospects for domestic reforms after
repo rate by a cumulative of 50 bps to 6.25% during the strong out-turn in the state assembly elections
the course of FY 2016-17. Highlighting its confidence conducted in Feb-Mar 2017.
on revival in economic growth, the central bank in
Feb-17 policy review shifted its monetary policy stance BUSINESS SEGMENT OVERVIEW
to neutral from accommodative earlier. This shift in CORPORATE BANKING
monetary policy stance is expected to help achieve the Your Bank’s Corporate Banking (CB) group provided
medium term inflation target of 4%. comprehensive financial and risk management
solutions to large corporate clients with a turnover
From an average deficit of ` 1,889 billions in March greater than ` 1,500 crores. Your Bank’s professional
2016, money market liquidity improved towards ` 95 relationship experts forged value-based long-term
billions in October 2016 largely on the back of front relationships with the top management and promoters
loading of government expenditure, seasonal behavior of almost all large corporate houses in India.
of currency in circulation, and dollar purchases by the
RBI. Thereafter, liquidity surplus spiked significantly Your Bank’s CB group offered comprehensive
to a record high level of ` 4,524 billions – average client focused Services comprising Working Capital
for the month of March 2017. Although the second Finance, Term Loans, Specialized Corporate Finance
half of the fiscal year generally witnesses contraction Products, Trade & Transaction Banking Products, Cash
in liquidity conditions, the surge in liquidity surplus Management Services, Debt Capital Markets, Treasury
since November 2016 happened on the back of the Services, Investment Banking Solutions and Liquidity
jump in bank deposits post the withdrawal of legal Management Solutions, among others. Your Bank
tender character of SBNs by the RBI, even as growth prioritized credit quality and all offerings were made
in bank credit weakened amidst deceleration in overall following a rigorous analysis of the client’s risk profile
economic activity. as well as proactive monitoring of credit, market and
operational risks.
Despite volatility in global financial markets and limited
amount of monetary policy easing by the RBI in Your Bank offered industry-specific products by
FY 2016-17 vis-a-vis FY 2015-16 the 10-year g-sec yield understanding customer businesses, market conditions
fell by 79 bps to 6.68% as of end March 2017. Continued and industry developments. This distinctive approach
gradual disinflation, quality fiscal consolidation, surge translated into mutually-beneficial relationships with
in money market liquidity surplus post withdrawal of clients in knowledge-driven sectors like life sciences
legal tender character of SBNs by the RBI in November and healthcare, information technology, food and
2016, and stability in rupee vis-a-vis other currencies agribusiness, manufacturing, infrastructure, media
in emerging markets were important enablers for the and entertainment, hospitality and education, among
decline in g-sec yields during FY 2016-17. others.
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MANAGEMENT DISCUSSION
AND ANALYSIS (CONTD.)
Your Bank remained committed to continuous group, focussed on servicing corporate clients with a
improvement in terms of service, risk management turnover in the range of ` 100-500 crores.
and product portfolio through original research,
benchmarking and client orientation. Considering the high-growth nature and continuous
expansion of your Bank’s clients, the Commercial
EMERGING CORPORATES BANKING Business Banking group adopted a ‘Lifecycle Banking’
The economic evolution of a dynamic economy is philosophy to fulfil the banking needs of the clients
characterized by the transformation of its mid-sized across the growth cycle. The impetus continued to
companies to large global businesses. The Indian be on servicing the clients through a ‘Money Doctor’
economy is at an inflection point with new tail-winds for approach, balancing the client expectations and the
sustained, substantial growth. The mid size businesses, Bank’s risk strategies.
backed by strong entrepreneurial ambition, form the
backbone of the economy and are in the best position Your Bank’s unique positioning provides an opportunity
to capitalize on this growth potential. Your bank strives to offer the entire product suite with customized
to be the catalyst in bringing about this growth. solutions. Your Bank helped forge a number of
success stories across industries, such as life sciences,
Emerging Corporates Banking group, setup by your healthcare, food & agribusiness, auto ancillaries and
bank in FY 2015-16, focuses on these corporates with e-commerce. With regional presence in more than 30
turnover between ` 500 crores and ` 1,500 crores. locations across India, Commercial Business Banking
It plays a crucial role by developing a thorough division caters to the financing needs of the clients
understanding of companies’ banking needs and with quick and efficient service.
delivering customized solutions including trade,
forex and advisory services, besides efficient cash Further, the Commercial Business Banking group
management & digital banking products. The group addresses the banking requirements for linked and
continues its knowledge-banking approach to cater ancillary businesses of the clients, ensuring continuous
to requirements of growth sectors including Auto deepening and retention of client relationships. The
Components, Food and Agri-processing, Media & division concentrated on granularity and achieving
Entertainment, Pharmaceuticals, Gems & Jewellery. capital efficiency by focusing on referral-led business
origination and cross-sell.
Recognizing the growth and the need for increased
local presence, the group has enhanced its footprint GOVERNMENT BANKING
by rolling out 7 new locations and is now present in At your bank, the Government Banking (GB) group
15 locations across India. The emerging needs of this addresses the financial and banking needs of Central
diverse segment present a significant opportunity for and State Government undertakings and affiliates.
your Bank, and the group is well poised to capture the
same through innovation and differentiation. Over the years, your Bank has provided financial
and advisory services to Ministries under the Union
COMMERCIAL BUSINESS BANKING Government, State Governments, Central and State
With recent policy reforms and regulatory changes, Public Sector Undertakings (PSUs), Boards and other
India is witnessing a rapid economic transformation affiliates. Your Bank remained committed to delivering
fuelled by various government initiatives and skilled innovative, structured and comprehensive solutions,
manpower. Correspondingly, this has led to the growth accomplishing several landmark transactions with
of mid-sized corporates across various manufacturing Maharatnas, Navratnas, Mini-Ratnas and other apex
and service industries. This has also reflected in the institutions and developed meaningful relationships
growth of your Bank’s Commercial Business Banking with over 850 entities across India. The GB group
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remained committed to the core values of client Bank and NHB to avail refinance, and with overseas
origination, innovation and superior service and has branches of domestic banks to avail foreign currency
over 125 experienced and seasoned Bankers in 56 long-term borrowings. The group also undertakes
locations across the country. Primary Dealership sales function by distribution of
Government Bonds across various institutional and
Your bank displayed strong commitment towards retail segment investors.
catalyzing sustainable growth in the country by
partnering with Central Government in their flagship Some of the standout deals that the group executed in
initiatives during the year like Maritime India Summit FY 2016-17 were:
2016 and India Aviation 2016 amongst others. Your
Bank was also part of the Make In India event which Acted as a BRLM for 3 major public NCD issues
is the driving force for India’s new manufacturing during the year.
revolution.
Acted as a left lead for a ` 14 billions Masala bond
Your Bank made concerted efforts to support issue.
educational, religious and sporting institutions
across India through unique transaction banking Your Bank was the sole investor in maiden AT1
offerings aimed at streamlining the working capital issuances of State Bank of India and EXIM Bank.
management of these apex and nationally important
institutions. Your Bank made inroads into the welfare In addition to the above, the group implemented
trusts management of leading Central and State Public various digital offerings using the bank’s pioneering
Sector Undertakings through its differentiated and technological platform such as:
competitive SA offering, complementing your Bank’s
efforts to build a sustainable CASA book. Launch of “SIMsePAY”, a mobile payment solution
with 10 state and district cooperative bank which
INDIAN FINANCIAL INSTITUTIONS enables secure mobile payments without the
BANKING internet and allows P2P, P2A, bill payments, DTH
Your Bank’s Indian Financial Institutions Banking and mobile recharges through feature phones
(IFIB) group interfaces with domestic financial also. The Bank has signed up agreement with over
institutions. The team primarily engages in offering 35 cooperative banks to offer mobile payment
banking solutions to domestic banks, non-banking services to their customers.
finance companies, housing finance companies,
insurance brokers and companies, small finance banks,
Interface with PFMS system of Department of
payment banks, mutual funds, financial institutions, Expenditure to transfer and settle Government
cooperative banks, regional rural banks and capital subsidy and grants to customers of rural
market participants (stock exchanges, stock brokers, cooperative banks and primary agriculture
commodity brokers and exchanges, foreign portfolio society. Your Bank is the only bank under such an
investors), primary dealers, depositories, AD II arrangement.
licence holders and payment aggregators. Your Bank
customizes specific solutions for domestic financial Application Programming Interface (API) Banking
institutions that enhances transactional efficiencies to offer real time/instant banking facility to NBFCs,
leading to enduring relationships. Brokers, Cooperative Banks and other Financial
Institutions, which is emerging as a key product
As a strategy to offer greater benefits to the customers to integrate and streamline the transaction
through reduced cost of funds, your Bank actively processing cycle.
engages with institutions like SIDBI, NABARD, EXIM
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MANAGEMENT DISCUSSION
AND ANALYSIS (CONTD.)
Nodal Bank offering for payment aggregators, partners by international institutions to meet their
Escrow arrangement for e-wallet players, and clients’ banking requirements in India. International
AD-II related transactions for money changers Banking, in coordination with MNC Corporate Banking,
and foreign-exchange related players. helped position your Bank as the preferred ‘Host
Country Bank’ by leveraging its rich relationship capital.
Bunch Note Acceptor (BNA) offering to large
financial institutions to transform the cash YES-International Banking continues to raise large-
transaction process with real-time credit, timely ticket offshore borrowings for your Bank. Your
reporting and reconciliation, and detection of fake bank raised USD 130 millions long tenor loan from
currency, which was widely acknowledged by Taiwanese banks in a marquee syndication deal. FMO
Cooperative Banks, NBFCs among others – Dutch development financial institution – invested
USD 50 millions (` 330 crores) in your Bank’s Green
Correspondent Banking with over 350 Infrastructure Bonds in its first investment in a Bank
Cooperative Banks and Regional Rural Banks by in India. YES – International Banking’s strong and well
offering of sub-membership of RTGS and NEFT established relationships with DFIs are borne out by
services, automated solutions for cheque clearing the fact that DEG – Germany’s development financial
under CTS, sponsorship of ATM transactions, institution – has made its third loan to your bank for
enabling merchant acquiring through deployment supporting small business growth in India. YES –
of POS terminals, collection of subsidy and grants International Banking has leveraged its global banking
under DBTL scheme, and integrated investment partnerships to support your Bank’s increasing FCY
solutions viz. CSGL account services to benefit lending requirements through a diverse mix of
them and their customers borrowing avenues aggregating to over USD 1 Billion
during the year.
Sponsor Bank for LIC to process NACH mandates
along with migration of ECS mandates to NACH YES - International Banking focused on emerging as
platform for select zones with monthly volumes a preferred host country banker and payments bank
of over 1 million transactions to global counterparts. As a result, more institutions
utilized your Bank’s network for their India-linked
Instant Redemption Offering for Mutual Funds, businesses. YES – International Banking has well
where the investor can redeem the value of his established relationships with exchange houses across
investment instantly 24*7 key geographies host to Indian diaspora viz. USA, UK,
Europe, APAC and GCC and through these originates a
INTERNATIONAL BANKING significant portion of NRI remittances into India.
YES - International Banking has a widespread partner
network of international banks, financial institutions, INTERNATIONAL FOOTPRINT
exchange houses and official bodies. Your Bank executed Your Bank established its international footprint by
marquee transactions across products and geographies inaugurating its first international office in the form
through its global banking partner network. of a Representative Office at Abu Dhabi, UAE in April
2015. The Representative Office has provided great
YES - International Banking offers a complete suite convenience to NRI customers by facilitating a host of
of products viz. Trade Finance, Treasury Services, Banking, Financial and Investment consultation services
Investment Banking Solutions, Remittance Solutions, of your bank in UAE and has played an important role
Financial Advisory and Global Indian Banking to in promoting your Bank services to the larger NRI
customers and has consistently delivered first to market Diaspora in the country. Additionally, it has provided
and unique product offerings leveraging on its global a significant Brand Value and visibility of your bank
alliances. Your Bank is counted among the preferred in UAE. Your Bank continues to explore expanding its
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overseas presence with a view to promote your Bank can choose to select his/ her own customized service
services to the NRI Diaspora. and price plan. In other words a customer can choose a
base-pack and a ‘top-up’ with other services.
As reported last year, Your Bank was the First Bank
in India to commence the operations at International As you are aware, on November 08 2016, the GOI
Financial Services Centre (IFSC) at GIFT City, Gujarat. launched the ‘Demonetization Drive’ to curtail the
A banking unit at GIFT IFSC (IBU) is equivalent to a shadow economy and crack down on the use of illicit
Foreign Branch and is a significant development and counterfeit currency. Your Bank saw a record
in overall augmentation of Your Bank’s business amount of customer footfall across branches for a
model whereby Bank, during the year, provided prolonged duration due to currency exchange and
comprehensive solutions for its client’s foreign currency its employees were fully committed to satisfactorily
banking requirements in the areas of Cross Border service the customer requirements with a twin pronged
Trade offerings, External Commercial Borrowings, focus on compassion as well as compliance. Further,
Foreign Currency Loans/Syndications, Arrangement/ your Bank continued to enrich and enhance its highly-
Underwriting of Masala Bonds issuance by Indian targeted product portfolio, specialized relationship
Corporates among others. During the year, your Bank management architecture, and superior customer
raised Foreign Currency resources from Marquee service framework.
Foreign Financial/Multi Lateral Institutions and Your
Bank is pleased to report that business momentum at ATMS / RECYCLERS
IBU has been building up well with its Balance Sheet Your Bank has 1,282 ATMs and 503 Bunch Note
already crossing USD 1 billion business transaction Acceptors/ Recyclers (BNA) as of March 31, 2017.
mark. Your Bank’s IBU continue to be a Flag Bearer Bunch Note Acceptors have been appreciated by many
at GIFT IFSC and in terms of business volumes, it is Corporate Clients as they offer multiple advantages
leading the pack amongst 7 operational IBUs. while fulfilling Corporate cash collection needs. Your
BANK has become the First Private Sector Bank to
BRANCH BANKING go live on Interoperable Cash Deposit platform and
In FY 2016-17 YES BANK’s geographical footprint now YES BANK BNAs/Recyclers can be used for
expanded to 1000 branches spread across more than depositing cash into any other Bank account. YES
700 locations with over 1,800+ ATMs and BNAs. Your BANK ATMs offer a wide array of services starting from
Bank has institutionalized a strategic framework to Cash withdrawals to Mobile Recharge Payments and
increase penetration in all States Capitals, Top 200 YES BANK Credit Card Bill Payments.
Deposit Centers covering all state capitals, having
substantial presence in the Delhi Mumbai Industrial CURRENCY CHEST
Corridor, Special Economic Zones, Economic Your Bank is expanding its network of Currency
Promotion Zones, Food Parks, Agri-Parks, Ports etc. Chests (and Small Coin Depots) and now has two
with a well-balanced parallel focus on financially- Currency Chests operational in Delhi and Mumbai,
efficient inclusive Banking. with a few more to on the anvil. Establishing Currency
Chests reflects your Bank’s support to Reserve Bank
This financial year saw a host of internal and external of India’s endeavor to increase the efficiency of
developments in the Branch-Banking segment. Your currency management in the Banking system. During
Bank amped up considerable focus towards the branch the Demonetization period, these currency chests
presence in rural, agri and MSME geographies by ensured supply and distribution of good quantity of
putting in focused leadership, with the local knowhow, currency across YES BANK branches & ATMs, thereby
and products targeted at these specific segments. The ensuring the quality of Bank notes in circulation
Bank also launched the 1st in the industry ‘Make Your through continuous supply of clean notes and timely
Own’ Current and Savings account, wherein a customer withdrawal of soiled notes.
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NEW CUSTOMIZABLE SAVINGS ACCOUNT market the IGC. Your Bank has signed an agreement
PROPOSITION with MMTC Ltd. for distribution of the IGC. Customers
Your Bank has launched a Customizable Savings can easily invest in these coins using convenient modes
Account proposition that renders the POWER TO of payments. IGC is currently being offered through
CHOOSE with the customer. Breaking the industry selected potential branches and soon it is expected to
norm of offering off-the-shelf Banking products to have a wider presence in the market.
every customer segment, Your Bank has become the
first Indian Bank to introduce the customizable version E-KYC
of the traditional Savings Account. This unique offering As an important step towards its digital transformation
enables the customer to create an account that suits journey, Your Bank has launched its E-KYC module
his or her lifestyle and Banking preferences, while with the objective of relieving the customers from the
choosing from a range of products and offerings. hassles of documentation. Additionally, E-KYC also
Based on extensive market research and customer facilitates the Bank with verifying customer credentials
feedback, Your Bank has launched Savings Account through a reliable digital source. Aadhaar Card holders
Product Tiers, which offers three variants – Prime, can give their consent to the Bank to access their data
Ascent and Crest. Customers can choose to start at from UIDAI’s Central Data Repository. This facility is
any of the three tiers according to their requirements. successfully launched in all Cluster Hub Branches of
The Bank will periodically review the customer’s overall your Bank.
relationship and automatically upgrade to a higher tier
if applicable. GLOBAL INDIAN BANKING
Your bank offers best-in-class banking products and
ALL NEW DEBIT CARD VARIANTS services for Indians settled across the globe and
Your Bank has ramped up its existing portfolio of strives to continually enhance these offerings for its
Debit Cards with the introduction of NFC (Near Field Global Indian Banking customers. This financial year
Communication) technology across card variants to saw a host of developments across GIB propositions.
enable Contactless Payments. Segmented across its Your Bank established ‘Global Service Desk’ – A one
flagship customer segments, YES Prosperity and YES stop shop for NRI customers for addressing their non-
FIRST, these Cards have been carefully customized face-to-face service requests. Your Bank also launched
and designed around the specific needs of debit card the convenient facility of booking non-resident term-
customers. New Debit Cards offer unique benefits deposits over Phone Banking. Your Bank now provides
such as Reward Points on all spends, NFC enabled an option of Fixed Exchange rate for its YES Remit
contactless payments, and YES InControl-Card spend users whereby NRIs can lock in forex rates at the time
management features. The YES Prosperity Debit Card of initiating a remittance transaction. YES Remit itself
range comprises of YES Prosperity Titanium, Titanium was completely overhauled and migrated to a superior
Plus, Platinum and RuPay Platinum Debit Cards, platform which provides state-of-the-art user interface
whereas the YES FIRST range includes the YES FIRST and enables access across touchpoints – Desktops/
WORLD Debit Card. Your Bank will issue these cards to Laptops/ Tablets/ Smartphones. Your Bank also
all new customers, and also focus on offering these to launched the GIB Corporate Salary Proposition for
its existing Debit Card customers. enhancing tie-ups with corporates which will contribute
towards buildup of a granular GIB liability book. NRI
INDIAN GOLD COIN Festival FY 2016-17 was also conducted to enhance
Your Bank has launched Indian Gold Coin (IGC), the visibility of YES BANK’s NRI Services by engaging with
first ever national gold coin offering by Government various NRI associations.
of India, and made available in denominations of 5,
10 & 20 grams. The government has mandated MMTC
Ltd., A Government of India Enterprise, to launch and
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Bullion (Gold & Silver) Sales and fulfillment of
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working capital requirement in the form of Gold of permissible products and services across Asset,
Loans Liability and Capital Market segments.
Financial Supply Chain solutions Consistent with its One Bank strategy, your Bank has
created a separate B2B2C group to focus on increasing
The core group also developed and implemented product penetration across all corporate relationship
unique and customized product propositions across groups with the objective of increasing cross sell
industry verticals. Your Bank exceeded customer opportunities as well as enhancing the retail liability
expectations by offering an efficient Transaction business. ‘YES: Head Startup’ - a comprehensive and
Banking unit, continuously expanding its product customized suite of banking solutions focused on
suite through its Knowledge Banking-led strategy supporting and encouraging the startup revolution in
and strengthening its delivery channels. The unit has India, has also been initiated and preliminary results
strengthened its focus on its Digital strategy to build are extremely encouraging. We anticipate a lot more
synergies amongst different verticals and enabling traction in this space in the coming year.
unique opportunities for clients, thus differentiating
YES BANK’s products and service propositions. FINANCIAL MARKETS
Backed by experienced professionals, the Financial
Your Bank’s ‘Integrated Financial Supply Chain’ Markets Group at your Bank offers a competitive
solutions, today assist the corporate client to reduce and comprehensive line of financial market products
cost, optimize working capital, avoid supply chain and services to its clients. Your Bank’s Financial
disruptions and manage risks. Today, financial supply Markets (FM) business model provides effective risk
chain offerings are digitally available through paperless management solutions relating to foreign currency and
records and cash less transactions riding on API’ on a interest rate exposures faced by its corporate clients.
real time online basis. Under its ‘API Banking’ suite, TBG The FM group proactively assists clients by making
launched multiple solutions encompassing payments, them aware about the risks they face with respect to
collections and Supply Chain Financing services. API capital raising, investments, exports, imports and other
solutions have been resonated successfully across market risks.
varied sectors including E-commerce, Financial
institutions, Overseas Exchange houses, Manufacturing, Your Bank has created a buoyant Debt Capital Markets
Utility service providers etc. (DCM) franchise with a deep-rooted knowledge of
the underlying market dynamics, coupled with strong
To further strengthen its product portfolio, Your Bank distribution and structuring capabilities. Since its
has decided to establish its Custody business. YES inception, the DCM group has originated and efficiently
Bank was also privileged to obtain approval from The executed numerous transactions, across the product
National Securities Clearing Corporation Ltd. (NSCCL) suite, for clients including corporates, PSUs, Central
and The Indian Clearing Corporation Limited (ICCL) as and State Government entities and many NBFCs.
a Professional Clearing Member of Future and Option
Segment. Your Bank was ranked No. 1 by Prime Database in the
‘Private Issuers Category – Manufacturing/Services’
YES Bank has been a proud flag bearer in the of the Arrangers tables and was ranked No. 7 in the
development of Gujarat International Financial Tec-City ‘All issuers category’ League table by Prime Database
(GIFT City) and was the first bank to start operations for 2016-17. Further, your Bank was ranked No.6 by
with the launch of its IFSC Banking Unit in October Bloomberg in the India Domestic Bonds league table
2015. The Bank has since grown and has emerged as for CY 2015.
the “Largest Bank” in IFSC, offering the entire range
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Financial Markets also conducts proprietary trading to Ranked 4th in India Rupee Loan Bookrunner
maximize earnings by optimal risk taking across key and India Rupee Loans Mandate Arranger by
fixed income, equities and global foreign exchange Thomson Reuters for CY 2016 up from 8th
markets. Additionally, it is responsible for Balance and 6th respectively in CY 2015
Sheet Management, Liquidity Monitoring, Maintenance
of Cash and Statutory Reserve requirements and ASSET RECONSTRUCTION AND
day-to-day Fund Management of the Bank. MANAGEMENT GROUP
Subordinated and hybrid debt capital for your Bank is An ongoing challenge faced by the Indian banking
also raised by the FM Group. Your Bank continues to industry is a decline in asset quality. Your Bank’s Asset
excel as ICRA (Moody’s affiliate in India) has reaffirmed Reconstruction and Management Group (ARM) was
your Bank’s A1+ rating for its 10,000 crores Certificate created for the effective management of distressed
of Deposit program. A1+ rating indicates the highest and non-performing assets comprising qualified and
level of safety in the short-term. experienced professionals specializing in distressed
asset management. The Group provided effective
LOAN SYNDICATIONS solutions for resolving stressed assets by leveraging its
The Loans Syndication (LS) team has sold down long regulatory and legal understanding.
term bulk exposures to banks & financial institutions
to improve the overall yields on the loan book of your ARM employed multi-pronged resolution strategies,
Bank thereby creating a strong brand equity across which included operational and financial restructuring,
stakeholders like banks, NBFCs and other financial identifying strategic investors for the takeover of
institutions. Over the years, the team has demonstrated stressed assets, business turnaround financing,
strong credit appraisal & structuring skills, sectoral negotiating with borrowers for onetime settlement,
knowledge and relationship management which has (recovering through the enforcement of security
been appreciated across the stakeholders spectrum interest) under the Securitisation Act 2002, using
and is reflected in the results below. various enablers from extant RBI policies and selling
non-performing assets to asset reconstruction
The LS team has successfully placed approximately companies (ARCs).
` 30,500 crores (~USD 4.7 Billion) in FY17 as
against ~ ` 21,000 crores (USD 3.3 Billion) in ARM’s focus resulted in your Bank continues to be
FY 2015-16 to its partner Banks, NBFCs and reflected in best-in-class credit metrics..
financial institutions within India as well as
internationally. The clientele involved pedigreed YES SECURITIES
players across the manufacturing, renewable YES Securities (India) Limited (YSIL), your Bank’s
energy and real estate sectors. Broking and Investment Banking subsidiary, continued
its growth in FY 2016-17. During the year, YSIL expanded
The team’s consistent performance has placed its coverage beyond Mumbai and NCR to offer its best-
your Bank in top 5 (maiden entry in top 5) in the in-class 3-in-1 proposition to customers in 8 additional
syndicated loans league table ranking by both cities – Bangalore, Chennai, Hyderabad, Kolkata,
Bloomberg and Thomson Reuters for CY 2016. Chandigarh, Pune, Ahmedabad and Jaipur. YSIL now
offers customers a best-in-class investment experience
Ranked 4th in Indian Borrower Local Currency on the web and across mobile devices (app available
Loans Bookrunner and India Borrower Local for iOS and Android) and continues to strengthen its
Currency Loans Mandate Lead Arranger by research and execution capabilities. The company
Bloomberg for CY 2016 up from 7th and 6th also built robust Institutional Broking capabilities and
respectively in CY 2015 has been empanelled as a Broker by several leading
institutional and corporate clients.
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INVESTMENT BANKING
YES Securities is a well-integrated financial services Exclusive strategic and financial advisor to Travel
firm offering a gamut of services, such as Investment Food Services Pvt. Limited for divesting 49%
Banking (including Equity Capital Markets and stake to SSP Group plc
Sustainable Investment Banking), Institutional Sales &
Trading and Equity Research to its clients. The firm is
Exclusive strategic and financial advisor to
a registered securities broker with SEBI and is also a Fonroche Energie for sale of its 22.3 MW solar
member of NSE and BSE. plant to Hinduja group
Investment Banking: The Investment Banking team Book Running Lead Manager to the ` 11.0 Billion
provides M&A and Capital Advisory services to large IPO of Varun Beverages Limited
and mid-market corporate and financial sponsor clients
through key products such as Mergers & Acquisition Book Running Lead Manager to the ` 7.5 Billion
Advisory and Private Equity fund-raising. QIP of Bharat Financial Inclusion (erstwhile SKS
Microfinance Ltd).
YSIL’s highly-experienced teams offer expertise across a
variety of sectors including Food & Agribusiness, Media Lead Manager to the ` 70 Billion NCD issue of
& Entertainment, Internet & E-Commerce, Consumer Indiabulls Housing Finance Limited.
Markets, Infrastructure & EPC, BFSI, Industrials and
Logistics to corporate clients. YSIL’s Investment and Merchant Banking: The Merchant Banking team
Merchant Banking closed 22transactions during provides Capital Market products such as Initial Public
the year under review. Some of the representative Offerings (IPO), Qualified Institutional Placements
transactions consummated by the team during the (QIP), Public Debt Offerings, Rights Issues and other
year under review include: structured offerings to leading Indian companies at
each stage of the capital life-cycle.
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Some of the representative transactions consummated for opportunity mapping & acquisition advisory
by the team during the year under review include: towards setting up a renewable energy platform
in India
Book Running Lead Manager to the ` 7.5 Billion QIP
of Bharat Financial Inclusion Limited (erstwhile Exclusive India advisor to New Generation Power,
SKS Microfinance Limited) USA with regards their identified acquisition for a
wind portfolio & a gas based project in India
Book Running Lead Manager to the ` 11.0 Billion
IPO of Varun Beverages Limited Business planning & financial advisory for the India
roll out of Veriown (subsidiary of New Generation
Lead Manager to ` 30 billions Public issue of NCDs Power, USA), a pay-as-you solar home lighting
of Reliance Home Finance Limited product targeted at the rural energy access
market.
Lead Manager to the ` 70 billions Public issue of
NCDs of Indiabulls Housing Finance Limited Institutional Sales & Trading: The Institutional
Equities team caters to Domestic Institutional
Lead Manager to ` 140 billions Public issue of Investors and Foreign Institutional Investors
NCDs of Dewan housing Finance Corporation across geographies. The client focused sales team
Limited follows a thorough research based and customized
service oriented approach. With a keen focus
Sustainable Investment Banking (SIB): The SIB practice on understanding client-specific objectives, the
focuses on providing advisory services exclusively in the sales team works closely with the research team
areas of Sustainability, Clean Technology, Renewable to provide market insight, actionable ideas and
Energy, Environmental Services and Education. Key opportunities relevant to the firm’s clients. The
transactions by the team during the year under review trading team provides trading strategies across
are as follows: the spectrum and ensures seamless execution of
every transaction.
Exclusive strategic and financial advisor to Atria
Brindavan Power Pvt. Ltd. for raising structured Equity Research: YES Securities provides Equity
debt of ` 7,500 millions from Piramal Enterprises Research services to clients, to enhance portfolio
Ltd. and APG Asset Management by issuance of performance and minimize risk, through an
Non-Convertible Debentures (NCDs) experienced fundamental and technical research
team covering 25+ companies across diverse
Exclusive strategic and financial advisor to sectors.
Greenko Energies for acquiring Sunedison’s solar
portfolio in India RESPONSIBLE BANKING
Your Bank’s Responsible Banking ethos remains the
Exclusive strategic and financial advisor to mainstay of its single-minded focus on inclusive and
Fonroche Energie SAS, France for sale of 22.3 MW sustainable growth, by weaving sustainability principles
operating solar projects to Hinduja Group into its core operations and expanding its alliances for
India’s development. As a core plank that runs across
Exclusive strategic and financial advisor to Indo all functions of the Bank, it is firmly integrated with our
Rama Renewables for sale of 30 MW operating business strategies, approaches and targets, enabling
wind assets to Tata Power Renewable Energy us to create shared stakeholder value both in the near
and long terms.
Exclusive advisor to CDC Group PLC, London
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During the year, the Bank’s global engagement on This year, your Bank became the first bank globally to
key sustainability topics expanded significantly and it migrate to the new ISO 14001:2015 certification, which
was recognized as a Thought Leader on noteworthy now covers the Bank’s 444 Metro-Urban branches
national and international platforms. The Bank was and 3 corporate offices. Towards mainstreaming
invited to speak at the UN High-Level Thematic Debate sustainability best practices across its value chain, the
at the UN in New York in April 2016 and was the Lead Bank formulated its Supplier Code of Conduct and
Discussant to the UN Private Sector Forum at the UN organized a ‘Sustainable Procurement’ Workshop for
General Assembly in September 2016. It spoke at the its strategic suppliers.
World Bank Group’s Dialogue for Climate Action in
Vienna in May 2016 and at the Climate Week organized YES COMMUNITY, the Bank’s unique branch-led
by the World Bank in New York in September 2016. In community engagement program, touched over
addition, your Bank was the only Indian bank invited to 20 lakhs lives in 2016-17, through its pan-India branches.
speak at the G20 ESG Workshop in Berne, Switzerland The Bank’s ‘Livelihood and Water Security’ program
in May 2016. Significantly, your Bank’s CSR project, ‘Say provided access to safe and clean drinking water to
YES to Sustainable MSMEs in India’ was highlighted as more than 3.66 crore lives in Maharashtra, Delhi and
a Role Model case study at the COP22 in Marrakech, Goa. The Bank’s ‘Say YES to Sustainable MSMEs in
Morocco, by the World Resources Institute, and India’ initiative impacted 2,229 MSME units and over
showcased at the Conference’s India Pavilion. 10,425 workers in 11 states.
Your Bank continues to be a signatory to key During the year, Your Bank launched an innovative,
protocols focused on climate action and sustainable blended finance project in pilot mode towards
development, including the UNEP FI, Carbon Pricing promoting environmentally sustainable livelihood
Leadership Coalition, UN Global Compact, CDP, security among 600 under-privileged women salt
Natural Capital Finance Alliance, and is member of key farmers in the Little Rann of Kutch region in Gujarat,
national and global alliances including the India GHG and became the first private sector company to enter
Program, TERI Council for Business Sustainability, and into a CSR commitment with the National Highways
WBCSD. In the year, Responsible Banking produced Authority of India under its ‘Adopt a Green Highway’
four knowledge reports on pertinent topics: program.
Financial Structures for Solar Energy ‘YES! i am the CHANGE’, the social film making
challenge launched by YES FOUNDATION, YES BANK’s
Transplanting Growth Greening our Highways social development arm, has achieved unparalleled
success, with participation of over 13 lakh individual
Climate Change as a Driver of Energy Efficiency in participants comprising 3.24 lakh teams, submitting
MSMEs over 29,000 films, and the launch of a new initiative,
the YES FOUNDATION Social Film Grant, in FY 2016-17.
Compendium of Global Success Stories in Solar
Power. Your Bank was recognized in India and abroad for its
sustainability performance, winning the Euromoney
Your Bank continues to be the only Indian Bank in Award for ‘Asia’s Best Bank for CSR’, the ‘Innovative
the DJSI Emerging Markets Index for the second Bond Structure of the Year’ by Environmental Finance
consecutive year in 2016, and in a significant Magazine, and the Award for ‘Most Effective Domestic
achievement, YES BANK was assigned an ESG rating Community Investment’ by Ethical Corporation, among
of AAA by MSCI ESG Research. others.
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INCLUSIVE & SOCIAL BANKING models and forged partnerships leading to their
In line with the Responsible Banking vision to seamless implementation. It aimed to create viable
mainstream sustainability within its core business and business models while providing ‘access to finance’ to
address needs of the ‘next billion’ customers, Your the bottom-of-the-pyramid customers.
Bank created a special division called Inclusive & Social
Banking (ISB). ISB is responsible for the design and ISB offered various financial services comprising
implementation of various financial inclusion initiatives. microcredit, micro-saving, micro-insurance and
For Your Bank, financial inclusion is not just a social and remittance services across geographical and
regulatory obligation but a viable business opportunity. socioeconomic contexts and partners. With the flagship
The mandate of ISB was to reach the un-banked and program, YES Livelihood Enhancement Action Program
under-banked population (rural, semi-urban and urban (YES LEAP), Your Bank provided comprehensive
areas) by leveraging your Bank’s branch network, financial services (credit, saving and insurance) to Self-
technology edge and relationship capital in the public, Help Groups/Joint Liability Groups through partner
private and social sectors. Following the guiding organizations acting as Business Correspondents and
principle of Frugal Innovations for Financial Inclusion touched over 1.7 millions households across 18 states
(FI4FI), the ISB team developed innovative business and 250 districts.
ROLL-OUT
OF YES LAUNCH
ROLL-OUT OF INTRODUCTION LIVELIHOOD OF LOAN OVER 1 LAC
URBAN OF MOBILE ENHANCEMENT MANAGEMENT ACTIVE SHGS/
YES BANK FINANCIAL TECHNOLOGY ACTION SYSTEM JLGS (17 MN
COMMENCES INCLUSION FOR PROGRAM SPECIFIC TO HOUSEHOLDS)
OPERATIONS PROGRAM TRANSACTION (YES LEAP) ISB PRODUCTS REACHED
AUG OCT JULY SEP OCT JUN SEP MAR MAR DEC MAR
2004 2006 2007 2009 2010 2011 2011 2013 2014 2014 2016
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While being committed to Financial Inclusion, ISB’s with stakeholders (MFIs, investors, rating agencies,
recent focus has been on enhancing technology policymakers, governmental agencies and regulatory
solutions to efficiently scale YES Bank’s outreach to bodies) and making it possible for the Group’s activities
cater to more unbanked and under banked population to touch the lives of millions of people.
of India. ISB introduced a dedicated first of its kind loan
origination & management system for booking SHG AGRIBUSINESS PRODUCT MANAGEMENT
loans. It offers the flexibility of microfinance institutions The Food and Agribusiness sector is fueling the growth
along with regulations and risk controls required for of an emerging India and is of strategic importance to
banks at the same time. All field transactions were the country. With the Government’s impetus on the
recorded in YES Sahaj mobile transaction device sector and a slew of policy measures initiated such as
and monitored centrally. Furthermore, for improved doubling of farmers’ income by 2022, market reforms
monitoring over field operations, increased efficiency for e-mandi, etc., the F&A sector is all set for a quantum
and transparency, tablet solution is being launched. jump, thus creating innumerable opportunities for
This will help bridge the inability of banks to have all the entities associated with it. F&A sector has
brick and mortar branches for serving the remote rural always been one of the focus areas for your Bank,
population. There will be seamless integration between which has put us in a good stead to capitalize on
field operations and loan booking with this initiative. these emerging opportunities. Agribusiness Product
Management (ABPM) is a specialized team which
The ISB team is also mandated with the implementation facilitates building of banking opportunities in the agri
of your Bank’s Financial Inclusion Plan (FIP) as approved value chains through structured financial products
by the Board and the RBI. Your Bank performed well that are regulatory compliant while mitigating credit
across almost all financial inclusion parameters. Your risk. The team is also responsible for ensuring that the
Bank’s radical FI4FI approach received several national bank meets the regulatory Priority Sector Lending
and international accolades. norms. The team of around 110 bankers, comprising
of experienced industry and banking professionals
MICROFINANCE INSTITUTIONS GROUP with relevant domain knowledge and skill sets,
Your Bank remains committed to creating equal interacts with F&A clients to create structured lending
financial opportunities for all. Your Bank promoted propositions for agri value chain participants – farmers,
microfinance as a new asset class, widening access MSMEs as well as corporates. As a part of agri value
to capital through a two-pronged strategy involving chain financing, your Bank has also created a robust
the Microfinance Institutions Group (MFIG), and portfolio against pledge of agri commodities while
mainstreaming bottom-of-the-pyramid clients through ensuring adequate risk mitigation. Within ABPM,
the Inclusive and Social Banking team. Via product there is a specialized team which closely monitors the
suite of MFIG that comprises of Term Loan Facilities, commodity pledge financing portfolio and mitigates
loan syndications, rated capital market loan products the inherent risks through daily monitoring of prices of
like pool securitization, bonds, commercial paper, the funded commodities & marking to market through
pass through certificates (PTCs), Your Bank catalyzes a Commodity Desk and frequent audits of the funded
growth of the Indian microfinance industry. stocks through an internal audit team on the ground.
Another focus area of the Bank has been the emerging
Your Bank aims to access more investors and reduce segment of Farmer Producer Companies (FPC)
fund costs, thereby making it possible to deliver wherein your Bank is partnering with select FPCs with
affordable, fairly-priced and customized financial sustainable business models, thus creating a sizeable &
solutions. The MFIG engaged in advocacy at various profitable portfolio.
levels, emerging as the primary channel to engage
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PROCESS, SERVICE & TECHNOLOGY which provides the Bank a single view of both
OVERVIEW Corporate and Retail customer segments. Lead
SERVICE AND TECHNOLOGY CAPITAL management system has been built for the sales
To enhance customer delight, your Bank has undertaken team to enhance their productivity.
various technology enabled business initiatives
to deliver improved customer experience, ease of Centralized back office functions (NOC-National
banking and operational excellence. As the number Operating Centres) of various businesses are
of ways to connect with customers’ increase and self- working in full capacity in Mumbai and Gurgaon
service channels become the primary way for banking, & recently at Chennai covering spread over 4 lakh
an omni channel approach provides competitive sq. ft. to employ 9,000 employees at full capacity
advantage to the Bank. Your Bank has leveraged state- and expanded to 12,000 by 2020.
of–the-art technology to enable customer accessibility
of all products across all channels through seamless ‘Yes Touch Contact Centre’ located in Gurgaon&
multi-channel integration. To achieve this, the Bank Mumbai provides superior customer service and
has been simultaneously focusing on adoption of efficient business continuity planning along with
innovative practices in digital banking and digitization dedicated Trade & CMS Helpdesk.
of end-to-end processes.
Business Excellence frameworks and quality
Technology is a key enabler and facilitator to the practices, such as Five S, Lean, Six Sigma and
critical goals of your Bank allowing it to make ISO 9001 standards established for (name all
systems and processes even more efficient. Since departments). Back-office operations at NOCs,
inception, your Bank continued to invest heavily in 101 key branches and your Bank’s Internal Audit
technology to provide better products and superior Function have been certified under ISO 9001
customer experience. Your Bank continues to (Quality Management System).
spread its electronically linked Branch Network with
state-of-the-art IT enabled core banking platform to Your Bank’s complaints management processes
ensure customers have access to 24*7 banking services. have been certified under ISO 10002 (Customer
Service - Complaints Management system). Your
BUSINESS PROCESSES - CREATING A Bank used the Complaints and Query Management
QUALITY ORGANIZATION System as a singular touch point to log, handle,
Your Bank continued to refine operational processes escalate and resolve customer grievances.
from the perspective of implementation of Best
Practices, Risk Identification and Containment to
Your Bank strengthened its Business Continuity
bring about greater precision in the management of Management Framework (ISO 22301-certified) and
operations in both the Corporate and Retail side of the Information Security Management Framework (ISO
Bank’s businesses. 27001-certified).There is an on-going evaluation
of all critical parameters, including an end-to-end
In our pursuit to Build a Quality Organization, your (e2e) review of critical business processes.
