Your Directors have pleasure in presenting the Ninety Fifth (95^th) Annual Report of The Federal Bank Limited (“Bank”) together with the
Audited Financial Statements for the financial year (“FY”) ended 31^st March, 2026.

1. CORPORATE OVERVIEW

Your Bank continually strives to achieve breakthroughs across all areas and remains committed to reaching 'the next level', serving
as a preferred partner for Personal, NRI, and Business banking across a growing customer base in both urban and rural India. The
Bank's mantra is “Digital at the Core and Human at the Fore”.

2. FINANCIAL HIGHLIGHTS

2.1 Consolidated:

2.2 Standalone:

2.3 Key performance indicators

Notes:

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

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

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

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

3. FINANCIAL PERFORMANCE OF THE GROUP

The Subsidiaries and the Associate Companies of the Bank continued to deliver steady performance. The Consolidated Net Profit
attributable to the group for FY 2025-26 is Rs 4,345.30 Crore as against Rs 4,158.85 Crore in FY 2024-25.

4. SUBSIDIARIES AND ASSOCIATE

As on March 31, 2026 the Bank has the following Subsidiaries and Associate company:

4.1 Federal Operations and Services Limited

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

FedServ's Board of Directors comprises of the following five
directors as on March 31, 2026:

• Mr. Sidhartha Sengupta, Chairman &

Non-Executive Director.

advances nor accepts deposits. FedServ is operating from
Five locations: - Kochi in Kerala, Visakhapatnam in Andhra
Pradesh, Bengaluru in Karnataka, Indore in Madhya Pradesh
and Coimbatore in Tamil Nadu.

The Total revenue of FedServ for the year ended on March
31, 2026, was Rs 135.03 Crore of which Rs 133.62 Crore
pertains to services provided by the Company to the Bank
and Rs 1.41 Crore relates to the indirect incomes. The Net
Profit before tax of FedServ stood at Rs 12.30 Crore for
the year ended on March 31, 2026. The Net worth at the
beginning of the year was Rs 33.67 Crore and closing net
worth as on March 31, 2026, was Rs 39.44 Crore.

The Profit after tax of the Company for the year ended
March 31, 2026, increased to Rs 11.19 Crore from Rs 7.91
Crore for the year ended March 31, 2025. The total assets
of the Company increased to Rs 48.82 Crore as on March
31, 2026, from Rs 44.06 Crore as on March 31, 2025.

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

4.2 Fedbank Financial Services Limited

Fedbank Financial Services Limited (“Fedfina”) is a subsidiary
company of The Federal Bank Limited (the “Bank”), which
was incorporated on April 17, 1995, in Aluva, Kochi, State
of Kerala under the Companies Act, 1956, and was granted
a certificate of incorporation by the Registrar of Companies,
Kochi, Kerala. The Reserve Bank of India had also issued
Certificate of Registration dated August 24, 2010 granting
approval to Fedfina to carry on the business of a non¬
banking financial institution without accepting public
deposits. Presently, the Registered and Corporate office
of Fedfina is at Mumbai, Maharashtra. Fedfina has a well-
tailored suite of products targeted to match our customers'
needs, which includes mortgage loans, business loans, and
gold loans. It also distributes loan products of the Bank and
has broadened its geographical presence by establishing
new branches across India providing multiple loan products
to various segments of borrowers. With the opening of
148 branches during the year, the branch network has now
reached to 757 branches as on March 31, 2026 across 17
states and union territories for multiple products.

Fedfina's Board of Directors comprises of the following ten
directors as on March 31, 2026: ¹

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

• Ms. Mona Mukund Bhide - Non-Executive -
Independent Director

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

• Mr. Maninder Singh Juneja - Non-Executive
Nominee Director

• Mr. Harsh Dugar- Non-Executive Nominee Director

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

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

The Total revenue of the Company for the financial year
ended March 31, 2026 has increased to INR 2,22,661
lakhs as against INR 2,07,982 lakhs for the previous year
ended March 31, 2025. Similarly, Net Interest Income (NII)
grew by 14.8 % from INR 1,07,081 Lakhs in FY25 to INR
1,22,974.66 Lakhs this year. The revenue increased by 7 %
on the back of growth of 23 % in loan book during the year.
The net profit of the Company increased by 53 % to 34,360
lakhs for the financial year ended March 31, 2026, as
against Rs 22,518 lakhs for the financial year ended March
31, 2025. The Net worth of Company at the beginning of
the financial year, that is, April 1, 2025, was Rs 2,54,736
lakhs and closing Net worth of Fedfina as on March 31,
2026, was Rs 2,92,610 lakhs.

As of March 31, 2026, the AUM increased by 27.5%
compared to FY 2024-25, reaching Rs 20,153 Crore while
disbursements improved by 67.2% to Rs 31,410 Crore.

Over the past year, Rs 2,12,665 lakhs of the Gold loan AUM
was through co-lending, and Fedfina conducted portfolio
sell-down transactions totalling Rs1,69,448 lakhs. At the
end of the year, 28 % of the AUM was off the books.

Matter Reported in the Auditors' Report of Fedfina: The
Board noted the observation in the Statutory Auditor's
Report of Fedfina for FY 2025-26 regarding the non¬
enablement of the audit trail (edit log) feature in certain
software applications used for maintaining books of account.
The Board was informed by the management of Fedfina that
the issue was limited to the Ind AS adjustment process and
was rectified before the year end through necessary system
changes. The Board noted the corrective action taken by
the management.

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

4.3 Associate Company

As on March 31, 2026, the Bank has one Associate Company
named Ageas Federal Life Insurance Company Limited.

The Bank has an investment in the life insurance sector
through a joint venture with Ageas Insurance International
N.V., a leading European insurance group. The joint
venture entity, Ageas Federal Life Insurance Company
Limited (formerly IDBI Federal Life Insurance), commenced
operations in March 2008. As on March 31, 2026, the Bank
held a total investment of H 240 crore in the equity capital of
the Company, representing a 30% stake. The total premium
collected by Ageas Federal Life Insurance Company Limited
during the period ended March 31, 2026, was H 3,664 crore.

On the financial front, the Company reported a net profit
after tax of H 28.82 crore in FY 2025-26, marking its
14^th consecutive year of profitability. The total premium
increased by 19% to H 3,664 crore in FY 2025-26 from
H 3,073 crore in FY 2024-25.

As on March 31, 2026, Mr. Venkataraman Venkateswaran
and Mr. Virat Diwanji served as Non-Executive Directors on
the Board of Ageas Federal Life Insurance Company Limited.

During FY 2025-26, the Bank acquired an additional 4%
equity stake in the Company, increasing its shareholding to
30%. The remaining 70% stake in the Company is held by
Ageas Federal Life Insurance.

The Consolidated Financial Statements of the Bank
along with its Subsidiaries and Associate Company
prepared for the financial year 2025-26 forms part of this
Integrated Annual Report.

The financial position and performance of the Bank's
Subsidiaries & Associate are given in Form AOC-1
-Statement containing salient features of the financial
statements of the Subsidiaries/Associate Companies/Joint
Venture which forms part of this Integrated Annual Report.

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

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

5.1 Financial performance

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

(i) The Total Business (Total Deposit Net Advances)
crossed H 5.79 Lakh Crore

(ii) The Total Deposit & Advances (Net) stood at H 3.14
Lakh Crore & H 2.65 Lakh Crore respectively.

(iii) CASA stood at H 1.03 Lakh Crore, crossing H 1 Lakh
Crore for the first time.

(iv) Net Profit Crossed H 4,117 Crore

(v) Recorded decadal best Asset quality ratios, NNPA at
0.20 % & GNPA at 1.62 %.