Bank seamlessly extended its professional approach
to business processes resulting in continuous Your Bank has embarked on a journey towards
improvement. ISO 31000 Standard on Enterprise Risk
Management framework for efficient and robust
Some key initiatives comprised: risk aggregation and monitoring.
Your bank has deployed an enterprise level
Your Bank implemented a framework for the
Customer Relationship Management solution measurement of Customer Experience (internal
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and external) to ensure that customer feedback being taken up for improvements. The complaints
across each touch point (including customer management team conducts Root Cause Analysis on an
complaint registers, customer satisfaction surveys, ongoing basis to arrest the repeated issues.
telephonic surveys and employee feedback) was
collected, analyzed and acted upon. The Service Quality framework of your bank is built
on the world renowned PDCA (Plan – Do – Check –
Your Bank has digitized transaction processing in Act) model of Deming’s improvement cycle. Under
critical functions for straight through processing this, Bank Branches are visited by the especially
and enabling paper less transactions. skilled quality professional for a detailed review of the
service delivery processes. This entails assessment,
Your Bank leveraged social media as a new gap identification, root cause analysis, action plan and
channel for superior customer service to address execution. The entire process is closed looped with
queries/complaints, receive feedback, garner actionable and closures.
inputs on service (VOC),
Your Bank’s three-pronged structure to bolster
Your Bank adhered to Banking Codes and customer service comprised customer experience,
Standards Board of India (BCSBI), Goiporia innovation and quality assurance. The Customer
Committee recommendations, Damodaran Experience unit captured the Voice of the Customer
Committee recommendations and the Committee (VOC), and assessed performance across key service
on Procedures and Performance Audit of Public drivers. These initiatives were managed through the
Services (CPPAPS) guidelines, thereby ensuring Innovation Centre, which acted as a clearing house for
compliance across its critical functions. ideas that helped your Bank implement ‘next practices’
across products, services and channels.
Your Bank is the first Bank in India to be certified
on ISO29990 (Learning Management System) for Specific quality goals were classified across the
YES School of Banking. categories of Process Management and External and
Internal Service Delivery in line with your Bank’s Quality
EMBEDDING A CONTINUOUS IMPROVEMENT Policy and Objectives. Quality improvement drives, like
APPROACH workforce suggestion schemes, Lean Six Sigma, Five
Your Bank’s Quality Assurance and Service Delivery S, ISO 9001 and ISO 10002 were implemented across
Units provided a framework that facilitated continuous business units and branches.
improvement. The Quality Policy at your Bank states,
‘YES BANK’ will strive to ensure a consistent superior Being a member Bank, Service Excellence team
service experience through operational excellence, proactive engages with all the customer facing
innovation, cutting-edge technology and best-in-class channels to ensure compliance with the BCSBI code.
systems, and processes in its mission to become ‘The This has enabled your bank and its service delivery
Finest Large Quality Bank of the World in India’ by processes to be more robust and customer friendly.
2020.
At your Bank, external and internal service delivery
THE SERVICE QUALITY STRATEGY (customer satisfaction) was measured using
The Quality Assurance and Service Excellence teams take dashboards, Voice of the Customer (VOC), Branch
up focus initiatives under the framework of Lean and Six Service Committee Meetings, Sigma Scorecards and
Sigma integrated methodology towards improvement External/Internal Customer Satisfaction Surveys. These
of service and process standards. The team actively initiatives not only helped build mutually-beneficial
engages with customers across various channels to customer relationships, but also ensured stringent
capture the feedback and the same is analyzed before Service Level Agreements (SLAs) across the Bank.
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The YES Service Program, an internal service Setting up of canopies outside the branches for
proposition, disseminated through a defined and customer convenience
on-going service marketing program, and measured
through mystery shopping, on-job monitoring and
Maintaining service gesture and supportive
Branch Executive Leadership Team (BELT) programs, attitude despite long hours by the branch staff.
were held periodically across key branches.
Some of the Key Awards in Quality, Customer Service
Your Bank created a knowledge pool of Six Sigma/Lean and Best Practices:
change agents to reinforce a culture of improvement.
2016 “Golden Peacock- National Quality Award” -
Your Bank undertook several strategic and tactical
Dubai
improvement projects) during the fiscal year.
2016 “Asia Pacific – Best Bank for Payments &
Collection” - Global Finance, London
The leadership of each business unit reviewed existing
2016 “The Banker- Transaction Banking award for
processes, initiated improvements and instilled Payment”- The Banker, London
procedural orientation. Within a short period, your 2016 “Best Trade Finance & Supply Chain Deal” –Asian
Bank has been recognized as ‘World-Class’ in the Banking & Finance, Singapore
Service Category by Asia Pacific Quality Organization. 2016 “Best Cash Management Project in India”- Asian
Your Bank is also the only Indian Bank to win this Banker’s Choice Awards
prestigious global award based on Malcolm Baldrige 2016 “The Best Trade Finance Bank in India.”- Asian
Business Excellence Framework (USA). Banker Transaction Banking Award
2016 “QimPro Qualtech Award for Process
SERVICE INITIATIVES DURING Improvement” – Qimpro Foundation
DEMONETIZATION:
During the Demonetization period, your Bank took INFORMATION TECHNOLOGY
various proactive measures to take care of the Information Technology (IT) is a critical enabler of
difficulties faced by the customers and public at large. business transformation and growth needs to play a
Your Bank received a huge number of appreciations in fundamentally distinctive role as it partners with the
writing and on Social Media due to the measures taken business. IT-enabled businesses, advances products
by the bank. and innovation and foster customer-led growth. As
a new generation Bank, Your Bank has deployed
Some of these were “Technology” as a Strategic Business enabler - to
build a distinct competitive advantage and to achieve
Initiated Extended Hours for Cash Deposit and superior standards of Customer Service.
Currency Exchange
Your Bank has recognized this and has committed to
Your Bank ensured sufficient Cash availability investing in Technology adopting an A-R-T (Alliances,
across most branches Relationships, and Technology) approach where-in we
have identified the need of the current times and pain
Your Bank was amongst the first few Banks to points of the customers concluding on these as a set
configure the ATMs to start dispensing the new of opportunities without compromising on security to
currency notes of 500 and 2000 denomination ensure the customers carry out their banking needs
and services with ease and comfort frame of mind.
Separate Queue for Senior Citizen and Divyang
persons In the Financial Year (FY) 2016-2017, the Technology
unit of the bank was re-aligned with Business and
renamed to Business & Digital Technology Solutions
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Group (BDTS) given the Digital focus and Strategic discounting and disbursal of funds to its vendors
Business Alignment. The vision of the Business & by integrating seamlessly with YES Banks systems.
Digital Technology Solutions Group (BDTS) at Your
Bank remains the same “To make life simpler for our
Your Bank collaborated with a Global Cyber
customers and colleagues”. Security Research Lab as a co-innovation partner
for developing next generation first of the kind
Working on its strategy which is broken into two parts Fintech and Cybersecurity Solutions solution with
i.e. “Run the Bank” to continue work on Initiatives which capability to provide “real time cryptographic
are needed to keep the banks operations running digital transaction signing” at massive scale.
effectively and “Build The Bank” BDTS keeps a laser-
sharp focus on transformation initiatives to meet the Your Bank has launched Corporate mobile banking
Vision of the Group and Your Bank. During the current App which will provide an OMNI Channel online
FY, many new initiatives were completed successfully banking experience to our corporate clients. It will
as well as systems were upgraded to latest versions to enable them to view and authorize transaction
support the growing needs of Your Bank. Few of the requests initiated on ‘Corporate Net Banking’ on
key projects which were bank-wide during the year are their mobile devices even when they are travelling
being highlighted as below: or are out of office.
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INDUSTRY AWARDS AND ACCOLADES 14. CSI – IT 2020 - Best CIO at the IT Innovation &
1. Indian Banks’ Association (IBA) Awards 2017 -The Excellence Awards 2016 - For Big Data Analytics
Best Technology Bank of The Year and Cyber Security.
2.
NETApp innovation Award for YES PAY-Digital HUMAN CAPITAL MANAGEMENT
App to YES Bank CIO; Mr. Anup Purohit Your Bank pursued a strong employee value
proposition of ‘Creating & Sharing Value’ driven by the
3.
National Payments Excellence Awards; to YES ethos of Professional Entrepreneurship and a talent
Bank for following two applications: philosophy of Owner-Partner-Manager model with
CTS-Cheque Truncation System all YES BANKers engaging, directing, managing and
IMPS-Immediate Payment Service accelerating development.
4.
Bankers Frontiers Finnoviti 2017 Awards for The Human Capital engagement practices at your
following two apps: Bank were targeted at developing the Bank’s brand as
SIM SE PAY a ‘Preferred Employer of Choice’. Your Bank continued
YES TAG to attract and retain the best talent from within India
and abroad. Besides, your Bank hired a number of
5. Dynamic CISO Summit & Excellence Award 2017 experienced professionals from other private sector
for “The Hero’s of Tomorrow” banks that strengthened our retail banking leadership.
Your Bank made significant people investments in
6. Fintech India Award 2017, Anup Purohit for API 2016-17, institutionalizing initiatives in the areas of
Banking executive engagement, improving workplace health
and wellness, learning and development. The result of
7. BSE CIOKlub IT Awards 2016- CIO of the Year this investment in people was that, your Bank created
a robust workforce of over 20,000 employees in just
8.
Golden Peacock National Quality Award, 2016 13 years.
at the Institute of Directors (IOD) 2016 World
Congress Some of the key highlights of your Bank’s Human
Capital practices are illustrated below:
9. The Asian Banker Awards 2016
Best Corporate Payment Project Award EXECUTIVE ENGAGEMENT
for Payment Solution implemented for MAKING YES BANK A ‘GREAT PLACE TO
Snap deal WORK’
Best Trade Finance Bank in India Your Bank has been participating in the ‘India’s Best
Companies to Work For ‘study since 2013. The study is
10.
IDRBT Banking Technology Excellence Awards conducted by Great Place to Work® Institute, a leading
2016 - Best Bank Award for Cyber Defence management research and consulting firm. During
this study, confidential and anonymous feedback is
11. Sify Technologies “Digital Innovation Champion at sourced by the Institute from randomly-identified YES
CIO Crown 2016, Mumbai”; BANKers, to measure the Bank‘s’ Trust Index’ across
such parameters, as organizational credibility, respect,
12.
IDG 11th Annual CIO100 Symposium & Awards fairness, pride and camaraderie. Your Bank also
“The Transformative 100”; participated in the 2017 study with 100% employees.
The Trust index score has consistently gone up from
13.
iCMG Architecture World Summit 2016 “India 70 in 2013 to 72 in 2014, and subsequently to 74 in 2015
Business CIO’s Award 2016”; and 2016. The scores increased across all parameters.
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Your Bank was declared the 2nd Best Place to Work encouraging open and honest COMMUNICATION,
For in the Banking Sector in 2015. strengthening CONNECT with employees and
community, supporting CAREER development and
While the detailed report is awaited, as per the showing their CARE as an organization.
preliminary report the Trust Index score has improved
to 75 for 2017. Given the increase in headcount in the UNIVERSITY & SCHOOLS RELATIONSHIP
Bank over the last one year and the sample size this MANAGEMENT (USRM)
time was the entire employee base, the increase in the The University & Schools Relationship Management
score is significant. (USRM) program is a structured, sustainable and
scalable engagement process, which has created and
maintained maximum mindshare for YES BANK, and
Hiring of 100+ management plays a pivotal role in building YES BANK’s brand as
graduates from premier a ‘Preferred Employer of Choice’ among the Best
Educational Institutions in India and abroad. Hiring of
B-Schools in FY 2016-17 through
100+ management graduates from premier B-Schools
the Y-PEP (YES Professional in FY 2016-17 through the Y-PEP (YES Professional
Entrepreneurship Program), the Entrepreneurship Program), the flagship program for
campus recruitment is testimony to the success of the
flagship program for campus
USRM program.
recruitment is testimony to the
success of the USRM program. The USRM Team launched the 5th edition of YES BANK
Transformation Series, a case study competition
themed on ‘Innovation to Impact’. It saw participation
5 C’S EMPLOYEE ENGAGEMENT MODEL from over 30,000 students from 700+ reputed Indian
and international institutes.
CULTURE
CAREER CARE
YES BANK
VALUES
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Business Goals at every stage of the Organization’s reiteration of Prevention of Sexual Harassment policy
growth. All learning & development initiatives at YES amongst all executives, the Bank launched “Say YES
BANK are domiciled under the aegis of this dedicated to G.R.A.C.E” (Gender Respect And Commitment
knowledge function. to Equality). This initiative is applicable to all YES
BANKers irrespective of gender. Though keeping in
The key focus areas for YSB are: mind the focus on women safety in India, this initiative
has played a key role in gender sensitization.
1. Massively multiplying Leadership Capability and
Capacity REWARDS AND RECOGNITION
Your Bank was recognised as:
2. Enabling Scale Up of Retail Franchise
No. 2 ‘Dream Company to Work For’, Best
3. Business Priorities Employer of the Year’, ‘Best Employer Brand
Design Thinking, Innovation, Creativity led of the Year (Banking Sector) by the World HRD
Entrepreneurship (DICE) Congress 2017
Productivity
Cross Sell First and only Learning & Development function
Service Culture in the Indian Banking Industry to be awarded dual
Compliance Culture international certification in ISO 9001:2008 and
ISO 29990:2010 in 2016
4. Digitalization (GO DIGITAL)
‘Best Employee Engagement Strategy’ by HT Mint
YES UDAAN HR Innovation Awards, 2016
Your Bank associated with Project Udaan, an
ambitious project undertaken in partnership with ‘L&D Team of the Year’ by TISS Leapvault CLO
the Ministry of Home Affairs and the National Skill Awards, 2016
Development Corporation (NSDC), to provide training
and employment opportunities to Jammu & Kashmir’s Most Inspiring Workplace of the Year 2015 – Private
youth. Your Bank launched the 4th edition of YES Sector Banks awarded by Banking Frontiers
UDAAN, offering Certification in Banking Fundamentals
program. The program received over 280 applications, No. 2 in Banking under India’s Best Companies to
out of which 23 youths were screened and selected Work For 2015 (GPTW Institute)
through an online aptitude test, followed by a selection
interview. The shortlist saw equal participation in Runners up of BML Munjal Awards 2015 for Business
terms of Gender, with 12 male and 11 female applicants Excellence through Learning & Development
selected for the training. (Private Sector – Services category).
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value. The Board of Directors of the Bank has Risk, Concentration risk etc., BASEL II / III compliance,
overall responsibility for Risk Management. The Risk Internal Capital Adequacy Assessment Process (ICAAP)
Management Architecture of your Bank is overseen review, migration to advanced approaches for capital
by five Board level Committees viz. Risk Monitoring charge computation and Bank wide Stress testing.
Committee (RMC), Audit Committee (AC), Fraud Your Bank has further constituted two Committees -
Monitoring Committee (FMC), Wilful Defaulters & Enterprise Risk and Capital Management Committee
Non-Cooperative Borrowers Committee and Board (ERCC) and Reputation Risk Management Committee
Credit Committee (BCC) which strives to put in (RRMC). ERCC is responsible for overseeing Enterprise
place specific policies, frameworks and systems for Risk Management, Capital Management, and ensuring
effectively managing the various risks. that all material risks are identified, measured,
monitored and controlled in accordance with Bank’s
The day-to-day functioning is managed by the Risk Risk Appetite, as well as, within Regulatory guidelines.
Management Department (RMD). The RMD is headed The RRMC oversees Reputation Risk Profile, designs
by the Chief Risk Officer (CRO). The Chief Risk Officer proactive steps for enhancement of Reputation of the
(CRO) is responsible for an effective implementation Bank and management of Reputation Risk events for
of an enterprise wide risk management framework and the Bank.
risk culture through various risk policies, processes,
thresholds and controls that would enable prompt Your Bank has successfully migrated to BASEL-II
risk identification, accurate risk measurement and capital adequacy norms since March 31, 2009. Under
effective risk mitigation. CRO is also responsible for this, it has adopted the ‘Standardized Approach’
risk compliance and monitoring as well as reviewing for measurement of Credit Risk, ‘Basic Indicator
and presenting various risk reports, policies and Approach’ for Operational Risk and ‘The Standardized
dashboards to RMC and Board. Duration Approach’ for Market Risk. Your Bank has also
implemented the Basel-III norms, and has laid down
The Risk Management Department consists of various a roadmap for migration to advanced approaches
teams such as Credit Risk Unit, General Legal Counsel for capital charge computation, across Credit Risk,
and Risk Control Units. Credit Risk Units under the Market Risk and Operational Risk. Your Bank has also
supervision of their respective Credit Risk Heads are formulated an overarching ERM Policy, an extensive
responsible for evaluating, rating and underwriting policy on ICAAP, commensurate with the Bank’s size,
credit. Risk Control Units such as Market Risk, level of complexity, risk profile and scope of operations.
Operational Risk, Enterprise Risk, Information Security, Your Bank has thus evolved a robust enterprise-wide
Portfolio Analytics Unit, Credit Risk Control Unit, Credit risk management framework which is geared to
Mid Office, Credit Intelligence & Analytics and Risk support the business plans of the Bank.
Containment Unit are responsible for independent
review, monitoring and reporting of all risk control CREDIT RISK
parameters and taking appropriate corrective actions Your Bank’s Credit Risk management is governed by
where necessary. These units under the supervision a comprehensive and well-defined Board approved
of Chief Risk Control Officers (CRCOs) are also Credit Policy. It encompasses credit approval processes
responsible for ensuring compliance to internal policies for all business segments, along with the guidelines for
and regulatory guidelines. monitoring and mitigating the risks associated with
them. All corporate credit proposals are approved
ENTERPRISE RISK MANAGEMENT either through a Committee approach or through
Your Bank has an Enterprise Risk Management Unit Joint Delegation, depending on rating and exposure
(ERM) that is responsible for implementation of ERM thresholds outlined in the Credit Policy. Your Bank
framework, Risk Aggregation, Risk based pricing, Pillar currently has three committees for approving credits,
II Risk assessment of – Reputational Risk, Compliance viz. Board Credit Committee (BCC), Management
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Credit Committee (MCC) and Executive Credit for migration to Internal Ratings Based (IRB) approach
committee (ECC). Of these, the BCC is a Board level and Ind AS for Credit Risk. Your Bank also has an active
sub-committee, while MCC and ECC comprise Top legal department that helps in assessing and managing
and Senior management personnel. Joint Delegation material legal risks. The department has developed a
involves two or three approvers jointly approving the comprehensive set of standard documents for various
proposal, which primarily addresses large volume types of credit products and is responsible for ensuring
of small ticket proposals. While exercising their legal compliance of applicable laws and ensuring that
sanctioning powers, these designated committees/ the documentation entered into by the Bank is legally
functionaries exercise the highest level of due diligence, valid and enforceable.
and ensure adherence to the Bank’s Credit policy and
other regulatory guidelines. MARKET RISK
Your Bank’s Market Risk management is governed by
The appraisal process encompasses a detailed risk comprehensive Board approved policies such as Market
assessment and rating of obligors, using your Bank’s Risk Policy, ALM Policy, Liquidity Policy, Investment
rating models. These models have been developed Policy, Hedging Policy, Stress Testing Policy, Derivative
in conjunction with a reputed external credit rating Policy and a Derivative Appropriateness Policy to
agency, and cover all corporate business segments of ensure that risks underwritten across business activities
your Bank. The ratings of customers are assessed based are within the stipulated risk appetite of the Bank, and
on their financial performance, industry characteristics, also to ensure that similar risks are aggregated. These
business positioning, project risks, operating policies have been benchmarked with industry-best
performance and other non-financial parameters, such practices and RBI regulations.
as quality of management and conduct of account.
Your Bank additionally has in place, scorecards for Your Bank has an integrated, straight-through
specific schematic programs, in case of Retail and SME processing and state-of-the-art treasury system for
borrowers. enabling better risk management. Your Bank measures
liquidity, currency, and interest rate risks through
This function works in close coordination with various various metrics, viz. Liquidity Gap Analysis, Dynamic
business segments to periodically review the individual Cash Flow Analysis, Intraday Liquidity Monitoring,
borrower relationships, identify early warning signals Liquidity Coverage Ratio, along with other Liquidity
and assess the overall health of borrowers. Your Ratios, Value at Risk (VaR), Earnings at Risk (EaR)
Bank has taken proactive measures to ensure that and Market Value of Equity, Sensitivity Analysis,
delinquencies are maintained at a minimum level, among others using robust internal risk models. Your
through robust post-sanction monitoring processes. Bank regularly conducts stress testing to monitor the
There is a dedicated team, which works towards Bank’s vulnerability towards extreme, but plausible
ensuring compliance to the sanctioned terms and unfavourable shocks. Your Bank monitors and
conditions, through an internal tracking system. There controls its risk, using various internal and regulatory
is also an independent ‘Portfolio Analytics Unit’, risk limits for trading book and banking book, which
which is responsible for monitoring the entire credit are set according to a number of criteria, including
portfolio across all segments, including monitoring economic scenario, business strategy, management
of early warning signals, identifying portfolio trends, experience, peer analysis and the Bank’s risk appetite.
and generating portfolio level MIS, covering various The risk reporting mechanism in the Bank comprises
credit quality indicators. Further, ‘Credit Risk Control disclosures, and reporting to the various management
Unit’ is responsible for independently reviewing your committees, viz. Investment Committee, Asset Liability
Bank’s credit policies and programs, including rating Committee, among others.
models for corporates and scorecards for retail /
program based lending. The unit is also responsible
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Your Bank has also put in place a Product and Process Further, physical risks are risks which arise from
Approval Committee (PPAC), which covers the approval the impact of climatic (i.e. extremes of weather) or
and risk evaluation process, of all the new products/ geologic (i.e. seismic) events. Extreme weather or
modifications to existing processes. Additionally, your geologic events, due to climate change increases the
Bank has also constituted Outsourcing Management risk to the Bank’s physical assets and poses a risk of
Committee (OMC) to ensure effective due diligence service disruption. Your Bank is ISO 22301 certified, an
and monitoring of your bank’s outsourced activities on International Business Continuity Standard, to manage
continuous basis. its business continuity and has a robust Business
Continuity Plan to manage any potential service
CLIMATE RISK disruptions
Environmental events have the potential to affect
the efficiency and effectiveness of markets, financial For more information on the Bank’s positive impact
institutions and the economy at large. Today’s risk climate finance, please refer to pages 62-65.
environment is increasingly seeing impacts that were
previously considered by financial institutions to be INTERNAL AUDIT
externalities becoming, more material. Thus, Your Bank Your Bank’s Internal Audit department performs
has classified climate related risks as Transition Risks independent and objective assessment to monitor
and Physical Risks. adequacy, effectiveness and adherence to the internal
controls, processes and procedures instituted by the
Your Bank has identified transition risks as risks which management and extant regulations.
arise from efforts to address environmental change,
including but not limited to regulatory changes in This function supports your Bank’s role in safeguarding
policies, technological changes or shifts in investor its assets. The function has adopted a Risk-based
sentiment and consumer behavior. Further, with approach of Internal Audit (RBIA). The primary focus
rising awareness on Environment and Social (E&S) of the audit is on key risk areas, which are of substantial
issues globally, countries have established robust E&S importance to the Bank. The RBIA approach has been
regulations that specify requirements for operating thoughtfully structured taking into account the RBI
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guidelines and internationally established practices. strategic goals of transparency and trust, among all its
The Internal Audit department reports to the Managing stakeholders. Your Bank has a dedicated Compliance
Director & CEO for day-to-day activities and to the Department for ensuring regulatory compliance, across
Audit Committee for Audit Planning & Reporting. all its businesses and operations. The key functions
Additionally, your Bank also subjects its operations to of this department includes, dissemination of key
Concurrent Audit by reputed audit firms to complement regulatory updates affecting the various businesses of
its Internal Audit function. The Concurrent Audit covers your Bank, review of new products and processes from
core activities such as the Credit Portfolio, Financial a regulatory compliance perspective, provide guidance
Markets, Operations, and Branches. All audit reports on compliance-related matters, impart training to
are circulated to the relevant management teams and employees on compliance aspects, among others. Your
the Audit and Compliance Committee of the Board. Bank has also put in place a ‘Know Your Customer’ and
‘Anti-Money Laundering Policy, ’approved by the Board
Your Bank’s Internal Audit department is ISO 9001:2008 of Directors, and transaction monitoring procedures, as
certified (Quality Management System). per the RBI guidelines.
COMPLIANCE
Your Bank has institutionalized a strong compliance
culture across the organization, pursuant to its
The Bank has continued to deliver on all key parameters with robust growth in net income, stable net interest
margins, improving liability franchise with a CASA ratio of 36.3% (an improvement of 8.2% over March 31, 2016)
and stable asset quality (excluding one-off item, expected to be recovered in the near term). This helped the Bank
to generate strong shareholder returns with basic and diluted EPS increasing to ` 78.89 and ` 76.77 respectively,
taking the book value up to ` 483.1.
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OPERATING PERFORMANCE
` in millions
Operating expenses increased by 38.3% from ` 29,763.71 millions in FY 2015-16 to ` 41,165.41 millions in FY 2016-17.
Key drivers of operating expense growth were continued investment in people, growing branch network of the
bank and scaling up of retail asset and credit card business of the bank.
Provisions and contingencies (including tax) increased by 42.2% from ` 17,630.52 millions in FY 2015-16 to `
25,074.27 millions in FY 2016-17.
Net Interest income (NII) of the Bank increased by 26.9% to ` 57,973.07 millions during FY 2016-17 as compared
to ` 45,667.23 millions during FY 2015-16. Increase in NII is on the back of improvement in CASA mix and increase
in net interest earning assets.
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NON-INTEREST INCOME:
` in millions
Non-interest income consists of commission and fee income, income from transaction banking business,
derivative and foreign exchange income, gain on sale of securities and other income. Non-interest income of the
Bank increased by 53.3% to ` 41,567.57 millions during FY 2016-17 as compared to ` 27,121.47 millions during FY
2015-16. Increase in non-interest income is primarily due to increase in commission and fees income, higher flows
in transaction banking business and gain on sale of securities.
OPERATING EXPENSES
The following table sets forth, for the periods indicated, the principal components of Operating expenses
` in millions
Non-interest expenses primarily include employee expenses, depreciation on assets and other administrative
expenses. Non-interest expenses increased by 38.3% from ` 29,763.71 millions in FY 2015-16 to ` 41,165.41 millions
in FY 2016-17.
The Bank continued to make substantial investments in human capital, information technology and branch
expansion to meet its growth targets. As a result, operating expenses increased by 38.3% from ` 29,763.71 millions
in FY 2015-16 to ` 41,165.41 millions in FY 2016-17. Employee costs increased by 39.2% from ` 12,968.02 millions in
FY 2015-16 to ` 18,050.43 millions in FY 2016-17, primarily due to the expansion of the branch network resulting in
headcount increasing from 15,000 as at March 31, 2016 to 20,125 as at March 31, 2017. Employee costs accounted
for 43.8% of our operating expenses for the FY 2016-17 compared to 43.6% for the FY 2015-16. Rent, taxes and
lighting (other operating expenses) also increased by 24.4% to ` 3,791.82 millions in FY 2016-17 on account of
the branch expansion to 1,000 as on March 31, 2017 from 860 as on March 31, 2016. The bank also scaled up
investments in information technology, retail asset and credit card business which contributed to increase in
operating expenses. Despite increasing investments in people and branches, the Bank maintained a satisfactory
cost to income ratio of 41.4% for the FY 2016-17.
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FINANCIAL CONDITION
ASSETS
` in millions
At At
Particulars % change
March 31, 2017 March 31, 2016
Assets
Cash and bank balances 195,494.44 82,184.25 137.9%
Cash and balances with RBI 69,520.70 57,761.64 20.4%
Balances with banks and money at call and short notice 125,973.74 24,422.60 415.8%
Investments 500,317.98 488,384.66 2.4%
SLR investments* 355,127.42 351,862.55 0.9%
Non-SLR investments 145,190.56 136,522.11 6.3%
Advances 1,322,626.77 982,099.27 34.7%
In India 1,262,286.76 967,109.46 30.5%
Outside India 60,340.00 14,989.81 302.5%
Fixed assets 6,835.39 4,707.18 45.2%
Other assets 125,324.60 95,258.77 31.6%
Total 2,150,599.18 1,652,634.12 30.1%
* Includes investment in government securities, Banks in India are required to maintain a specified percentage, currently 20.5%, of
their net demand and time liabilities by way of liquid assets like cash, gold or approved unencumbered securities.
Total assets of the Bank increased by 30.1% from March 31, 2017 primarily due to an increase in
` 1,652,634.12 millions at March 31, 2016 to ` 2,150,599.18 investments in government securities by ` 3,264.87
millions at March 31, 2017, primarily due to 34.7% millions from ` 351,862.55 at March 31, 2016 to
increase in advances. ` 355,127.42 at March 31, 2017.
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FINANCIAL CONDITION
LIABILITIES
` in Million
At At
Particulars % change
March 31, 2017 March 31, 2016
Liabilities
Capital 4,564.86 4,205.32 8.5%
Reserves and Surplus 215,975.74 133,660.67 61.6%
Deposits 1,428,738.57 1,117,195.33 27.9%
Current deposit accounts 190,878.20 109,250.77 74.7%
Saving Account 327,818.30 204,176.99 60.6%
CASA 518,696.50 313,427.76 65.5%
Term Deposit 910,042.07 803,767.58 13.2%
Borrowings 386,066.73 316,589.77 21.9%
Borrowing in India 225,174.46 210,459.83 7.0%
Borrowings outside India 160,892.27 106,129.94 51.6%
Other liabilities and provisions 115,253.29 80,983.03 42.3%
Total 2,150,599.18 1,652,634.12 30.1%
125
The A.R.T. of Banking
MANAGEMENT DISCUSSION
AND ANALYSIS (CONTD.)
At At
Capital Adequacy Ratios
March 31, 2017 March 31, 2016
As per Basel III norms, your Bank had a capital (MCA) has notified these accounting standards
adequacy ratio of 17.0% as at the end of March 31, 2017. (Ind AS) for adoption. For banking companies, the
As per Basel-III, Tier-I capital ratio was 13.3% and the implementation of Ind AS will begin from April 1, 2018
Tier-II capital ratio was 3.7% as at March 31, 2017. The onwards, with comparatives for the year beginning
bank had raised ` 49,066.50 millions through QIP and April 1, 2017. The Ind AS quarterly financials of
` 30,000.00 millions of Basel III compliant AT-1 bonds FY 2017-18 will need to be published as YoY comparison
which helped in strengthening the capital adequacy of from June 2018 onwards.
the bank.
As per RBI directions, your Bank has taken following
SUBSIDIARY PERFORMANCE steps so far:
YES Securities (India) Limited (YSIL) is the Bank’s
Broking and Investment Banking subsidiary. During Submitted Proforma Ind AS financial statements
FY 2016-17 profit after tax of YSIL increased from to the RBI for the half-year ended September 30,
loss of ` 97.58 millions in FY 2015-16 to profit of ` 2016, as required.
97.89 millions in FY 2016-17. Total revenue of YSIL
increased by 161% from 244.51 millions during
Yes Bank has formed Steering Committee for
FY 2015-16 to 637.90 millions in FY 2016-17. Ind AS implementation. The Steering Committee
comprises Chief Financial Officer (CFO)
UPDATE ON IND AS IMPLEMENTATION: (Chairman), Chief Risk Officer (CRO), Chief
The Institute of Chartered Accountants of India has Operating Officer (COO), Chief Information Officer
issued Ind AS (a revised set of accounting standards) (CIO) and members of the Senior Management
which largely converges the Indian accounting from Financial Management, Risk Control and
standards with International Financial Reporting Treasury Operations. The Committee oversees
Standards (IFRS). The Ministry of Corporate Affairs the progress of Ind AS implementation in the
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ANNUAL REPORT 2016-17
Bank, and provides guidance on critical aspects Your Bank has demonstrated time and again its ability
of the implementation such as Ind AS technical to raise Capital. During the FY 2016-17 your bank
requirements, systems and processes, business successfully raised ` 30.0 Billion Additional Tier (AT)
impact, people and project management. The 1 capital and QIP issue of USD 750 millions, which
Committee closely reviews progress of the was the largest Private Sector Issue in INR terms,
implementation. demonstrating its ability to raise capital across various
macroeconomic cycles.
Your Bank will continue to liaise with RBI and industry
bodies on various aspects pertaining to Ind AS Your Bank is also committed to provide outstanding
implementation. service delivery and quality experience to its customers
through our new age technology platforms and
SWOT ANALYSIS continuously evolving digital channels. These alternative
STRENGTHS digital channels increase efficiency, improve service,
Your Bank has displayed strong financial performance enhance customer experience as well as reducing
each year across the macroeconomic cycles while operative costs in the long run. Your bank has been the
withstanding domestic and global adversities. This First to create UPI compliant Mobile integrations for
is given the Bank’s focus on Knowledge Banking, merchants and also to launch First wallet on BOT. Your
superior Human Capital and its commitment to provide Bank was the 1st to implement API Banking in 2015, and
outstanding service and delivery experience to its is now partnering with corporates and startups to offer
customers. ‘Banking-as-a-Service” and allow the customers to build
their own solutions using Your Bank’s expertise. Your
Total Assets and Net Profit have increased with a healthy Bank’s endeavor is to become one of the technology
CAGR of 21.4% and 26.5% respectively showcasing and digital pioneers of the industry.
strong growth and consistency. Going forward, your
Bank is committed to replicate the success of the Last but not the least, your Bank’s performance is
corporate business into Retail businesses as well. attributable to the finest human capital and talented
management cadre. Your Bank has always emphasized
In spite of such higher than market growth and on ‘Knowledge’ as a key differentiator and over the years
macroeconomic challenges which the banking industry has developed finest human and intellectual capital by
has been impacted by, your bank has been able to equipping executives with skills and knowledge through
maintain a healthy Asset Quality consistently over the initiatives viz. Yes School of Banking. Your Bank has a
past many years. It is reflective of the bank’s robust total of 20,125 employees as on March 31, 2017 with an
Risk Management approach and well defined controls, average age of 31 years. The average vintage for Top
checks and processes that your bank has developed Management is 6 years, while for Senior Management
since inception, hereby protecting Shareholder’s is 7 years showcasing the longevity and commitment
interest. Your Bank had delivered RoA (annualized) at of its exceptional management cadre.
or above 1.5% and RoE (annualized) around 20%, over
last eight years. WEAKNESS
In spite of demonstrating consistent growth over the
Low Liquidity which was once a weakness for years, your bank is still a relatively small player in the
your Bank is now a key Strength as CASA Ratio Indian Banking industry with market share of 1.7% in
has grown with CAGR of 42.2% to 36.3% as on Advances and 1.3% in Deposits. However, the market
March 31, 2017. This is a result of increase in national share as well as mind share is increasing rapidly on
presence and investment in Technology resulting in account of strategic investments made by your bank
development of new Digital Channels, well established in Technology, Human Capital and Infrastructure. The
brand, expanding franchise and technology innovations.
127
The A.R.T. of Banking
MANAGEMENT DISCUSSION
AND ANALYSIS (CONTD.)
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ANNUAL REPORT 2016-17
before our eyes. Disruptive technologies such as Big resulting in stressed assets in the banking sector.
Data, Blockchain, Artificial Intelligence (AI), IoT are Despite government’s efforts at faster clearances of
changing the face of business. projects, non conducive market conditions and lack of
promoter interest are holding back a sustained recovery
Given the improving macroeconomic situation locally in investment demand. With evidence of populism
as well as globally provides a great opportunity for across some of the key developed economies, the
our existing and well established corporate businesses threat of trade protectionism has risen considerably in
to improve further at a rapid pace. Demonetization the last few months. This could provide considerable
and the focus on digital has also created some good uncertainty for both merchandise and services exports
opportunities for our retail business franchise to flourish. from India. Meanwhile, rupee has been one of the
Your bank has thrived during periods of disruptions outperformers among emerging market currencies
since inception and its endeavor is to continue to do so. with 2017 YTD appreciation of 5.5% against the dollar -
further strength could potentially result in some loss of
THREATS competitiveness in global export market.
Private investment currently remains tepid amid excess
capacities, stressed balance sheets and excessive
leverage especially in infrastructure companies, thereby
129
The A.R.T. of Banking
DIRECTORS’ REPORT
To the Members, 13.3%, ensuring that the Bank is well positioned for
Your Directors are pleased to present the Thirteenth growth. Further, during FY 2016-17, your Bank raised
Annual Report on business and operations of your ` 30,000 millions of Basel III Compliant Additional
Bank together with the audited accounts for the year Tier-1 (‘AT1’) Bonds through private placement. The
ended March 31, 2017. Bonds were listed on the BSE Limited and its proceeds
qualify for Basel III Tier-I Capital. The Bonds have been
BUSINESS OVERVIEW AND OUTLOOK rated as CARE AA (Stable Outlook) by Credit Analysis
Your Bank performed well in Financial Year and Research Limited (‘CARE’), ICRA AA (Hyb), Stable
(‘FY’) 2016-17 with a net profit of ` 33,300.96 millions by ICRA Limited (‘ICRA’) and IND AA (Stable Outlook)
which is an increase of 31.1% from FY 2015-16. Your by India Ratings & Research - A Fitch Group Company
Bank showed continued acceleration and momentum (‘India Ratings’).
in building a strong liability franchise with CASA ratio
at 36.3% at the end of FY 2016-17. Your Bank has also Your Bank continued its leadership in Green
completed its Retail Assets Product Suite and remains Infrastructure Bonds and raised ` 3,300 millions
focused on increasing diversification in advances by (approx. USD 50 millions equivalent) through an issue
growing the Retail and SME book. In terms of Human of a 7-year Green Infrastructure Bonds to FMO, the
Capital strength, your Bank has achieved a significant Dutch Development Bank, on a private placement
milestone in FY 2016-17 by crossing the 20,000 mark. basis. FMO invested in your Bank’s bonds through
FMO’s own sustainable bonds. This was FMO’s 1st
Your Bank’s branch network stood at 1,000 branches investment in a Green Bonds in India. This was the third
and 1,800+ ATMs (including Bunch Note Acceptors) as such green bond issuance by your Bank after the highly
on March 31, 2017. Your Bank is also in the process of successful maiden issuance of ` 10,000 millions (USD
commissioning its single largest National Centralised 160 millions equivalent) in February 2015 followed by
Operations Management & Service Delivery facility ` 3,150 millions (USD 50 millions equivalent) private
in Ambattur, Chennai. Your Bank has adopted an placement to International Finance Corporation (‘IFC’),
‘Alliances, Relationships & Technologies – ART’ Washington in August 2015.
approach to Banking by building strong relationships
with firms across multiple domains including Fintech, Your Bank also successfully raised ` 21,350 millions of
Responsible Banking, Human Capital and leveraging Senior Long-term Infrastructure Bonds. The issue was
their innovations to provide a superior Banking rated ICRA AA+ by ICRA and CARE AA+ by CARE.
experience.
Your Bank signed an MoU for a USD 50 millions loan
STATE OF THE AFFAIRS OF THE BANK from IFC, Washington, to be used exclusively to lend to
FY 2016-17 was a significant year in your Bank’s women-owned businesses. This project is part of the
lifecycle. Your Bank continued on its consistent Women Entrepreneurs Opportunity Facility (‘WEOF’),
performance with Profit after Tax (‘PAT’) growing to the first-of-its-kind global facility dedicated to
` 33,300.96 millions from ` 25,394.47 millions showing expanding access to capital for approximately 100,000
a Y-o-Y growth of 31.1%. women entrepreneurs.
On March 31, 2017, your Bank successfully issued Your Bank was the first bank in India to commence the
32,711,000 Equity shares by way of Qualified operations at International Financial Services Centre
Institutions Placement at a price of ` 1,500.00 per (‘IFSC’) at GIFT City, Gujarat (‘IBU’). Setting up of an
equity share aggregating to ` 49,066.50 millions IFSC in India has been the vision of Hon’ble Prime
(approx. USD 750 millions) resulting in dilution of 7.2% Minister of India, as this would be a major game changer
on the expanded capital base. The Bank’s Total Capital for the financial services sector in India. In FY 2016-17,
Adequacy has increased to 17.0 % & Tier I Capital to your Bank’s IFSC gained significant momentum as a
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ANNUAL REPORT 2016-17
specialized knowledge sectors focussed IBU of YES Govt. of India announcing various incentives, to propel
BANK and has reached the milestone of USD 1 billion the growth of IFSC, this will provide further impetus to
balance sheet size as on March 31, 2017. A banking unit your Bank’s operations in GIFT City.
at GIFT IFSC (IBU) is equivalent to a foreign branch and
is a significant development in overall augmentation of Further information on the Business overview and
your Bank’s business model whereby your Bank will outlook and State of the affairs of your Bank is
be in a position to provide comprehensive solutions discussed in detail in the Management Discussion &
for its client’s foreign currency banking requirements. Analysis section.