During the year under review, CRAR of the Bank has
increased to 17.25% for the FY 2025-26 as against 16.40%
in the previous year, after considering dividend @ 60% of
paid-up capital. Net worth has improved to H 38,690.54
Crore from H 33,121.64 Crore. Total Debts to Total
Assets is at 5.46%.

As on March 31, 2026, Net Advances increased by 13% to
H 2,64,594.37 Crore as compared to H 2,34,836.39 Crore as
March 31, 2025. As per internal classification, Corporate &
Institutional Banking grew by 8% & Commercial Banking at
26% on Year-on-Year basis. Retail Book up by 9% with 1%
growth in Core Retail segment, 3% growth in Agri and Allied
segment, 6.5% growth in Business Banking segment, 25%
growth in Commercial Vehicle/ Construction Equipment
segment, 26% growth in gold loan segment & 6% growth
in Micro Finance segment on a Year-on-Year basis. (Credit
segments are based on internal classifications and are
realigned at the beginning of every FY. Vertical wise advance
figures excludes IBPC/ BRDS.)

With the expanding network of banking outlets & customers,
the Total Deposits grew further from H 2,83,647.47 Crore as
on March 31, 2025, to H 3,13,909.39 Crore as on March 31,
2026, registering a growth of 11%. The Current Account &
Savings Account (‘CASA') deposits have recorded an increase
of 21% from H 85,757.19 Crore as on March 31, 2025, to
H 1,03,390.30 Crore as on March 31, 2026. Net Investments
increased by 16% to H 76,676.21 Crore as on March 31,
2026 from H 66,245.61 Crore as on March 31, 2025.

During the FY under review, the Total Income of the Bank
has increased by 7% to H 32,135.77 Crore as against the
total income of H 30,166.50 Crore for FY 2024-25. The
Net Profit of the Bank grew by 2% to H 4,117.32 Crore as
against H 4,051.89 Crore in the previous year. Operating
profit for the year ended increased by 18% to H 7,206.20
Crore from H 6,101.13 Crore. The Net interest margin for
the year increased to 3.24% from 3.13% in the previous
year. Consequently, Return on Average Equity (‘ROAE')
is at 11.47% for FY 2025-26 & Return on Average Asset
(‘ROAA') stood at 1.15% for FY 2025-26. Correspondingly,
Basic earnings per share (‘EPS') increased from H 16.54 in
FY 2024-25 to H 16.74 for FY 2025-26 whereas diluted
earnings per share (‘DEPS') is up from H 16.37 to H 16.56

5.2 Asset Quality

The Gross NPA of the Bank as on March 31, 2026, stood at
H 4,335.29 Crore and Gross NPA as a percentage to Gross
Advances is at 1.62%. The Net NPA stood at H 529.25 Crore
& Net NPA percentage is at 0.20% as on March 31, 2026.
The Provision Coverage Ratio (excluding technical write
offs) stood at 87.07% as on March 31, 2026.

5.3 Outreach of Bank presence & network

During the year under review, the Bank added 51 new
banking outlets, taking its total network to 1,640 outlets
as on March 31, 2026. Out of the total banking outlets,
310 are in metros, 234 are in rural, 780 in semiurban & 316
in urban centres. Apart from above, the Bank has 2,112
ATMs/ Recyclers as on March 31, 2026. The Bank also has
its Digital Banking Unit at Kolkata, Representative Office
at Abu Dhabi & Dubai & an International Financial Service
Centre (IFSC) Banking unit (IBU) in Gujarat International
Finance Tec-City (GIFT City).

5.4 Change in the nature of business.

There is no change in the nature of business of the Bank
for the financial year under review. Further information on
the business overview & outlook/state of the affairs of the
Bank is disclosed in detail in the Management Discussion &
Analysis Report which forms part of this Annual Report.

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

There were no material changes and commitments affecting
the financial position of the Bank, between the end of the
financial year to which the financial statements relate and
the date of this report.

6. DIVIDEND, DIVIDEND DISTRIBUTION POLICY
& TRANSFER TO RESERVE

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

In view of the overall performance of the Bank and while
retaining capital to support future growth, the Board, at
its meeting held on April 29, 2026, recommended a final
dividend of H 1.20 (60 %) per equity share of H 2/- each fully
paid-up, subject to the approval of members at the ensuing
95^th Annual General Meeting (AGM). The record date for
payment of dividend is mentioned in the notice of the ensuing
95^th AGM of the Bank. In terms of Accounting Standard (AS)
- 4 'contingencies and events occurring after the balance
sheet date' as notified by the Ministry of Corporate Affairs
(MCA) under Section 133 of the Companies Act, 2013 (Act)
read together with the Companies (Accounts) Rules, 2014
and the Companies (Accounting Standards) Rules, 2021,
such proposed dividend has not been recognised as a liability
as on March 31, 2026. Further, shares issued on exercise
of stock options after March 31, 2026, till record date will
also be eligible for such proposed dividend. In terms of the
Income Tax Act, 1961, the dividend income is taxable in the
hands of the members. Therefore, the dividend will be paid
to the members after deduction of applicable tax, if any. For
further details, shareholders are requested to refer to the
Notice of the 95^th Annual General Meeting of the Bank.

7. CAPITAL STRUCTURE & FUND RAISING

7.1 Share Capital

Consequent to the allotment of equity shares pursuant to
the exercise of stock options under the Employee Stock
Option Scheme (ESOS), the paid-up equity share capital of
the Bank increased from H 491.16 crore as at March 31, 2025
to H 492.86 crore as at March 31, 2026, representing an
increase of H 1.70 crore. The equity shares allotted pursuant
to exercise of stock options under the ESOS rank pari passu
in all respects with the existing equity shares of the Bank.

During the year, the Bank has issued and allotted
27,29,74,043 warrants by way of preferential allotment on
a private placement basis to Asia II Topco XIII Pte. Ltd., on
receipt of 25% of the warrant price of ^ 227 per warrant,
aggregating to ^ 1,549.13 Crore. Each warrant carries the
right to subscribe to one fully paid up equity share of the
Bank having a face value of ^ 2 per share, upon exercise, by
paying the remaining 75% within 18 months of allotment.

7.2 Share Based Employee Benefits

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

The Bank's shareholders had approved The Federal Bank
Limited Employee Stock Option Scheme 2010 (ESOS 2010)
on December 24, 2010, The Federal Bank Limited Employee
Stock Option Scheme 2017 (ESOS 2017) on July 14, 2017,
The Federal Bank Limited Employee Stock Option Scheme
2023 (ESOS 2023) and The Federal Bank Limited Employee
Stock Incentive Scheme 2023 (ESIS 2023) on August 18,
2023 and The Federal Bank Limited Employee Stock Option
Scheme 2025 (ESOS 2025) and The Federal Bank Limited
Employee Stock Incentive Scheme 2025 (ESIS 2025) on
August 29, 2025.

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

Under ESOS 2010, the Nomination, Remuneration, Ethics
and Compensation Committee granted 3,47,20,200 options
during the year 2011-12, 2,44,84,750 options during the
year 2012-13, 2,60,94,250 options during the year 2013¬
14, 1,11,56,450 options during 2014-15, 10,25,000
options during the year 2015-16, 9,65,000 options during
the year 2016-17, 1,00,000 options during the year 2017¬
18, 55,29,550 options during the year 2023-24, 23,14,750
options during the year 2024-25 and 6,95,000 options
during the year 2025-26. The options granted which
are non-transferable, with vesting period of 1 to 5 years
subject to standard vesting conditions, must be exercised
within five years from the date of vesting. During FY 2026,
3,32,965 options had been exercised and as on March 31,
2026, 79,28,535 options were in force