The opening of an IBU has boosted YES BANK’s
Cross Border Trade offerings, External Commercial There is no change in the nature of business of your
Borrowings, Foreign Currency loans/syndications and Bank for the year under review.
offshore M&A funding business among others. With the
131
The A.R.T. of Banking
Your Bank posted Net Revenues (Net Interest ` 49,066.50 millions by issuing 32,711,000 equity shares
Income and other income) of ` 99,540.64 millions of ` 10 each at an issue price of ` 1,500 per equity share
and Net Profit of ` 33,300.96 millions for FY 2016- including premium of ` 1,490 per equity share. The
17. The Net Revenues and Net Profit for FY 2015-16 Bank accreted ` 48,239.39 millions (net of share issue
was ` 72,788.70 millions and ` 25,394.47 millions expenses of ` 500 millions) as premium, on account of
respectively. Appropriations from the Net Profit have QIP. The Bank also issued 3,243,172 shares pursuant to
been made as per the table given above. Please refer to the exercise of stock option aggregating to ` 1,010.12
the section on Financial and Operating Performance in millions. Overall, 35,954,172 equity shares were issued
the Management Discussion and Analysis for a detailed by your Bank during financial year.
analysis of financial data.
Post allotment of equity shares as aforesaid, the issued,
DIVIDEND subscribed and paid-up share capital of your Bank
Your Bank is rewarding its shareholders by way of stands at ` 4,564,858,130 comprising of 456,485,813
consecutive cash dividends considering the consistent equity shares of ` 10 each as on March 31, 2017.
financial performance of your Bank and promising
future prospects while retaining capital to maintain a Your Bank has not issued any equity shares with
healthy Capital Adequacy Ratio and to support future differential voting rights during the year.
growth. In view of the excellent financial performance
of your Bank and in continuance of the earlier trends During the year, your Bank raised ` 30,000 millions
of cash dividends, the Board of Directors have through private placement by issue of 9.50% Listed
recommended Dividend at a rate of ` 12 per equity Rated Perpetual Subordinated Unsecured BASEL
share of ` 10 each for the year ended March 31, 2017 III compliant Additional Tier I Bonds in the Form of
for approval by the Shareholders at the 13th Annual Debentures. Your Bank has also issued ` 24,650 millions
General Meeting as against ` 10 per equity share for through infrastructure bonds.
the previous year ended March 31, 2016. This dividend
shall be subject to tax on dividend to be paid by the In line with the RBI circular on Capital Adequacy
Bank. This reflects our confidence in your Bank’s ability Framework, your Bank has computed capital charge
to consistently grow earnings over time. for operational, market and credit risk and its Capital
Adequacy Ratio as per Basel III accord as at March 31,
TRANSFER TO RESERVES 2017.
As per requirement of RBI regulations, the Bank has
transferred the following amounts to various reserves Your Bank is well capitalised with a Capital Adequacy
during Financial Year ended March 31, 2017: Ratio of 17.0% as at March 31, 2017; of which Tier I Capital
` in millions Ratio was 13.3% and Tier II Capital Ratio was 3.7%.
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YES BANK has been recognized as the ‘Best Mid- YES BANK was recognized among India’s Best
Sized Bank’ in the 21st edition of the Business BFSI Brands by Economic Times Best BFSI
Today - KPMG India’s Best Banks study. This Brands 2016.
is the 8th year in a row, where YES BANK has
been awarded by Business Today in its annual YES BANK received multiple awards at The Asian
Banking survey for growing robustly, embracing Banker Awards 2016:
technology, innovating and reaching out to people
at the bottom of the pyramid. Best Trade Finance Bank in India;
YES BANK has been adjudged as Asia’s Best Best Corporate Payments Project in India for
Bank for Corporate Social Responsibility at the API Banking implementation for Snapdeal,
Euromoney Excellence Awards 2016 held in Hong one of India’s leading e-commerce players.
Kong.
YES BANK received the Best Bank (midsized)
YES BANK has been adjudged the Best Bank Award for Cyber Defence from RBI Governor Dr.
in Asia Pacific for Payments and Collections by Raghuram Rajan at the IDRBT Banking Technology
Global Finance, a leading international business Excellence Awards 2016.
magazine headquartered in New York.
YES BANK was adjudged Strongest Bank in India
YES BANK won the award for The Best Technology (by balance sheet) – 2015 by The Asian Banker,
Bank of the Year in the medium banks category, Hong Kong. This is the 4th time in the last 5 years
at the Indian Banks’ Association’s (IBA) Banking that YES BANK has been recognized at these
Technology Awards 2017, in Mumbai. global awards.
YES BANK won 2 awards at The Asset Triple A YES BANK has been adjudged the Global winner
Asia Infrastructure Awards 2016, Hong Kong: in ‘Payments’ Category by The Banker magazine,
London (part of the Financial Times Group) at The
Best Energy/Renewable Energy Deal – Solar, Banker Transaction Banking Awards 2016.
India for Porbandar Solar Power ` 1,260
millions non-convertible debentures, in which
YES BANK won the Porter Prize 2016 for
YES BANK acted as sole underwriter. Leveraging Unique Activities. The citation
recognizes YES BANK’s outstanding performance
Best Green Bond Facility within highly in the industry and to recognize its effective
commended category in India, for IFC’s rendering of activities across the value chain that
` 3,150 millions green infrastructure bonds created competitive advantage.
on the back of YES BANK’s domestic green
bond issuance.
YES BANK has won Ethical Corporation
Responsible Business Award 2016, London in the
YES BANK made its maiden entry into the Forbes ‘Most Effective Domestic Community Investment’
Global 2,000 List of World’s Top Companies 2016. category for its program on providing Access to
YES BANK was the youngest Indian Company on Clean & Safe Drinking Water.
the Forbes 2,000 List and also one of the youngest
Banks in the World on this prestigious list.
YES BANK was the sole Indian Bank to be
recognized by Global Finance magazine as part of
its Digital Banks of Distinction Awards 2016 in the
Corporate/Institutional Banking Category.
133
The A.R.T. of Banking
YES School of Banking (the Learning & and Environment Excellence Award 2016 in
Development unit of YES BANK) has been Service Industry category by Indian Chamber of
awarded dual international certification in ISO Commerce, Kolkata in December, 2016.
9001:2008 and ISO 29990:2010, making it the first
Learning & Development function in the Indian
YES BANK’s Sustainability Report was Highly
banking sector to be recognized by this highest Commended as Asia’s Best Integrated Report at
level of quality management system. the Asia Sustainability Reporting Awards 2016 by
CSR Works International, Singapore in November,
YES BANK has won the Reuters Most Accurate 2016.
Forecaster Award for 2016 for the Indian economy
for providing most accurate predictions of EMPLOYEES STOCK OPTION SCHEME
economic indicators in Reuters Poll in January Your Bank has instituted Stock Option Plans to enable
2016. its employees to participate in your Bank’s growth and
financial success. Your Bank provides its employees a
YES BANK received the Commendation Certificate platform for participating in important decision making
for Significant Achievement in Environment and instilling long term commitment towards growth
Management at the CII ITC Sustainability Awards of the Bank by way of rewarding them through Stock
2016 for innovative approaches, including policy Options. In terms of the Compensation and Benefit
and practice, to reduce the Bank’s environmental Policy of the Bank, employees are granted options as
impact in December, 2016. part of Annual Performance Review process based on
their performance as well as to ensure their retention,
YES BANK was conferred the SKOCH Resilient and to hire the best talent for its senior management
India Award (Gold) for Innovative Methods of and key positions.
Training in Bancasurrance at the 48th SKOCH
Summit in December, 2016 in New Delhi. The Bank has Four Employee Stock Option Schemes
in operation viz:
YES BANK won the Good Corporate Citizen Award
2016 in the ‘Banking and Financial Companies’ Joining Employee Stock Option Plan II (JESOP II);
category by Bombay Chamber of Commerce Joining Employee Stock Option Plan III (JESOP III);
and Industry for manifesting corporate social YBL ESOP (consisting of two sub schemes JESOP
responsibility towards civic communities and IV/PESOP I); and
operational excellence, and embedding social YBL JESOP V/PESOP II (consisting of three sub
and economic dimensions of sustainability in schemes JESOP V/PESOP II/ PESOP II -2010).
programmes and practices in October, 2016.
The Employee Stock Option Plans are administered
YES BANK won the prestigious ‘Golden Peacock by the Nomination & Remuneration Committee of the
Award for Sustainability, 2016’, for its nature, Board of the Bank.
scope, and effectiveness of social and economic
dimension of sustainability programs and
practices, at the Institute of Director’s 16th London
Global Convention on Corporate Governance and
Sustainability held in London in December, 2016.
YES BANK was awarded Certificate of
Appreciation in Environment Excellence at
the 10th Environment Partnership Summit
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ANNUAL REPORT 2016-17
The details of vesting of various schemes are as follows: During the year, all new grants have been made in YBL
JESOP V and YBL PESOP II – 2010 and grants under
ESOP Schemes Vesting Period
PESOP-II has been discontinued w.e.f. January 20,
JESOP II 50% at the end of 3rd year and 2010. The Schemes are in compliance with the SEBI
balance at the end of 5th year from (Share Based Employee Benefits) Regulations, 2014.
the Grant date. Source of shares are primary in nature, since your Bank
JESOP III 50% at the end of 3rd year and has been issuing new equity shares upon exercise of
balance at the end of 5th year from
options.
the Grant Date.
JESOP IV 50% at the end of 3rd year and
Options under all the aforesaid plans are granted for a
balance at the end of 5th year from
the Grant date. term of 10 years (inclusive of the vesting period) and
JESOP V 50% at the end of 3rd year and are settled with equity shares being allotted to the
balance at the end of 5th year from beneficiary upon exercise.
the Grant Date.
PESOP I 25% at the end of each year from the No stock options were issued to the Directors of your
Grant Date. Bank.
PESOP II 30%, 30% & 40% at the end of
1st year, 2nd year and 3rd year Various details including option movement during the
respectively from the Grant Date. year under Schemes i.e. JESOP II, JESOP III, YBL ESOP
PESOP II - 2010 30%, 30% & 40% at the end of and YBL JESOP V/PESOP II respectively are as follows:
3rd year, 4th year and 5th year
respectively from the Grant Date.
135
YBL ESOP YBL JESOP V/PESOP II
136
Particulars JESOP II JESOP III YBL ESOP YBL ESOP YBL PESOP
YBL JESOP V YBL PESOP II
(JESOP IV ) (PESOP I) –II 2010
Date of Shareholders Approval July 24, July 24, August 29, August 29, September September September
2006 2006 2007 2007 18, 2008* 18, 2008* 18, 2008*
Total No. of Options approved 5,000,000 5,000,000 5,000,000 5,000,000 9,500,000 15,228,000 20,272,000
Total No. of options outstanding at the - 13,000 119,768 214,465 4,456,232 1,138,135 13,384,420
Beginning of the period
Total No. of Options granted - - - - 821,500 - 872,050
(during FY 2016-17)
The Pricing Formula Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note
1 1 1 1 1 1 1
Options Vested (during FY 2016-17) - - - - 850,700 - 2,766,750
Options Exercised (during FY 2016-17) - 13,000 46,308 81,500 957,727 132,000 2,012,637
Total No. of shares arising as a result of - 13,000 46,308 81,500 957,727 132,000 2,012,637
exercise of option
Options lapsed/ Forfeited - - - - 270,475 - 422,500
(during FY 2016-17)
The A.R.T. of Banking
Total No. of options exercisable at the - - 73,460 132,965 751,030 1,006,135 3,388,833
end of the year
Total No. of options outstanding at the - - 73,460 132,965 4,049,530 1,006,135 11,821,333
end of the year
Variation in terms of options Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note
2 2 2 2 2 2 2
DIRECTORS’ REPORT (CONTD.)
Money realized by exercise of Options - 1,195,775 10,655,180 13,964,718 313,328,858 15,880,648 655,099,337
(during FY 2016-17) (in `)
(i) Total No. of Options granted to Senior Nil Nil Nil Nil 50,000 Nil 170,500
Management Personnel (SMP) (as per (as per
Sub-table 1) Sub-table 1)
(ii) Any other employee who received Nil Nil Nil Nil (as per Nil (as per
a grant in any one year of options, Sub-table 2) Sub-table 2)
amounting to 5% or more of options
granted during that year
YBL ESOP YBL JESOP V/PESOP II
Particulars JESOP II JESOP III YBL ESOP YBL ESOP YBL PESOP
YBL JESOP V YBL PESOP II
(JESOP IV ) (PESOP I) –II 2010
(iii) Identified employees who are Nil Nil Nil Nil Nil Nil Nil
granted options, during any one year
equal to or exceeding 1% of the issued
capital (excluding outstanding warrants
1-33
Corporate Overview
Fair Value of the Options on Profits and Black- Scholes pricing model), for pricing and accounting of options, net profit after tax would have
on EPS been lower by ` 464.49 millions (Previous year: ` 414.23 millions), the basic earnings per share would
have been ` 77.79 (Previous year: ` 59.63) per share instead of ` 78.89 (Previous year: ` 60.62) per
share; and diluted earnings per share would have been ` 75.70 (Previous year: ` 58.34) per share
instead of ` 76.77 (Previous year: ` 59.31) per share.
Weighted average Share/ Exercise Price - 91.98 230.09 171.35 327.16 120.31 325.49
of the shares exercised during the year
Statutory Reports
93-228
(in `)
Weighted average fair values/price of - - 179.62 164.59 655.93 125.24 522.41
the outstanding options (in `)
* The options under the scheme were increased subsequently from 1 crore to 3 crores and finally to 4.5 crores by the shareholders’ approval
dated September 3, 2009 and June 28, 2011 respectively.
The Securities and Exchange Board of India (‘SEBI’) has prescribed two methods to account for stock grants; namely (i) the intrinsic value
method; (ii) the fair value method. The Bank adopts the intrinsic value method to account for the stock options it grants to the employees.
The Bank also calculates the fair value of options at the time of grant, using Black-Scholes pricing model with the following assumptions:
229-338
Financial Statements
137
Note 2: There is no variation in the terms of the options during the Financial Year ended March 31, 2017.
The A.R.T. of Banking
Sub-table 1: Following are the total number of stock options that have been granted to Senior Management
Personnel (SMP) during the financial year ended March 31, 2017:
Sub-table 2: Following are the details of the employee who have received a grant of options amounting to 5% or
more of options granted during the financial year ended March 31, 2017.
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enhance client stickiness and deepen relationships, Fonroche Energie for sale of its 22.3 MW solar
YSIL made enhancements to its product and service plant to Hinduja Group;
proposition such as launch of Equity SIP, online
subscription to IPOs, deployment of a dedicated Book Running Lead Manager to the ` 11.0 billions
HNI dealing desk and introduction of value-linked IPO of Varun Beverages Limited;
brokerage plans. YSIL’s average monthly retail
trading volume grew by 130% to ` 4,440 millions in Book Running Lead Manager to the ` 7.5 billions
FY 2016-17. Retail Broking revenue increased to ` 45.65 QIP of Bharat Financial Inclusion (erstwhile SKS
millions translating to a year-on-year growth of 118%. Microfinance Limited);
Additionally, YSIL proactively assisted its clients to Lead Manager to the ` 70 billions public issue of
invest in new products like Government of India’s NCDs of Indiabulls Housing Finance Limited;
Sovereign Gold Bonds and the CPSE ETF. During the
year, YSIL’s Retail Research desk was acknowledged by
Lead Manager to ` 30 billions public issue of NCDs
Zee Business with India’s Best Market Analyst Award in
the Initial Public Offerings (‘IPO’) category. of Reliance Home Finance Limited;
Exclusive strategic and financial advisor to Travel ii. Your Bank issued 30,000 Rated listed unsecured
Food Services Private Limited for divesting 49% perpetual subordinated Basel III compliant
stake to SSP Group plc; Additional Tier I (AT-1) bonds in the nature of
Debentures of a Face Value of ` 10,00,000/- each
Exclusive strategic and financial advisor to aggregating to ` 30,000 millions on December 23,
2016 and the issue was rated by CARE, ICRA and
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India Ratings. CARE assigned a rating of ‘CARE 2016. Accordingly, Mr. Ajay Vohra ceased to be Director
AA; Stable’, ICRA assigned a rating of ‘ICRA AA of the Bank with effect from April 28, 2016.
(hyb); Stable’ and India Ratings assigned a rating
of ‘IND AA; Stable’. MS. RADHA SINGH:
Ms. Radha Singh was appointed as Director on the
iii. Your Bank issued 3,300 Rated Listed Unsecured Board of the Bank on April 29, 2008. Further, she was
Redeemable Long-Term Bonds in the nature of appointed as Non-Executive Part-time Chairperson
Debentures “Green Infrastructure Bonds” of a of the Bank on October 30, 2014 for a period of two
Face Value of ` 10,00,000/- each aggregating to years and has completed her tenure as Non-Executive
` 3,300 millions on December 29, 2016 rated by Part-time Chairperson of the Bank in terms of RBI
CARE, ICRA and by India Ratings. CARE assigned approval dated August 01, 2014 as on October 29, 2016
a rating of ‘CARE AA+; Stable’, ICRA assigned and accordingly ceased to be Director on the Board of
a rating of ‘ICRA AA+; Stable’ and India Ratings the Bank at the close of business on October 29, 2016.
assigned a rating of ‘IND AA+; Stable’.
MR. M. R. SRINIVASAN AND MR. DIWAN ARUN
BOARD OF DIRECTORS & KEY NANDA:
MANAGERIAL PERSONNEL Mr. M. R. Srinivasan, Non-Executive Non-Independent
Director and Mr. Diwan Arun Nanda, Independent
APPOINTMENT: Director of the Bank, on October 22, 2016 completed
APPOINTMENT OF MR. ASHOK CHAWLA AS their tenure as Directors on the Board of the Bank
NON-EXECUTIVE PART-TIME CHAIRMAN OF in terms of RBI approval dated March 04, 2015.
THE BANK: Accordingly, Mr. M. R. Srinivasan and Mr. Diwan Arun
Mr. Ashok Chawla was appointed as Additional Director Nanda ceased to be Directors on the Board of the Bank
on the Board on March 5, 2016 and subsequently was at the close of business hours on October 22, 2016.
appointed by the Shareholders as an Independent
Director on June 7, 2016 for a period of five years. The Board places on record its appreciation for
Further, RBI vide it’s letter dated August 12, 2016 the valuable services rendered by Mr. Ajay Vohra,
had approved the appointment including terms of Ms. Radha Singh, Mr. M. R. Srinivasan and Mr. Diwan
appointment of Mr. Ashok Chawla as Non-Executive Arun Nanda during their tenure as Directors of
Part-time Chairman of the Bank for three (3) years the Bank.
from the date of his taking charge. Accordingly,
Mr. Ashok Chawla took charge as Non-Executive Considering the above changes, your Bank
Part-time Chairman of the Bank effective from October has Seven (7) Directors consisting of Five (5)
Independent Directors, One (1) Non-Executive
30, 2016 for a period of 3 years.
Director and Managing Director & Chief Executive
Officer (‘MD & CEO’).
The relevant details including profile of Mr. Ashok
Chawla is included separately in the Notice calling the RETIREMENT BY ROTATION
13th Annual General Meeting of the Shareholders. In terms of Section 152 of the Companies Act, 2013,
Mr. Ajai Kumar, Non-Executive Non-Independent
CESSATIONS: Director being liable to retire by rotation, shall retire at
MR. AJAY VOHRA the ensuing AGM and being eligible for re-appointment,
Mr. Ajay Vohra, Independent Director of the Bank, offers himself for re-appointment.
completed his tenure of eight years as Director of
the Bank and hence, in terms of the provisions of KEY MANAGERIAL PERSONNEL
Regulation 10A (2-A) of the Banking Regulation Act Mr. Rana Kapoor, MD & CEO, Mr. Rajat Monga, Chief
1949, has vacated his office with effect from April 28, Financial Officer and Mr. Shivanand R. Shettigar,
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Company Secretary of the Bank are the Key Managerial COMMITTEES OF THE BOARD
Personnel as per the provisions of the Companies Act, The Bank has 12 Committees of the Board which
2013 and rules made thereunder. have been established as a part of the best corporate
governance practices and are in compliance with the
None of the Key Managerial Personnel has resigned or requirements of the relevant provisions of applicable
appointed during the year under review. laws and statutes.
DECLARATION BY INDEPENDENT DIRECTORS The Bank has following Committees of the Board:
The Bank has received necessary declarations from
each independent director under Section 149(7) of the Audit Committee
Companies Act, 2013 and SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 Risk Monitoring Committee
(“Listing Regulations”), that they meet the criteria of
independence laid down in the Companies Act, 2013 Board Credit Committee
and Listing Regulations.
IT Strategy Committee
FAMILIARIZATION PROGRAMS FOR
INDEPENDENT DIRECTORS Corporate Social Responsibility Committee
The various programs undertaken for familiarizing
Independent Directors with the functions and Nomination and Remuneration Committee
procedures of the Bank are disclosed in the Corporate
Governance Report, which forms part of this Annual Stakeholders Relationship Committee
Report.
Fraud Monitoring Committee
NUMBER OF MEETINGS OF THE BOARD
Regular meetings of the Board are held to discuss
Service Excellence, Branding and Marketing
and decide on various business policies, strategies, Committee
financial matters and other businesses. The schedule
of the Board/Committee meetings to be held in the
Board Committee on Willful Defaulters &
forthcoming financial year is circulated to the Directors Non-Cooperative Borrowers
in advance to enable them to plan their schedule for
effective participation in the meetings. Due to business Capital Raising Committee
exigencies, the Board has also been approving several
proposals by circulation from time to time. Committee of Independent Directors
The Board met five (5) times during the Financial The details with respect to the compositions, powers,
Year 2016-17 viz. on April 26 & 27, 2016, June 7, 2016, roles, terms of reference, etc. of these committees are
July 27, 2016, October 20, 2016 and January 19, 2017. given in the report on Corporate Governance which
Additionally, several Committee meetings were held forms part of this Annual Report.
during the year including Audit Committee meeting,
which met six (6) times during the year. CORPORATE SOCIAL RESPONSIBILITY
COMMITTEE:
Detailed information on the meetings of the Board and In compliance with Section 135 of the Companies
its committees are included in the report on Corporate Act, 2013 read with the Companies (Corporate Social
Governance, which forms part of this Annual Report. Responsibility Policy) Rules, 2014, the Bank has
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The A.R.T. of Banking
established Corporate Social Responsibility (‘CSR’) A separate section on Corporate Governance standards
Committee and statutory disclosures with respect to followed by your Bank and the relevant disclosures, as
the CSR Committee and an Annual Report on CSR stipulated under Listing Regulations, Companies Act,
Activities forms part of this Report as Annexure 1. The 2013 and rules made thereunder forms part of the
CSR Policy as recommended by the CSR Committee Annual Report.
and as approved by Board is available on the website of
the Bank. https://www.yesbank.in/pdf/ybl_corporate_ A Certificate from M/s. BNP & Associates, Practicing
social_responsibility_policy Company Secretaries, conforming compliance to the
conditions of Corporate Governance as stipulated
PERFORMANCE EVALUATION OF THE BOARD under Listing Regulations, is annexed to the Report on
In terms of the provisions of the Companies Act, 2013 Corporate Governance, which forms part of the Annual
and Listing Regulations, your Bank has laid down Report.
criteria for performance evaluation of Directors,
Chairperson, MD & CEO, Board Level Committees MANAGEMENT DISCUSSION AND
and Board as a whole and also the evaluation process ANALYSIS
for the same. The Bank has further aligned its Board The Management Discussion and Analysis Report
Evaluation Framework in line with the Guidance Note for the year under review as stipulated in Listing
on the Board Evaluation issued by SEBI vide circular Regulations is presented in a separate section forming
dated January 05, 2017. part of the Annual Report.
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Legal: The Legal Risk Management Third Line of Defence – Internal Audit: The
(LRM) division of the Bank undertakes Bank’s Internal Audit function independently
various activities including advising reviews activities of the first two lines of
business and operational management, defence based on a risk-based audit plan
acting as an independent control and methodology approved by the Audit
function while facilitating business, Committee of the Board. Internal Audit
ensuring legal compliance, assisting provides independent assurance to the
the Board and Committees of the Board, the Audit Committee of the Board,
Board regarding analysis of laws senior management and regulators regarding
and regulations, regulatory matters, the effectiveness of the Bank’s governance
disclosure matters, and potential risks and controls designed for risk mitigation
and exposures on key litigation and and to enhance the Bank’s compliance and
transactional matters. control.
Finance: The Finance vertical provides The Board of Directors of the Bank has overall
key data and consultation to facilitate responsibility for Risk Management. The
sound decisions in support of the Board oversees the Bank’s Risk and related
objectives of the Bank and the control environment, reviews and approves the
business verticals. Finance serves as an policies designed as part of overseeing the Risk
independent control function advising Management practices. The Board ensures that
business management and establishing comprehensive policies, systems and controls
policies or processes to manage risk. It are in place to identify, monitor and manage
has overall responsibility for managing material risks at a Bank-wide level, with clearly
the Bank’s balance sheet and the Bank’s defined risk limits. The Board has laid down a
liquidity and interest rate risk. Risk Appetite framework which articulates the
quantum of risk the Bank is willing and able to
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The A.R.T. of Banking
assume in its exposures and business activities Fraud & Suspicious Transaction Monitoring
in pursuit of its strategic objectives and desired Committee
returns. The Board has also established policies
governing risk management, such as, Enterprise Reputation Risk Management Committee
Risk Management Policy, Reputation Risk Policy,
Credit Policy, ALM Policy, etc. In order to maintain Standing Committee on Customer Service
oversight on risk management, the Board
approves the annual Internal Capital Adequacy IT Steering Committee
Assessment Process (ICAAP) and reviews the
Bank’s Stress Testing framework and the periodic Steering Committee for IFRS (Ind AS)
stress testing results.
Whistle Blower Committee
The Board has put in place five Board level
committees which inter alia pertain to Risk Model Assessment Committee
Management, viz. Risk Monitoring Committee
(RMC), Audit Committee (AC), Fraud Monitoring Risk events, potential threats, performance of the
Committee (FMC), Board Committee on willful Bank vis-à-vis Risk Limits and Risk Appetite, Risk
Defaulters & Non-Cooperative Borrowers (BCWD Profile dashboard covering key risk indicators,
& NCB) and Board Credit Committee (BCC) to etc. are presented to these Committees, with
deal with risk management practices, policies, QoQ/YoY trends highlighted, with level and
procedures and to have adequate oversight on direction of risk. The Chief Risk Officer (‘CRO’) is
the risks faced by the Bank. responsible for the overall Risk Governance and
Supervision, on a day to day basis. CRO ensures
The Board Committees have set up various an effective implementation of an enterprise
management committees for oversight over wide risk management framework and risk
specific risks. culture through various risk policies, processes,
thresholds, controls and continuous training and
Enterprise Risk Management & Capital awareness programmes that enable prompt risk
Management Committee identification, accurate risk measurement and
effective risk mitigation. CRO also ensures risk
Management Credit Committee compliance and monitoring as well as reviewing
and presenting information to the RMC and the
Executive Credit Committee Board.
Asset & Liability Management Committee The Risk Management Department under the CRO
is delegated with responsibilities of managing the
Investment & Financial Market Management risk - including risk assessment, measurement,
Committee control and reporting - by the Risk Monitoring
Committee of the Board. The Risk Management
Operational Risk Management Committee Department consists of various teams such as
Credit Risk Unit, General Legal Counsel and Risk
Outsourcing Management Committee Control Units. Credit Risk Unit is responsible for
evaluating, rating and underwriting credit under
Security Council respective Credit Risk Heads. Risk Control Units
such as Market Risk, Operational Risk, Enterprise
Product Process Approval Committee Risk, Information Security, Portfolio Analytics Unit,
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Credit Risk Control Unit, Credit Mid Office, Credit Since all related party transactions entered into by the
Intelligence & Analytics and Risk Containment Bank were in the ordinary course of business and were
Unit are responsible for independent review, on an arm’s length basis, form AOC-2 is not applicable
monitoring and reporting of all risk control to the Bank.
parameters and take appropriate corrective
actions where necessary. These units under the CONSOLIDATED FINANCIAL
supervision of Chief Risk Control Officer are also STATEMENTS
responsible for ensuring compliance to internal Pursuant to sub-section (3) of Section 129 of the
policies and regulatory guidelines. Companies Act, 2013, the Bank has prepared a
consolidated financial statement of the Bank and also
LOANS, GUARANTEES OR of its Subsidiary, YES Securities (India) Limited, in the
INVESTMENTS IN SECURITIES same form and manner as that of the Bank which shall
Pursuant to Section 186(11) of the Companies Act, 2013, be laid before the ensuing 13th Annual General Meeting
loans made, guarantees given or securities provided of the Bank along with the Bank’s Financial Statement
or acquisition of securities by a Banking company in under sub-section (2) of Section 129 i.e. Standalone
the ordinary course of its business are exempted from Financial Statement of the Bank.
disclosure requirements under Section 134(3)(g) of the
Companies Act, 2013. Further, pursuant to the provisions of Accounting
Standard (‘AS’) 21, Consolidated Financial Statements
CONTRACTS OR ARRANGEMENTS notified under Section 133 of the Companies Act, 2013,
WITH RELATED PARTIES read together with Rule 7 of the Companies (Accounts)
All related party transactions that were entered during Rules, 2014 issued by the Ministry of Corporate
the financial year were in the ordinary course of the Affairs, the Consolidated Financial Statements of the
business of the Bank and were on arm’s length basis. Bank along with its subsidiary for the year ended
There were no materially significant related party March 31, 2017 forms part of the Annual Report.
transactions entered by the Bank with Promoters,
Directors, Key Managerial Personnel or other persons INTERNAL FINANCIAL CONTROLS
which may have a potential conflict with the interest SYSTEMS AND THEIR ADEQUACY
of the Bank. Your Bank has implemented adequate procedures
and internal controls which provide reasonable
All Related Party Transactions are placed before the assurance regarding reliability of financial reporting
Audit Committee for approval. Prior omnibus approval and preparation of financial statements. The Bank also
for normal banking transactions is also obtained from ensures that internal controls are operating effectively.
the Audit Committee for the related party transactions
which are of repetitive nature as well as for the normal AUDITORS
banking transactions which cannot be foreseen and (A) STATUTORY AUDITORS
accordingly the required disclosures are made to the The Members of the Bank at the 12th Annual
Committee on quarterly basis in terms of the approval General Meeting held on June 07, 2016, have
of the Committee. approved the appointment of M/s. B S R & Co.
LLP, Chartered Accountants as Statutory Auditors
The policy on materiality of Related Party Transactions of the Bank for a period of 4 years, subject to the
and also on dealing with Related Party Transactions as approval of the Reserve Bank of India, to hold
approved by the Audit Committee and the Board of office from the conclusion of the 12th AGM till the
Directors is uploaded on the website of the Bank and conclusion of 16th AGM of the Bank to be held in
the link for the same is https://www.yesbank.in/about- 2020, subject to ratification of the appointment
us/corporate-governance. by the Members at every AGM. Accordingly,
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The A.R.T. of Banking
appointment of M/s. B S R & Co. LLP, Chartered had been the Chairperson of the Bank from October
Accountants, as a Statutory Auditors of the Bank 30, 2014 till October 29, 2016. The Bank has always
is required to be ratified by the Members at 13th recognized the importance of appointing directors
AGM, subject to the approval of the Reserve Bank with diverse educational background, functional
of India. The Bank has received the consent from expertise, experiences and skill set, to ensure optimum
the Auditors and confirmation to the effect that Board Diversity, including gender diversity, in fullest
they are not disqualified to be appointed as the conformity with the stipulated regulations. The Bank
Auditors of the Bank in terms of the provisions is in the process of identifying a suitable woman
of the Companies Act, 2013 and rules made candidate in her place. Being a banking company, the
thereunder. Accordingly, the Board of Directors proposed director is required to satisfy the prescriptions
has recommended the ratification of appointment contained in the Banking Regulation Act, 1949; the
of M/s. B S R & Co. LLP, Chartered Accountants, as “fit and proper” criteria prescribed by Reserve Bank
the Statutory Auditors of the Bank, to hold office of India and the internal policies of Bank on ‘Board
from the conclusion of the ensuing AGM till the Diversity, Fit & Proper Criteria and Succession Planning’.
conclusion of the 14th AGM on remuneration to In view of the above, the process has taken slightly
be decided by the Board or Committee thereof, to more time than expected. Nevertheless, the Board and
the Members for approval. the Nomination and Remuneration Committee of the
Board is in the process of appointing a woman director
(B) SECRETARIAL AUDITORS AND at the earliest.
SECRETARIAL AUDIT REPORT
Pursuant to Section 204 of the Companies Act, 2. In respect of compliance with the requirements
2013, your Bank had appointed M/s. Mehta & of Regulation 29(1) (d) of Listing Regulations
Mehta, Practicing Company Secretaries, Mumbai in respect of the Board Meeting held on
as its Secretarial Auditors to conduct the April 27, 2016.
secretarial audit of the Bank for the FY 2016-17.
The Bank provided all assistance and facilities The Board approval for capital raising upto USD 1
to the Secretarial Auditors for conducting billion, inter alia, by way of QIP was first obtained at
their audit. The Report of Secretarial Auditors the Board meeting held on April 22, 2015 in line with
for the FY 2016-17 is annexed to this report as the extant Regulations (subject to final approval
Annexure 2. of the Shareholders), subsequently approved by
the shareholders’ at the AGM held on June 06, 2015
SECRETARIAL AUDITORS’ OBSERVATIONS IN which was in the public domain, when the Board of
SECRETARIAL AUDIT REPORT AND DIRECTORS’ the Bank met on April 27, 2016. Hence, there was no
EXPLANATION THERETO: intention on the part of the Bank to deviate from the
1.
In respect of appointment of woman Director Listing Regulations since the resolution passed by the
as required under Rule 3 of the Companies Board of Directors at their meeting held on April 27,
(Appointment and Qualification of Directors) 2016 was essentially a continuation/reiteration of the
Rule, 2014 and Regulation 17(1)(a) of Listing existing Board and Shareholders’ approvals obtained
Regulations. (Similar observation has been made in 2015 for raising of capital for the Bank, inter alia,
in the Certificate on Compliance with Conditions by way of QIP. However, the Bank has made required
of Corporate Governance issued by M/s. BNP & intimation to Stock Exchanges in October 2016 before
Associates, Company Secretaries). the Board considered the proposal for reiteration and
re-endorsement of the resolution passed by the Board
Ms. Radha Singh, who was on the Board of the Bank of Directors at its meeting held on April 27, 2016 and
for last 8 years, retired from the Board of the Bank at as approved by the Shareholders at the 12th Annual
the close of business on October 29, 2016. In fact, she
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General Meeting held on June 07, 2016 for capital Act, 2013 read with Rule 5(2) of the Companies
raising by way of QIP and other permitted mode. (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 forms part of this report. In
BUSINESS RESPONSIBILITY REPORT terms of Section 136 of the Companies Act, 2013,
As stipulated in Listing Regulations, the Business the same is open for inspection during working
Responsibility Report describing the initiatives taken hours at the Registered Office of your Bank. A
by the Bank from environmental, social and governance copy of this statement may be obtained by the
perspective is attached as part of the Annual Report. members by writing to the Company Secretary of
your Bank.
MATERIAL CHANGES AND
COMMITMENT AFFECTING FINANCIAL (b) The ratio of the remuneration of each Director to
POSITION OF THE BANK the median remuneration of the employees of the
There are no material changes and commitments, Bank and other details in terms of Section 197(12)
affecting the financial position of the Bank which has of the Companies Act, 2013 read with Rule 5(1) of
occurred between the end of the financial year of the the Companies (Appointment and Remuneration
Bank i.e. March 31, 2017 and the date of the Directors’ of Managerial Personnel) Rules, 2014, are forming
report i.e. April 19, 2017. part of this report as Annexure 3.
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market by subsequently raising two other may be increasingly used for strategic decision making
green bonds. In August 2015, the Bank raised by investors. The GBP has the following four key
` 3,150 millions (equivalent to USD 49.4 millions) components that YES BANK has adopted:
through the issue of Green Bonds to International
Finance Corporation (‘IFC’) on a private placement Use of proceeds;
basis, the first investment by IFC in an Emerging
Markets Green Bond issue in the world through
Process to identify, evaluate and select eligible
the first offshore rupee dominated bond or “Green projects;
Masala Bond.”
Management of proceeds; and
Moving ahead with its conviction towards Climate
Finance, YES Bank has raised ` 3,300 millions Reporting.
(equivalent to USD 50 millions) in September 2016,
through an issue of a 7-year Green Infrastructure USE OF PROCEEDS
Bonds to FMO, the Dutch Development Bank, on a The proceeds raised through the issue of these bonds/
private placement basis. This is FMO’s 1st Investment debentures are used in eligible project categories
in a Green Bond issued by a bank in India. The issuance to enhance the long-term resources for funding
is unique owing to its innovative financing structure. infrastructure projects and include all projects funded
FMO, the Dutch Development Bank has used the in whole, or in part, in the fields of renewable and
proceeds of sustainability bonds raised by them to clean energy projects including generation from
invest in this third green bond issued by your Bank. sources such as Wind, Solar, Biomass, Hydropower and
other such projects. Wind, Solar, Hydro and Biomass
The amount raised through all of these issues, are used projects sanctioned post the closure of debenture
to finance Green Infrastructure Projects as per ‘Eligible subscription only (February 24, 2015 for ` 10,000
Projects’ outlined in the Bank’s internal guidelines for millions issue, August 05, 2015 for ` 3,150 millions issue,
adherence to Green Bond Principles. KPMG, India has and September 26, 2016 for ` 3,300 millions issue) are
provided assurance on the use of proceeds for the considered for the allocation of the proceeds from
first two green bonds for FY 2015-16. A third-party Green Bonds.
assurance provider would be providing the Assurance
Services this year, on the use of proceeds in accordance PROCESS FOR EVALUATION AND
with the Green Bond principles. SELECTION OF ELIGIBLE PROJECTS
Along with the Bank’s credit policy that provides
GREEN BOND PRINCIPLES guidance for the identification, formulation and
The Green Bond Principles (‘GBP’) are voluntary appraisal of projects, the Bank has formally adopted
process guidelines intended for broad use by the an Environment and Social Policy which governs its
market that recommend transparency and disclosure, lending decisions. The Project evaluation process
and promote integrity in the development of the Green follows from the interactions with potential borrower
Bond market. The Principles provide issuers guidance to understand the overall aspects of the project and
on the key components involved in launching a credible a comparison against the eligibility criteria. Post
Green Bond; they aid investors by promoting availability preliminary consideration, based on the merits of the
of information necessary to evaluate the environmental project, the evaluation moves to the risk team which
impact of their Green Bond investments; and they assesses it and conveys opinion on detailed due-
assist underwriters by moving the market towards diligence, if required. The eligibility of the project is
standard disclosures which will facilitate transactions. thus confirmed and further documentation is sought
The GBP emphasize transparency and accuracy which as per the Bank’s policies and Green Bond Principles.
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REPORTING Types
of temporary investment instruments for
Communication to investors through an annual update the balance of unallocated proceeds.
would include information on allocation of proceeds:
The proceeds from Green Bonds have been allocated
List
of projects to which Green Bond proceeds to the following eligible projects:
have been allocated;
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and platforms. Your Bank has implemented unique innovation that allows any account
virtualization in its data centers, to ensure its holder to do money transfers, pay utility bills
IT Infrastructure is highly resilient and usage and other mobile banking services, without
is optimized. As a result, your Bank has the need for smart phones or internet.
reduced its carbon footprint. SIMsePAY is a wafer-thin sticker which can
be stuck on any type of SIM card of any Telco
The Bank has embarked upon implementing service provider – Standard, Micro and Nano.
Virtual Desktop Infrastructure (‘VDI’). VDI This sticker installs a SIM Tool Kit (STK) based
refers to the process of running a user app which can be accessed by the consumer
desktop inside a virtual machine that resides on ANY mobile phone without the need for
on a server in the data centre It’s a powerful internet connectivity. The SIMsePAY is linked
form of desktop virtualization because it to a Prepaid Wallet which can be loaded by
enables fully personalized desktops for each the consumer to perform various types of
user with all the security and simplicity of transactions. The transactions are performed
centralized management. VDI will help us using a patented encrypted SMS technology
in streamlining management and costs by to communicate with the servers of the Bank.
consolidating and centralizing the desktops
while delivering end-users mobility. This will Your Bank has also upgraded its Mobile
enable access to virtual desktops anytime, Banking App for seamless customer
from anywhere, on any device. This means a experience. YES Mobile comes packed with
more centralized, efficient client environment a host of exciting features that enable you to
that is easier to maintain and able to respond truly bank On-The-Go. From simplified login
more quickly to the changing needs of the through your fingerprint to transfer funds
user and business. to pay all your bills in one go or experience
the all new augmented reality to locate a
Your Bank is at the forefront on the next- YES Branch nearby. YES Mobile Banking
generation payments system like Unified App comes with over 85 services offering
Payments Interface (‘UPI’), a simplified and to YES Bank customers Anytime, Anywhere
robust payments system being operated Banking.
by National Payments Corporation of India
(NPCI). Leveraging capabilities of the UPI Your Bank has launched Corporate mobile
platform like Phone-linked payments, any- banking App which will provide an OMNI
bank account debit and 1-click 2 factor Channel online banking experience to our
authentication – to deliver a superior user corporate clients. It will enable them to view
experience to customers. We aim to have and authorize transaction requests initiated
the widest range of offerings in the digital on ‘Corporate Net Banking’ on their mobile
payments space by covering multiple use devices even when they are travelling or are
cases either directly via our own branded out of office. The App would allow decisions
offering or via strategic partnerships with to be made on the move, eliminating process
industry leaders, start-up forums, start-ups bottlenecks due to unavailability of the
etc., to emerge as a thought and business decision makers and facilitating faster turn-
leader in the Indian payments space around times.
leveraging the capabilities provided by UPI
and move toward the era of a ‘less-cash’ India. Your Bank has implemented a multi-nodal
Blockchain transaction to fully digitize
Your Bank has launched the SIMsePAY, a vendor financing for Bajaj Electricals. Your
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Bank will leverage IBM Watson Conversation, solution. This integration offers
a cloud-based cognitive service, to enhance automated processing of transactions
the digital experience of partners, corporate with almost zero manual intervention.
clients and developers collaborating YES BANK was the 1st Bank in India to
with them on the integrated Blockchain launch API Banking services, which was
– API Banking platform. Capitalizing on also in collaboration with IBM in 2015;
the efficiency and security features of
Blockchain, your Bank has used the Hyper Use of a permissioned blockchain with
ledger Fabric supported by IBM to design flexibility to add other participants later;
a vendor financing solution which allows
Bajaj Electricals (anchor client) to digitize Use of superior Cryptokey to offer state-
the process for discounting and disbursal of of-the-art security for both documents
funds to its vendors by integrating seamlessly and transactions on the blockchain.
with YES BANK’s systems. The solution
will also facilitate an automated debit from (II) THE BENEFITS DERIVED LIKE PRODUCT
Bajaj Electricals’ account by YES BANK. IMPROVEMENT, COST REDUCTION,
The business logic and rules are captured PRODUCT DEVELOPMENT OR IMPORT
in a smart contract (Chain Code) developed SUBSTITUTION:
by Cateina Technologies. The key business Technology has responded by being true
advantages and highlights of this blockchain strategic partner with business. Many first
implementation for vendor financing include: mover implementations have provided
business, long lasting advantages, as also
The entire process cycle for bill won many accolades and awards for the
discounting reduces from four days Bank. One of the finest direct banking
(owing to manual intervention and platforms, first bank in India to offer two
transit) to almost real-time; factor authentication, single PIN access to all
electronic channels, Wi-Fi branches are some
Transparency to all parties through of the examples.
blockchain’s shared public ledger;
Innovations like API Banking, ‘Bank in a
End-to-end digital process eliminating BOX’ , Money Monitor (aggregation of
paper trail & manual intervention; customer accounts of all types across 11,000
institutions globally), Mobile Money Services,
The entire transaction history of a dual factor authentication, one view of
particular vendor is recorded and is customer relationship and most advanced
immutable through blockchain; voice enabled IVR helps the products and
sales teams to offer superior products
The transaction status along with and services.
details are seamlessly transmitted to
Bajaj Electricals’ Enterprise Resource Your Bank has evaluated and implemented
Planning; cutting edge technologies like virtualization,
cloud computing and social media to invest
Seamless integration with existing API in the best in class IT systems and practices,
Banking implementation by YES BANK and in order to ensure that its technology
using IBM’s Enterprise Service Bus platform becomes a strategic business tool
(IIB), API management and Datapower for building a competitive advantage.
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The A.R.T. of Banking
Apart from product development, product improvement & effective cost management, technology
has also played a major role in customer acquisition & ensuring high level of service delivery &
customer excellence. Your Bank has also been able to cater to Financial Inclusion needs through
its award winning and globally recognized technology solution platform which offers doorstep
banking services.
(III) IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST THREE YEARS
RECKONED FROM THE BEGINNING OF THE FINANCIAL YEAR):
Whether the If not fully absorbed,
Year of Technology areas where absorption
Details of Technology Imported
Import been fully has not taken place, and
absorbed the reasons thereof
(IV) YOUR BANK HAS NOT INCURRED ANY NUMBER OF CASES FILED, IF ANY, AND
EXPENDITURE ON RESEARCH AND THEIR DISPOSAL UNDER SECTION 22 OF
DEVELOPMENT DURING THE YEAR UNDER THE SEXUAL HARASSMENT OF WOMEN AT
REVIEW. WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013.
(C) FOREIGN EXCHANGE EARNINGS AND As a responsible organization, the Bank strives to
OUTGO- foster a safe and respectful work environment. The
The Foreign Exchange earned in terms of actual Bank has Zero tolerance towards any action on
inflows during the year and the Foreign Exchange the part of any executive which may fall under the
outgo during the year in terms of actual outflows. ambit of “Sexual Harassment” at workplace, and is
fully committed to uphold and maintain the dignity
During the year ended March 31, 2017 the Bank of every women executive working in the Bank.
earned ` 4,566.02 millions and spent ` 5,102.38 The Policy regarding Prevention & Prohibition of
millions in foreign currency. This does not include Sexual Harassment at Workplace provides for
foreign currency cash flows in derivatives and protection against sexual harassment of women
foreign currency exchange transactions. at workplace and for prevention and redressal
of complaints. Also, in its endeavour to spread
awareness on the aforementioned policy and
ensure compliance by all the executives, the Bank
has implemented a plan of action to disseminate
the information and train the executives on the
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The A.R.T. of Banking
ANNEXURE 1
THE ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
ACTIVITIES
A brief outline of the Bank’s CSR policy, including overview of projects or programs proposed to be undertaken
YES BANK’S CSR POLICY: which positively impacted lives. The initiatives for
Through its Responsible Banking ethos, YES BANK has FY 2016-17 focused on scaling up projects that were
created stakeholder value by implementing projects launched over the last two years with an objective
based on unique models with scalable and sustainable to deliver on exponential impact and creating
impact. Guided by its Corporate Social Responsibility sustainable CSR models. The key initiatives undertaken
(‘CSR’) policy the bank has delivered internal and during the year:
external positive socio-environmental impact by
following a unique approach. Access to safe and clean drinking water
Environmental conservation
APPROACH TOWARDS CSR: Skill building and entrepreneurship
Promote principles of social responsibility and Livelihood enhancement
inclusive growth through awareness and support Awareness and educating communities on
environmental and social topics of national
Invest in socially and environmentally responsible importance
activities to create positive impact
WEB-LINK TO THE CSR POLICY:
Engage with stakeholders to further the
https://www.yesbank.in/pdf/ybl_corporate_social_
sustainability agenda of the bank and empower responsibility_policy
with knowledge
COMPOSITION OF CSR COMMITTEE
Collaborate with likeminded institutions and forge
Your bank recognizes its responsibility towards the
partnerships towards addressing the needs of the society and environment in which it operates and
stakeholders accordingly has worked towards CSR and Sustainable
Development focusing on the ‘Triple Bottom line’
Monitor the environmental and social investment ethos since its inception. Your bank’s Corporate Social
of YES BANK Limited through structured Responsibility Committee monitors the CSR activities
governance and transparent performance on a periodic basis.
indicators
Members of the committee as on March 31, 2017:
YOUR BANK’S FOCUS AREAS UNDER CSR: 1. Mr. Ashok Chawla (Independent Director)
1. Livelihood security and enhancement 2. Mr. Brahm Dutt (Independent Director)
a) Education 3. Mr. Rana Kapoor (Managing Director & CEO)
b) Skills/Employability training
2. Healthcare and Social welfare AVERAGE NET PROFIT BEFORE TAX OF
3. Environment Sustainability THE BANK FOR LAST THREE FINANCIAL
4. Arts/Sports and culture YEARS
` 3,001 crores
OVERVIEW OF ACTIVITIES:
In line with the CSR policy and in accordance of PRESCRIBED CSR EXPENDITURE (TWO
Schedule VII of the Companies Act, 2013, your PER CENT OF THE AMOUNT AS ABOVE)
Bank undertook unique initiatives during the year ` 60.02 crores
156
DETAILS OF CSR SPENT DURING THE FINANCIAL YEAR.
a. Total amount to be spent for the financial year: ` 50.00 crores
The Bank has spent ` 41.66 crores during FY 2016-17
b. Amount unspent , if any: ` 8.34 crores
c. Manner in which the amount spent during the financial year is detailed below:
Projects or
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Corporate Overview
Amount spent on
programs
the projects
(1) Local area or Amount Cumulative
or programs Sub- Amount spent:
CSR project other (2) Specify outlay Expenditure
Sr. heads: (1)Direct Direct or through
or activity Sector in which the project is covered the State and (budget) upto the
No. expenditure implementing
identified district where project or Reporting
on projects or agency
projects or program wise Period
programs.
Programs
(2)Overheads
was undertaken
1 YES COMMUNITY Promoting education Pan India 7 crores 6.46 crores 16.28 crores Direct
Livelihood enhancement
34-92
Sustainability Review
3 Say YES to
Ensuring environment sustainability Delhi/ NCR, 2.5 crores 2.55 crores 5.69 crores Direct
Promoting preventive healthcare & Gujarat, Haryana, Foundation for
Sustainable
education Karnataka, MSME Clusters
MSMEs in India Madhya Pradesh, (FMC) and The
Maharashtra, Entrepreneurship
Punjab, Rajasthan, Development
Tamil Nadu, Institute of India
Telangana, West (EDI)
Bengal
4 Promoting education Pan India 6 crores 5.21 crores 10.62 crores Direct
229-338
YES STEADY
Financial Statements
6 Support to YES Promoting education Pan India 13.5 crores 14.34 crores 24.84 crores YES Foundation
Foundation
7 Expenditure on 1.9 crores 4.05 crores
administrative
overheads
ANNUAL REPORT 2016-17
157
TOTAL 41.66 crores 86.89 crores
The A.R.T. of Banking
Your Bank has accelerated its commitments and with migrants and large scale projects on sustainable
actions in line with India’s sustainable development energy, which are beyond the ambit of the definition of
growth trajectory, to create maximum positive social CSR under the Companies Act, 2013.
and environmental impact. The Bank’s strategic focus
on the Sustainable Development Goals (SDGs) has To meet the daunting task of India’s SDG implementation
percolated in its core strategy, addressing the need goals, your Bank has committed ` 250 crores till
of communities through unique CSR programs. In FY 2020 towards two key focus areas of livelihood and
FY 2016-17, your Bank scaled up its initiative of water security, and environment sustainability, through
providing access to safe and clean drinking water, focused and intensified CSR and Sustainability actions.
in partnership with the Indian Railways by touching
more than 1 lakh lives every day across 192 railway The CSR Committee confirms that the implementation
stations. Since the start of the project in FY 2015- and monitoring of CSR Policy, is in compliance with
16, this initiative has provided access to safe and CSR objectives and Policy of the Bank.
clean drinking water, to nearly 5 crore lives. Through
intensive interventions, your Bank addressed the
needs of the critical MSME sector. 2,229 MSMEs were Rana Kapoor Ashok Chawla
educated on energy efficiency and occupational health Managing Director & CEO Chairman – CSR Committee Meeting
and safety of their workers, thereby helping feed into (DIN No. 00320702) (DIN No. 00056133)
India’s larger goals of creating a low carbon economy.
The Bank’s unique flagship community engagement
initiative, delivered exponential impact by working on
socio-environmental issues of national importance like
financial literacy, Swachh Bharat, road safety, energy
conservation and creation of a carbon sink through
tree plantation, touching 20 lakh lives through the year.
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ANNEXURE 2
FORM NO. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017
[Pursuant to Section 204(1) of the Companies Act, 2013 and the rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014]
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The A.R.T. of Banking
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ii. The Bank has allotted 3,243,172 equity shares of 29(1)(d) of Securities and Exchange Board of India
face value of ` 10/- each to the eligible employees (Listing Obligations and Disclosure Requirements)
of the Bank under various Employee Option Plans. Regulations, 2015.
September 30, 2016 8.00% Senior Unsecured Listed Rated ` 10,00,000 21,35,00,00,000
Redeemable Long-Term Bonds
December 23, 2016 9.50% Unsecured Perpetual Subordinated ` 10,00,000 30,00,00,00,000
Basel III Compliant Additional Tier 1 Bonds
December 29, 2016 7.62% Unsecured Redeemable ` 10,00,000 330,00,00,000
Non-Convertible Long-term Bonds
161
The A.R.T. of Banking
vii. As per the terms of the Information Memorandum and approval granted by the Reserve Bank of India, the
Bank has redeemed various Debt Instruments as mentioned below:
Dipti Mehta
Partner
Place : Mumbai FCS No. 3667 CP No. 3202
Date : April 19, 2017
Note: This report is to be read with our letter of even date which is annexed as ‘ANNEXURE A’ and forms an integral part of
this report.
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Annexure A
To, 4.
Where ever required, we have obtained
YES BANK Limited, the Management representation about the
9th Floor, Nehru Centre, Discovery of India, compliance of laws, rules and regulations and
Dr. A.B. Road, Worli, happening of events etc.
Mumbai - 400 018
5. The compliance of the provisions of corporate laws,
Our report of even date is to be read along with this rules, regulations, standards is the responsibility
letter. of management. Our examination was limited to
the verification of procedures on test basis.
1.
Maintenance of secretarial record is the
responsibility of the management of the Company. 6. The secretarial audit report is neither an assurance
Our responsibility is to express an opinion on as to the future viability of the Company nor of
these secretarial records based on our audit. the efficacy or effectiveness with which the
management has conducted the affairs of the
2.
We have followed the audit practices and Company.
processes as were appropriate to obtain
For Mehta & Mehta,
reasonable assurance about the correctness
Company Secretaries
of the contents of the secretarial records. The
verification was done on test basis to ensure that (ICSI Unique Code P1996MH007500)
correct facts are reflected in secretarial records.
Dipti Mehta
We believe that the processes and practices
we followed provide a reasonable basis for our Partner
opinion. Place : Mumbai FCS No. 3667 CP No. 3202
Date : April 19, 2017
3.
We have not verified the correctness and
appropriateness of financial records and Books of
Accounts of the Company.
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The A.R.T. of Banking
ANNEXURE 3
The ratio of the remuneration of each director to the median employee’s remuneration and other details in
terms of sub-section 12 of Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014:
Sr.
Requirements Disclosure
No.
I The ratio of the remuneration of each director to the median MD & CEO 102.56x
remuneration of the employees for the financial year Radha Singh * 2.07x
Ashok Chawla ** 1.89x
II The percentage increase in remuneration of each director, MD & CEO 21.20%
CFO, CEO, CS in the financial year CFO 7.20%
CS 6.20%
III The percentage increase in the median remuneration of The median remuneration of the employees
employees in the financial year in the financial year was increased by
13.8%. The calculation of % Increase in
Median Remuneration is done based on
comparable employees. For this we have
excluded employees who were not eligible
for any increment.
IV The number of permanent employees on the rolls of the Bank There were 20,125 employees as on
March 31, 2017
VIII Average percentile increase already made in the salaries of Not Applicable to the Bank, as all the
employees other than the managerial personnel in the last employees are considered under Managerial
financial year and its comparison with the percentile increase role.
in the managerial remuneration and justification thereof
and point out if there are any exceptional circumstances for
increase in the managerial remuneration
XII Affirmation that the remuneration is as per the remuneration Yes, it is confirmed
policy of the company
GENERAL NOTES
‘x’ denotes the median remuneration of the employees in the financial year.
Remuneration in case of MD & CEO is regulated by Reserve Bank of India Guidelines and as approved by the
Reserve Bank of India.
In case of the CFO, he is also responsible for Digital Banking; Financial Management (FINMGT); Financial
Markets (FM); SA Liabilities Product Management (LPM); Business and Digital Technology Solutions Group
(BDTS); Transaction Banking Group (TBG) and Company Secretarial (CS). He is part of the Bank since
inception and has contributed significantly in the Bank’s overall growth. His overall remuneration is arrived
after considering the wide scope of his responsibilities, his contribution to Bank and market benchmarking.
he Remuneration for the purpose of this table is defined as “Total Cost to the Company (TCC)” for all the
T
employees except for KMPs. KMPs remuneration is as per the Form 16 (on an annualized basis) excluding
stock option exercised since it does not form part of TCC.
Notes:
*Radha Singh’s remuneration considered from April 1, 2016 to October 29, 2016.
**Ashok Chawla’s remuneration considered from October 30, 2016 to March 31, 2017.
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ANNEXURE 4
EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2017
(Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and
Administration) Rules, 2014)
165
IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL
166
EQUITY)
i) CATEGORY-WISE SHARE HOLDING
No. of Shares held at the beginning of the year (as on No. of Shares held at the end of the year (as on
April 01, 2016 i.e. on the basis of SHP of March 31, 2016) March 31, 2017 i.e. on the basis of SHP of March 31, 2017) % Change
Category of Shareholders during the
% of % of year
Demat Physical Total Demat Physical Total
Total Shares Total Shares
Total shareholding of Promoter/Promoter Group 92,142,450 0 92,142,450 21.91 92,142,450 0 92,142,450 20.19 -1.72
(A) = (A)(1)+(A)(2)
B. PUBLIC SHAREHOLDING
(1) INSTITUTIONS
a) Mutual Funds 47,911,475 0 47,911,475 11.39 47,763,989 0 47,763,989 10.46 -0.93
b) Banks/FI 457,261 0 457,261 0.11 334,969 0 334,969 0.07 -0.04
c) Central Govt. 0 0 0 0.00 0 0 0 0.00 0.00
d) State Govt.(s) 0 0 0 0.00 0 0 0 0.00 0.00
e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00
f) Insurance Companies 53,653,401 0 53,653,401 12.76 58,094,774 0 58,094,774 12.73 -0.03
g) FIIs 173,466,349 0 173,466,349 41.25 212,958,407 0 212,958,407 46.65 5.40
h) Foreign Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00
i) Others (specify - Qualified Foreign 0 0 0 0.00 211,585 0 211,585 0.05 0.05
Investor) - Alternative Investment
Fund
Sub-total (B)(1): 275,488,486 0 275,488,486 65.51 319,363,724 0 319,363,724 69.96 4.45
No. of Shares held at the beginning of the year (as on No. of Shares held at the end of the year (as on
April 01, 2016 i.e. on the basis of SHP of March 31, 2016) March 31, 2017 i.e. on the basis of SHP of March 31, 2017) % Change
Category of Shareholders during the
% of % of year
Demat Physical Total Demat Physical Total
Total Shares Total Shares
(2) NON-INSTITUTIONS
a) Bodies Corp.
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Corporate Overview
c) Others (Foreign Nationals, HUF, 5,340,509 0 5,340,509 1.27 5,731,100 0 5,731,100 1.26 -0.01
Clearing members, NRIs, Trusts,
NBFC)
Sub-total (B)(2): 52,775,369 113,341 52,888,710 12.58 44,956,368 23,271 44,979,639 9.85 -2.73
Total Public Shareholding (B)=(B)(1)+ (B)(2) 328,275,850 113,341 328,389,191 78.09 364,320,092 23,271 364,343,363 79.81 1.72
C) SHARES HELD BY CUSTODIAN FOR GDRs & 0 0 0 0 0 0 0 0
ADRs
Grand Total(A+B+C) 420,418,300 113,341 420,531,641 100.00 456,462,542 23,271 456,485,813 100 0
Statutory Reports
93-228
229-338
Financial Statements
167
ii) SHAREHOLDING OF PROMOTER/PROMOTER GROUP
168
Shareholding at the beginning of the year Share holding at the end of the year (as on
(as on April 01, 2016 i.e. on the basis of March 31, 2017 i.e. on the basis of SHP of
SHP of March 31, 2016) March 31, 2017) % change
in share
Sr. % of Shares % of Shares
Shareholder’s Name holding
No. % of total Pledged / % of total Pledged /
No. of No. of during the
Shares of the encumbered Shares of encumbered year
Shares Shares
Bank to total the Bank to total
shares shares
iii) CHANGE IN PROMOTER /PROMOTER GROUP SHAREHOLDING (PLEASE SPECIFY, IF THERE IS NO CHANGE)
The A.R.T. of Banking
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179
v) SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
180
Shareholding at the Shareholding at the end
Change in Shareholding
beginning of the year of the year
(No. of Shares)
Sr. (April 01, 2016) (March 31, 2017)
Name of Director and KMP
No. % of total % of total
No. of No. of
shares of Increase Decrease shares of
shares shares
the Bank the Bank
Directors
1. Saurabh Srivastava 1,610 0.00 - - 1,610 0.00
2. Vasant V. Gujarathi 1,000 0.00 - - 1,000 0.00
3. Ajai Kumar 105 0.00 100 - 205 0.00
4. Rana Kapoor 20,000,000 4.76 - - 20,000,000 4.38
KMPs
1. Rajat Monga (CFO) 901,271 0.21 100,000 - 1,001,271 0.22
2. Shivanand Shettigar (CS) 450 0.00 9,496 - 9,946 0.00
V. INDEBTEDNESS
The A.R.T. of Banking
INDEBTEDNESS OF THE BANK INCLUDING INTEREST OUTSTANDING/ACCRUED BUT NOT DUE FOR
PAYMENT
In ` millions
Secured
DIRECTORS’ REPORT (CONTD.)
Secured
Loans Unsecured Total
Deposits*
excluding Loans Indebtedness
deposits
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Corporate Overview
In `
1. Gross salary
Statutory Reports
93-228
(a) Salary as per provisions contained in section 17(1) of the 54,556,849 54,556,849
Income-tax Act, 1961 (Fixed pay, pension, LTA, Bonus and
medical)
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 11,428,506 11,428,506
(c) Profits in lieu of salary under section 17(3) - -
Income-tax Act, 1961
2. Stock Option - -
Granted during the year
3. Sweat Equity - -
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Financial Statements
4. Commission as % of profit - -
others, specify…
5. Others (Company contribution towards PF, Medical 2,732,424 2,732,424
Reimbursement)
Total (A) (Total of remuneration does not include the number of 68,717,779 68,717,779
Stock Options)
Ceiling as per the Act ‘Refer note’
Note:
In terms of the provisions of the Companies Act, 2013, the remuneration payable to MD&CEO shall not exceed 5% of the net profit of the Bank. The
remuneration paid to the MD&CEO is well within the said limit.
ANNUAL REPORT 2016-17
181
B. REMUNERATION TO OTHER DIRECTORS:
182
In `
Name of Directors
Lt. Gen.
Sr. Particulars of Diwan (Dr.) Total
No. Remuneration Radha M. R. Srini- Ajay Vasant Brahm Saurabh Ashok Amount
Arun Mukesh Ajai Kumar
Singh* vasan* Vohra* Gujarathi Dutt Srivastava Chawla
Nanda* Sabharwal
(Retd.)
1. Gross salary
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Corporate Overview
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 83,364,319 9,285,770 92,650,089
1961 (Fixed pay, pension, LTA, Bonus and medical)
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 32,400 32,400
(c) Profits in lieu of salary under Section 17(3) Income-tax Act, 1961
2. Stock Option
Granted during the year 5000 options
3. Sweat Equity
4. Commission as % of profit
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others, specify…
5. Others (Company contribution towards PF, Medical Reimbursement) 2,001,945 323,860 2,325,805
Total (A) (Total of remuneration does not include the number of Stock Options) 85,366,264 9,642,030 95,008,294
Details of Penalty
Section of the /Punishment/ Authority [RD/ Appeal made, if
Type Brief Description
Companies Act Compounding NCLT/ COURT] any (give Details)
fees imposed
COMPANY
Penalty
Punishment None
229-338
Financial Statements
Compounding
DIRECTORS
Penalty
Punishment None
Compounding
OTHER OFFICERS IN DEFAULT
Penalty
Punishment None
Compounding
ANNUAL REPORT 2016-17
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The A.R.T. of Banking
REPORT ON
CORPORATE GOVERNANCE
(The Report on Corporate Governance forms part of (the ‘Board’) is at the core of our Corporate
the Directors’ Report for the year ended March 31, 2017) Governance practices and oversees how the
Management serves and protects the long-term
I BANK’S PHILOSOPHY ON CODE OF interests of our stakeholders.
GOVERNANCE
YES BANK is committed to set the highest Our Corporate Governance framework ensures
standards of Corporate Governance right that we make timely disclosures and share
from its inception benchmarked with the best accurate information regarding our financials
in class practices across the globe. Effective and performance, as well as the leadership and
Corporate Governance is the manifestation of governance of the Bank.
professional beliefs and values, which configures
the organizational values, credo and actions of its ENVIRONMENTAL, SOCIAL &
employees. Transparency and accountability are GOVERNANCE RATING
the fundamental principles to sound Corporate Corporate Governance has become an important
Governance, which ensures that the organization agenda for policy makers around the world. Over
is managed and monitored in a responsible the last few decades corporate governance is
manner for ‘creating and sharing value’. getting an ever increasingly importance across
the globe. Your Bank is pleased to report that
YES BANK believes that there is a need to MSCI Environmental, Social & Governance (‘ESG’)
view Corporate Governance as more than Research has assigned ‘AAA’ Rating to YES Bank.
just regulatory requirements as there exists a It highlights the Bank’s key strengths in Financial
fundamental link with the organization of business, Product Safety, Corporate Governance and Financial
corporate responsibility and shareholder’s wealth System Instability. The ‘AAA’ rating reaffirms the
maximization. Therefore, your Bank is articulating Bank’s 360 degree risk framework which includes
a multi-stakeholder model (including shareholder ESG parameters and underscores the Bank’s ability
value) of accountability that will manage the to proactively mitigate emerging risks and create
symbolic relationship between the various new opportunities in India’s sunrise sectors. The
stakeholders. This approach will be central to said rating indicates Bank’s capability with respect
the day-to-day functioning of your Bank and in to ESG performance and its commitment towards
implementation of its business strategy. value creation for all its stakeholders. The Bank
endeavors to benchmark itself with the best of
As part of the Bank’s objective and commitment companies in India and globally, to maintain the
to implement best practices in Corporate highest ratings for its ESG practices. In 2016, your
Governance, it is felt necessary to codify these Bank also continued to be the only Indian Bank
Governance Practices of the Bank by framing included as an index component in Dow Jones
the ‘Code for Corporate Governance’ as another Sustainability Indices (‘DJSI’) Emerging Markets for
milestone towards its endeavor for achieving higher the second consecutive year.
governance standards. Accordingly, the Board has
adopted the ‘Code for Corporate Governance’.
Your Bank has closely aligned its corporate
governance practices with shareholders’ interests,
We believe that an active, well-informed and undertaking in-depth reporting and disclosures
independent Board is necessary to ensure the on all key aspects of the business. Your Bank
highest standards of Corporate Governance. It is is a benchmark institution for Triple Bottom
well-recognized that an effective Board is a pre- Line accounting and reporting in India and in
requisite for a strong and effective Corporate FY16, became the first Indian bank to release a
Governance. At YES BANK, the Board of Directors Sustainability report based on the Integrated
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Reporting guidelines of the International The Board functions as a full Board and through
Integrated Reporting Council, while continuing various Committees constituted to oversee
to adhere with Global Reporting Initiative (GRI) specific areas. Overall direction and strategy,
G4 guidelines. Your Bank has also received ISO Policy formulation, Succession Planning, setting
27001 certification for its information security up of goals, evaluation of performance and control
management system and data privacy policies. functions vest with the Board. The Committees
have oversight of operational issues assigned to
II BOARD OF DIRECTORS them by the Board. The dates of the meetings of
The composition of Board of Directors of the the Board and Committees are decided in advance
Bank is governed by the relevant provisions of and the Agenda documents are sent to the Board
the Banking Regulation Act, 1949, the Companies and the Committee members in compliance
Act, 2013 and rules made thereunder, Securities with the provisions of the Companies Act, 2013,
and Exchange Board of India (Listing Obligations Secretarial Standards and the Listing Regulations.
and Disclosure Requirements) Regulations, 2015 This enables the Board members to manage their
(‘Listing Regulations’), the Articles of Association schedule effectively and prepare for the meetings
of the Bank and in accordance with the best in advance.
practices in Corporate Governance.
During the year under review, Mr. Ashok
The Corporate Governance philosophy of your Chawla has been appointed as Non-Executive
Bank establishes that the Board’s independence is (Independent) Part-Time Chairman with
essential to bring objectivity and transparency in effect from October 30, 2016. Mr. Ajay Vohra,
the Management and in the dealings of the Bank. Independent Director ceased to be the Director
of the bank with effect from April 28, 2016,
The Board presently comprises of 7 Directors, 5 of Mr. Diwan Arun Nanda, Independent Director
them being Independent Directors, representing and Mr. M. R. Srinivasan, Non-Executive Non-
diverse combination of professionalism, Independent Director ceased to be the Directors
qualification, knowledge, skill sets, track record, of the Bank at the close of business hours on
integrity, expertise and experience as required October 22, 2016 and Ms. Radha Singh, Non-
in the Banking Business. The Board reviews its Executive Part-time Chairperson ceased to be the
strength and combination from time to time to Director with effect from close of business hours
ensure that it remains aligned with the statutory on October 29, 2016.
as well as business requirements.
The Composition of the Board of Directors of the Bank as on March 31, 2017, was as follows:
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GOVERNANCE STRUCTURE
BOARD OVERSIGHT
BOARD OF DIRECTORS
Audit Committee Risk Monitoring Committee Board Credit Committee IT Strategy Committee
Nomination & Corporate Social Stakeholders Relationship Fraud Monitoring
Remuneration Committee Responsibility Committee Committee Committee
Service Excellence, Board Committee on Capital Raising Committee Committee of Independent
Branding & Marketing Willful Defaulters & Non- Directors
Committee Cooperative Borrowers
Management Credit Executive Credit Committee Operational Risk Asset & Liability
Committee Management Committee Management Committee
Reputation Risk IT Steering Committee Product Process Approval Outsourcing Management
Management Committee Committee Committee
Investment and Financial Fraud & Suspicious Enterprise Risk Standing Committee on
Market Management Transaction Monitoring Management & Capital Customer Service
Committee Committee Management Committee
Security Council Standing Committee Whistle Blower Committee Model Assessment
for IFRS (IND AS) Committee
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a)
Form A - for Non-Executive Directors
The Board shall also consider the
including Independent Directors (‘IDs’) performance evaluation of Board as a
whole as per the report of the CoID and
b) Form B – for Managing Director & CEO shall also review the self assessment of the
performance submitted by each of the Board
c) Form C - for Chairman level Committees and take appropriate steps,
if deemed necessary.
d) Form D - for the Board as a whole
CRITERIA OF PERFORMANCE EVALUATION:
e) Form E - for the Board Level Committees. NON–EXECUTIVE DIRECTORS, MD & CEO AND
CHAIRPERSON
The following process is being followed by the Qualification and Experience; Attendance at the
Bank for performance evaluation of the Individual meetings; Participation and contribution; Responsibility
Directors including IDs and Non-IDs, Managing towards stakeholders; Contribution in Strategic
Director & CEO, Chairperson, Committees of the Planning; Compliance and Governance; Participation;
Board and the Board as a whole: Performance Evaluation; and Updation of Knowledge.
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In addition to the above criteria, following are the Some of the decisions taken by the Board, post
parameters for the performance evaluation of MD & performance evaluation are:
CEO and Chairperson:
1.
Reconfirm that the Board of the Bank is well
Managing Director & CEO balanced in terms of diversity of experience and
Performance of the Bank; Recognition and awards skill sets to meet the requirements of the Bank.
to the Bank; and Recognition and awards to the
MD & CEO. 2.
The Board and its committees were effective
in achieving their respective charters and the
Chairperson members acted with diligence and care.
Leadership; Relationships and Communications;
Conduct of Meetings; Impartiality; and Resources. 3. Directors qualified to continue on the Board having
understood and discharged their responsibilities
BOARD AS A WHOLE and also continue to qualify under the “Policy
Process/Policy for Appointment to the Board; on Board Diversity and Fit & Proper criteria and
Composition and Diversity; Committees of the Board; Succession Planning” of the Bank.
Board Meetings; Agenda; Discussions at Board
Meetings; Cohesiveness of Board decisions; Team Work; B) POLICY ON APPOINTMENT OF
Recording of minutes; Board Procedure; Understanding DIRECTORS
the role and effectiveness; Understanding the Business Your Bank has a Board approved ‘Policy on Board
of the Bank; Stakeholder value and Responsibility; Diversity and Fit & Proper Criteria and Succession
Strategy and Growth; Risk Management and Financial Planning’ (‘Fit & Proper Policy’) which laid
Controls; Foresight to avoid crisis and effectiveness down the process for appointment of Directors
in crisis management; Understanding the regulatory including the required skill sets, experience,
environment; Board’s communication; Grievance etc. The Policy covers all the aspects of board
redressal for Investors; Conflict of Interest; Review of composition, skill sets, diversification of board of
Board evaluation; Board and Management; Succession directors as required under the Companies Act,
Planning; and Induction Program. 2013, Listing Regulations, the Banking Regulation
Act, 1949 and other regulatory requirements.
BOARD LEVEL COMMITTEES As per the Fit & Proper Policy of the Bank, your
Composition and Balance of skill sets; Frequency Bank ensures that not less than 51% of the total
and duration; Overall contribution; Relationships; number of members of the Board of Directors
Communication; Understanding of regulatory have special knowledge or practical experience in
environment and developments; Interaction with the (i) accountancy, (ii) agriculture and rural economy,
board; Independence of the Committee from the (iii) banking, (iv) co-operation, (v) economics,
Board; Justice to the role of committee; and Procedure. (vi) finance, (vii) law, (viii) small-scale industry,
(ix) Information Technology, (x) Payment &
OUTCOME OF PERFORMANCE EVALUATION: Settlement Systems, (xi) Human Resources,
An annual performance evaluation of the Board, (xii) Risk Management, (xiii) Business Management,
Committees of the Board and the individual members (xiv) any other skill/special knowledge/practical
of the Board was conducted in April 2017 as per the experience as may be specified by RBI from time
aforesaid process and the report on the evaluation to time. In terms of the Fit and Proper Policy,
were presented at the meeting of the N&RC and the N&RC identifies and scrutinizes the prospective
Board of Directors. candidates for the position of Director keeping
in view the requisite qualifications, expertise, skill
sets, track record, etc relevant to the Banking
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Business and as per the Statutory requirements subsidiary or associate Company, or their
and as prescribed under the Fit & Proper Policy. Promoters or Directors, during the two
The N&RC, post assessing the fulfillment of ‘fit immediately preceding financial years or
and proper’ criteria by the candidate on the basis during the current financial year;
of various declarations and disclosures received
from the Candidate, makes the recommendation (V) none of whose relative, has or had pecuniary
for the appointment of proposed Director to relationship or transaction with the Company,
the Board for its approval. The Board thereafter its holding, subsidiary or associate Company,
having considered the recommendation of the or their Promoters, or Directors, amounting
N&RC, makes its own assessment on the proposal to two per cent or more of its gross turnover
for appointment of Director, basis the business or total income or fifty lakh rupees or such
as well as statutory requirements. The Board also higher amount as may be prescribed from
recommends the appointment/re-appointment time to time, whichever is lower, during the
of Directors to the Shareholders for approval, two immediately preceding financial years or
after taking into consideration the results of during the current financial year.
performance evaluation, and other statutory
requirements. The Board also recommends the (VI) neither himself nor any of his relatives —
appointment of Managing Director & CEO and the
Part-time Chairman for the approval of Reserve i. holds or has held the position of a Key
Bank of India. Managerial Personnel or is or has been
employee of the Company or its holding,
The N&RC while considering the proposal for subsidiary or associate Company in any
appointment of Independent Directors also of the three financial years immediately
considers the criteria of independence prescribed preceding the Financial Year in which he
under the Companies Act, 2013 and Listing is proposed to be appointed.
Regulations. Criterion for the Independence is as
under: ii. is or has been an employee or proprietor
or a partner, in any of the three financial
An Independent Director is a Director other than years immediately preceding the
a Managing Director or a Whole time Director or a Financial Year in which he is proposed
Nominee Director, who:- to be appointed, of
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iii.
holds together with his relatives two degree of contribution, skill and availability of
percent or more of the total voting talent owing to competitive market forces by
power of the Company; or taking into account factors such as role, skills,
competencies, experience and grade/seniority.
iv.
is a Chief Executive or Director, by Your Bank would also strive to achieve the long
whatever name called, of any Non-Profit term association with its employees by providing
Organization that receives twenty-five long term wealth creation opportunities through
percent or more of its receipts or corpus stock option schemes.
from the Company, any of its Promoters,
Directors or its holding, subsidiary or REMUNERATION POLICY FOR DIRECTORS
associate Company or that holds two In terms of the provisions of the Companies Act,
percent or more of the total voting 2013, Listing Regulations and Banking Regulation
power of the Company; Act, 1949, the Bank has a Board approved
Remuneration Policy for Directors including
v. is a material supplier, service provider Chairperson. The Board annually reviews the
or customer or a lessor or lessee of the policy and last reviewed on April 19, 2017. The
Company; details of the said policy are as follows:
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The payment of profit based commission to Non- The compensation in the form of profit based
Executive Directors other than Non-Executive commission can be paid only after the approval of
Chairperson shall be recommended by the Board the Shareholders of the Bank.
basis the following criteria:
The payment of profit based commission to
A.
Outcome of the annual performance Non-Executive Directors excluding Part-
evaluation; time Chairperson has been approved by the
Shareholders of the Bank at its meeting held
B. Attendance and participation of such Non- on June 07, 2016 upto a maximum of Rupees
Executive Director at the Board/Board Ten Lakhs per Director which is the maximum
Committee Meetings; permitted by the Reserve Bank of India and within
the overall cap of one per cent (1%) of the net
C. Comparison with the peer banks; profits of the Bank, as computed in the manner
laid down in section 198 of the Companies Act,
D. Industry benchmarking; 2013.
E. Regulatory guidelines, as applicable, etc The Bank does not grant any Stock Options to any
Non-Executive Directors.
D) DIRECTORS’ REMUNERATION
The details of the remuneration of Directors during FY 2016-17 are given below:
(Amount in `)
No. of
Salary and Sitting
Name of the Director Perquisites Others Commission$ Total equity
Allowances Fees*
shares held
Executive Directors
Mr. Rana Kapoor 54,556,849 11,428,506 2,732,424 N.A. N.A. 68,717,779 20,000,000
Non-Executive Directors
Mr. Ashok Chawla** 1,266,129 - - 1,350,000 N.A. 2,616,129 -
Mr. M. R. Srinivasan - - - 950,000 1,000,000 1,950,000 -
Ms. Radha Singh 1,387,097 - - 800,000 N.A. 2,187,097 -
Lt. Gen. (Dr.) Mukesh - - - 1,200,000 1,000,000 2,200,000 -
Sabharwal (Retd.)
Mr. Ajay Vohra - - - - 500,000 500,000 -
Mr. Diwan Arun Nanda - - - 100,000 250,000 350,000 -
Mr. Vasant V. Gujarathi - - - 1,100,000 1,000,000 2,100,000 1,000
Mr. Saurabh Srivastava - - - 950,000 500,000 1,450,000 1,610
Mr. Brahm Dutt - - - 1,450,000 1,000,000 2,450,000 -
Mr. Ajai Kumar** - - - 1,700,000 N.A. 1,700,000 205
Commission pertaining to FY 2015-16 paid during FY 2016-17.
$
*The Non-Executive Directors were paid sitting fees of ` 1,00,000/- for attending each meeting of the Board of Directors and ` 50,000
for attending any Board Committee Meetings.
**Includes ` 1,00,000 as sitting fees for attending the Board Committee meetings as Invitee.
Notes:
a) The Bank did not pay any amount to directors by way of salary and perquisites except to the MD & CEO and
the Part-time Chairman.
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b) The Bank has not issued any stock options to its E) FAMILIARIZATION PROGRAM FOR
Directors. BOARD MEMBERS
Your Bank had conducted various sessions during
c)
There were no other pecuniary relationships or the financial year to familiarize Independent and
transactions of Non-Executive Directors vis-à-vis other Directors with the Bank, their roles, rights,
the Bank (except normal banking transactions). responsibilities in the Bank, nature of the Banking
Industry, business model, risk management system
d)
The Managing Director & CEO is being paid and technology architecture of the Bank. During
remuneration as recommended by the N&RC and the financial year, the Directors attended/received
approved by the Board of Directors, Reserve Bank training on the Board evaluation, familiarize
of India and within the limit as approved by the newly appointed Directors on business of the
members. The details of remuneration of Mr. Rana Bank, Various Regulatory and Supervisory issues
Kapoor, Managing Director & CEO for FY 2016-17 relating to banks, etc. Further, the Directors are
have also been disclosed in the Directors’ Report. also encouraged to attend the training programs
being organized by various Regulators/Bodies/
e)
Mr. Ashok Chawla has been appointed as Institutions. The details of such familiarization
Non-Executive (Independent) Part-time Chairman programs are displayed on the website of the Bank
of the Bank w.e.f. October 30, 2016. Mr. Chawla at (https://www.yesbank.in/investor-relations/
has been paid remuneration as recommended by corporate-governance.html).
the N&RC and approved by the Board of Directors
and Reserve Bank of India. The remuneration of F) INFORMATION SUPPLIED/AVAILABLE
Mr. Chawla w.e.f. October 30, 2016 as approved TO THE BOARD
by RBI will be placed before the members at the The Board has complete access to all the relevant
ensuing AGM for their approval. information within the Bank and also access to the
Top Management of the Bank. The information
f)
Mr. Ajay Vohra on completion of 8 years of shared on a regular basis with the Board
directorship in the Bank (the maximum permitted specifically includes:
tenure of directorship as per the Banking
Regulation Act, 1949) had ceased to be the
All relevant agenda papers pertaining to
Director of the Bank w.e.f. April 28, 2016. the Board/Committees are being circulated
well in advance to the Directors of the Bank
g)
Mr. M. R. Srinivasan, Non-Executive Non- through environmental friendly web-based
Independent Director and Mr. Diwan Arun Nanda, portal to facilitate easy access of agenda on
Independent Director of the Bank have on October IPad which would provide sufficient time to
22, 2016 completed their tenure as Directors on the Board for reading and understanding the
the Board of the Bank in terms of RBI approval proposals.
dated March 04, 2015.