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

Under ESOS 2017, the Nomination, Remuneration, Ethics
and Compensation Committee granted 2,23,18,348 options
during the year 2017-18, 3,72,31,307 options during the
year 2018-19, 3,05,24,986 options during the year 2019¬
20, 1,68,84,159 options during the year 2020-21, 37,33,250
options during the year 2021-22, 45,03,375 options during
the year 2022-23, 1,05,000 options during the year 2023¬
24, 49,9800 options during the year 2024-25 and 6,80,000
options during the year 2025-26. The options granted which
are non-transferable, with vesting period of 1 to 4.25 years
subject to standard vesting conditions, must be exercised
within five years from the date of vesting. During FY 2026,
81,20,326 options had been exercised and as on March 31,
2026, 3,03,33,669 options were in force.

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

Under ESIS 2023, the Nomination, Remuneration, Ethics and
Compensation Committee granted 25,000 options during
the year 2023-24 and 14,82,000 options during the year
2025-26. The options granted which are non-transferable,
with vesting period of 1 to 3 years subject to standard
vesting conditions, must be exercised within four years from
the date of vesting. As on March 31, 2026, no option had
been exercised, and 15,03,500 options were in force.

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

Under ESOS 2023, the Nomination, Remuneration,
Ethics and Compensation Committee granted 12,00,000
options during the year 2024-25 and 29,72,800 options
during the year 2025-26. The options granted which
are non-transferable, with vesting period of 1 to 4 years
subject to standard vesting conditions, must be exercised
within five years from the date of vesting. As on March
31, 2026, no option had been exercised, and 41,61,800
options were in force.

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

7.3 Debt capital

As on March 31, 2026, the Bank has an outstanding
of 1,51,695 units rated, unsecured, redeemable, non¬
convertible, Basel III compliant tier II subordinated bonds
aggregating to H 3,195 Crore.

7.4 Capital Adequacy Ratio

The Bank's overall Capital Adequacy Ratio (CAR) under
Basel III stood at 17.25 % at the end of fiscal 2026, well
above the benchmark requirement stipulated by the RBI. Of
this, the common equity tier I (CET I) CAR was 15.93% and
tier II CAR under Basel III stood at 1.32%.

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

8.1 Transfer of Unpaid/ Unclaimed Dividend to IEPF

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

In compliance with the aforesaid statutory requirements,
the unclaimed/unpaid dividend pertaining to the financial
year 2017-18, amounting to H 60,15,055/-, which
remained unclaimed for a continuous period of seven years,
has been duly transferred by the Bank to the IEPF. Further,
the unpaid/unclaimed dividend relating to the financial year
2018-19 is due for transfer to the IEPF during the financial
year 2026-27, within the prescribed timelines.

The Bank, with a view to safeguarding the interests of
its shareholders and ensuring awareness of their rights,
periodically sends reminders to shareholders to claim their
unclaimed dividend amounts and corresponding shares
prior to their transfer to IEPF. Shareholders may note that
any unclaimed dividends and the corresponding shares
transferred to the IEPF, together with all benefits accruing
thereon, if any, can be reclaimed by following the procedure
prescribed under the applicable rules. Members are,
therefore, advised to lodge their claims with the Bank in
respect of such dividends well before the due date, failing
which the same shall be transferred to the IEPF in accordance
with the provisions of the Companies Act, 2013 and the rules
framed thereunder. The detailed schedule of due dates for
such transfers is set out in the Corporate Governance Report.

In accordance with the IEPF (Accounting, Audit, Transfer,
and Refund) Rules, 2016, the Bank has uploaded and
periodically updates on its website the details of unpaid
and unclaimed dividends athttps://www.federal.bank.in/
unclaimed-unpaid-dividend.

8.2 Transfer of Shares to IEPF

Pursuant to the provisions of Section 124(6) of the Act and
the Investor Education and Protection Fund (IEPF) Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016
notified by the Ministry of Corporate Affairs on September
7, 2016 and subsequently amended vide notification dated
February 28, 2017, all the equity shares of the Bank in

respect of which dividend amounts have not been paid or
claimed by the shareholders for 7 consecutive years or more
are required to be transferred to demat account of IEPF
Authority. The said requirement does not apply to shares in
respect of which there is a specific Order of Court, Tribunal
or Statutory Authority, restraining transfer of the shares.

Upon such transfer, all corresponding benefits accruing on
such shares, including but not limited to dividends, bonus
shares, stock splits, and consolidations, if any, shall stand
credited to the account of the IEPF. Further, the voting
rights attached to such shares shall remain frozen until the
rightful claimant reclaims the shares in accordance with the
procedure prescribed under the IEPF Rules.

Accordingly, 3,60,270 number of equity shares were
transferred to demat account of IEPF Authority. The Bank
had sent individual notice to all the members concerned
and has also published the notice in the leading English
and Malayalam newspapers. Additionally, the Bank has not
transferred or hold any Equity shares in the Demat suspense
account or unclaimed suspense account.

The details of the Nodal Officer appointed by the Bank
under the provisions of IEPF are disseminated in the
website of the Bank viz.,https://www.federal.bank.in/
unclaimed-unpaid-dividend

9. CAPITAL EXPENDITURE

As on March 31, 2026, the Gross Fixed Assets at cost
stood at Rs 3,412.43 Crore and net fixed assets (cost less
accumulated depreciation) at Rs 1,472.52 Crore. Fixed
assets additions during the year amounted to H 243.01 Crore.

10. FUTURE PROSPECTS

Building on an eventful initial year of Breakthrough, the Bank
aims to continue rebalancing its balance sheet to enhance
operational efficiency while navigating an environment of
uncertainty. The success of various breakthrough initiatives
has established a strong foundation, enabling the Bank
to shape and transition confidently into a new phase of
growth and transformation. This transformation will be
underpinned by the Bank's core ethos of responsible
growth, while steadfastly upholding its commitment to the
environment and the interests of all stakeholders, alongside
the continued enhancement of shareholder value.

11 AWARDS AND ACCOLADES

The Bank has received several prestigious awards and
recognitions from various revered institutions during
the FY 2025-26 which have been disclosed in
of the Annual report. The awards and accolades are also
disclosed in the website athttps://www.federal.bank.in/
awards-accolades

12. LISTING

The Equity Shares of the Bank continue to remain listed
on BSE Limited and the National Stock Exchange of India
Limited (NSE). The Global Depository Receipts (GDR's) of
the Bank are listed on the London Stock Exchange (LSE).

13. DEPOSITS

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

15. ANNUAL RETURN

The Annual Return for the Financial Year ended March 31,
2026 as required under Section 92 and Section 134 of the
Companies Act, 2013 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014 shall be
posted on the Bank's website,https://www.federal.bank.in/
shareholder-information.

16. SECRETARIAL STANDARDS

The Bank is in compliance with the applicable Secretarial
Standards issued by the Institute of Company Secretaries of
India (ICSI) and approved by the Central Government under
Section 118(10) of the Act for FY 2025-26.

17. PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

Pursuant to the provisions of Section 186(11) of the Act, the
provisions of Section 186 of the Act except sub-section (1),
do not apply to a loan made, guarantee given, or security
provided by a banking company in the ordinary course of its
business and are exempted from the disclosure requirement
under Section 134 (3)(g) of the Act.

The particulars of investments made by the Bank are
disclosed in Schedule 8 of the Financial Statements.

18. BOARD OF DIRECTORS

18.1 Appointments/Re-appointment & Cessation of
Directors & Key Managerial Personnel (KMP):

The appointment/re-appointment of Directors during the
financial year under review and till the date of approval of
this Directors Report is as follows:

• Mr Venkatraman Venkateswaran (DIN: 09227554)
was appointed as Executive Director (KMP) on the
Board of the Bank for a period of three (3) years with
effect from July 10, 2025 which was subsequently
approved by the members of the Bank at the 94^th
Annual General Meeting held on August 29, 2025.