All Board and Committee meetings are
h)
Ms. Radha Singh, on completion of her tenure governed by structured agenda note which
as Non-Executive Part-time Chairperson ceased is backed by comprehensive background
to be the Director of the Bank at the close of along with relevant attachments.
business hours on October 29, 2016.
Minutes of meetings of Board and Board
Committees, resolutions passed by
circulations and Board minutes of the
unlisted subsidiary company.
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Regular business updates. 20, 2016 and January 19, 2017. The maximum gap
between any two Board meetings was less than
Risk related matters. One Hundred and Twenty days.
Update on Corporate Social Responsibility The Board was presented with the information
activities. on various important matters of operations and
business, new initiatives in business, budgets,
G) POST MEETING INTERNAL financial results, minutes of audit and other
COMMUNICATION / FOLLOW UP committees, appointment or cessation and
SYSTEM remuneration of the Senior Management and Key
The Bank has a mechanism to track important Managerial Personnel, details of joint ventures or
decisions taken at the Board/Committee meetings collaborations, if any, information on subsidiaries,
till the closure of such decisions and a report on sale of investments, assets which are material in
ongoing actionables are being placed before the nature and not in the normal course of business,
Board/Committees from time to time. foreign exposure and non-compliance, if any with
regulatory or statutory guidelines or in the Listing
III BOARD MEETINGS Regulations, etc., and other matters which are
Five Board Meetings were held during the required to be placed before the Board in terms
Financial Year ended March 31, 2017 i.e. April 26 of the Companies Act, 2013, Listing Regulations,
& 27, 2016, June 7, 2016, July 27, 2016, October Theme Based Review agenda as prescribed by
RBI, etc.
The names of the members of the Board, their category, their attendance at the Board Meetings and the last
Annual General Meeting (AGM), number of other Directorships and Committee membership(s)/chairmanship(s)
of each Director are as under:
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**
Mr. M. R. Srinivasan, Non-Executive Non-Independent Director and Mr. Diwan Arun Nanda, Independent Director of the Bank
have on October 22, 2016 completed their tenure as Directors on the Board of the Bank in terms of RBI approval dated
March 04, 2015.
***Ms. Radha Singh, on completion of her tenure as Non-Executive Part-time Chairperson ceased to be the Director of the Bank at the
close of business hours on October 29, 2016.
Includes directorship held in Foreign Companies, Private Limited Companies and Section 8 Companies in India.
1
2
Includes memberships of Audit Committee and Stakeholders Relationship Committee of all Indian Public Limited Companies; figures in
brackets indicate number of Committee Chairmanships as per Regulation 26 of the Listing Regulations.
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Banking Regulation Act, 1949 and to meet the Companies Act, 2013 and rules made
business requirements during the year under thereunder;
review.
b.
accounting policies and practices and
The Bank had twelve Committees as on March 31, changes, if any, with reasons for the
2017 and these are briefly described below. same;
v.
Discussing with statutory auditors before viii.
Scrutiny of inter-corporate loans and
the audit commences, about the nature investments;
and scope of audit as well as post-audit
discussion to ascertain any area of concern; ix.
Valuation of undertakings or assets of the
Bank, wherever it is necessary;
vi.
Reviewing the results/financial statements
(quarterly, half yearly, annual) standalone x.
Annual Tax Audit statement and auditors’
as well as consolidated and analyze report thereon;
performance of the Bank, along with the
Management, before the same are forwarded xi. Review of Annual Long Form Audit Report
to the Board with primary focus on: as prepared by the Statutory Auditors;
a. matters required to be included in the xii. Periodic inspection report submitted by the
Director’s Responsibility Statement RBI;
to be included in the Board’s report
in terms of Section 134(3)(c) of the
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xiii.
Certificates/ returns/ reports to the RBI and review of financial statement before
pertaining to the Audit Committee function; their submission to the Board and may also
discuss any related issues with the internal
xiv.
Monitoring the adequacy of the internal and statutory auditors and the management
control environment, adequacy of checks and of the Bank;
balances including Management Information
Systems (MIS) and the adequacy of internal xxiii. Investigating into any matter in relation to the
audit function, its policies, its structure viz. items specified or referred to it by the Board
staffing and seniority of the official heading and for the said purpose shall have power
the department, coverage and frequency of to obtain professional advice from external
internal audits; sources and have full access to information
contained in the records of the Bank;
xv. Discussions and review with the Internal and
Concurrent Auditors their reports/findings xxiv. To investigate any activity within its terms of
with an objective of reporting any significant reference;
/ material findings to the Board;
xxv. Seeking information from any employee;
xvi.
Reviewing the findings of any internal
investigations by the internal auditors into xxvi. Obtaining outside legal or other professional
matters where there is suspected fraud or advice;
irregularity or a failure of internal control
systems of a material nature and reporting xxvii.
Securing attendance of outsiders with
the matter to the board; relevant expertise, if it considers necessary;
xvii.
Approving any subsequent modification of xxviii. Overseeing the Company’s financial reporting
transactions with related parties; process and the disclosure of its financial
information to ensure that the financial
xviii.
Instituting special investigation teams with statement is correct, sufficient and credible;
complete access to all records, information
and personnel of the Bank, if necessary; xxix. Reviewing compliance function of the Bank
on quarterly and annual basis;
xix.
Scrutinizing the reasons for default, if any,
in payments to Depositories, Debenture xxx.
To review, with the management, the
holders, Shareholders, Creditors, etc. and statement of uses/application of funds raised
legal matters that could have a significant through an issue (public issue, rights issue,
impact on the financial statements; preferential issue, etc.), the statement of
funds utilized for purposes other than those
xx. Reviewing the Whistle blower policy and Vigil stated in the offer document/ prospectus/
Mechanism for Directors and Employees; notice and the report submitted by the
monitoring agency monitoring the utilisation
xxi. Evaluating the internal financial controls and of proceeds of a public or rights issue, and
risk management systems; making appropriate recommendations to the
Board to take up steps in this matter;
xxii. Calling for comments of the auditors about
internal control systems, the scope of audit, xxxi.
Approve appointment of CFO (i.e., the
including the observations of the auditors whole-time Finance Director or any other
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The Composition of the Audit Committee and details of participation of the Members at the Meetings of the
Committee held during the year were as under:
No. of No. of
Name of the Member Category meetings Meetings
held@ attended
Mr. Ajay Vohra (ceased to be a member w.e.f. April 27, 2016) Independent Director 1 0
Mr. M. R. Srinivasan (ceased to be a member Non-Executive Non- 4 4
w.e.f. October 22, 2016) Independent Director
Mr. Vasant V. Gujarathi, Chairman Independent Director 6 5
Mr. Brahm Dutt Independent Director 6 6
Mr. Ashok Chawla (appointed as a member Independent Director 5 5
w.e.f. April 27, 2016)
Mr. Saurabh Srivastava Independent Director 6 5
Mr. Ajai Kumar (appointed as a member w.e.f. April 27, 2016) Non-Executive Non- 5 5
Independent Director
Chairman– ID and Composition – 80% IDs
@
Number of meetings held during the tenure of the Director as a member/chairman of the Committee.
ote: Due to business exigencies, three resolutions were passed through Circulation and the said resolutions have been noted at the
N
subsequent committee meetings.
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The Chairman of the Audit Committee was setting of quantitative prudential limits on
present at the last Annual General Meeting. various products and segments of the Bank’s
operations;
Mr. Shivanand R. Shettigar, Company Secretary,
acts as the Secretary to the Audit Committee. vi.
Monitoring compliance of various risk
parameters by operating departments;
2) RISK MONITORING COMMITTEE
TERMS OF REFERENCE: vii.
Developing an integrated framework for
The terms of reference of the Risk Monitoring charting/categorizing various types of loans,
Committee include: determining implications on quality;
Four Risk Monitoring Committee meetings were held during the FY 2016-17 i.e. on April 26, 2016, July 26,
2016, October 19, 2016 and January 18, 2017. The Composition of the Risk Monitoring Committee and details
of participation of the Members at the Meetings of the Committee held during the year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held@ attended
Mr. Ajay Vohra (ceased to be a member w.e.f. April 27, 2016) Independent Director 1 0
Mr. M. R. Srinivasan (ceased to be a member Non-Executive Non- 3 3
w.e.f. October 22, 2016) Independent Director
Mr. Ajai Kumar, Chairman Non-Executive Non- 3 3
(appointed as a member w.e.f. April 27, 2016) Independent Director
Mr. Rana Kapoor MD & CEO 4 4
Mr. Vasant V. Gujarathi (ceased to be a member Independent Director 1 1
w.e.f. April 27, 2016)
Mr. Brahm Dutt (appointed as a member w.e.f. April 27, Independent Director 3 3
2016)
Mr. Ashok Chawla (appointed as a member w.e.f. Independent Director 3 3
April 27, 2016)
Chairman– NID and Composition – 50% IDs
@
Number of meetings held during the tenure of the Director as a member/chairman of the Committee.
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ii.
Examining the qualification, knowledge, x.
To develop and recommend to the Board
skill sets and experience of each director Corporate Governance guidelines applicable
vis-a-vis the Bank’s requirements and their to the Bank for incorporating best practices;
effectiveness to the Board on a yearly basis
and accordingly recommend to the Board for xi. To implement policies and processes relating
the induction of new Directors; to Corporate Governance principles;
iii.
To review the composition of the existing xii.
To formulate the criteria for determining
Committees of the Board and to examine qualifications, positive attributes and
annually whether there is any need to have independence of a director;
a special committee of directors to meet
the business requirements of the Bank and xiii. To devise a Policy on Board diversity;
accordingly recommend to the Board for
formation of a special committee; xiv. To recommend to the Board a policy relating
to, the remuneration for the directors, key
iv. To scrutinize nominations for Independent/ managerial personnel and other employees;
Non-Executive Directors with reference
to their qualifications and experience and xv. Reviewing the Bank’s overall compensation
making recommendations to the Board for structure and related polices with a view to
appointment/filling of vacancies; attract, motivate and retain employees and
review compensation levels vis-à-vis other
v.
To identify persons who are qualified to Banks and the industry in general;
become directors and who may be appointed
in senior management in accordance with xvi. Ensuring the following while formulating the
the criteria laid down, recommend to the policy on the aforesaid matters:
Board their appointment and removal;
a.
the level and composition of
vi.
Formulating the criteria for evaluation of remuneration is reasonable and sufficient
performance of independent directors and to attract, retain and motivate directors,
the board of directors; key managerial personnel and senior
management of the quality required to
vii.
Carrying out evaluation of every director’s run the company successfully;
performance;
b.
relationship of remuneration to
performance is clear and meets
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xvii.
To formulate and determine the Bank’s xx.
Performing any other function or duty as
policies on remuneration packages payable stipulated by the Companies Act, Reserve
to the Directors and key managerial personnel Bank of India, Securities and Exchange Board
including performance/achievement bonus, of India, Stock Exchanges and any other
perquisites, retirals, sitting fee, etc.; regulatory authority or under any applicable
laws as may be prescribed from time to time.
Four Nomination & Remuneration Committee meetings were held during FY 2016-17 i.e. on April 26, 2016,
October 19, 2016, January 18, 2017 and March 17, 2017. The Composition of the Nomination & Remuneration
Committee and details of participation of the Members at the Meetings of the Committee held during the
year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held@ attended
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Five Board Credit Committee meetings were held during the FY 2016-17 i.e. on April 26, 2016, July 26, 2016,
October 19, 2016, January 18, 2017 and March 17, 2017. The Composition of the Board Credit Committee and
details of participation of the Members at the Meetings of the Committee held during the year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held@ attended
iii.
Overseeing the performance of the
5) STAKEHOLDERS RELATIONSHIP
Registrar and Transfer Agent of the Bank
COMMITTEE
and recommends measures for overall
TERMS OF REFERENCE:
improvement in the quality of investor
The terms of reference of the Stakeholders
services;
Relationship Committee include:
iv.
Reviewing / taking note of various
i.
Reviewing and redressing complaints from investors presentations / communication
various security holders such as shareholders, with stakeholders;
debenture holders and any other security
v.
Performing any other function, duty as
holders such as non receipt of dividend, non
stipulated by the Companies Act, Reserve
receipt of interest on debentures, annual
Bank of India, Securities & Exchange Board
report, transfer of shares or debentures, issue
of India, Stock Exchanges, and any other
of duplicate share / debenture certificates, etc.;
regulatory authority or under any applicable
ii.
Overseeing and reviewing all matters laws, as amended from time to time.
connected with transfers, transmissions,
Mr. Shivanand R. Shettigar, Company Secretary also
dematerialization, rematerialization, splitting
acts as the Compliance Officer of the Bank.
and consolidation of securities issued by the
Bank;
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Two Stakeholders Relationship Committee meetings were held during FY 2016-17 i.e. on July 26, 2016
and March 17, 2017. The Composition of the Stakeholders Relationship Committee and details of Members
participation at the Meetings of the Committee held during the year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held attended
6) CORPORATE SOCIAL iii. To monitor the CSR Policy of the Bank from
RESPONSIBILITY COMMITTEE time to time;
TERMS OF REFERENCE: iv.
Instituting a transparent monitoring
The terms of reference of the Corporate Social mechanism for implementation of CSR
Responsibility Committee include: projects or programs or activities undertaken
by the Bank;
i. To formulate and recommend to the Board, a
Corporate Social Responsibility Policy which v.
Performing any other function or duty as
shall indicate the activities to be undertaken stipulated by the Companies Act, Reserve
by the Bank as specified in Schedule VII of Bank of India, Securities and Exchange Board
the Companies Act, 2013; of India, Stock Exchanges and any other
regulatory authority or under any applicable
ii. To recommend the amount of expenditure to laws, as may be prescribed from time to time.
be incurred on CSR activities as indicated in
the CSR Policy;
Two Corporate Social Responsibility Committee meetings were held during FY 2016-17 i.e. on April 27,
2016 and March 17, 2017. The Composition of the Corporate Social Responsibility Committee and details of
participation of the Members at the Meeting of the Committee held during the year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held@ attended
Mr. Ajay Vohra (ceased to be a member w.e.f. April 27, 2016) Independent Director 1 0
Mr. Diwan Arun Nanda (ceased to be a member w.e.f. Independent Director 1 0
October 22, 2016)
Ms. Radha Singh (ceased to be a member w.e.f Non-Executive Non- 1 1
October 29, 2016) Independent Director
Mr. Rana Kapoor MD & CEO 2 2
Mr. Brahm Dutt Independent Director 2 2
Mr. Ashok Chawla (appointed as a member Independent Director 1 1
w.e.f. April 27, 2016)
Chairman– ID and Composition – 67% IDs
@
Number of meetings held during the tenure of the Director as a member/chairman of the Committee.
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7) SERVICE EXCELLENCE, BRANDING iv. Taking measures for enhancing the quality of
AND MARKETING COMMITTEE customer service;
TERMS OF REFERENCE: v. Improving the level of customer satisfaction
The terms of reference of the Service Excellence, for all categories of clientele;
Branding and Marketing Committee include: vi.
Reviewing of branding and marketing
i. Reviewing of the product approval process; activities of the bank; and
ii. Formulating comprehensive deposit policy; vii. Performing any other act, duty as stipulated
by the Companies Act, Reserve Bank of
iii. Conducting and reviewing annual survey of India, Securities & Exchange Board of India,
depositor satisfaction; Stock Exchanges and any other regulatory
authority, as prescribed from time to time.
Two Service Excellence, Branding and Marketing Committee meetings were held during FY 2016-17 i.e. on
July 26, 2016 and January 18, 2017. The Composition of the Service Excellence, Branding and Marketing
Committee and details of participation of the Members at the Meetings of the Committee held during the
year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held attended
8) IT STRATEGY COMMITTEE v.
Securing attendance of outsiders with
TERMS OF REFERENCE: relevant expertise, if it considers necessary;
The terms of reference of the IT Strategy
Committee include: vi.
Working in partnership with other Board
committees and Senior Management to
i. Performing oversight functions over the IT provide input, review and amend the aligned
Steering Committee (at a senior management corporate and IT strategies;
level);
vii. To approve IT strategy and policy documents;
ii. Investigating activities within this scope;
viii. Reviewing that the management has put an
iii. Seeking information from any employee; effective strategic planning process in place;
iv.
Obtaining outside legal or professional ix. To ratify the IT strategy in alignment with the
advice; business strategy;
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xi.
Reviewing whether the management has xvii.
To issue high-level policy guidance (e.g.
implemented processes and practices that related to risk, funding, or sourcing tasks);
ensure that the IT delivers value to the
business; xviii.
To confirm whether IT or business
architecture is to be designed, so as to derive
xii.
Reviewing that IT investments represent the maximum business value from IT;
a balance of risks and benefits and that
budgets are acceptable; xix.
Overseeing the aggregate funding of IT
at a bank-level, and ascertaining if the
xiii.
Monitoring the method that management management has resources to ensure the
uses to determine the IT resources needed proper management of IT risks;
to achieve strategic goals and provide high-
level direction for sourcing and use of IT xx. Reviewing the IT performance measurement
resources; and contribution of IT to businesses (i.e.,
delivering the promised value);
xiv. Reviewing whether there is a proper balance
of IT investments for sustaining bank’s xxi.
Performing any other function or duty as
growth; stipulated by the Companies Act, Reserve
Bank of India, Securities and Exchange Board
xv.
To become aware about exposure towards of India, Stock Exchanges and any other
IT risks and controls and evaluating regulatory authority or under any applicable
effectiveness of management’s monitoring laws as may be prescribed from time to time.
of IT risks;
Four meetings of the IT Strategy Committee were held during the FY 2016-17 i.e. on April 26, 2016, July 26,
2016, October 19, 2016 and January 18, 2017. The Composition of the IT Strategy Committee and details of
participation of the Members at the Meetings of the Committee held during the year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held@ attended
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9) FRAUD MONITORING COMMITTEE of Investigation/Police investigation, and
TERMS OF REFERENCE: recovery position thereof;
The terms of reference of the Fraud Monitoring v. Ensuring that staff accountability is examined
Committee include: at all levels in all the cases of frauds and
action against staff, if required, is completed
i. Monitoring and reviewing in detail all frauds quickly, with minimum loss of time;
in excess of ` 1 crore;
vi.
Reviewing the efficacy of the remedial
ii. Identifying the systematic lacunae if any, that action taken to prevent recurrence of frauds,
facilitate perpetration of the fraud and put in such as strengthening of internal control
place measures to plug the same; environment;
iii.
Identifying reasons for delay in detection, vii. Performing any other act, duty as stipulated
if any and reporting of frauds to top by the Companies Act, Reserve Bank of
management of the Bank and the Reserve India, Securities & Exchange Board of India,
Bank of India; Stock Exchanges, and any other regulatory
iv.
Monitoring progress of Central Bureau authority, as prescribed from time to time.
Two Fraud Monitoring Committee meetings were held during the FY 2016-17 i.e. on September 2, 2016 and
March 17, 2017. The Composition of the Fraud Monitoring Committee and details of participation of the
Members at the Meetings of the Committee held during the year were as under:
No. of No. of
Name of the Member Category Meetings Meetings
held@ attended
i. To analyze various options for infusion of iii. To appoint the issue management and issue
capital; related agencies;
ii.
To crystallize pricing and size after iv. Incurring necessary expenditure;
negotiations by the management with the
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The Capital Raising Committee met once during the FY 2016-17 on March 31, 2017 for allotment of equity
shares pursuant to Qualified Institutions Placement. The Composition of the Capital Raising Committee and
details of participation of the Members at the Meeting of the Committee held during the year was as under:
No. of No. of
Name of the Member Category Meetings Meetings
held attended
The Board Committee on Willful Defaulters and Non-Co-operative Borrowers met once during the
FY 2016-17 on April 26, 2016. The Composition of the said Committee and details of participation of the
Members at the Meeting of the Committee held during the year was as under:
No. of No. of
Name of the Member Category Meetings Meetings
held attended
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12) COMMITTEE OF INDEPENDENT of flow of information between the Company
DIRECTORS: management and the Board that is necessary
for the Board to effectively and reasonably
TERMS OF REFERENCE:
perform their duties;
The terms of reference of the Committee includes:
iv. Submitting its report as above to Nomination
i.
Reviewing the performance of non-
& Remuneration Committee and the Board
independent directors and the Board as a
of Directors, as the case may be;
whole;
v.
Performing such other roles as may be
ii.
Reviewing the performance of the
prescribed by the Companies Act, 2013,
Chairperson of the Company, taking into
Listing Regulations, SEBI Regulations,
account the views of executive directors and
Banking Regulation Act, 1949 and the
non-executive directors;
Circulars/Regulations issued by the
iii. Assessing the quality, quantity and timeliness Regulatory Authorities from time to time.
The Committee of Independent Directors met once during the FY 2016-17 on April 26, 2016. The Composition
of the Committee of Independent Directors and details of participation of the Members at the Meeting of the
Committee held during the year was as under:
No. of No. of
Name of the Member Category Meetings Meetings
held attended
Mr. Ajay Vohra (ceased to be a member w.e.f. April 28, 2016) Independent Director 1 0
Mr. Diwan Arun Nanda (ceased to be a member Independent Director 1 0
w.e.f. October 22, 2016)
Mr. Brahm Dutt Independent Director 1 1
Mr. Vasant V. Gujarathi Independent Director 1 1
Mr. Saurabh Srivastava Independent Director 1 1
Lt. Gen. (Dr.) Mukesh Sabharwal (Retd.), Chairman Independent Director 1 1
Mr. Ashok Chawla (became a member w.e.f. June 07, 2016) Independent Director NA NA
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length pricing basis and do not attract the D) CODE OF CONDUCT AND ETHICS
provisions of Section 188 of the Companies The confirmation from the Managing Director
Act, 2013. There were no materially significant & CEO regarding compliance with the Code
transactions with related parties during the of Conduct and Ethics by all the Directors
financial year which were in conflict with the and Senior Management forms part of the
interest of the Bank. Suitable disclosure as Report. The Code of Conduct and Ethics
required by the Accounting Standards (AS18) is displayed on the website of the Bank
has been made in the notes to the Financial (www.yesbank.in).
Statements. The details of the transactions
with related parties, if any, are placed before E) CODE OF CONDUCT FOR
the Audit Committee from time to time. PREVENTION OF INSIDER
TRADING
The Board of Directors has formulated The Bank has adopted a Code of Conduct for
a policy on materiality of Related Party Prevention of Insider Trading in accordance
Transactions and also on dealing with with the requirements of the SEBI (Prohibition
Related Party Transactions pursuant to the of Insider Trading) Regulations, 2015 and
provisions of the Companies Act, 2013 and Companies Act, 2013 with a view to regulate
Listing Regulations. The same is displayed trading in securities of the Bank by the
on the website of the Bank at (https://www. Directors, KMPs and designated employees
yesbank.in/investor-relations/corporate- of the Bank. This code is applicable to all
governance.html). Directors, KMPs, and Employees of the Bank
and its Subsidiaries and they are required to
C) MD & CEO / CFO CERTIFICATION abide by the Code of Conduct for Prevention
The MD & CEO and the CFO have issued of Insider Trading of the Bank, SEBI
certificate pursuant to the provisions of (Prohibition of Insider Trading) Regulations,
Regulation 17 of the Listing Regulations 2015, as amended from time to time, and
certifying that the financial statements do provisions under Section 195 the Companies
not contain any materially untrue statement Act, 2013 as amended. The Board has
and these statements represent a true and delegated powers to MD & CEO for carrying
fair view of the Company’s affairs. They also out amendments, if any, in the Code to align
certify that, to the best of their knowledge it with the amendments in the regulatory
and belief, no transactions entered into requirements, from time to time.
during the year were fraudulent, illegal
or violative of the code of conduct of the The Code requires pre-clearance for dealing
Bank, they are responsible for establishment in the Bank’s securities beyond threshold
and maintenance of the Internal Financial limits. Further, it prohibits the purchase or
Controls for financial reporting and they sale of Bank’s securities by the Directors,
have indicated to the auditors and the Audit KMPs, Auditors and the employees while in
Committee about any significant changes possession of unpublished price sensitive
in internal control over financial reporting, information in relation to the Bank and
significant changes in the accounting policies categorically prohibits the purchase or sale
and instances of significant frauds, if any, of Bank’s securities by the Directors, KMPs,
which they were aware. The said certificate Auditors and the designated employees
is annexed and forms part of the Annual during the period when the Trading Window
Report. is closed. Timely disclosures are made to
the Stock Exchanges of the transactions in
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excess of ` 10 lakhs. The Bank has procured and foster responsible reporting, a Whistle
a system which periodically monitors and Blower cannot resort to the Whistle Blower
facilitates the compliance by the employees Policy to report his/her personal grievances.
with the SEBI (Prohibition of Insider Trading)
Regulations, 2015.
The policy has been implemented
through a web-based ‘Corporate Whistle
The Bank has also put in place a code of Blower Initiative’ (CWI) portal, which is
conduct for Managing Director & CEO, KMPs, an independent online reporting service
employees of the respective departments aimed at facilitating secure and anonymous
and their immediate relatives for trading in communication between the Bank and
securities of other listed entities. The said Whistle Blower.
code requires pre-clearance for dealing
in securities of other listed entities, as The policy has provisions to safeguard
the respective departments may have Whistle Blower against victimization. As a
unpublished price sensitive information of responsible and vigilant organization, the
other entities due to Business Relationship, Bank encourages responsible and fearless
Exposures, etc. This ensures that any reporting of genuine concerns or grievances
employee who has unpublished price and also provides for direct access to the
sensitive information of other entities does Chairman of the Audit Committee of the
not deal in the securities of such other Board, in exceptional cases.
entities.
The functioning of the Vigil Mechanism is
F) WHISTLE BLOWER POLICY reviewed by the Audit Committee of the
In line with the provisions of SEBI (Listing Board regularly. None of the Whistle Blowers
Obligations and Disclosure Requirements) have been denied access to the Audit
Regulations, 2015, the Companies Act, 2013 Committee of the Board. The details of the
and the principles of good governance, the Whistle Blower Policy is available on the
Bank has devised and implemented a vigil website of the Bank https://www.yesbank.
mechanism, in the form of “Whistle Blower in/pdf/whistleblowerpolicy for stakeholders’
Policy”. The policy devised is also aligned perusal.
to the recommendations of Protected
Disclosure Scheme for Private Sector and G) STRICTURES AND PENALTIES
Foreign Banks, instituted by Reserve Bank of During the last three years, there were no
India. penalties or strictures imposed on the Bank
by the Stock Exchange(s) and/or SEBI and/
This policy enables a Whistle Blower to raise or any other statutory authorities on matters
concerns relating to reportable matters (as relating to capital market.
elucidated in the said policy) such as breach
of Bank’s Code of Conduct, fraud, bribery, H) HUMAN RIGHTS – BEST PRACTICES
corruption, employee misconduct, illegality, With the objective of mitigating risk by
health & safety, environmental issues and enhancing the Fraud awareness levels at the
wastage/misappropriation of bank funds/ organization level, the Fraud Containment
assets, etc., without fear of reprisals and to Unit & Risk Management team in partnership
provide for independent investigation. The with YES SCHOOL OF BANKING (‘YSB’)
framework of the policy endeavors to simplify deploys awareness and need based
and smoothen the process for Whistle Blower Fraud & Risk training programs as per the
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(I)
SHAREHOLDERS’ RIGHTS L) DISCLOSURE OF COMMODITY
PRICE RISKS AND COMMODITY
The Bank has a policy of announcement
HEDGING ACTIVITIES
of the quarterly results. The results, as
approved by the Board of Directors Information on the commodity price
are first submitted to Stock Exchanges risk or foreign exchange risk and
within 30 minutes (under Regulation hedging activities in the Bank
30 of the Listing Regulations) of the
Your Bank has Board approved
conclusion of the meeting. Once taken
Market Risk policy which defines risk
on record by the Stock Exchanges, the
control framework for undertaking
same were disseminated in the media
any Commodity price risk and Foreign
through press release. The quarterly
exchange risk. Vide Market Risk policy,
results are also published in newspapers
Board of the Bank has defined overall
and uploaded on Bank’s website www.
Net Overnight Open Position (NOOP)
yesbank.in. Further, an earnings call is
Limit, Stop Loss Limit, Aggregate
also organized, where the management
Gap limit (AGL), Value at Risk (VaR)
responds to the queries of the investors/
limit to control the Commodity Price/
analysts. The transcripts of the same are
Foreign exchange risk within its risk
also uploaded on the Banks’ website.
control framework. The Bank has not
(II)
AUDIT QUALIFICATIONS undertaken any commodity price risk
during the period. Bank has undertaken
The Banks’ financial statements are
all commodity transactions on back to
unqualified.
back basis. Further, the Bank has not
(III) SEPARATE POSTS OF CHAIRMAN exceeded any of its Board approved risk
AND CEO limit framework with respect to Foreign
Exchange Risk during the period.
The Bank has separate positions of the
part-time Chairman and the Managing Your Bank uses Derivatives including
Director & Chief Executive Officer of the Forwards & swaps for hedging its
Bank. currency risk in its balance sheet,
customer offerings and proprietary
(IV) REPORTING OF INTERNAL
trading in compliance with overall
AUDITORS
risk limit and control framework. The
The Internal Auditors of the Bank management of these products and
reports directly to the Audit Committee. businesses is governed by Board
approved Market Risk Policy, Investment
(V) COMPLIANCE WITH THE ICSI
Policy, Derivatives Policy, Hedging
SECRETARIAL STANDARDS
Policy and ALM policy of the Bank.
The relevant Secretarial Standards
Whether the commodity price risks
issued by the Institute of Company
and commodity hedging activities
Secretaries of India (ICSI) has been
are disclosed to the shareholders/
complied with by the Bank.
publically
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VI SHAREHOLDERS’ INFORMATION
A) EQUITY SHARE CAPITAL HISTORY OF OUR BANK:
The history of the equity share capital of our Bank is provided in the following table.
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The voting rights on the shares outstanding in the suspense account as on March 31, 2017 shall remain
frozen till the rightful owner of such shares claims the shares.
Details of shares lying in the ‘Unclaimed Suspense Account’ as on March 31, 2017 are as under:
Number of
Particulars Shares
shareholders
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C) DIVIDEND
FY16 100
FY15 90
FY14 80
FY13 60
FY12 40
FY11 25
FY10 15
Dividend for the year ended Date of Declaration of Dividend Last date of claiming Dividend
REMINDER TO INVESTORS
Reminders to encash the unclaimed dividend on shares are sent to the relevant shareholders at regular
intervals.
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POSTAL BALLOT
During the year, the following Resolutions were passed through Postal Ballot on June 4, 2016.
Mr. B. Narasimhan of M/s. B. N. & Associates, Practicing Company Secretaries, Mumbai was appointed
as the Scrutinizer for overseeing the postal ballot voting process. The details of voting pattern and
resolutions passed are as follows:
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The Bank has complied with the procedures for the postal ballot as prescribed under Section 108
and Section 110 of the Companies Act, 2013 read with Rule 22 of the Companies (Management and
Administration) Rules, 2014 and Regulation 44 of Listing Regulations.
No special resolution requiring postal ballot is being proposed on or before the ensuing Annual General
Meeting of the Bank.
The Bank receives investor complaints The said email Id’s are also displayed on the
through various sources and informs the official website of the Bank.
Stakeholders Relationship Committee of
the Board on the resolution and redressal F) QUERIES AT ANNUAL GENERAL
of the complaints, and also to the Board on MEETING
quarterly basis. The Bank receives investor Shareholders desiring any information with
complaints from Stock Exchanges, SEBI regard to the accounts are requested to
Complaints Redress System (SCORES), write to the Company at an early date so
Registrar of Companies, Mumbai, through as to enable the management to keep the
the Bank’s Registrar and Transfer Agents, information ready. The queries relating to
directly from investors’ correspondence and operational and financial performance may
from the investors personal visits to the Bank. be raised at the Annual General Meeting.
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G) MEANS OF COMMUNICATION
The financial and other information
Your Bank has provided adequate and timely filed by the Bank from time to time is
information to its members inter alia through also available on the websites of the
the following means Stock Exchanges i.e. BSE Limited (BSE)
and the National Stock Exchange of
Quarterly Results are announced India Limited (NSE). NSE and BSE have
through a Press Conference and a introduced NSE Electronic Application
Press Release sent to leading media Processing System (NEAPS) and BSE
publications. The results are also Listing Centre respectively. Various
communicated through newspaper compliances as required/prescribed
advertisements in prominent national under the Listing Regulations are filed
and regional dailies like the Economic through these systems.
Times, Business Standard, Mint, Free
Press Journal, Navshakti, Financial The Bank has established systems and
Express, DNA Money and Hindu procedures to disseminate relevant
Business Line. information to its stakeholders, including
shareholders, analysts, suppliers,
The financial results, official news customers, employees and the society
releases and presentations are also at large. It also conducts earning calls
displayed on the website of the Bank with analysts and investors.
(www.yesbank.in)
The Bank also publishes its Balance
The presentations made to institutional Sheet and Profit and Loss Account
investors and financial analysts on the together with the Auditors’ Report in
Bank’s financial results are displayed on newspaper(s) as required in terms of
the website of the Bank (www.yesbank. Section 31 of the Banking Regulation
in). The Bank also informs the Schedule Act, 1949 and Rule 15 of the Banking
of meetings with the institutional Regulation (Companies) Rules, 1949.
investors and financial analysts to the
Stock Exchanges.
Day, Date, Time and Venue of Tuesday, June 06, 2017 at 4:00 P.M.
the Annual General Meeting Hall of Culture, Ground Floor, Nehru Centre, Dr. A. B. Road, Worli,
Mumbai – 400 018
Financial Year April 01, 2016 to March 31, 2017
Date of Book Closure Wednesday, May 31, 2017 to Tuesday, June 06, 2017 (both days
inclusive)
Dividend Payment Date Will be paid on or after Wednesday, June 07, 2017
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The Listing Fees for the financial year 2016-17 is being paid to the
aforesaid Stock Exchanges.
Stock Code BSE : 532648
NSE : YESBANK
ISIN INE528G01019
MARKET PRICE DATA: HIGH, LOW DURING EACH MONTH IN LAST FINANCIAL YEAR
NSE BSE
Month High (`) Low (`) Volume High (`) Low (`) Volume
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Performance of the YES BANK Equity Shares relative to NSE Nifty Indices during the FY 2016-17
NSE
9500 1600
1500
9100 1400
1300
8700
1200
1100
8300
1000
7900 900
800
7500 700
01-Apr-16
01-May-16
01-Jun-16
01-Jul-16
01-Aug-16
01-Sep-16
01-Oct-16
01-Nov-16
01-Dec-16
01-Jan-17
01-Feb-17
01-Mar-17
Nifty Closing Value YBL Closing Price
Performance of the YES BANK Equity Shares relative to S&P BSE SENSEX during the FY 2016-17
BSE
30000 1600
1500
29000
1400
28000
1300
27000 1200
1100
26000
1000
25000
900
24000 800
01-Apr-16
01-May-16
01-Jun-16
01-Jul-16
01-Aug-16
01-Sep-16
01-Oct-16
01-Nov-16
01-Dec-16
01-Jan-17
01-Feb-17
01-Mar-17
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DEBT
Link Intime India Pvt. Ltd.,
C 101, 247 Park, L B S Marg, Vikhroli West, Mumbai 400 083
Tel No.: +91 22 49186000
Fax No.: +91 22 49186060
Contact Person: Mr. Ganesh Jadhav/Mr. Vinayak Bendal
Email: [email protected]
Share Transfer System The Board has delegated the authority for approving transfer,
transmission, etc. of the Bank’s securities to the Managing Director &
CEO and the Company Secretary.
Category No. of
% Total Shares Amount % of Amount
(No. of Shares) shareholders
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0.88 1.37
Promoter & Promoter Group 7.72
20.19
Mutual Funds
Foreign Institutional Investors 12.73
Insurance Companies 10.46
Individuals
Bodies Corporate
Others
46.65
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REPORT ON
CORPORATE GOVERNANCE (CONTD.)
Sr.
Name No. of shares %
No.
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Dematerialization of shares and As on March 31, 2017, the Share Capital of the Bank was held in the
liquidity dematerialized form with NSDL (98.15%) and CDSL (1.84%) except
23,271 shares were being held in physical form (0.01%).
Outstanding GDRs/ ADRs/ The Bank does not have any Outstanding GDRs/ ADRs/ Warrants or
Warrants or any Convertible any other Convertible instrument as on date.
instruments, conversion date
and likely impact on equity
Commodity price risk or foreign The information on the Commodity price risk or foreign exchange
exchange risk and hedging risk and hedging activities is explained elsewhere in this report.
activities
Plant Locations As the Bank is engaged in the business of banking/financial services,
there is no plant location.
Debenture Trustees: IDBI Trusteeship Services Limited
Asian Building, Ground Floor,
17, R Kamani Marg, Ballard Estate,
Mumbai – 400 001
Contact Person: Mr. Ajit Guruji, Vice President
Tel No.: 022 - 40807001
Fax No.: 022 – 66311776
Place: Mumbai
Date: April 19, 2017
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Rana Kapoor
Managing Director & CEO Place: Mumbai
(DIN No.: 00320702) Date: April 19, 2017
a. We have reviewed financial statements and the cash flow statement for the year ended March 31, 2017 and
that to the best of our knowledge and belief:
i. these statements do not contain any materially untrue statement or omit any material fact or contain
any statements that might be misleading;
ii. these statements together present a true and fair view of the Bank’s affairs and are in compliance with
existing accounting standards, applicable laws and regulations.
b. There are, to the best of our knowledge and belief, no transactions entered into by the Bank during the year
which are fraudulent, illegal or violative of the Bank’s Code of Conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that
we have evaluated the effectiveness of internal control systems of the Bank pertaining to financial reporting
and have disclosed to the Auditors and Audit Committee, deficiencies in the design or operation of such
internal controls, if any, of which we are aware and the steps we have taken or proposed to take to rectify
these deficiencies.
Yours faithfully
Place: Mumbai
Date: April 19, 2017
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Annexure to the Report on Corporate Governance for the year ended March 31, 2017
CERTIFICATE OF COMPLIANCE OF
CONDITIONS OF CORPORATE
GOVERNANCE
To
The Members of
YES BANK LIMITED
We have examined the compliance of conditions of corporate governance by YES BANK Limited (the 'Bank')
for the year ended March 31, 2017, as prescribed in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2)
of regulation 46 and paras C, D and E of Schedule V of Chapter IV of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 ('LODR').
We state that the compliance of conditions of Corporate Governance is the responsibility of the management,
and our examination was limited to procedures and implementation thereof adopted by the Bank for ensuring
the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Bank.
In our opinion, and to the best of our information and according to the explanations given to us, we certify that
the Bank has complied with the conditions of Corporate Governance as stipulated in the aforesaid provisions of
LODR except clause (a) of sub- regulation (1) read with Regulation 17 of LODR with respect to appointment of
a woman director on the Board of the Bank since 30th October, 2016.
We further state that such compliance is neither an assurance as to the future viability of the Bank nor the
efficiency or effectiveness with which the management has conducted the affairs of the Bank.
This certificate is issued solely for the purposes of complying with the aforesaid Regulations and may not be
suitable for any other purpose.
Prakash K Pandya
Partner
FCS 3901/ CP no. 2311
Place: Mumbai
Date: April 19, 2017
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FINANCIAL
STATEMENTS
STANDALONE FINANCIAL STATEMENTS
Independent Auditors’ Report 230
Balance Sheet 234
Profit and Loss Accounts 235
Cash Flow Statement 236
Schedules 238
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INDEPENDENT
AUDITORS’ REPORT
To, AUDITOR’S RESPONSIBILITY
The Members of Yes Bank Limited Our responsibility is to express an opinion on these
standalone financial statements based on our audit.
REPORT ON THE STANDALONE
FINANCIAL STATEMENTS We have taken into account the provisions of the Act,
We have audited the accompanying standalone the accounting and auditing standards and matters
financial statements of YES BANK LIMITED (‘the which are required to be included in the audit report
Bank’), which comprise the Balance Sheet as at under the provisions of the Act, and the Rules, made
March 31, 2017, the Profit and Loss Account, the thereunder.
Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and We conducted our audit in accordance with the
other explanatory information. Standards on Auditing (‘the Standards’) specified
under Section 143 (10) of the Act. Those Standards
MANAGEMENT’S RESPONSIBILITY require that we comply with ethical requirements
FOR THE STANDALONE FINANCIAL and plan and perform the audit to obtain reasonable
STATEMENTS assurance about whether the financial statements are
The Bank’s Board of Directors is responsible for the free from material misstatement.
matters stated in Section 134 (5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation An audit involves performing procedures to obtain
of these standalone financial statements that give a audit evidence about the amounts and the disclosures
true and fair view of the financial position, financial in the financial statements. The procedures selected
performance and cash flows of the Bank in accordance depend on the auditor’s judgment, including the
with the accounting principles generally accepted in assessment of the risk of material misstatement of the
India, including the Accounting Standards specified financial statements, whether due to fraud or error. In
under Section 133 of the Act, read with Rule 7 of the making those risk assessments, the auditor considers
Companies (Accounts) Rules, 2014, provisions of internal control relevant to the Bank’s preparation of
Section 29 of the Banking Regulation Act, 1949 and the financial statements that give a true and fair view in
the circulars, guidelines and directions issued by the order to design audit procedures that are appropriate
Reserve Bank of India (‘RBI’) from time to time. This in the circumstances. An audit also includes evaluating
responsibility also includes maintenance of adequate the appropriateness of the accounting policies used
accounting records in accordance with the provisions and the reasonableness of the accounting estimates
of the Act for safeguarding of the assets of the Bank made by the Bank’s Directors, as well as evaluating the
and for preventing and detecting frauds and other overall presentation of the financial statements.
irregularities; selection and application of appropriate
accounting policies; making judgments and estimates We believe that the audit evidence we have obtained
that are reasonable and prudent; and the design, is sufficient and appropriate to provide a basis for our
implementation and maintenance of internal financial audit opinion on the standalone financial statements.
controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting OPINION
records, relevant to the preparation and presentation In our opinion and to the best of our information and
of the financial statements that give a true and fair view according to the explanations given to us, the aforesaid
and are free from material misstatement, whether due standalone financial statements give the information
to fraud or error. required by the Banking Regulation Act, 1949 as well
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as the relevant requirements of the Companies Act, The disclosure required on holdings as well as dealings
2013, in the manner so required for banking companies in Specified Bank Notes during the period from
and give a true and fair view in conformity with the November 08, 2016 to December 30, 2016 as envisaged
accounting principles generally accepted in India, of in notification GSR 308(E) dated March 30, 2017 issued
the state of affairs of the Bank as at 31 March 2017, its by the Ministry of Corporate Affairs, is not applicable to
profit and its cash flows for the year then ended on the Bank. Refer note 18.7.17 to the financial statements.
that date.
Further, as required by Section 143 (3) of the Companies
OTHER MATTERS Act, 2013, we further report that:
The standalone financial statements of the Bank for
the year ended March 31, 2016 were audited by another (a) we have sought and obtained all the information
auditor who expressed an unmodified opinion on those and explanations which to the best of our
statements on 27 April 2016. knowledge and belief were necessary for the
purpose of our audit;
REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS (b)
in our opinion, proper books of account as
The Balance Sheet and Profit and Loss Account have required by law have been kept by the Bank so
been drawn up in accordance with the provisions of far as it appears from our examination of those
Section 29 of the Banking Regulation Act, 1949 read books;
with Section 133 of the Companies Act, 2013 read with
the Rule 7 of the Companies (Accounts) Rules, 2014. (c) the Balance Sheet, the Profit and Loss Account
and the Cash Flow Statement dealt with by this
As required by sub section (3) of Section 30 of the report are in agreement with the books of account;
Banking Regulation Act, 1949, we report that:
(d) in our opinion, the aforesaid standalone financial
(a)
we have obtained all the information and statements comply with the Accounting Standards
explanations which, to the best of our knowledge specified under Section 133 of the Act, read with
and belief, were necessary for the purpose of our Rule 7 of the Companies (Accounts) Rules, 2014.
audit and have found them to be satisfactory;
(e)
on the basis of the written representations
(b)
the transactions of the Bank, which have come received from the directors as on March 31, 2017
to our notice, have been within the powers of the taken on record by the Board of Directors, none
Bank; and of the directors is disqualified as on March 31, 2017
from being appointed as a director in terms of
(c)
since the key operations of the Bank are Section 164 (2) of the Act.
automated with the key applications integrated
to the core banking systems, the audit is carried (f) with respect to the adequacy of the internal financial
out centrally as all the necessary records and controls over financial reporting of the Bank and
data required for the purposes of our audit are the operating effectiveness of such controls, refer
available therein. During the course of our audit to our separate Report in “Annexure A”;
we have visited 22 branches.
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(g) with respect to the other matters to be included in derivative contracts - Refer Note 18.7.16 to
the Auditor’s Report in accordance with Rule 11 of the financial statements; and
the Companies (Audit and Auditors) Rules, 2014,
in our opinion and to the best of our information (iii)
there has been no delay in transferring
and according to the explanations given to us: amounts, required to be transferred, to the
Investor Education and Protection Fund by
(i)
The Bank has disclosed the impact of the Bank.
pending litigations on its financial position in
its financial statements - Refer Note 18.7.15 to For B S R & Co. LLP
the financial statements; Chartered Accountants
Firm’s Registration No. 101248W/W - 100022
(ii)
The Bank has made provision, as required
under the applicable law or accounting Manoj Kumar Vijai
ANNEXURE A
TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE
STANDALONE FINANCIAL STATEMENTS OF YES BANK LIMITED
Report on the Internal Financial Controls under clause for ensuring the orderly and efficient conduct of its
(i) of sub-section 3 of Section 143 of the Companies business, including adherence to Bank’s policies, the
Act, 2013 safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness
We have audited the internal financial controls over of the accounting records, and the timely preparation
financial reporting of YES Bank Limited (‘the Bank’) of reliable financial information, as required under the
as at March 31, 2017 in conjunction with our audit of Companies Act, 2013 (‘the Act’).
the standalone financial statements of the Bank for the
year ended on that date. AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on the Bank’s
MANAGEMENT’S RESPONSIBILITY FOR internal financial controls over financial reporting based
INTERNAL FINANCIAL CONTROLS on our audit. We conducted our audit in accordance
The Bank’s Board of Directors is responsible for with the Guidance Note and the Standards on Auditing
establishing and maintaining internal financial controls (‘the Standards’), issued by the ICAI and deemed to
based on the internal control over financial reporting be prescribed under section 143(10) of the Act, to
criteria established by the Bank considering the the extent applicable to an audit of internal financial
essential components of internal control stated in the controls, both issued by the ICAI. Those Standards
Guidance Note on Audit of Internal Financial Controls and the Guidance Note require that we comply with
Over Financial Reporting (‘the Guidance Note’) issued ethical requirements and plan and perform the audit to
by the Institute of Chartered Accountants of India obtain reasonable assurance about whether adequate
(‘the ICAI’). These responsibilities include the design, internal financial controls over financial reporting
implementation and maintenance of adequate internal was established and maintained and if such controls
financial controls that were operating effectively operated effectively in all material respects.
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ANNEXURE A
TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE
STANDALONE FINANCIAL STATEMENTS OF YES BANK LIMITED
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BALANCE SHEET
AS AT MARCH 31, 2017
( ` in thousands)
As at As at
Schedule
March 31, 2017 March 31, 2016
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No: 101248W/W-10022
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(` in thousands)
I. INCOME
Interest earned 13 164,246,437 135,334,419
Other income 14 41,567,569 27,121,472
TOTAL 205,814,006 162,455,891
II. EXPENDITURE
Interest expended 15 106,273,367 89,667,193
Operating expenses 16 41,165,410 29,763,714
Provisions and contingencies 17 25,074,265 17,630,518
TOTAL 172,513,042 137,061,425
III. PROFIT
Net profit for the year 33,300,964 25,394,466
Profit brought forward 55,446,801 42,200,505
TOTAL 88,747,765 67,594,971
IV. APPROPRIATIONS
Transfer to Statutory Reserve 8,325,241 6,348,617
Transfer to Capital Reserve 1,082,995 734,827
Transfer to Investment Reserve - -
Dividend paid for previous year 4,665 2,740
Tax on Dividend paid for previous year 950 468
Proposed Dividend (refer note 18.4.1) - 4,205,316
Tax (including surcharge and education cess) on - 856,202
Dividend (refer note 18.4.1)
Balance carried over to balance sheet 79,333,915 55,446,801
TOTAL 88,747,765 67,594,971
Significant Accounting Policies and Notes to 18
Accounts forming part of financial statements
Earning per share (Refer Sch. 18.6.15)
Basic (`) 78.89 60.62
Diluted (`) 76.77 59.31
(Face Value of Equity Share is ` 10/-)
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No: 101248W/W-10022
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(` in thousands)
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(` in thousands)
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No: 101248W/W-10022
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 1 - CAPITAL
AUTHORIZED CAPITAL
600,000,000 equity shares of ` 10/- each 6,000,000 6,000,000
20,000,000 preference shares of ` 100/- each 2,000,000 -
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
456,485,813 equity shares of ` 10/- each 4,564,858 4,205,316
(March 31, 2016 : 420,531,641 equity shares of ` 10/- each) [Refer Sch 18.5.1.1]
TOTAL 4,564,858 4,205,316
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 3 - DEPOSITS
A. I. DEMAND DEPOSITS
i) From Banks 10,543,996 8,430,375
ii) From Others 180,334,205 100,820,390
II. SAVINGS BANK DEPOSIT 327,818,301 204,176,990
III. TERM DEPOSITS
i) From banks 78,421,060 65,233,073
ii) From others 831,621,005 738,534,503
TOTAL 1,428,738,567 1,117,195,331
B. I. DEPOSITS OF BRANCHES IN INDIA 1,428,635,283 1,117,195,331
II. DEPOSITS OF BRANCHES OUTSIDE INDIA 103,284 -
TOTAL 1,428,738,567 1,117,195,331
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 4 - BORROWINGS
I. INNOVATIVE PERPETUAL DEBT INSTRUMENTS (IPDI) AND TIER II
DEBT
A. BORROWING IN INDIA
i) IPDI 37,410,000 7,410,000
ii) Tier II Borrowings 84,828,000 88,614,000
TOTAL (A) 122,238,000 96,024,000
B. BORROWINGS OUTSIDE INDIA
i) IPDI 324,250 331,275
ii) Tier II Borrowings 10,969,876 11,268,509
TOTAL (B) 11,294,126 11,599,784
TOTAL (A+B) 133,532,126 107,623,784
II. OTHER BORROWINGS*
A. BORROWINGS IN INDIA
i) Reserve Bank of India - 10,000,000
ii) Other banks 21,818,909 19,520,000
iii) Other institutions and agencies ** 81,117,555 84,915,827
TOTAL (A) 102,936,464 114,435,827
B. BORROWINGS OUTSIDE INDIA 149,598,140 94,530,158
TOTAL (A+B) 252,534,604 208,965,985
TOTAL (I+II) 386,066,730 316,589,769
*Secured borrowings are ` 14,198,629 (March 31, 2016 : ` 17,994,327 thousands).
**Including refinance borrowing.
( ` in thousands)
As at As at
March 31, 2017 March 31, 2016
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FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 9 - ADVANCES
A. i) Bills purchased and discounted 15,592,229 13,618,402
ii) Cash credit, overdrafts and loans payable on demand 285,619,143 233,961,280
iii) Term loans 1,021,415,397 734,519,588
TOTAL 1,322,626,769 982,099,270
B. i) Secured by tangible assets (includes advances secured by fixed 971,727,832 729,383,226
deposits and book debt)
ii) Covered by Bank/Government guarantees 9,982,743 3,162,345
iii) Unsecured (Note 1 and 2) 340,916,194 249,553,699
TOTAL 1,322,626,769 982,099,270
1 Includes advances of ` 194,674,665 thousands (March 31, 2016
` 131,205,302 thousands) for which security documentation is
either being obtained or being registered.
2 There are no outstanding advances as at March 31, 2017 and
March 31, 2016 for which only intangible securities such as
charge over the rights, licenses, authority, etc has been taken.
C. I. ADVANCES IN INDIA
i) Priority sectors 291,727,756 265,143,459
ii) Public sector 611,812 47,396
iii) Banks 1,336,192 879,657
iv) Others 968,611,004 701,038,944
TOTAL (I) 1,262,286,764 967,109,456
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FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
(` in thousands)
(` in thousands)
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FORMING PART OF FINANCIAL STATEMENTS
(` in thousands)
(` in thousands)
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FORMING PART OF FINANCIAL STATEMENTS
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FORMING PART OF FINANCIAL STATEMENTS
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
guidelines. Transfer of scripts from AFS / HFT category is deducted from interest income
category to HTM category is made at the lower in accordance with RBI Circular DBR.No.BP.
of book value or market value. In the case of BC.6/21.04.141/2015-16 dated July 01, 2015. Where
transfer of securities from HTM to AFS / HFT in the opinion of management, a diminution,
category, the investments held under HTM at a other than temporary in the value of investments
discount are transferred to AFS / HFT category classified under HTM has taken place, suitable
at the acquisition price and investments placed in provisions are made.
the HTM category at a premium are transferred to
AFS/ HFT at the amortized cost. Treasury Bills, Commercial Paper and Certificates
of deposit being discounted instruments, are
Transfer of investments from AFS to HFT or valued at carrying cost.
vice-a-versa is done at the book value.
Depreciation carried, if any, on such investments Pass Through Certificates purchase for priority
is also transferred from one category to another. sector lending requirements are valued at Book
Value in accordance with FIMMDA guidelines
D) VALUATION FIMCIR/2017-18/001/April 03, 2017.
Investments categorized under AFS and HFT
categories are marked to market (MTM) on a The market/ fair value applied for the purpose
periodical basis as per relevant RBI guidelines. of periodical valuation of quoted investments
Net depreciation, if any, in the category under included in the AFS and HFT categories is the
the classification mentioned in Schedule 8 market price of the scrip as available from the
(‘Investments’) is recognized in the profit and trades/ quotes on the stock exchanges and
loss account. The net appreciation, if any, in the for Subsidiary General Ledger (‘SGL’) account
category under each classification is ignored, transactions, the prices as periodically declared
except to the extent of depreciation previously by Primary Dealers Association of India jointly
provided. The book value of individual securities with FIMMDA.
is not changed consequent to periodic valuation
of investments. The market/fair value of unquoted government
securities included in the AFS and HFT category
Investments received in lieu of restructured is determined as per the prices published by
advances/under Strategic Debt Restructuring FIMMDA. Further, in the case of unquoted bonds,
(SDR) scheme are valued in accordance with debentures, pass through certificates (other than
RBI guidelines. Any diminution in value on priority sector) and preference shares, valuation is
these investments is provided for and is not carried out by applying an appropriate mark-up
used to set off against appreciation in respect (reflecting associated credit risk) over the Yield to
of other performing securities in that category. Maturity (‘YTM’) rates of government securities.
Depreciation on equity shares acquired and held Such mark up and YTM rates applied are as per
by the Bank under SDR scheme is provided as per the relevant rates published by FIMMDA.
RBI guidelines.
The Bank undertakes short sale transactions
Investments classified under the HTM category in Central Government dated securities in
are carried at their acquisition cost and any accordance with RBI guidelines. The short position
premium over the face value, paid on acquisition, is reflected as the amount received on sale and
is amortized on a straight line basis over the is netted in the Investment schedule. The short
remaining period to maturity. Amortization position is marked to market and loss, if any, is
expense of premia on investments in the HTM charged to the Profit and Loss account while gain,
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
if any, is ignored. Profit / Loss on settlement of the Masala bonds are valued using either Composite
short position is recognized in the Profit and Loss Bloomberg Bond Trader (CBBT) price, Bloomberg
account. Valuation Service (BVAL) price or as per FIMMDA
guided valuation methodology for unquoted
Units of Venture Capital Funds (VCF) held under bonds in the chronological order based on
AFS category are valued using the Net Asset availability.
Value (NAV) shown by VCF as per the financial
statement. The VCFs are valued based on the Special bonds such as oil bonds, fertilizer bonds,
audited results once in a year. In case the audited UDAY bonds etc. which are directly issued by
financials are not available for a period beyond 18 Government of India (‘GOI’) is valued based on
months, the investments are valued at ` 1 per VCF. FIMMDA valuation.
Quoted equity shares are valued at their closing Non-performing investments are identified and
price on a recognized stock exchange. Unquoted depreciation / provision are made thereon based
equity shares are valued at the break-up value if on the RBI guidelines. Based on management
the latest balance sheet is available, else, at ` 1 per assessment of impairment, the Bank may
company, as per relevant RBI guidelines. additionally create provision over and above the
RBI guidelines. The depreciation / provision on
At the end of each reporting period, security such non-performing investments are not set
receipts issued by the asset reconstruction off against the appreciation in respect of other
company are valued in accordance with the performing securities. Interest on non-performing
guidelines applicable to such instruments, investments is not recognized in the Profit and
prescribed by RBI from time to time. Accordingly, Loss account until received.
in cases where the cash flows from security
receipts issued by the asset reconstruction E) PROFIT/LOSS ON SALE OF INVESTMENTS
company are limited to the actual realization of Profit/Loss on sale of Investments in the HTM
the financial assets assigned to the instruments in category is recognized in the profit and loss
the concerned scheme, the Bank reckons the net account and profit thereafter is appropriated
asset value obtained from the asset reconstruction (net of applicable taxes and statutory reserve
company from time to time, for valuation of such requirements) to Capital Reserve. Profit/Loss on
investments at each reporting date. sale of investments in HFT and AFS categories is
recognized in the Profit and Loss account.
Investments in quoted Mutual Fund (MF) Units
are valued at the latest repurchase price/net asset F) ACCOUNTING FOR REPOS / REVERSE
value declared by the mutual fund. Investments REPOS
in un-quoted MF Units are valued on the basis of Securities sold under agreements to repurchase
the latest re-purchase price declared by the MF in (Repos) and securities purchased under
respect of each particular Scheme. agreements to resell (Reverse Repos) including
liquidity adjustment facility (LAF) with RBI
Sovereign foreign currency Bonds are valued using are treated as collateralized borrowing and
either Composite Bloomberg Bond Trader (CBBT) lending transactions respectively in accordance
price, Bloomberg Valuation Service (BVAL) price with RBI master circular No. DBR.No.BP.
or on Treasury curve in the chronological order BC.6/21.04.141/2015-16 dated 1 July 2015. The
based on availability. first leg of the repo transaction is contracted
at the prevailing market rates. The difference
between consideration amounts of first and
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second (reversal of first) leg reflects interest and country exposure). Countries are categorized into risk
is recognized as interest income/expense over the categories as per Export Credit Guarantee Corporation
period of transaction. of India Ltd. (‘ECGC’) guidelines and provisioning is done
in respect of that country where the net funded exposure
Bank also undertakes Repo and Reverse repo is one percent or more of the Bank’s total assets.
transactions from IFSC Banking Unit in GIFT
City in Foreign currency Sovereign Securities In respect of restructured standard and non-performing
and accounting is similar to the domestic repo advances, provision is made for the present value of
transactions. principal and interest component sacrificed at the time
of restructuring the assets, based on the RBI guidelines.
18.4.4 ADVANCES
ACCOUNTING AND CLASSIFICATION Accounts are written-off in accordance with the Bank’s
Advances are classified as performing and non- policies. Recoveries from bad debts written-off are
performing based on the relevant RBI guidelines. recognized in the Profit and Loss account and included
Advances are stated net of specific provisions, interest under other income.
in suspense, inter-bank participation certificates issued
and bills rediscounted. In case of loans sold to asset reconstruction company
and consideration is more than net book value, the
PROVISIONING Bank records the security receipts at Net Book Value
Provisions in respect of non-performing advances as per RBI guidelines.
are made based on management’s assessment of the
degree of impairment of the advances, subject to the 18.4.5 TRANSACTIONS INVOLVING FOREIGN
minimum provisioning level prescribed in relevant RBI EXCHANGE
guidelines. Foreign currency income and expenditure items of
domestic operations are translated at the exchange
The specific provision levels for retail non-performing rates prevailing on the date of the transaction. Income
assets are also based on the nature of product and and expenditure items of integral foreign operations
delinquency levels. Specific provisions in respect of (representative offices) are translated at the daily
non-performing advances are charged to the Profit average closing rates and of non-integral foreign
and Loss account and included under Provisions and operations (foreign branches) at the monthly average
Contingencies. closing rates.
As per the RBI guidelines a general provision is made Premia/discounts on foreign exchange swaps, that
on all standard advances, including provision for are used to hedge risks arising from foreign currency
borrowers having unhedged foreign currency exposure assets and liabilities, are amortized over the life of the
and for credit exposures computed as per the current swap.
marked to market values of interest rate and foreign
exchange derivative contracts. The Bank also maintains Monetary foreign currency assets and liabilities are
additional general provisions on standard exposure translated at the balance sheet date at rates notified
based on the internal credit rating matrix as approved by the Foreign Exchange Dealers’ Association of India
by the Board of the Bank. These provisions are included (‘FEDAI’). Foreign exchange contracts are stated at
in Schedule 5 - ‘Other liabilities & provisions - Others’. net present value using LIBOR/SWAP curves of the
respective currencies. The resulting profits or losses
Further to the provisions required to be held according are recognized in the profit and loss account.
to the asset classification status, provisions are held
for individual country exposures (other than for home
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In accordance with AS 11 ‘The Effects of changes transaction designated with an asset or liability that is
in Foreign Exchange Rates’, contingent liabilities in carried at market value or lower of cost or market value
respect of outstanding foreign exchange forward in the financial statements, which are accounted similar
contracts, derivatives, guarantees, endorsements and to the underlying asset or liability.
other obligations are stated at the exchange rates
notified by FEDAI corresponding to the balance sheet The Bank follows the option premium accounting
date. framework prescribed by FEDAI SPL- circular dated
December 14, 2007. Premium on option transaction
Both monetary and non-monetary foreign currency is recognized as income/expense on expiry or early
assets and liabilities of non-integral foreign operations termination of the transaction. Mark to market (MTM)
are translated at closing exchange rates notified by gain/loss (adjusted for premium received/paid on
FEDAI at the Balance Sheet date and the resulting option contracts) is recorded under ‘Other Income’.
profit / loss arising from exchange differences are
accumulated in the Foreign Currency Translation The amounts received/paid on cancellation of option
Account until remittance or the disposal of the net contracts are recognized as realized gains/losses on
investment in the non-integral foreign operations in options. Charges receivable/payable on cancellation/
accordance with AS - 11. termination of foreign exchange forward contracts and
swaps are recognized as income/ expense on the date
18.4.6 EARNINGS PER SHARE of cancellation/ termination under ‘Other Income’.
The Bank reports basic and diluted earnings per equity
share in accordance with Accounting Standard (AS) 20, The requirement for collateral and credit risk mitigation
“Earnings per Share” notified under Section 133 of the on derivative contracts is assessed based on internal
Companies Act 2013, read together with paragraph 7 of credit policy. Overdues if any, on account of derivative
the Companies (Accounts) Rules, 2014. Basic earnings transactions are accounted in accordance with extant
per equity share have been computed by dividing net RBI guidelines.
profit after tax for the year by the weighted average
number of equity shares outstanding for the period. As per the RBI guidelines on ‘Prudential Norms for Off-
balance Sheet Exposures of Banks’ a general provision
Diluted earnings per equity share have been computed is made on the current gross MTM gain of the contract
using the weighted average number of equity shares for all outstanding interest rate and foreign exchange
and dilutive potential equity shares outstanding during derivative transactions.
the period except where the results are anti dilutive.
Cross currency interest rate swaps which are used by
18.4.7 ACCOUNTING FOR DERIVATIVE the Bank to hedge its foreign currency borrowings
TRANSACTIONS have been designated as cash flow hedges and are
Derivative transactions comprises forward rate measured at fair value. The corresponding gain or loss
agreements, swaps and option contracts. The Bank is recognized as cash flow hedge reserve. Further to
undertakes derivative transactions for market making/ match profit/ loss on account of revaluation of foreign
trading and hedging on-balance sheet assets and currency borrowing, the corresponding amount is
liabilities. All market making/trading transactions are recycled from cash flow hedge reserve to Profit and
marked to market on a monthly and the resultant Loss account.
unrealized gains/losses are recognized in the profit
and loss account. 18.4.8 FIXED ASSETS
Fixed assets are stated at cost less accumulated
Derivative transactions that are undertaken for hedging depreciation, amortization and accumulated
are accounted for on accrual basis except for the impairment losses. Cost comprises the purchase price
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and any cost attributable for bringing the asset to its Assets costing up to ` 5,000 are fully depreciated
working condition for its intended use. Subsequent in the year of purchase.
expenditure incurred on assets put to use is capitalised
only when it increases the future benefit /functioning
For assets purchased/sold during the year,
capability from / of such assets. depreciation is being provided on pro rata basis
by the Bank.
Fixed assets are reviewed for impairment whenever
events or changes in circumstances indicate that the Improvements to leasehold assets are depreciated
carrying amount of an asset may not be recoverable. over the remaining period of lease
An asset’s recoverable amount is the higher of an asset’s
net selling price and its value in use. If such assets are Reimbursement, if any, is recognized on receipt
considered to be impaired, the impairment is recognized and is adjusted to the book value of asset and
by debiting the profit and loss account and is measured depreciated over the balance life of the asset
as the amount by which the carrying amount of the
assets exceeds the fair value of the assets. Whenever there is a revision in the estimated useful
life of the asset, the unamortized depreciable
18.4.9 DEPRECIATION amount is charged over the revised remaining
Depreciation on fixed assets is provided on straight- useful life of the said asset
line method, overestimated useful lives, as determined
by the management, at the rates mentioned below-
The useful life of assets is based on historical
experience of the Bank, which is different from
the useful life as prescribed in Schedule II to the
Useful life
Useful life Companies Act, 2013.
of Assets as
of Assets
per Bank's
Class of asset as per
Accounting 18.4.10 IMPAIRMENT OF ASSETS
Companies
Policy The Bank assesses at each balance sheet date whether
Act, 2013
there is any indication that an asset may be impaired.
Owned Premises 60 years 60 years
Impairment loss, if any, is provided in the Profit and
Loss account to the extent the carrying amount of
Office equipment 5 years 5 years
assets exceeds their estimated recoverable amount.
Computer hardware1 6 years 3 years
Computer software * 6 years 4 years
18.4.11 EMPLOYEE BENEFITS
Vehicles1 8 years 5 years
EMPLOYEE STOCK OPTION SCHEME (‘ESOS’)
Furniture and Fixtures 10 years 10 years
The Employee Stock Option Scheme (‘the Scheme’)
Automated Teller 15 years 10 years
provides for the grant of options to acquire equity
Machines (‘ATMs’)1
shares of the Bank to its employees. The options
Leasehold improvements Over the lease period or 9
granted to employees vest in a graded manner and
to premises years whichever is less.
these may be exercised by the employees within a
*As per RBI Guidelines.
specified period.
1
Based on technical evaluation, the management believes that the
useful lives as given above best represent the period over which Measurement of the employee share-based payment
management expects to use these assets. Hence, the useful lives plans is done in accordance with the Guidance Note
for these assets is different from the useful lives as prescribed on Accounting for Employee Share-based Payments
under Part C of Schedule II of the Companies Act, 2013. issued by Institute of Chartered Accountants of India
(ICAI) and SEBI (Share Based Employee Benefits)
Regulations, 2014. The Bank measures compensation
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Deferred tax assets are recognized only to the extent 18.4.15 CASH AND CASH EQUIVALENT
there is reasonable certainty that the assets can be Cash and cash equivalents include cash in hand,
realized in future. In case of unabsorbed depreciation balances with RBI, balances with other banks and
or carried forward loss under taxation laws, all deferred money at call and short notice.
tax assets are recognized only if there is virtual certainty
of realization of such assets supported by convincing 18.4.16 CORPORATE SOCIAL RESPONSIBILITY
evidence. Deferred tax assets are reviewed at each Expenditure towards corporate social responsibility, in
balance sheet date and appropriately adjusted to accordance with Companies Act, 2013, are recognized
reflect the amount that is reasonably/virtually certain in the Profit and Loss account.
to be realized.
18.4.17 DEBIT AND CREDIT CARDS REWARD
18.4.14 PROVISIONS AND CONTINGENT POINTS
ASSETS/LIABILITIES The Bank estimates the probable redemption of debit
A contingent liability is a possible obligation that arises and credit card reward points and cost per point
from past events whose existence will be confirmed using actuarial valuation method by employing an
by the occurrence or non-occurrence of one or more independent actuary, which includes assumptions such
uncertain future events beyond the control of the as mortality, redemption and spends.
company or a present obligation that is not recognized
because it is not probable that an outflow of resources Provisions for liabilities on said reward points are made
will be required to settle the obligation. A contingent based on the actuarial valuation report as furnished
liability also arises in extremely rare cases where there is by the said independent actuary and included in other
a liability that cannot be recognized because it cannot liabilities.
be measured reliably. The Bank does not recognize a
contingent liability but discloses its existence in the 18.4.18 BULLION
financial statements The Bank imports bullion including precious metal bars
on a consignment basis for selling to its customers.
In accordance with AS 29, Provisions, Contingent The imports are typically on a back-to-back basis and
Liabilities and Contingent Assets, the Bank creates a are priced to the customer based on a price quoted
provision when there is a present obligation as a result by the supplier. The Bank earns a fee on such bullion
of a past event that probably requires an outflow of transactions. The fee is classified in other income.
resources and a reliable estimate can be made of the The Bank also deals in bullion on a borrowing and
amount of the obligation. lending basis and the interest paid / received thereon
is classified as interest expense / income respectively.
Provisions are reviewed at each balance sheet date
and adjusted to reflect the current best estimate. If 18.4.19 SHARE ISSUE EXPENSES
it is no longer probable that an outflow of resources Share issue expenses are adjusted from Share Premium
would be required to settle the obligation, the Account in terms of Section 52 of the C o m p a n i e s
provision is reversed. Act, 2013.
Contingent assets are not recognized in the financial 18.4.20 SEGMENT INFORMATION
statements. However, contingent assets are assessed The disclosure relating to segment information is in
continually and if it is virtually certain that an inflow accordance with AS-17, Segment Reporting and as per
of economic benefits will arise, the asset and related guidelines issued by RBI.
income are recognized in the period in which the
change occurs.
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18.5.1 CAPITAL
18.5.1.1 EQUITY ISSUE
During the financial year ended March 31, 2017, the Bank has issued 32,711,000 equity shares of ` 10 each for cash
pursuant to a Qualified Institutions Placement (QIP) at ` 1,500 per share aggregating to ` 49,066.50 millions.
The Bank accreted ` 48,239.39 millions (net of share issue expenses of ` 500 millions) as premium, on account
of QIP. Provision on share issue expenses created by debiting to share premium account is on estimated basis.
Adjustments, if any required, to share premium shall be made upon final settlement of these expenses. The Bank
also issued 32,43,172 shares pursuant to the exercise of stock option aggregating to ` 1,010.12 millions.
During the financial year ended March 31, 2016, the Bank has issued 2,795,543 shares pursuant to the exercise of
stock option aggregating to ` 739.51 millions.
` in millions
As at As at
Share Capital
March 31, 2017 March 31, 2016
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As at As at
March 31, 2017 March 31, 2016
For the financial year ended March 31, 2016, the Bank has raised Tier II Debt instruments amounting to ` 38,992.00
millions, details of which are as follows:
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Nature of Coupon
Particulars Date of Issue Tenure Amount
Security Rate (%)
18.5.2 INVESTMENTS
I) VALUE OF INVESTMENTS
` in millions
As at As at
Particulars
March 31, 2017 March 31, 2016
As at As at
Particulars (In India)
March 31, 2017 March 31, 2016
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` in millions
The details of securities sold and purchased under repos and reverse repos during the year ended March 31, 2016:
` in millions
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` in millions
Extent of
Extent of ‘below Extent of Extent of
No Issuer Amount private investment ‘unrated’ ‘unlisted’
placement grade’ securities # securities*
securities
Issuer composition of Non SLR investments as at March 31, 2016 is given below:
` in millions
Extent of
Extent of ‘below Extent of Extent of
No Issuer Amount private investment ‘unrated’ ‘unlisted’
placement grade’ securities # securities*
securities
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Non-Performing Investments
` in millions
The Bank has not sold and transferred securities to or from HTM category exceeding 5% of the book value of
investment held in HTM category at the beginning of the year. The 5% threshold referred to above does not
include onetime transfer of securities to/from HTM category with the approval of Board of Directors permitted
to be undertaken by banks as per extant RBI guidelines, sale of securities under pre-announced Open Market
Operation (OMO) auction to the RBI and sale of securities or transfer to AFS / HFT consequent to the reduction
of ceiling on SLR securities under HTM.
18.5.5 DERIVATIVES
18.5.5.1 FORWARD RATE AGREEMENT/ INTEREST RATE SWAP
The details of Forward Rate Agreements / Interest Rate Swaps outstanding as at March 31, 2017 is given below:
` in millions
As at As at
Sr. No Items
March 31, 2017 March 31, 2016
2
Fair values represent mark-to-market including accrued interest.
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The nature and terms of the Rupee IRS as on March 31, 2017 are set out below:
` in millions
Notional
Nature Nos. Benchmark Terms
Principal
The nature and terms of the FCY IRS as on March 31, 2017 are set out below:
` in millions
Notional
Nature Nos. Benchmark Terms
Principal
Trading 348 189,592.35 USD LIBOR Fixed Receivable V/S Floating Payable
Trading 256 167,004.10 USD LIBOR Fixed Payable V/S Floating Receivable
Trading 68 32,348.25 USD LIBOR Floating Receivable V/S Floating Payable
Trading 10 1,253.50 EURIBOR Fixed Receivable V/S Floating Payable
Trading 9 1,218.63 EURIBOR Fixed Payable V/S Floating Receivable
Trading 1 116.01 JPY LIBOR Fixed Payable V/S Floating Receivable
The nature and terms of the Rupee IRS as on March 31, 2016 are set out below:
` in millions
Notional
Nature Nos. Benchmark Terms
Principal
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The nature and terms of the FCY IRS as on March 31, 2016 are set out below:
` in millions
Notional
Nature Nos. Benchmark Terms
Principal
Trading 126 100,444.38 USD LIBOR Fixed Receivable V/S Floating Payable
Trading 154 100,183.66 USD LIBOR Fixed Payable V/S Floating Receivable
Trading 27 7,823.16 USD LIBOR Floating Receivable V/S Floating Payable
Trading 2 171.91 EURIBOR Fixed Receivable V/S Floating Payable
Trading 2 171.91 EURIBOR Fixed Payable V/S Floating Receivable
Trading 1 117.97 JPY LIBOR Fixed Payable V/S Floating Receivable
` in millions
Sr. As at As at
Particulars
No. March 31, 2017 March 31, 2016
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a) Purpose: The Bank uses Derivatives including Forwards & swaps for various purposes viz. hedging its currency
and interest rate risk in its balance sheet, customer offerings and proprietary trading. The management of
these products and businesses is governed by the Market Risk Policy, Investment Policy, Derivatives Policy,
Derivatives Appropriate ness Policy, Hedging Policy and ALM policy.
b) Structure: The Board of Directors of the Bank have constituted a Board level sub-committee, the Risk
Monitoring Committee (‘RMC’) and delegated to it all functions and responsibilities relating to the risk
management policy of the Bank and its supervision thereof.
c) As part of prudent business and risk management practice, the Bank has also instituted a comprehensive
limit and control structure encompassing Value-at-Risk (VAR), Sensitivity, Greeks, Stop loss & credit limits
for derivative transactions including a robust suitability and appropriateness framework. The Bank has an
elaborate internal reporting mechanism providing regular reports to the RMC as well as Top management
of the Bank. Such a structure helps the Bank to monitor and mitigate market risk across FX, interest rates as
well as credit risk, operational risk, reputational risk and legal risk.
d)
The Bank has an independent Middle Office and Market Risk, which are responsible for monitoring,
measurement, and analysis of derivative related risks, among others. The Bank has a Credit Risk Management
unit which is responsible for setting up counterparty limits and also a treasury operation unit which is
responsible for managing operational aspects of derivatives control function and settlement of transactions.
The Bank is subject to a concurrent audit for all treasury transactions, including derivatives, a monthly report
of which is periodically submitted to the Audit & Compliance Committee of the Bank.
e) In addition to the above, the Bank independently evaluates the potential credit exposure on account of all
derivative transactions, wherein risk limits are specified separately for each product, in terms of both credit
exposure and tenor. As mandated by the Credit Policy of the Bank, the Bank has instituted an approval
structure for all treasury/derivative related credit exposures. Wherever necessary, appropriate credit
covenants are stipulated as trigger events to call for collaterals or terminate a transaction and contain the
risk.
f) The Bank reports all trading positions to the management on a daily basis. The Bank revalues its trading
position on a daily basis for Management and Information System (‘MIS’) and control purposes and records
the same in the books of accounts on a monthly basis.
g) For derivative contracts in the banking book designated as hedge, the Bank documents at the inception
of the relationship between the hedging instrument and the underlying exposure, the risk management
objective for undertaking the hedge and ALCO monitors all outstanding hedges on a periodical basis.
Further the Bank’s ‘Hedging Policy’ has stipulated conditions to ensure that the Hedges entered into are
effective.
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` in millions
Currency derivatives 1
Interest rate derivatives 4
Sr. As at As at As at As at
Particular
No March 31, March 31, March 31, March 31,
2017 2016 2017 2016
Note:
1) Denotes absolute value of loss which the Bank could suffer on account of a change in interest rates by 1%
which however doesn’t capture the off-setting exposures between interest rate and currency derivatives.
2) PV01 exposures reported above may not necessarily indicate the interest rate risk the Bank is exposed to,
given that PV01 exposures in Investments (which may offset the PV01 reflected above) do not form part of
the above table.
3) The notional principal amount of foreign exchange contracts classified as trading at March 31, 2017 amounted
to ` 1,631,110.62 millions (previous year: ` 1,752,326.72 millions). For these trading contracts, at March 31,
2017, marked to market position was asset of ` 35,428.99 millions (Previous year: ` 18,477.52 millions) and
liability of ` 40,014.63 millions (Previous Year: ` 18,406.34 millions).The notional principal amount of foreign
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exchange contracts classified as hedging at March 31, 2017 amounted to ` 2,329.98 millions (previous year:
` 13,583.12 millions). Credit exposure on forward exchange contracts at March 31, 2017 was ` 66,733.58
millions (Previous Year: ` 54,081.82 millions) of which exposure on CCIL is ` 35,132.52 millions (Previous Year:
` 33,307.68 millions).
` in millions
Sr.
Particulars March 31, 2017 March 31, 2016
No.
The Bank does not have any advances which are outstanding in the books of the branches, but have been written-
off (fully or partially) at Head Office level.
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18.5.6.3 DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAS – (REF DBR.
BP.BC.NO. 63/ 21.04.018/2016-17 DATED APRIL 18, 2017)
` in millions
Sr.
Particulars
No.
The table above is in conformity with RBI circular issued on April 18, 2017 and as per approval from Board of
Directors at its Board meeting held on April 19, 2017, the audited financial statements of the Bank for the year
ended March 31, 2017, duly incorporates the current impact of divergences observed recently by RBI
a) With ongoing remedial actions undertaken by the Bank during FY 16-17, there have been several reductions /
exits / improvement in account conduct which has reduced the overall Gross NPA outstanding to ` 10,399.76
million as on March 31, 2017.
b) Of this amount, one single account represents ` 9,114 millions (88%). The net impact of divergences observed
as per above referred RBI circular is given below
Of which
impact
of single
Reported as on
account where
March 31, 2017
management
expects near
term recovery
After duly factoring the provision impact of divergences, Banks credit cost for FY 17 is at 53 basis points
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` in millions
PRIORITY SECTOR
Agriculture and Allied 79,305.47 2,923.35 3.69% 108,187.23 2,115.50 1.96%
activities
Advances to industries 60,135.24 305.81 0.51% 40,749.82 368.74 0.90%
sector eligible as priority
sector lending
Gems and Jewellery 17,281.13 - - 11,927.78 - -
Services 141,046.10 649.46 0.46% 107,868.23 182.60 0.17%
Fertilizers 10,044.59 - - 13,976.97 - -
NBFC's 18,832.51 189.50 1.01% 14,057.30 - -
Personal Loans - - - - - -
Others 12,924.53 3.14 0.02% 9,401.81 13.17 0.14%
Sub-Total (A) 293,411.34 3,881.76 1.32% 266,207.09 2,680.01 1.01%
NON PRIORITY SECTOR
Agriculture and Allied 2,173.21 45.66 2.10% 2,335.69 - -
activities
Industry 679,595.25 15,518.26 2.28% 456,015.47 3,156.31 0.69%
Construction 81,825.57 1,247.91 1.53% 29,613.30 365.01 1.23%
Electricity (generation- 128,295.73 1,747.32 1.36% 79,589.61 - -
transmission and
distribution)
Services 314,300.22 647.79 0.21% 240,600.96 1,553.65 0.65%
Commercial Real Estate 106,007.73 107.49 0.10% 94,431.60 471.70 0.50%
Tourism, Hotel and 56,107.01 - - 35,348.31 - -
Restaurants
Personal Loans 9,312.94 5.16 0.06% 1,344.04 - -
Others 33,296.70 86.95 0.26% 20,241.10 99.85 0.49%
268
18.5.6.6 RESTRUCTURED ACCOUNTS
The details of accounts Restructured during the year ended March 31, 2017 are given below:
` in millions
Sr. Type of Restructured Accounts as on April 1 of Downgradations of restructured Write-offs/Sale/Recovery of restructured Restructured Accounts as on March 31 of
Fresh restructuring during the year
No. Restructuring the FY (opening figures) accounts during the FY accounts during the FY the FY
Amount Provision Amount Provision
Asset No. of outstanding thereon as No. of Amount Provision No. of Amount Provision No. of Amount Provision No. of outstanding thereon as
Classification borrowers as at March at March 31, borrowers outstanding thereon borrowers outstanding thereon borrowers outstanding thereon borrowers as at March 31, at March 31,
31, 2016 2016 2017 2017
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1 CDR
Standard 4 642.39 186.61 - - - (2) (425.78) (113.46) (1) (207.09) (72.68) 1 9.52 0.48
Substandard - - - - - - 2 425.78 113.46 - (144.30) 98.83 2 281.48 212.29
Doubtful 1 8.55 8.55 - - - - - - (1) (8.55) (8.55) - - -
Loss - - - - - - - - - - - - - - -
Total 5 650.94 195.16 - - - - - - - - - 3 291.00 212.77
SCHEDULES
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3 GRAND TOTAL
FORMING PART OF FINANCIAL STATEMENTS
Standard 14 6,133.46 683.32 - 432.13 49.51 (2) (425.78) (113.46) (1) (429.36) (116.50) 11 5,710.46 502.88
Substandard 2 102.84 61.96 - - - - 322.94 51.50 - (144.30) 98.83 2 281.48 212.29
Doubtful 1 8.55 8.55 - - - 2 102.84 61.96 (1) (13.95) (5.26) 2 97.44 65.25
Loss - - - - - - - - - - - - - - -
Total 17 6,244.86 753.83 - 432.13 49.51 - - - (2) (587.61) (22.92) 15 6,089.38 780.42
NOTES:-
1. There are no SME cases which have been restructured during the year ended March 31, 2017.
229-338
Statutory Reports Financial Statements
2. There have been no upgradations of restructured advances during the year ended March 31, 2017.
3. The outstanding amount and number of borrowers as at March 31, 2017 is after considering recoveries and sale of assets during the year.
4. The above table pertains to advances and does not include investment in shares of net book value of ` 119.15 millions in the amount outstanding.
5. The provision in the above table includes general loan loss provision and other provisions held on the restructured advances.
6. Additional facilities availed by borrowers in existing restructured accounts are disclosed under “Fresh restructuring during the year” and partial repayments
in existing restructured accounts are disclosed under “Write-offs/sale/recovery of restructured accounts”, however, for the purpose of arithmetical accuracy,
the number of existing borrowers availing additional facility or partial repayments have been ignored for presentation purpose.
7. For the purpose of arithmetical accuracy as required by Para 3.4.2. (xii) of RBI circular no DBR.BP.BC.No.23/21.04.018/2015-16 movement in provisions in
the existing restructured account as compared to opening balance, is disclosed under column fresh restructuring(for increase in provision) and write-off/
sale/recovery(for decrease in provision) during the year and are not comparable with the additional facilities availed and partial recovery disclosed under
the respective columns.
ANNUAL REPORT 2016-17
269
The details of accounts Restructured during the year ended March 31, 2016 are given below:
270
` in millions
Sr. Type of Restructured Accounts as on April 1 of Downgradations of restructured Write-offs/Sale/Recovery of restructured Restructured Accounts as on March 31
Fresh restructuring during the year
No Restructuring the FY (opening figures) accounts during the FY accounts during the FY of the FY
Amount Provision Amount Provision
Asset No. of outstanding thereon as No. of Amount Provision No. of Amount Provision No. of Amount Provision No. of outstanding thereon as
Classification borrowers as at March at March borrowers outstanding thereon borrowers outstanding thereon borrowers outstanding thereon borrowers as at March at March
31, 2015 31, 2015 31,2016 31,2016
1 CDR
Standard 4 742.51 406.31 - 5.92 - - - - - (106.04) (219.70) 4 642.39 186.61
Substandard 2 252.73 196.96 - - - - - - (2) (252.73) (196.96) - - -
Doubtful 2 58.01 56.87 - - - - - - (1) (49.46) (48.32) 1 8.55 8.55
Loss - - - - - - - - - - - - - - -
SCHEDULES
2 OTHERS
Standard 8 3,306.71 560.19 4 2,987.77 285.13 (1) (764.63) (177.29) (1) (38.78) (171.32) 10 5,491.07 496.71
Substandard 2 261.21 156.56 2 102.84 61.96 1 764.63 177.29 (3) (1,025.84) (333.85) 2 102.84 61.96
The A.R.T. of Banking
3 GRAND
TOTAL
Standard 12 4,049.22 966.50 4 2,993.69 285.13 (1) (764.63) (177.29) (1) (144.82) (391.02) 14 6,133.46 683.32
Substandard 4 513.94 353.52 2 102.84 61.96 1 764.63 177.29 (5) (1,278.57) (530.81) 2 102.84 61.96
Doubtful 3 163.43 162.30 - - - - - - (2) (154.88) (153.74) 1 8.55 8.55
Loss - - - - - - - - - - - - - - -
Total 19 4,726.59 1,482.32 6 3,096.53 347.09 - - - (8) (1,578.27) (1,075.57) 17 6,244.86 753.83
NOTES:-
1. There are no SME cases which have been restructured during the year ended March 31, 2016.
2. There have been no upgradations of restructured advances during the year ended March 31, 2016.
3. The outstanding amount and number of borrowers as at March 31, 2016 is after considering recoveries and sale of assets during the year.
4. The above table pertains to advances and does not include investment in shares of net book value of ` 386.26 millions in the Amount Outstanding.
5. The provision in the above table includes general loan loss provision and other provisions held on the restructured advances.
6. Additional facilities availed by borrowers in existing restructured accounts are disclosed under “Fresh restructuring during the year” and partial repayments
in existing restructured accounts are disclosed under “Write-offs/sale/recovery of restructured accounts”, however, for the purpose of arithmetical accuracy,
the number of existing borrowers availing additional facility or partial repayments have been ignored for presentation purpose.
7. For the purpose of arithmetical accuracy as required by Para 3.4.2. (xii) of RBI circular no DBR.BP.BC.No.23/21.04.018/2015-16 movement in provisions in the existing
restructured account as compared to opening balance, is disclosed under column fresh restructuring(for increase in provision) and write-off/sale/recovery(for
decrease in provision) during the year, and are not comparable with the additional facilities availed and partial recovery disclosed under the respective columns.
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No. of
borrowers Exposure weighted average
Amount of loans taken up for
taken up duration of loans taken up
flexible structuring
for flexibly for flexible structuring
Period structuring
Before After
Classified as Classified as applying applying
Standard NPA flexible flexible
structuring structuring
5 2,995.36 - - - 2,995.36 -
The above table includes one account amounting to ` 260.78 millions which is a standard restructured account.
18.5.9 DISCLOSURES ON CHANGE IN OWNERSHIP OUTSIDE SDR SCHEME (ACCOUNTS WHICH ARE
CURRENTLY UNDER THE STAND-STILL PERIOD)
There are no accounts where the Bank has decided to affect the change of ownership outside SDR scheme and
which are currently under the stand-still period
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18.5.11 DISCLOSURES ON THE SCHEME FOR SUSTAINABLE STRUCTURING OF STRESSED ASSETS (S4A) AS
ON MARCH 31, 2017
` in millions
` in millions
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c) Details of ageing of Investments held as Security Receipts as at March 31, 2017 are as follows-
` in millions
SRs issued
SRs issued more than 5 SRs issued
within Past 5 years ago but more than 8
Years within past 8 years ago
years
(i) Book Value of SRs backed by NPAs* sold by the Bank 9,941.36 - -
as underlying
Provision held against (i) 170.00 - -
(ii) Book value of SRs backed by NPAs* sold by other - - 211.03
banks / financial institutions / non-banking financial
companies as underlying
Provision held against (ii) - - 211.03
Total (i) + (ii) 9,941.36 - 211.03
*Includes all Security Receipts received by Bank on sale of assets as permitted under RBI circular DBOD.BP.BC.No.
98/21.04.132/2013-14 dated February 26, 2014.
As at As at
Business Ratios
March 31, 2017 March 31, 2016
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` in millions
The following table sets forth the maturity pattern of assets and liabilities of the Bank as on March 31, 2016
` in millions
Classification of assets and liabilities under the different maturity buckets is based on the same estimates and
assumptions as used by the Bank for compiling the return submitted to the RBI.
Maturity profile of foreign currency assets and liabilities is excluding Off Balance Sheet item.
18.5.17 EXPOSURES
The Bank has lending to sectors, which are sensitive to asset price fluctuations. Such sectors include capital
market and real estate.
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` in millions
Sr. As at As at
Particulars
No. March 31, 2017 March 31, 2016
I) DIRECT EXPOSURE
Residential Mortgages 17,279.91 10,951.77
Commercial Real Estate* 166,117.19 132,352.00
Of total Commercial real estate - exposure to residential real estate 125,810.16 112,461.10
projects
Of total Commercial Real Estate outstanding as advances 109,287.29 100,251.71
Investments in Mortgage Backed Securities (MBS) and other
securitized exposures
- Residential 1,257.16 1,538.02
- Commercial Real Estate - -
II) INDIRECT EXPOSURE
Fund based and non-fund based exposures on National Housing Board 47,235.56 18,703.48
and Housing Finance Companies
TOTAL 231,889.82 163,545.27
*Commercial real estate exposure classification is based on RBI circular DBOD.BP.BC.No. 42/08.12.015/2009-10
dated September 9, 2009.
Sr. As at As at
Particulars
No. March 31, 2017 March 31, 2016
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FORMING PART OF FINANCIAL STATEMENTS
` in millions
Sr. As at As at
Particulars
No. March 31, 2017 March 31, 2016
iv) advances for any other purposes to the extent secured by the collateral 1,703.10 3,841.53
security of shares or convertible bonds or convertible debentures or
units of equity oriented mutual funds i.e. where the primary security
other than shares / convertible bonds / convertible debentures / units
of equity oriented mutual funds 'does not fully cover the advances;
v) secured and unsecured advances to stockbrokers and guarantees 7,931.82 7,149.50
issued on behalf of stockbrokers and market makers;*
vi) loans sanctioned to corporate against the security of shares / bonds / 9,220.00 2,500.00
debentures or other securities or on clean basis for meeting promoter's
contribution to the equity of new companies in anticipation of raising
resources;
vii) financing for acquisition of equity in overseas companies 2,248.20 2,613.77
viii) bridge loans to companies against expected equity flows / issues; - -
ix) underwriting commitments taken up by the banks in respect of primary - -
issue of shares or convertible bonds or convertible debentures or units
of equity oriented mutual funds;
x) financing to stockbrokers for margin trading - -
xi) all exposures to Venture Capital Funds (both registered and 182.17 225.90
unregistered)
Total Exposure to Capital Market 22,279.55 16,655.51
Capital market exposure is reported in line with Para 2.3 of RBI’s Master Circular on Exposure Norms dated July 1, 2015 (DBR.
No.Dir.BC.12/13.03.00/2015-16).
* Out of the above ` 2,050.00 millions is exposure to YES Securities (India) Ltd, which is a subsidiary of the Bank.
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18.5.17.4 DETAILS OF SINGLE BORROWER LIMIT (SBL) AND GROUP BORROWER LIMIT (GBL)
During the year ended March 31, 2017 and March 31, 2016, the Bank has complied with the Reserve Bank of India
guidelines on single borrower and borrower group limit. As per the exposure limits permitted under the extant
RBI regulation, the Bank, with the approval of the Board of Directors, can enhance exposure to a single borrower
or borrower group by a further 5 percent of capital funds.
During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned
enhancement in single borrower limit for Nirma Limited within the ceiling of 20% of Capital Funds. As on
March 31, 2017, the exposure to Nirma Limited as a percentage of capital funds was 0.1%.
During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned
enhancement in single borrower limit for Reliance Ports and Terminals Limited within the ceiling of 25% of Capital
Funds. As on March 31, 2017, the exposure to Reliance Ports and Terminals Limited as a percentage of capital
funds was 4.6%.
During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned
enhancement in group borrower limit for Reliance Group within the ceiling of 55% of Capital Funds. As on March
31, 2017, the exposure to Reliance Group as a percentage of capital funds was 21.0%.
During the year ended March 31, 2017, with the prior approval of the Board of Directors, the Bank sanctioned
enhancement in group borrower limit for Tata Group within the ceiling of 55% of Capital Funds. As on March 31,
2017, the exposure to Tata Group as a percentage of capital funds was 18.3%.
During the year ended March 31, 2016, the Bank has not exceeded regulatory single borrower or group borrower
exposure limit.
18.6 MISCELLANEOUS
18.6.1 INCOME TAXES
Provisions made for Income Tax during the year
` in millions
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FORMING PART OF FINANCIAL STATEMENTS
` in millions
278
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b) Amount spent towards CSR during the year and recognized as expense in the Profit and Loss account on
CSR related activities is ` 416.62 millions (previous year ` 295.23 millions), which comprise of following –
` in millions
` in millions
As at As at
March 31, 2017 March 31, 2016
` in millions
Fair value of plan assets at the beginning of the year 549.52 353.95
Adjustment to Opening Balance 5.39 -
Expected return on plan assets 54.57 31.03
Contributions 298.08 220.00
Benefits paid (43.63) (41.22)
Actuarial gain/( loss) on planned assets 6.95 (14.25)
Fair value of planned assets at the end of the period 870.91 549.51
The Bank has entire contribution of Gratuity Fund as Investments with Insurance Companies.
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FORMING PART OF FINANCIAL STATEMENTS
The overall expected rate of return on assets is determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled.
Net gratuity cost for the year ended March 31, 2017 and March 31, 2016 comprises the following components:
` in millions
EXPERIENCE HISTORY:
` in millions
For the year For the year For the year For the year For the year
ended ended ended ended ended
March 31, 2017 March 31, 2016 March 31, 2015 March 31, 2014 March 31, 2013
The assumptions used in accounting for the gratuity plan are set out below:
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Actuarial assumption on salary increase also takes into consideration the inflation, seniority, promotion and other
relevant factors.
` in millions
The Bank is yet to determine future contribution to Gratuity fund for Financial Year 2017-18
Treasury: Includes investments, all financial markets activities undertaken on behalf of the Bank’s customers,
Proprietary trading, maintenance of reserve requirements and resource mobilisation from other banks and
financial institutions.
Corporate / Wholesale Banking: Includes lending, deposit taking and other services offered to corporate
customers.
Retail Banking: Includes lending, deposit taking and other services offered to retail customers.
Other Banking Operations: Includes para banking activities like third party product distribution, merchant
banking etc.
281
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
Segmental results for the year ended March 31, 2017 are set out below:
` in millions
Corporate / Other
Retail
Business Segments Treasury Wholesale Banking Total
Banking
Banking Operations
Segmental results for the year ended March 31, 2016 are set out below:
` in millions
Corporate / Other
Retail
Business Segments Treasury Wholesale Banking Total
Banking
Banking Operations
282
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2. In computing the above information, certain estimates and assumptions have been made by the Management
and have been relied upon by the auditors.
3. Income, expense, assets and liabilities have been either specifically identified with individual segment or
allocated to segments on a systematic basis or classified as unallocated.
4. The unallocated assets includes tax paid in advance/tax deducted at source and deferred tax asset.
5. The unallocated liabilities include Share Capital and Reserves and Surplus.
6. Inter-segment transactions have been generally based on transfer pricing measures as determined by the
Management.
7. The Bank has refined the allocation methodology and has allocated certain items that were previously
classified as unallocated, to various segments. The same have been applied to segment information for
previous periods also.
As per AS 18 “Related Party Disclosures”, notified under section 133 of the Companies Act 2013, read together
with paragraph 7 of the Companies (Accounts) Rules 2014, the Bank’s related parties for the year ended March
31, 2017 are disclosed below:
SUBSIDIARY
Yes Securities (India) Limited
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
` in millions
Relatives of
Whole time
whole time
Maximum directors / Maximum Maximum
directors /
Items / Related Balance individual Balance Balance
Subsidiaries individual
Party Category during the having during the during the
having
year significant year year
significant
influence
influence
The following represents the significant transactions between the Bank and such related parties including relatives
of above mentioned KMP during the year ended March 31, 2016:
` in millions
Relatives of
Whole time
whole time
Maximum directors / Maximum Maximum
directors /
Items / Related Party Balance individual Balance Balance
Subsidiaries individual
Category during the having during the during the
having
year significant year year
significant
influence
influence
284
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` in millions
Relatives of
Whole time
whole time
Maximum directors / Maximum Maximum
directors /
Items / Related Party Balance individual Balance Balance
Subsidiaries individual
Category during the having during the during the
having
year significant year year
significant
influence
influence
Reimbursement of 5.31 #
Cost incurred
Receiving of services 58.66 #
Dividend paid #
* Represents outstanding as of March 31, 2016
# In Financial Year 2015-16 there was only one related party in the said category, hence the Bank has not disclosed the details
of transactions in accordance with circular issued by the RBI on March 29, 2003 “Guidance on compliance with the accounting
standards by banks”.
As at March 31, 2017 and March 31, 2016 the Bank had certain non-cancellable outsourcing contracts for information
technology assets and branches on rent. The future minimum lease obligations against the same were as follows:
` in millions
As at As at
Lease obligations
March 31, 2017 March 31, 2016
The Bank does not have any provisions relating to contingent rent.
The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.
There are no undue restrictions or onerous clauses in the agreements.
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FORMING PART OF FINANCIAL STATEMENTS
` in millions
Basic (annualised)
Weighted average no. of equity shares outstanding 422,140,801 418,916,568
Net profit / (loss) 33,300.96 25,394.47
Basic earnings per share (` ) 78.89 60.62
Diluted (annualised)
Weighted average no. of equity shares outstanding 433,753,206 428,171,182
Net profit / (loss) 33,300.96 25,394.47
Diluted earnings per share (` ) 76.77 59.31
Nominal value per share (` ) 10.00 10.00
The difference between weighted average number of equity shares outstanding between basic and diluted in the
above mentioned disclosure is on account of outstanding ESOPs.
18.6.16 ESOP DISCLOSURES JESOP II and JESOP III were in force for employees
Statutory Disclosures Regarding Joining Stock Option joining the Bank up to March 31, 2006 and March 31,
Scheme: 2007 respectively.
The Bank has Five Employee Stock Option Schemes YBL JESOP V is in force for employees joining the Bank
viz. from time to time. Under JESOP V, 50% options vest
takes place at the end of three years and remaining
Joining Employee Stock Option Plan II (JESOP II), 50% at the end of five years from the date of Grant.
Joining Employee Stock Option Plan III (JESOP III), PESOP I, PESOP II and PESOP II - 2010 are Performance
Stock Option Plans. Under PESOP I, 25% of the options
YBL ESOP (consisting of two sub schemes JESOP granted would vest at the end of each year from the
IV/PESOP I) date of grant. Under PESOP II, 30% of the granted
options vest at the end of first year, 30% vest at the
YBL JESOP V/PESOP II (Consisting of three sub end of second year and balance 40% vest at the end
schemes JESOP V/ PESOP II/PESOP II -2010). of third year. Under YBL PESOP II – 2010, 30% of the
granted options vest at the end of the third year, 30%
The schemes include provisions for grant of options vest at the end of the fourth year and balance 40% vest
to eligible employees of the Bank and its subsidiaries/ at the end of the fifth year.
affiliates. All the aforesaid schemes have been
approved by the Nomination and Remuneration Further, grants under PESOP II had been discontinued
Committee (N&RC) and the Board of Directors and with effect from January 20, 2010.
were also approved by the members of the Bank. All
these schemes are administered by the N&RC. Options under all the aforesaid plans are granted for a
term of 10 years (inclusive of the vesting period) and
are settled with equity shares being allotted to the
beneficiary upon exercise.
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A summary of the status of the Bank’s stock option plans as on March 31, 2017 and March 31, 2016 is set out below:
Options outstanding at the beginning of the year 14,737,020 4,589,000 14,449,500 4,530,288
Granted during the year 872,050 821,500 2,378,350 1,427,250
Exercised during the year 2,226,137 1,017,035 1,812,580 982,963
Forfeited / lapsed during the year 422,500 270,475 278,250 385,575
Options outstanding at the end of the year 12,960,433 4,122,990 14,737,020 4,589,000
Options exercisable 4,527,933 824,490 3,990,320 990,825
Weighted average exercise price (`) 307.68 319.73 276.49 242.49
Weighted average remaining contractual life of 1.86 2.12 2.10 2.07
outstanding option (yrs)
The Bank has charged Nil amount, being the intrinsic value of the stock options granted for the year ended
March 31, 2017 and March 31, 2016. Had the Bank adopted the Fair Value method (based on Black- Scholes pricing
model), for pricing and accounting of options, net profit after tax would have been lower by ` 464.49 millions
(Previous year: ` 414.23 millions), the basic earnings per share would have been ` 77.79 (Previous year: ` 59.63)
per share instead of ` 78.89 (Previous year: ` 60.62) per share; and diluted earnings per share would have been
` 75.70 (Previous year: ` 58.34) per share instead of ` 76.77 (Previous year: ` 59.31) per share.
The following assumptions have been made for computation of the fair value of ESOP granted for the year ended
March 31, 2017 and March 31, 2016.
In computing the above information, certain estimates and assumptions have been made by the Management.
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The components that give rise to the deferred tax asset included in the balance sheet are as follows:
` in millions
As at As at
Particulars
March 31, 2017 March 31, 2016
The Board of Directors of the Bank through its Nomination and Remuneration Committee (N&RC) shall
exercise oversight & effective governance over the framing and implementing of the Compensation policy.
The N&RC shall comprise a minimum of 3 non-executive Directors, majority being Independent Directors.
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Mr. Ajai Kumar, Non-Executive Non- To evaluate whether to extend or continue
Independent Director (appointed w.e.f. the term of appointment of the independent
October 30, 2016) director, on the basis of the report of
performance evaluation of independent
The roles and responsibilities of the N & RC are as directors;
under-
To validate ‘fit and proper’ status of all
Reviewing the current Board composition, its Directors on the Board of the Bank in terms
governance framework and determine future of the Guidelines issued by the RBI or other
requirements and making recommendations regulatory authorities;
to the Board for approval;
To develop and recommend to the Board
Examining the qualification, knowledge, Corporate Governance guidelines applicable
skill sets and experience of each director to the Bank for incorporating best practices;
vis-a-vis the Bank’s requirements and their
effectiveness to the Board on a yearly basis To implement policies and processes relating
and accordingly recommend to the Board for to Corporate Governance principles;
the induction of new Directors;
To formulate the criteria for determining
To review the composition of the existing qualifications, positive attributes and
Committees of the Board and to examine independence of a director;
annually whether there is any need to have
a special committee of directors to meet To devise a Policy on Board diversity;
the business requirements of the Bank and
accordingly recommend to the Board for To recommend to the Board a policy relating
formation of a special committee; to, the remuneration for the directors, key
managerial personnel and other employees;
To scrutinize nominations for Independent/
Non Executive Directors with reference Reviewing the Bank’s overall compensation
to their qualifications and experience and structure and related polices with a view to
making recommendations to the Board for attract, motivate and retain employees and
appointment/filling of vacancies; review compensation levels vis-à-vis other
Banks and the industry in general;
To identify persons who are qualified to
become directors and who may be appointed Ensuring the following while formulating the
in senior management in accordance with policy on the aforesaid matters:
the criteria laid down, recommend to the
Board their appointment and removal;
the level and composition of
remuneration is reasonable and sufficient
Formulating the criteria for evaluation of to attract, retain and motivate directors,
performance of independent directors and key managerial personnel and senior
the board of directors; management of the quality required to
run the company successfully;
Carrying out evaluation of every director’s
performance;
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relationship of remuneration to 12 dated January 13, 2012 which is approved by
performance is clear and meets the Nomination and Remuneration Committee
appropriate performance benchmarks; on January 7, 2013. The remuneration of MD &
and CEO/Wholetime Directors will be in accordance
with the above mentioned circular and shall be
remuneration to directors, key reviewed basis RBI guidelines issued from time
managerial personnel and senior to time and approved by N&RC before obtaining
management involves a balance Regulatory approvals.
between fixed and incentive pay
reflecting short and long- term The compensation philosophy of the Bank is
performance objectives appropriate aligned to the organizational values aimed at
to the working of the company and its encouraging Professional Entrepreneurship
goals, and reinforcing a strong culture promoting
meritocracy, performance, potential and prudent
To formulate and determine the Bank’s risk taking.
policies on remuneration packages payable
to the Directors and key managerial personnel The Bank’s Remuneration policy is to position
including performance/achievement bonus, its pay structure competitively in relation to the
perquisites, retrials, sitting fee, etc.; market to be able to attract and retain critical talent.
The compensation strategy clearly endeavors to
To consider grant of Stock Options differentiate performance significantly and link
to employees including employees of the same with quality and quantum of rewards.
subsidiaries and administer and supervise The Bank also strives to create long term wealth
the Employee Stock Option Plans; creation opportunities through stock option
schemes.
To function as the Compensation Committee
as prescribed under the SEBI (Share Based
Human Capital Management shall review the
Employee Benefits) Regulations, 2014 and policy annually or as required, based on changes
is authorized to allot shares pursuant to in statutory, regulatory requirements and industry
exercise of Stock Options by employees; practices pertaining to Compensation and
Benefits.
Performing any other function or duty as
stipulated by the Companies Act, Reserve Description of the ways in which current and future
c.
Bank of India, Securities and Exchange Board risks are taken into account in the remuneration
of India, Stock Exchanges and any other processes. It should include the nature and type
regulatory authority or under any applicable of the key measures used to take account of these
laws as may be prescribed from time to time. risks
b. Information relating to the design and structure of The broad factors taken into account for the
remuneration processes and the key features and Annual Review /revision of Fixed Compensation
objectives of remuneration policy- (TCC) & Performance Bonus are:
The Bank has framed Compensation and benefit 1. Individual performance based on the Annual
policy based on the guidelines contained in the Performance Review (APR) process of the
RBI circular DBOD No. BC.72/29.67.001/2011- Bank.
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2.
Business Unit performance in terms of of risk. Further, the compensation in all forms will
financial outcomes, productivity, etc. be consistent with the risk alignment.
3. Consideration of all types of risk factors and One of the key factors to be considered for the
shall be symmetrical with risk outcomes as Annual Review /revision of Fixed Compensation
well as sensitive to the time horizon of risk. (TCC) & Performance Bonus includes individual
performance based on the Annual Performance
4. Profitability of the Bank. Review (APR) process of the Bank. The evaluation
on risk management parameters is an integral part
5.
Industry Benchmarking and consideration of the Annual Performance Review process, forming
towards cost of living adjustment/inflation part of Key Result Areas of the executives with
suitable weightage. The inputs for assessment on
The Bank subscribes to a ‘Sum-of-Parts’ these parameters will be independently provided
compensation methodology, which is reflective by the Risk Management function of the Bank.
of the Bank’s commitment and philosophy of
creating and sharing value with its employee
For the services pertaining to financial year
partners. 2015-16 where variable pay is 50% or more,
40-60% shall be deferred over minimum period
The sum-of-parts compensation comprises: of 3 years. In the event of a negative contribution,
deferred compensation shall be subject to
FIXED COMPENSATION appropriate malus/claw back arrangements as
Variable Compensation in the form of Performance decided by the N&RC . Guaranteed bonus shall
Bonus not be a part of the compensation plan.
EMPLOYEE STOCK OPTION PLANS (ESOP) The compensation for executives in Risk Control
The Board of Directors of the Bank through its and Compliance functions shall be independent of
Nomination and Remuneration Committee (N&RC) the business areas they oversee.
shall exercise oversight & effective governance
over the framing and implementing of the
The Bank shall not provide any facility or
Compensation policy. Human Capital Management funds or permit employees to insure or hedge
under the guidance of MD & CEO shall administer their compensation structure to offset the
the Compensation and Benefits structure in line risk alignment effects embedded in their
with Industry practices and statutory requirements compensation arrangement.
as applicable from time to time.
e. escription of the different forms of variable
D
Description of the ways in which the Bank
d. remuneration (i.e. cash, shares, ESOPs and other
seeks to link performance during a performance forms) that the Bank utilizes and the rationale for
measurement period with levels of remuneration using these different forms.
and a discussion of the bank’s policy and criteria
for adjusting deferred remuneration before
The Bank subscribes to a ‘Sum-of-Parts’
vesting and after vesting. compensation methodology, which is reflective
of the commitment and philosophy of creating
The Bank ensures that the compensation remains and sharing value with the employee partners.
adjusted for all types of risk, symmetrical with risk The sum-of-parts compensation for executives
outcomes as well as sensitive to the time horizon comprises:
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Variable compensation in the form of Performance /Deferred Bonus – Variable pay shall be in the form
of Performance Bonus which will be calculated as a percentage of Fixed Pay. The evaluation on risk
management parameters is an integral part of the Annual Performance Review process, forming part of Key
Result Areas of the executives with suitable weightage. The inputs for assessment on these parameters will
be independently provided by the Risk Management function of the Bank.
Employee Stock Options Plans – These are formulated on a mid to long term basis by the Bank in accordance
with SEBI and other Regulatory guidelines. The grant of ESOP shall be under approval from MD & CEO,
which shall be subsequently ratified by the N&RC.
f. Quantitative Disclosures on Remuneration for MD & CEO and other risk takers
There were 4 meetings of the N&RC held during the year ended March 31, 2017. The Bank had paid a
remuneration of ` 0.60 million* to the members of the N&RC for attending the meetings of the N&RC.
` in millions
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` in millions
293
` in millions
294
Current Year Previous Year
Quarter ended Quarter ended Quarter ended Quarter ended Year ended
March 31, 2017 * December 31, 2016 ** September 30, 2016 ** June 30, 2016 ** March 31, 2016***
Particulars
Total Total Total Total Total Total Total Total
Total Weighted Total Weighted
Unweighted Weighted Unweighted Unweighted Weighted Unweighted Unweighted Weighted
Value Value
Value Value Value Value Value Value Value Value
(ii) Less stable deposits 411,730.91 41,173.09 385,730.55 38,573.05 337,692.59 33,769.26 310,390.26 31,039.03 257,717.13 25,771.71
3 Unsecured wholesale funding, of which: 603,965.68 298,218.25 574,284.36 277,418.52 571,006.96 277,467.19 573,734.00 275,332.12 484,322.58 230,048.01
(i) Operational deposits (all counterparties) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(ii) Non-operational deposits (all counterparties) 603,965.68 298,218.25 574,284.36 277,418.52 571,006.96 277,467.19 573,734.00 275,332.12 484,322.58 230,048.01
(iii) Unsecured debt 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
The A.R.T. of Banking
4 Secured wholesale funding 995.89 0.00 13,154.10 0.00 0.00 0.00 3,666.67 0.00 0.00 0.00
5 Additional requirements, of which 14,841.95 10,519.87 14,198.43 9,995.48 13,589.50 10,348.67 11,209.50 7,707.90 9,491.40 6,007.72
(i) Outflows related to derivative exposures and other 10,039.64 10,039.64 9,528.49 9,528.49 9,988.58 9,988.58 7,318.83 7,318.83 5,620.65 5,620.65
FORMING PART OF FINANCIAL STATEMENTS
collateral requirements
(ii) Outflows related to loss of funding on debt products 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(iii) Credit and liquidity facilities 4,802.32 480.23 4,669.94 466.99 3,600.92 360.09 3,890.67 389.07 3,870.75 387.07
6 Other contractual funding obligations 35,341.11 35,341.11 33,437.97 33,437.97 33,468.70 33,468.70 23,510.20 23,510.20 22,709.99 22,709.99
7 Other contingent funding obligations 1,012,163.79 38,129.54 961,781.66 36,363.71 874,501.84 33,232.21 821,540.35 31,058.09 790,622.48 37,850.14
8 Total Cash Outflows 426,339.93 398,613.58 390,674.07 370,870.14 324,272.93
CASH INFLOWS
9 Secured lending (e.g. reverse repos) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
10 Inflows from fully performing exposures 56,872.61 19,572.26 29,297.04 3,737.57 44,596.20 19,457.24 32,286.73 8,068.38 36,616.85 12,759.96
11 Other cash inflows 34,551.82 34,551.82 37,109.64 37,109.64 46,919.68 46,919.68 56,421.07 56,421.07 32,048.57 31,215.23
12 Total Cash Inflows 91,424.43 54,124.08 66,406.68 40,847.21 91,515.89 66,376.92 88,707.80 64,489.45 68,665.41 43,975.19
21 TOTAL HQLA 327,891.84 314,675.27 272,087.65 254,712.23 219,058.79
22 Total Net Cash Outflows 372,215.85 357,766.37 324,297.15 306,380.69 280,297.74
23 Liquidity Coverage Ratio (%) 88.1% 88.0% 83.9% 83.1% 78.2%
* For the quarter ended March 31, 2017, the weighted and unweighted amounts are calculated taking simple average of daily positions for 90 days starting 1st
Jan’17 to 31st March’17.
**For the quarters April 2016 to December 2016, the weighted and unweighted amounts are calculated taking simple average of month-end positions.
***For the year ended March 31, 2016, the weighted and unweighted amount are calculated taking simple average month-end positions from April 2015 to
March 2016.
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LIQUIDITY COVERAGE RATIO (LCR): Funding strategies are formulated by the ALCO of
The Bank measures and monitors the LCR in line with the Bank. The objective of the funding strategy is to
the Reserve Bank of India’s circular dated June 09, 2014 achieve an optimal funding mix which is consistent
and November 28, 2014 on “Basel III Framework on with prudent liquidity, diversity of sources and
Liquidity Standards - Liquidity Coverage Ratio (LCR), servicing costs. Accordingly, BSMG (Balance Sheet
Liquidity Risk Monitoring Tools and LCR Disclosure Management Group) of the Bank estimates daily
Standards” as amended for “Prudential Guidelines liquidity requirement of the various business segments
on Capital Adequacy and Liquidity Standards” dated and manages the same on consolidated basis under
March 31, 2015. The LCR guidelines aims to ensure that ALCO guidance. With the help of Structural and
a bank maintains an adequate level of unencumbered Liquidity Statement prepared by the Bank, BSMG
High Quality Liquid Assets (HQLAs) that can be evaluates liquidity requirement and takes necessary
converted into cash to meet its liquidity needs for a 30 action. Periodical reports are also placed before the
calendar day time horizon under a significantly severe ALCO for perusal and review.
liquidity stress scenario. At a minimum, the stock of
liquid assets should enable the bank to survive until day The Bank’s HQLA comprises of Excess CRR, Excess
30 of the stress scenario, by which time it is assumed SLR, eligible foreign sovereign investments, Marginal
that appropriate corrective actions can be taken. Banks Standing Facility (MSF) and Facility to Avail Liquidity
are required to maintain High Quality Liquid Assets for Liquidity Coverage Ratio (FALLCR) as permitted
of a minimum of 100% of its Net Cash Outflows by under prudential guidance and eligible Level 2
January 01, 2019. However, with a view to provide investments. The Bank has a very limited exposure to
transition time, the guidelines mandate a minimum liquidity risk on account of its Derivatives portfolio.
requirement of 60% w.e.f. January 01, 2015 and a Further, the Bank believes that all inflows and outflows
step up of 10% every year to reach the minimum which might have a material impact under the liquidity
requirement of 100% by January 01, 2019. Currently, stress scenario have been considered for the purpose
the LCR applicable is 80%. The adequacy in the LCR of LCR. Further, SLR investments as well as Corporate
maintenance is an outcome of a conscious strategy of Bond portfolio of the Bank considered for HQLA is also
the Bank towards complying with LCR mandate ahead well diversified across various instruments and Liquid
of the stipulated timelines. The maintenance of LCR, Asset Type Mix and should provide the Bank with
both on end of period and on a average basis, has been adequate and timely liquidity.
on account of multiple factors viz. increase in excess
SLR, existing eligibility in Corporate Bond Investments, The daily average LCR for quarter ending March 31, 2017
increase in Retail deposits and increase in non callable is 88.1% which is comfortably above RBI prescribed
deposits. minimum requirement of 80%.
Board of Directors of the Bank has empowered ALCO Further for the financial year ending 2016 and 2017, the
(Top Management Executive Committee) to monitor Bank has considered nil operational deposit pending
and strategize the Balance Sheet profile of the Bank. approval from RBI.
In line with the business strategy, ALCO forms an
Interest Rate/Liquidity view for the bank with the help
of the economic analysis provided by the in-house
economic research team of the bank. ALCO of the
Bank channelizes various business segments of the
Bank to target good quality asset and liability profile
to meet the Bank’s profitability as well as Liquidity
requirements with the help of robust MIS and Risk
Limit architecture of the Bank.
295
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
` in millions
As of As of
Particulars
March 31, 2017 March 31, 2016
18.7.7 INVESTOR EDUCATION AND Bank) after considering factors such as internal rating
PROTECTION FUND of the borrower, size, possibility of natural hedging,
There were no amounts which were required to be sophistication of borrower and maturity of borrower’s
transferred to the Investor Education and Protection financial systems, relative size of unhedged foreign
Fund by the Bank as on March 31, 2017. currency exposure with respect to total borrowings of
the client, etc. Further, the Bank reviews the unhedged
18.7.8 UNHEDGED FOREIGN CURRENCY foreign currency exposure across its portfolio on a
EXPOSURE OF BANK’S CUSTOMER periodic basis. The Bank also maintains incremental
The Bank has in place a policy on managing credit risk provision and capital towards the unhedged foreign
arising out of unhedged foreign currency exposures of currency exposures of its borrowers in line with the
its borrowers. The objective of this policy is to maximize extant RBI guidelines.
the hedging on foreign currency exposures of borrowers
by reviewing their foreign currency product portfolio The Bank has maintained provision of ` 558.08 millions
and encouraging them to hedge the unhedged portion. (previous year of ` 586.87 millions) and additional
In line with the policy, assessment of unhedged foreign capital of ` 2,413.54 millions (previous year of ` 2,485.69
currency exposure is a part of assessment of borrowers millions) on account of Unhedged Foreign Currency
and is undertaken while proposing limits or at the Exposure of its borrowers as at March 31, 2017.
review stage. Additionally, at the time of sanctioning
limits for all clients, the Bank stipulates a limit on the
unhedged foreign currency exposure of the client (as a
% of total foreign currency exposure sanctioned by the
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SCHEDULES
FORMING PART OF FINANCIAL STATEMENTS
` in millions
As at As at
Particulars
March 31, 2017 March 31, 2016
Sr.
Contingent Liabilities Brief
No.
1. Claims against The Bank is a party to various legal and tax proceedings in the normal course of
the Bank not business. The Bank does not expect the outcome of these proceedings to have a
acknowledged as material adverse effect on the Bank’s financial conditions, results of operations or
debts cash flows.
2. Liability on account The Bank enters into foreign exchange contracts, currency options, forward rate
of forward exchange agreements, currency swaps and interest rate swaps with interbank participants
and derivative and customers. Forward exchange contracts are commitments to buy or sell foreign
contracts. currency at a future date at the contracted rate. Currency swaps are commitments
to exchange cash flows by way of interest/principal in one currency against another,
based on predetermined rates. Interest rate swaps are commitments to exchange fixed
and floating interest rate cash flows. The notional amounts of financial instruments of
such foreign exchange contracts and derivatives provide a basis for comparison with
instruments recognized on the balance sheet but do not necessarily indicate the amounts
of future cash flows involved or the current fair value of the instruments and, therefore,
do not indicate the Bank’s exposure to credit or price risks. The derivative instruments
become favorable (assets) or unfavorable (liabilities) as a result of fluctuations in market
rates or prices relative to their terms. The aggregate contractual or notional amount of
derivative financial instruments on hand, the extent to which instruments are favorable or
unfavorable and, thus the aggregate fair values of derivative financial assets and liabilities
can fluctuate significantly.
3. Guarantees given As a part of its commercial banking activities the Bank issues documentary credit
on behalf of and guarantees on behalf of its customers. Documentary credits such as letters of
constituents, credit enhance the credit standing of the customers of the Bank. Guarantees generally
acceptances, represent irrevocable assurances that the Bank will make payments in the event of the
endorsements and customer failing to fulfill its financial or performance obligations.
other obligations
4. Other items for - Value dated purchase of securities
which the Bank is - Capital commitments
contingently liable - Amount deposited with RBI under Depositor Education Awareness Fund
- Foreign Exchange Contracts (Tom & Spot)
Refer Schedule 12 for amounts relating to contingent liability
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18.7.18 PSLCs SOLD AND PURCHASED DURING THE YEAR ENDED MARCH 31, 2017
` in millions
PSLC - Agriculture - -
PSLC - SF/MF 22,500.00 -
PSLC - Micro Enterprises - -
PSLC - General - -
299
The A.R.T. of Banking
INDEPENDENT
AUDITORS’ REPORT
To, estimates that are reasonable and prudent; and design,
The Members of YES Bank Limited implementation and maintenance of adequate internal
financial controls, that were operating effectively
REPORT ON THE CONSOLIDATED for ensuring the accuracy and completeness of the
FINANCIAL STATEMENTS accounting records, relevant to the preparation and
We have audited the accompanying consolidated presentation of the financial statements that give a true
financial statements of YES Bank Limited (hereinafter and fair view and are free from material misstatement,
referred to as ‘the Holding Company’) and its whether due to fraud or error, which have been used for
subsidiary (the Holding Company and the subsidiary the purpose of preparation of the consolidated financial
together referred to as ‘the Group’), comprising of the statements by the Directors of the Holding Company,
Consolidated Balance Sheet as at March 31, 2017, the as aforesaid.
Consolidated Profit and Loss Account, the Consolidated
Cash Flow Statement for the year then ended, and a AUDITOR’S RESPONSIBILITY
summary of the significant accounting policies and Our responsibility is to express an opinion on these
other explanatory information (hereinafter referred to consolidated financial statements based on our audit.
as ‘the consolidated financial statements’). While conducting our audit, we have taken into account
the provisions of the Act, the accounting and auditing
MANAGEMENT’S RESPONSIBILITY standards and matters which are required to be
FOR THE CONSOLIDATED FINANCIAL included in the audit report under the provisions of the
STATEMENTS Act and the Rules made thereunder.
The Holding Company’s Board of Directors is
responsible for the preparation of these consolidated We conducted our audit in accordance with the
financial statements in terms of the requirements Standards on Auditing specified under Section 143(10)
of the Companies Act, 2013 (hereinafter referred of the Act. Those Standards require that we comply
to as ‘the Act’) that give a true and fair view of the with ethical requirements and plan and perform the
consolidated financial position, consolidated financial audit to obtain reasonable assurance about whether
performance and consolidated cash flows of the Group the financial statements are free from material
in accordance with the accounting principles generally misstatement.
accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule An audit involves performing procedures to obtain audit
7 of the Companies (Accounts) Rules 2014, provisions evidence about the amounts and the disclosures in the
of Section 29 of the Banking Regulation Act, 1949 and financial statements. The procedures selected depend
the circulars, guidelines and directions issued by the on the auditor’s judgment, including the assessment of
Reserve Bank of India (‘RBI’) from time to time. the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In
The respective Board of Directors of the companies making those risk assessments, the auditor considers
included in the Group are responsible for maintenance internal financial control relevant to the Holding
of adequate accounting records in accordance with Company’s preparation of the consolidated financial
the provisions of the Act for safeguarding the assets statements that give a true and fair view in order to
of the Group and for preventing and detecting frauds design audit procedures that are appropriate in the
and other irregularities; the selection and application of circumstances. An audit also includes evaluating the
appropriate accounting policies; making judgments and appropriateness of the accounting policies used and
300
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the reasonableness of the accounting estimates made (b) in our opinion, proper books of account as required
by the Holding Company’s Board of Directors, as well as by law relating to the presentation of the aforesaid
evaluating the overall presentation of the consolidated consolidated financial statements have been kept
financial statements. so far as it appears from our examination of those
books;
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our (c) the Consolidated Balance Sheet, the Consolidated
audit opinion on the consolidated financial statements. Profit and Loss Account and the Consolidated
Cash Flow Statement dealt with by this report are
OPINION in agreement with the books of account;
In our opinion and to the best of our information
and according to the explanations given to us, the (d) in our opinion, the aforesaid consolidated financial
aforesaid consolidated financial statements give the statements comply with the Accounting Standards
information required by the Act in the manner so specified under Section 133 of the Act, read with
required and give a true and fair view in conformity with Rule 7 of the Companies (Accounts) Rules, 2014.
the accounting principles generally accepted in India,
of the consolidated state of affairs of the Group as at (e) on the basis of the written representations received
March 31, 2017, their consolidated profit and their from the directors of the Holding Company and
consolidated cash flows for the year ended on that date. of the Subsidiary as on March 31, 2017 taken on
record by the Board of Directors of the respective
OTHER MATTERS companies, none of the directors of the Group
The consolidated financial statements of the Group for is disqualified as on March 31, 2017 from being
the year ended March 31, 2016 were audited by another appointed as a director in terms of Section 164 (2)
auditor who expressed an unmodified opinion on those of the Act.
statements on April 27, 2016.
(f)
with respect to the adequacy of the internal
REPORT ON OTHER LEGAL AND financial controls over financial reporting of the
REGULATORY REQUIREMENTS Group and the operating effectiveness of such
The disclosure required on holdings as well as dealings controls, refer to our separate Report in “Annexure
in Specified Bank Notes (SBNs) during the period from A”; and
November 08, 2016 to December 30, 2016 as envisaged
in notification GSR 308(E) dated March 30, 2017 issued (g) with respect to the other matters to be included in
by the Ministry of Corporate Affairs, is not applicable to the Auditor’s Report in accordance with Rule 11 of
the Bank. The subsidiary of the Bank has NIL reporting the Companies (Audit and Auditors) Rules, 2014,
for this disclosure. Refer Note 18.21 to the financial in our opinion and to the best of our information
statements. and according to the explanations given to us:
301
The A.R.T. of Banking
Group – Refer Note 18.18 to the consolidated Investor Education and Protection Fund by
financial statements; the Holding Company and its subsidiary.
(ii) provision has been made in the consolidated For B S R & Co. LLP
financial statements, as required under the Chartered Accountants
applicable law or accounting standards, for Firm’s Registration No. 101248W/W - 100022
material foreseeable losses, if any, on long- Manoj Kumar Vijai
term contracts including derivative contracts
Mumbai Partner
- Refer Note 18.20 to the consolidated
April 19, 2017 Membership No. 046882
financial statements;
(iii)
There has been no delay in transferring
amounts, required to be transferred, to the
ANNEXURE A
TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE
CONSOLIDATED FINANCIAL STATEMENTS OF YES BANK LIMITED
Report on the Internal Financial Controls under clause financial controls that were operating effectively
(i) of sub-section 3 of Section 143 of the Companies for ensuring the orderly and efficient conduct of
Act, 2013 its business, including adherence to the respective
policies, the safeguarding of its assets, the prevention
In conjunction with our report of the consolidated and detection of frauds and errors, the accuracy and
financial statements of YES Bank Limited and its completeness of the accounting records, and the
subsidiary (collectively referred to as ‘the Group’) as of timely preparation of reliable financial information, as
and for the year ended March 31, 2017, we have audited required under the Companies Act, 2013 (‘the Act’).
the internal financial controls over financial reporting
of YES Bank Limited (hereinafter referred to as the AUDITOR’S RESPONSIBILITY
‘Holding Company’) and its subsidiary. Our responsibility is to express an opinion on the Group’s
internal financial controls over financial reporting based
MANAGEMENT’S RESPONSIBILITY FOR on our audit. We conducted our audit in accordance
INTERNAL FINANCIAL CONTROLS with the Guidance Note and the Standards on Auditing
The respective Board of Directors of the Holding (‘the Standards’), issued by the ICAI and deemed to
Company and its subsidiary are responsible for be prescribed under Section 143(10) of the Act, to
establishing and maintaining internal financial controls the extent applicable to an audit of internal financial
based on the internal control over financial reporting controls, both issued by the ICAI. Those Standards
criteria established by the Group considering the and the Guidance Note require that we comply with
essential components of internal control stated in the ethical requirements and plan and perform the audit to
Guidance Note on Audit of Internal Financial Controls obtain reasonable assurance about whether adequate
Over Financial Reporting (‘the Guidance Note’) issued internal financial controls over financial reporting
by the Institute of Chartered Accountants of India was established and maintained and if such controls
(‘the ICAI’). These responsibilities include the design, operated effectively in all material respects.
implementation and maintenance of adequate internal
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ANNEXURE A
TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE
CONSOLIDATED FINANCIAL STATEMENTS OF YES BANK LIMITED
303
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(` in thousands)
As at As at
Schedule
March 31, 2017 March 31, 2016
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No. 101248W/W-10022
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CONSOLIDATED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED MARCH 31, 2017
(` in thousands)
I. INCOME
Interest earned 13 164,249,985 135,334,419
Other income 14 42,177,999 27,294,218
TOTAL 206,427,984 162,628,637
II. EXPENDITURE
Interest expended 15 106,265,280 89,654,092
Operating expenses 16 41,686,077 30,050,340
Provisions and contingencies 17 25,077,771 17,627,318
TOTAL 173,029,128 137,331,750
III. PROFIT
Net profit for the year 33,398,856 25,296,887
Profit brought forward 55,204,622 42,055,905
TOTAL 88,603,478 67,352,792
IV. APPROPRIATIONS
Transfer to Statutory Reserve 8,325,241 6,348,617
Transfer to Capital Reserve 1,082,995 734,827
Transfer to Investment Reserve - -
Dividend paid for previous year 4,665 2,740
Tax on Dividend paid for previous year 950 468
Proposed Dividend - 4,205,316
Tax (including surcharge and education cess) on Dividend - 856,202
Balance carried over to balance sheet 79,189,628 55,204,622
TOTAL 88,603,478 67,352,792
Significant Accounting Policies and Notes to Accounts 18
forming part of financial statements
Earning per share (Refer Sch.18.12)
Basic (`) 79.12 60.39
Diluted (`) 77.00 59.08
(Face Value of Equity Share is ` 10/-)
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No. 101248W/W-10022
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CONSOLIDATED
CASH FLOWSTATEMENT
FOR THE YEAR ENDED MARCH 31, 2017
(` in thousands)
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CONSOLIDATED
CASH FLOWSTATEMENT
FOR THE YEAR ENDED MARCH 31, 2017
(` in thousands)
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No. 101248W/W-10022
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SCHEDULES
FORMING A PART OF CONSOLIDATED FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 1 - CAPITAL
Authorized Capital
600,000,000 equity shares of ` 10/- each 6,000,000 6,000,000
20,000,000 preference shares of ` 100/- each 2,000,000 -
Issued, subscribed and paid-up capital
456,485,813 equity shares of ` 10/- each 4,564,858 4,205,316
(March 31, 2016 : 420,531,641 equity shares of ` 10/- each) [Refer Sch 18.6]
TOTAL 4,564,858 4,205,316
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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SCHEDULES
FORMING A PART OF CONSOLIDATED FINANCIAL STATEMENTS
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 3 - DEPOSITS
A. I. DEMAND DEPOSITS
i) From Banks 10,543,996 8,430,375
ii) From Others 180,221,576 100,772,910
II. SAVINGS BANK DEPOSIT 327,818,301 204,176,990
III. TERM DEPOSITS
i) From banks 78,421,060 65,233,073
ii) From others 831,569,505 738,428,453
TOTAL 1,428,574,438 1,117,041,801
B. I. DEPOSITS OF BRANCHES IN INDIA 1,428,471,154 1,117,041,801
II. DEPOSITS OF BRANCHES OUTSIDE INDIA 103,284 -
TOTAL 1,428,574,438 1,117,041,801
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(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 4 - BORROWINGS
I.
INNOVATIVE PERPETUAL DEBT INSTRUMENTS (IPDI) AND TIER II
DEBT
A. BORROWINGS IN INDIA
i) IPDI 37,410,000 7,410,000
ii) Tier II Borrowings 84,828,000 88,614,000
TOTAL (A) 122,238,000 96,024,000
B. BORROWINGS OUTSIDE INDIA
i) IPDI 324,250 331,275
ii) Tier II Borrowings 10,969,876 11,268,509
TOTAL (B) 11,294,126 11,599,784
TOTAL (A+B) 133,532,126 107,623,784
II. OTHER BORROWINGS*
A. BORROWINGS IN INDIA
i) Reserve Bank of India - 10,000,000
ii) Other banks 21,818,909 19,520,000
iii) Other institutions and agencies ** 81,117,555 84,915,827
TOTAL (A) 102,936,464 114,435,827
B. BORROWINGS OUTSIDE INDIA 149,598,140 94,530,158
TOTAL (A+B) 252,534,604 208,965,985
TOTAL (I+II) 386,066,730 316,589,769
*Secured borrowings are ` 14,198,629 thousands (March 31, 2016: ` 17,994,327 thousands).
**Including refinance borrowing.
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
SCHEDULE 9 - ADVANCES
A. i) Bills purchased and discounted 15,592,229 13,618,402
ii) Cash credit, overdrafts and loans payable on demand 285,619,143 233,961,280
iii) Term loans 1,021,415,397 734,519,588
TOTAL 1,322,626,769 982,099,270
B. i) Secured by tangible assets (includes advances secured by 971,727,832 729,383,226
fixed deposits and book debt)
ii) Covered by Bank/Government guarantees 9,982,743 3,162,345
iii) Unsecured (Note 1 and 2) 340,916,194 249,553,699
TOTAL 1,322,626,769 982,099,270
1 Includes advances of ` 194,674,665 thousands
(March 31, 2016 ` 131,205,302 thousands) for which
security documentation is either being obtained or being
registered.
2 There are no outstanding advances as at March 31, 2017
and March 31, 2016 for which only intangible securities
such as charge over the rights, licenses, authority, etc. has
been taken.
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(` in thousands)
As at As at
March 31, 2017 March 31, 2016
C. I. ADVANCES IN INDIA
i) Priority sectors 291,727,756 265,143,459
ii) Public sector 611,812 47,396
iii) Banks 1,336,192 879,657
iv) Others 968,611,004 701,038,944
TOTAL (I) 1,262,286,764 967,109,456
II. ADVANCES OUTSIDE INDIA
i) Due from Banks 803,409 1,977,769
ii) (a) Bills purchased and discounted - -
(b) Syndicated loans 59,536,596 13,012,045
(c) others - -
TOTAL (II) 60,340,005 14,989,814
TOTAL (I+II) 1,322,626,769 982,099,270
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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(` in thousands)
As at As at
March 31, 2017 March 31, 2016
(` in thousands)
As at As at
March 31, 2017 March 31, 2016
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(` in thousands)
(` in thousands)
(` in thousands)
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(` in thousands)
(` in thousands)
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The Bank consolidates its subsidiaries in accordance 18.5.1 SIGNIFICANT CHANGES IN ACCOUNTING
with Accounting Standard (‘AS’) 21, Consolidated POLICY
Financial Statements notified under Section 133 of the PROPOSED DIVIDEND:
Companies Act, 2013, read together with paragraph 7 In terms of revised Accounting Standard (AS) 4
of the Companies (Accounts) Rules, 2014 issued by the ‘Contingencies and Events occurring after the
Balance sheet date’ as notified by the Ministry of
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Corporate Affairs through amendments to Companies / S4A. Interest on non-performing assets and
(Accounting Standards) Amendment Rules, 2016, accounts under SDR / S4A is recognized upon
dated 30 March, 2016, Group has not accounted for realization as per the prudential norms of the RBI.
proposed dividend as a liability as at March 31, 2017.
Proposed Dividend was however accounted for as a
Loan processing fee is recognized when it
liability as at March 31, 2016 in line with the existing becomes due.
accounting standard applicable at that time.
Dividend income is recognized when the right to
The Board of Directors of the Group has recommended receive payment is established.
a dividend of ` 12 per equity share for approval by
shareholders at the 13th Annual General Meeting. If Commission on guarantees issued by the Group
approved the total liability arising to the Group would is recognized as income over the period of the
be ` 6,593.11 million (including dividend tax) in Fiscal guarantee
year 2018 (previous year ` 5,061.52 million). The actual
dividend payout may however change due to equity Commission on Letters of Credit (‘LC’) issued by
shares exercised by employees between the end of the the Group is recognized as income at the time of
financial year and the dividend declaration date. issue of the LC.
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Fee income from Investment banking / Merchant guidelines. Transfer of scrips from AFS / HFT
banking services are recognized based on category to HTM category is made at the lower
completion of milestone as per the engagement of book value or market value. In the case of
letter. transfer of securities from HTM to AFS / HFT
category, the investments held under HTM at a
Fee for subscription based services are recognized discount are transferred to AFS / HFT category
as earned on a pro-rata basis over the term of the at the acquisition price and investments placed in
plan. the HTM category at a premium are transferred to
AFS / HFT at the amortized cost.
18.5.3 INVESTMENTS
Classification and valuation of the Group’s investments Transfer of investments from AFS to HFT or
are carried out in accordance with RBI Circular DBR. vice-a-versa is done at the book value.
No. BP.BC.6/21.04.141/2015-16 dated July 01, 2015 Depreciation carried, if any, on such investments
and Fixed Income Money Market and Derivative is also transferred from one category to another.
Association (FIMMDA) guidelines FIMCIR/2017-18/001/
April 03, 2017. d) Valuation
Investments categorized under AFS and HFT
ACCOUNTING AND CLASSIFICATION categories are marked to market (MTM) on a
Investments are recognized using the value date basis periodical basis as per relevant RBI guidelines.
of accounting. In compliance with RBI guidelines, all Net depreciation, if any, in the category under
investments, are categorized as “Held for trading” the classification mentioned in Schedule 8
(‘HFT’), “Available for sale” (‘AFS’) or “Held to maturity” (‘Investments’) is recognized in the profit and
(‘HTM’) at the time of its purchase. For the purpose loss account. The net appreciation, if any, in the
of disclosure in the balance sheet, investments are category under each classification is ignored,
classified as disclosed in Schedule 8 (‘Investments’) except to the extent of depreciation previously
under six groups (a) government securities (b) other provided. The book value of individual securities
approved securities (c) shares (d) bonds and debentures is not changed consequent to periodic valuation
(e) subsidiaries and joint ventures and (f) others. of investments.
a) Cost of acquisition
Investments received in lieu of restructured
Costs such as brokerage pertaining to investments, advances/under Strategic Debt Restructuring
paid at the time of acquisition are charged to the (SDR) scheme are valued in accordance with
profit and loss account as per the RBI guidelines. RBI guidelines. Any diminution in value on
these investments is provided for and is not
b) Basis of classification used to set off against appreciation in respect
Securities that are held principally for resale within of other performing securities in that category.
90 days from the date of purchase are classified Depreciation on equity shares acquired and held
under the HFT category. Investments that the by the Group under SDR scheme is provided as
Group intends to hold till maturity are classified per RBI guidelines.
under the HTM category, or as per RBI guidelines.
Securities which are not classified in the above Investments classified under the HTM category
categories are classified under the AFS category. are carried at their acquisition cost and any
premium over the face value, paid on acquisition,
c) Transfer between categories is amortized on a straight line basis over the
Reclassification of investments from one category remaining period to maturity. Amortization
to the other, if done, is in accordance with RBI expense of premia on investments in the HTM
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category is deducted from interest income if any, is ignored. Profit / Loss on settlement of the
in accordance with RBI Circular DBR. No.BP. short position is recognized in the Profit and Loss
BC.6/21.04.141/2015-16 dated July 01, 2015. Where account.
in the opinion of management, a diminution,
other than temporary in the value of investments Units of Venture Capital Funds (VCF) held under
classified under HTM has taken place, suitable AFS category are valued using the Net Asset
provisions are made. Value (NAV) shown by VCF as per the financial
statement. The VCFs are valued based on the
Treasury Bills, Commercial Paper and Certificates audited results once in a year. In case the audited
of deposit being discounted instruments, are financials are not available for a period beyond 18
valued at carrying cost. months, the investments are valued at ` 1 per VCF.
Pass Through Certificates purchase for priority Quoted equity shares are valued at their closing
sector lending requirements are valued at Book price on a recognized stock exchange. Unquoted
Value in accordance with FIMMDA guidelines equity shares are valued at the break-up value if
FIMCIR/2017-18/001/April 03, 2017. the latest balance sheet is available, else, at ` 1 per
company, as per relevant RBI guidelines.
The market/fair value applied for the purpose
of periodical valuation of quoted investments At the end of each reporting period, security
included in the AFS and HFT categories is the receipts issued by the asset reconstruction
market price of the scrip as available from the company are valued in accordance with the
trades/quotes on the stock exchanges and guidelines applicable to such instruments,
for Subsidiary General Ledger (‘SGL’) account prescribed by RBI from time to time. Accordingly,
transactions, the prices as periodically declared in cases where the cash flows from security
by Primary Dealers Association of India jointly receipts issued by the asset reconstruction
with FIMMDA. company are limited to the actual realization of
the financial assets assigned to the instruments in
The market/fair value of unquoted government the concerned scheme, the Group reckons the net
securities included in the AFS and HFT category asset value obtained from the asset reconstruction
is determined as per the prices published by company from time to time, for valuation of such
FIMMDA. Further, in the case of unquoted bonds, investments at each reporting date.
debentures, pass through certificates (other than
priority sector) and preference shares, valuation is Investments in quoted Mutual Fund (MF) Units
carried out by applying an appropriate mark-up are valued at the latest repurchase price/net asset
(reflecting associated credit risk) over the Yield to value declared by the mutual fund. Investments
Maturity (‘YTM’) rates of government securities. in un-quoted MF Units are valued on the basis of
Such mark up and YTM rates applied are as per the latest re-purchase price declared by the MF in
the relevant rates published by FIMMDA. respect of each particular Scheme.
The Group undertakes short sale transactions Sovereign foreign currency Bonds are valued using
in Central Government dated securities in either Composite Bloomberg Bond Trader (CBBT)
accordance with RBI guidelines. The short position price, Bloomberg Valuation Service (BVAL) price
is reflected as the amount received on sale and or on Treasury curve in the chronological order
is netted in the Investment schedule. The short based on availability.
position is marked to market and loss, if any, is
charged to the Profit and Loss account while gain,
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Masala bonds are valued using either Composite f) Profit/Loss on sale of Investments
Bloomberg Bond Trader (CBBT) price, Bloomberg Profit/Loss on sale of Investments in the HTM
Valuation Service (BVAL) price or as per FIMMDA category is recognized in the profit and loss
guided valuation methodology for unquoted account and profit thereafter is appropriated
bonds in the chronological order based on (net of applicable taxes and statutory reserve
availability. requirements) to Capital Reserve. Profit/Loss on
sale of investments in HFT and AFS categories is
Special bonds such as oil bonds, fertilizer bonds, recognized in the Profit and Loss account.
UDAY bonds etc. which are directly issued by
Government of India (‘GOI’) is valued based on 18.5.4 ADVANCES
FIMMDA valuation. ACCOUNTING AND CLASSIFICATION
Advances are classified as performing and non-
Non-performing investments are identified and performing based on the relevant RBI guidelines.
depreciation/provision are made thereon based Advances are stated net of specific provisions, interest
on the RBI guidelines. Based on management in suspense, inter-bank participation certificates issued
assessment of impairment, the Group may and bills rediscounted.
additionally create provision over and above the
RBI guidelines. The depreciation/provision on PROVISIONING
such non-performing investments are not set Provisions in respect of non-performing advances
off against the appreciation in respect of other are made based on management’s assessment of the
performing securities. Interest on non-performing degree of impairment of the advances, subject to the
investments is not recognized in the Profit and minimum provisioning level prescribed in relevant RBI
Loss account until received. guidelines.
e) Accounting for repos / reverse repos The specific provision levels for retail non-performing
Securities sold under agreements to repurchase assets are also based on the nature of product and
(Repos) and securities purchased under delinquency levels. Specific provisions in respect of
agreements to resell (Reverse Repos) including non-performing advances are charged to the Profit
liquidity adjustment facility (LAF) with RBI and Loss account and included under Provisions and
are treated as collateralized borrowing and Contingencies.
lending transactions respectively in accordance
with RBI master circular No. DBR. No. BP.BC. As per the RBI guidelines a general provision is
6/21.04.141/2015-16 dated July 01. 2015. The first made on all standard advances, including provision
leg of the repo transaction is contracted at the for borrowers having unhedged foreign currency
prevailing market rates. The difference between exposure and for credit exposures computed as
consideration amounts of first and second per the current marked to market values of interest
(reversal of first) leg reflects interest and is rate and foreign exchange derivative contracts. The
recognized as interest income/expense over the Group also maintains additional general provisions on
period of transaction. standard exposure based on the internal credit rating
matrix as approved by the Board of the Group. These
Group also undertakes Repo and Reverse repo provisions are included in Schedule 5 - ‘Other liabilities
transactions from IFSC Banking Unit in GIFT & provisions - Others’.
City in Foreign currency Sovereign Securities
and accounting is similar to the domestic repo Further to the provisions required to be held according
transactions. to the asset classification status, provisions are held
for individual country exposures (other than for home
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country exposure). Countries are categorised into risk In accordance with AS 11 ‘The Effects of changes in
categories as per Export Credit Guarantee Corporation Foreign Exchange Rates’, contingent liabilities in respect
of India Ltd. (‘ECGC’) guidelines and provisioning is of outstanding foreign exchange forward contracts,
done in respect of that country where the net funded derivatives, guarantees, endorsements and other
exposure is one percent or more of the Group’s total obligations are stated at the exchange rates notified by
assets. FEDAI corresponding to the balance sheet date.
In respect of restructured standard and non performing Both monetary and non-monetary foreign currency
advances, provision is made for the present value of assets and liabilities of non-integral foreign operations
principal and interest component sacrificed at the time are translated at closing exchange rates notified by
of restructuring the assets, based on the RBI guidelines. FEDAI at the Balance Sheet date and the resulting
profit/loss arising from exchange differences are
Accounts are written-off in accordance with the accumulated in the Foreign Currency Translation
Group’s policies. Recoveries from bad debts written- Account until remittance or the disposal of the net
off are recognized in the Profit and Loss account and investment in the non-integral foreign operations in
included under other income. accordance with AS - 11.
In case of loans sold to asset reconstruction company 18.5.6 EARNINGS PER SHARE
and consideration is more than net book value, the The Group reports basic and diluted earnings per
Group records the security receipts at Net Book Value equity share in accordance with Accounting Standard
as per RBI guidelines. (AS) 20, “Earnings per Share” notified under Section
133 of the Companies Act, 2013, read together with
18.5.5 TRANSACTIONS INVOLVING FOREIGN paragraph 7 of the Companies (Accounts) Rules, 2014.
EXCHANGE Basic earnings per equity share have been computed
Foreign currency income and expenditure items of by dividing net profit after tax for the year by the
domestic operations are translated at the exchange weighted average number of equity shares outstanding
rates prevailing on the date of the transaction. Income for the period.
and expenditure items of integral foreign operations
(representative offices) are translated at the daily Diluted earnings per equity share have been computed
average closing rates and of non-integral foreign using the weighted average number of equity shares
operations (foreign branches) at the monthly average and dilutive potential equity shares outstanding during
closing rates. the period except where the results are anti dilutive.
Premia/discounts on foreign exchange swaps, that are 18.5.7 ACCOUNTING FOR DERIVATIVE
used to hedge risks arising from foreign currency assets TRANSACTIONS
and liabilities, are amortized over the life of the swap. Derivative transactions comprises forward rate
agreements, swaps and option contracts. The Group
Monetary foreign currency assets and liabilities are undertakes derivative transactions for market making/
translated at the balance sheet date at rates notified trading and hedging on-balance sheet assets and
by the Foreign Exchange Dealers’ Association of India liabilities. All market making/trading transactions are
(‘FEDAI’). Foreign exchange contracts are stated at marked to market on a monthly basis and the resultant
net present value using LIBOR/SWAP curves of the unrealized gains/losses are recognized in the profit
respective currencies. The resulting profits or losses and loss account.
are recognized in the profit and loss account.
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Derivative transactions that are undertaken for hedging Cross currency interest rate swaps which are used by
are accounted for on accrual basis except for the the Bank to hedge its foreign currency borrowings
transaction designated with an asset or liability that is have been designated as cash flow hedges and are
carried at market value or lower of cost or market value measured at fair value. The corresponding gain or loss
in the financial statements, which are accounted similar is recognized as cash flow hedge reserve. Further to
to the underlying asset or liability. match profit/ loss on account of revaluation of foreign
currency borrowing, the corresponding amount is
The Group follows the option premium accounting recycled from cash flow hedge reserve to Profit and
framework prescribed by FEDAI SPL- circular dated Loss account.
December 14, 2007. Premium on option transaction
is recognized as income/expense on expiry or early 18.5.8 FIXED ASSETS
termination of the transaction. Mark to market (MTM) Fixed assets are stated at cost less accumulated
gain/loss (adjusted for premium received/paid on depreciation, amortization and accumulated
option contracts) is recorded under ‘Other Income’. impairment losses. Cost comprises the purchase price
and any cost attributable for bringing the asset to its
The amounts received/paid on cancellation of option working condition for its intended use. Subsequent
contracts are recognized as realized gains/losses on expenditure incurred on assets put to use is capitalized
options. Charges receivable/payable on cancellation/ only when it increases the future benefit/ functioning
termination of foreign exchange forward contracts and capability from/ of such assets.
swaps are recognized as income/expense on the date
of cancellation/termination under ‘Other Income’. Fixed assets are reviewed for impairment whenever
events or changes in circumstances indicate that the
The requirement for collateral and credit risk mitigation carrying amount of an asset may not be recoverable.
on derivative contracts is assessed based on internal An asset’s recoverable amount is the higher of an
credit policy. Overdues if any, on account of derivative asset’s net selling price and its value in use. If such
transactions are accounted in accordance with extant assets are considered to be impaired, the impairment
RBI guidelines. is recognized by debiting the profit and loss account
and is measured as the amount by which the carrying
As per the RBI guidelines on ‘Prudential Norms for Off- amount of the assets exceeds the fair value of the
balance Sheet Exposures of Group’s a general provision assets.
is made on the current gross MTM gain of the contract
for all outstanding interest rate and foreign exchange
derivative transactions.
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18.5.9 DEPRECIATION
Depreciation on fixed assets is provided on straight-line method, over estimated useful lives, as determined by the
management, at the rates mentioned below-
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Deferred tax assets are recognized only to the extent 18.5.14 CASH AND CASH EQUIVALENT
there is reasonable certainty that the assets can be Cash and cash equivalents include cash in hand,
realized in future. In case of unabsorbed depreciation balances with RBI, balances with other banks and
or carried forward loss under taxation laws, all deferred money at call and short notice.
tax assets are recognized only if there is virtual certainty
of realization of such assets supported by convincing 18.5.15 CORPORATE SOCIAL RESPONSIBILITY
evidence. Deferred tax assets are reviewed at each Expenditure towards corporate social responsibility, in
balance sheet date and appropriately adjusted to accordance with Companies Act, 2013, are recognized
reflect the amount that is reasonably/virtually certain in the Profit and Loss account.
to be realized.
18.5.16 SHARE ISSUE EXPENSES
18.5.13 PROVISIONS AND CONTINGENT Share issue expenses are adjusted from Share Premium
ASSETS/LIABILITIES Account in terms of Section 52 of the Companies
A contingent liability is a possible obligation that arises Act, 2013.
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more 18.5.17 SEGMENT INFORMATION
uncertain future events beyond the control of the The disclosure relating to segment information is in
company or a present obligation that is not recognized accordance with AS-17, Segment Reporting and as per
because it is not probable that an outflow of resources guidelines issued by RBI.
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is 18.6 EQUITY ISSUE
a liability that cannot be recognized because it cannot During the financial year ended March 31, 2017, the
be measured reliably. The Group does not recognize Bank has issued 32,711,000 equity shares of ` 10 each
a contingent liability but discloses its existence in the for cash pursuant to a Qualified Institutions Placement
financial statements. (QIP) at ` 1,500 per share aggregating to ` 49,066.50
million. The Bank accreted ` 48,239.39 million (net of
In accordance with AS 29, Provisions, Contingent share issue expenses of ` 500 million) as premium,
Liabilities and Contingent Assets, the Group creates a on account of QIP. Provision on share issue expenses
provision when there is a present obligation as a result created by debiting to share premium account is on
of a past event that probably requires an outflow of estimated basis. Adjustments, if any required, to
resources and a reliable estimate can be made of the share premium shall be made upon final settlement of
amount of the obligation. these expenses. The Bank also issued 32,43,172 shares
pursuant to the exercise of stock option aggregating to
Provisions are reviewed at each balance sheet date and ` 1,010.12 millions.
adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of resources would During the financial year ended March 31, 2016, the Bank
be required to settle the obligation, the provision is has issued 2,795,543 shares pursuant to the exercise of
reversed. stock option aggregating to ` 739.51 millions.
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As at As at
Share Capital
March 31, 2017 March 31, 2016
` in millions
` in millions
As at As at
March 31, 2017 March 31, 2016
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Fair value of plan assets at the beginning of the year 563.73 353.95
Adjustment to Opening Balance 5.39 -
Expected return on plan assets 54.57 31.03
Contributions 299.27 234.21
Benefits paid (45.48) (41.22)
Actuarial gain/(loss) on planned assets 8.45 (14.25)
Fair value of planned assets at the end of the period 885.95 563.73
The Group has entire contribution of Gratuity Fund as Investments with Insurance Companies.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled.
Net gratuity cost for the year ended March 31, 2017 and March 31, 2016 comprises the following components:
` in millions
Experience History:
` in millions
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The assumptions used in accounting for the gratuity plan are set out below:
Actuarial assumption on salary increase also takes into consideration the inflation, seniority, promotion and other
relevant factors.
Treasury: Includes investments, all financial markets activities undertaken on behalf of the Group’s customers,
proprietary trading, maintenance of reserve requirements and resource mobilisation from other Groups and
financial institutions.
Corporate/Wholesale Banking: Includes lending, deposit taking and other services offered to corporate
customers.
Retail Banking: Includes lending, deposit taking and other services offered to retail customers.
Other Banking Operations: Includes para banking activities like third party product distribution, merchant
banking etc.
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Segmental results for the year ended March 31, 2017 are set out below:
` in millions
Corporate / Other
Retail
Business Segments Treasury Wholesale Banking Total
Banking
Banking Operations
Segmental results for the year ended March 31, 2016 are set out below:
` in millions
Corporate/ Other
Retail
Business Segments Treasury Wholesale Banking Total
Banking
Banking Operations
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As per AS 18 “Related Party Disclosures”, notified under Section 133 of the Companies Act, 2013, read together
with paragraph 7 of the Companies (Accounts) Rules 2014, the Group’s related parties for the year ended
March 31, 2017 are disclosed below:
The following represents the significant transactions between the Group and such related parties including
relatives of above mentioned KMP during the year ended March 31, 2017:
` in millions
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As per AS 18 “Related Party Disclosures”, prescribed by the Companies (Accounting Standards) Rules, 2006, the
Group’s related parties for the year ended March 31, 2016 are disclosed below:
The following represents the significant transactions between the Group and such related parties including
relatives of above mentioned KMP during the year ended March 31, 2016:
` in millions
As at March 31, 2017 and March 31, 2016 the Group had certain non-cancellable outsourcing contracts for
information technology assets and properties on rent. The future minimum lease obligations against the same
were as follows:
` in millions
As at As at
Lease obligations
March 31, 2017 March 31, 2016
The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.
There are no undue restrictions or onerous clauses in the agreements.
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Basic (annualised)
Weighted average no. of equity shares outstanding 422,140,801 418,916,568
Net profit/(loss) (` in millions) 33,398.86 25,296.89
Basic earnings per share (` ) 79.12 60.39
Diluted (annualized)
Weighted average no. of equity shares outstanding 433,753,206 428,171,182
Net profit/(loss) (` in millions) 33,398.86 25,296.89
Diluted earnings per share (` ) 77.00 59.08
Nominal value per share (` ) 10.00 10.00
The schemes include provisions for grant of options to eligible employees of the Group and its subsidiaries/
affiliates. All the aforesaid schemes have been approved by the Nomination & Remuneration Committee (N&RC)
and the Board of Directors and were also approved by the members of the Group. All these schemes are
administered by the N&RC.
Options under all the aforesaid plans are granted for a term of 10 years (inclusive of the vesting period) and are
settled with equity shares being allotted to the beneficiary upon exercise.
JESOP II and JESOP III were in force for employees joining the Group up to March 31, 2006 and March 31, 2007
respectively.
YBL JESOP V is in force for employees joining the Group from time to time. Under JESOP V, 50% options vest
takes place at the end of three years and remaining 50% at the end of five years from the date of Grant.
PESOP I, PESOP II and PESOP II - 2010 are Performance Stock Option Plans. Under PESOP I, 25% of the options
granted would vest at the end of each year from the date of grant. Under PESOP II, 30% of the granted options
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vest at the end of first year, 30% vest at the end of second year and balance 40% vest at the end of third year.
Under YBL PESOP II – 2010, 30% of the granted options vest at the end of the third year, 30% vest at the end of
the fourth year and balance 40% vest at the end of the fifth year.
Further, grants under PESOP II had been discontinued with effect from January 20, 2010.
A summary of the status of the Group’s stock option plans as on March 31, 2017 and March 31, 2016 is
set out below:
Options outstanding at the beginning of the year 14,737,020 4,589,000 14,449,500 4,530,288
Granted during the year 872,050 821,500 2,378,350 1,427,250
Exercised during the year 2,226,137 1,017,035 1,812,580 982,963
Forfeited/lapsed during the year 422,500 270,475 278,250 385,575
Options outstanding at the end of the year 12,960,433 4,122,990 14,737,020 4,589,000
Options exercisable 4,527,933 824,490 3,990,320 990,825
Weighted average exercise price (`) 307.68 319.73 276.49 242.49
Weighted average remaining contractual life of 1.86 2.12 2.10 2.07
outstanding option (yrs)
The Group has charged Nil, being the intrinsic value of the stock options granted for the year ended March 31,
2017 and March 31, 2016. Had the Group adopted the Fair Value method (based on Black- Scholes pricing model),
for pricing and accounting of options, net profit after tax would have been lower by ` 464.49 millions (Previous
year: ` 414.23 millions), the basic earnings per share would have been ` 78.02 (Previous year: ` 59.40) per share
instead of ` 79.12 (Previous year: ` 60.39) per share; and diluted earnings per share would have been ` 75.93
(Previous year: ` 58.11) per share instead of ` 77.00 (Previous year: ` 59.08) per share.
The following assumptions have been made for computation of the fair value of ESOP granted for the year ended
March 31, 2017 and March 31, 2016.
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The components that give rise to the deferred tax asset and liability included in the balance sheet are as follows:
` in millions
As at As at
Particulars
March 31, 2017 March 31, 2016
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Sr.
Contingent Liabilities Brief
No.
1. Claims against the Group not The Group is a party to various legal and tax proceedings in the normal
acknowledged as debts course of business. The Group does not expect the outcome of these
proceedings to have a material adverse effect on the Group’s financial
conditions, results of operations or cash flows.
2. Liability on account of forward The Group enters into foreign exchange contracts, currency options,
exchange and derivative forward rate agreements, currency swaps and interest rate swaps with
contracts. interbank participants and customers. Forward exchange contracts
are commitments to buy or sell foreign currency at a future date at the
contracted rate. Currency swaps are commitments to exchange cash flows
by way of interest/principal in one currency against another, based on
predetermined rates. Interest rate swaps are commitments to exchange
fixed and floating interest rate cash flows. The notional amounts of financial
instruments of such foreign exchange contracts and derivatives provide a
basis for comparison with instruments recognized on the balance sheet but
do not necessarily indicate the amounts of future cash flows involved or
the current fair value of the instruments and, therefore, do not indicate the
Group’s exposure to credit or price risks. The derivative instruments become
favorable (assets) or unfavorable (liabilities) as a result of fluctuations in
market rates or prices relative to their terms. The aggregate contractual or
notional amount of derivative financial instruments on hand, the extent to
which instruments are favorable or unfavorable and, thus the aggregate fair
values of derivative financial assets and liabilities can fluctuate significantly.
3. Guarantees given on behalf of As a part of its commercial banking activities the Group issues documentary
constituents, credit and guarantees on behalf of its customers. Documentary credits
acceptances, endorsements such as letters of credit enhance the credit standing of the customers of
and other obligations the Group. Guarantees generally represent irrevocable assurances that the
Group will make payments in the event of the customer failing to fulfill its
financial or performance obligations.
4. Other items for which the - Value dated purchase of securities
Group is contingently liable - Capital commitments
- Amount deposited with RBI under Depositor Education Awareness Fund
- Foreign Exchange Contracts (Tom & Spot)
Refer Schedule 12 for amounts relating to contingent liability
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` in millions
At at At at
Particulars
March 31, 2017 March 31, 2016
For B S R & Co. LLP For and on behalf of the Board of Directors
Chartered Accountants YES BANK Limited
ICAI Firm Registration No. 101248W/
W-100022
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FORM AOC -1
PURSUANT TO FIRST PROVISO TO SUB-SECTION (3) OF SECTION 129 READ
WITH RULE 5 OF COMPANIES (ACCOUNTS) RULES, 2014
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures
(amt in ` 000)
1 Sr. No. 1
Not Applicable
In accordance with RBI circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’
requires banks to make applicable Pillar 3 disclosures including leverage ratio under Basel III Framework. The Pillar
III disclosures have not been subjected to review by the statutory auditors. The Bank has made these disclosures
which are available on its website at the following link.
https://www.yesbank.in/pdf/basel_iii_disclosure_March_31_2017.pdf
338
NOTES
NOTES
ABOUT YES BANK