• The members of the Bank at its 94^th Annual General
Meeting held on August 29, 2025 approved the
Re-appointment of Ms. Varsha Purandare (DIN:
05288076) for second term for a period of 3 years
from September 08, 2025.

• Mr. A P Hota (DIN:02593219) retired from the office
of the Part Time Chairman & Independent Director
of the Bank with effect from January 14, 2026,
on completion of his tenure of eight years on the
Board of the Bank.

• Mr. Harsh Dugar (DIN: 00832748) was re-appointed as
the Executive Director (KMP) of the Bank for a period
of 3 years from June 23, 2026 pursuant to RBI approval
letter no. DoR.GOV.No.9538/08.38.001/2025-
26 dated March 30, 2026 and the members of the
Bank through postal ballot had also approved the
re-appointment.

• The RBI, vide its letter DoR.GOV.No.1607/08.38.001/
2026-27 dated May 22, 2026 accorded its approval for
the appointment of Mr. Elias George (DIN:00204510),
Independent Director, as Part Time Chairman of the
Bank for a period of three years with effect from
the date of taking charge. Accordingly, Mr. Elias
George (DIN:00204510) took charge as the Part time
Chairman of the Bank with effect from May 23, 2026.

• In accordance with the provisions of the Act and the
Articles of Association of the Bank, Mr. Krishnan
Venkat Subramanian (DIN: 00031794) Managing
Director & Chief Executive Director of the Bank, is
liable to retire by rotation at the ensuing 95^th Annual
General Meeting and being eligible, has offered himself
for re-appointment.

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

Necessary information pursuant to SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, in respect
of directors to be appointed and re-appointed at the ensuing
Annual General Meeting are given in the Annexure to the
Notice convening the 95^th Annual General Meeting.

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

18.2 Key Managerial Personnel

The details of the Key Managerial Personnel (KMP) of the
Bank as on March 31, 2026, is as follows:

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

• Mr. Venkatraman Venkateswaran* - Executive
Director & Chief Financial Officer

• Mr. Harsh Dugar** - Executive Director

• Mr. Samir P Rajdev - Company Secretary

The RBI vide its letter DoR.GOV.No. 2798/08.38.001/
2025-26 dated July 09, 2025 has given its approval for
the appointment of Mr. Venkatraman Venkateswaran
(DIN: 09227554) as Executive Director (Key Managerial
Personnel) on the Board of the Bank for a period of three (3)
years with effect from July 10, 2025 and was subsequently
approved by the members of the Bank at the Annual General
Meeting held on August 29, 2025.

**The RBI vide its letter DoR.GOV.No.9538/08.38.001/
2025-26 dated March 30, 2026 has given its approval for
the re-appointment of Mr. Harsh Dugar (DIN: 00832748) as
the Executive Director on the Board of the Bank for a period
of three (3) years from June 23, 2026 and the members
of the Bank through postal ballot had also approved the
re-appointment.

The changes in KMP during the financial year under
review and till the date of approval of this Directors'
Report is as follows:

• Mr. Venkatraman Venkateswaran* - Executive Director

• Mr. Manikandan M**- Chief Financial Officer (CFO)

*Mr. Venkatraman Venkateswaran (DIN: 09227554) relieved
as Chief Financial Officer of the Bank with effect from close
of business hours on April 30, 2026 and continues to serve
as the Executive Director of the Bank.

**The Board approved the appointment of Mr Manikandan
M (FCA No: 234412) as Chief Financial Officer (Key
Managerial Personnel) and Senior Management Personnel
of the Bank pursuant to the provisions of Section 203 of the
Companies Act, 2013 and regulation 16(1)(d) of SEBI(LODR)
Regulations, with effect from May 01, 2026.

18.3 Declaration by Independent Directors

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

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

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

19. BOARD COMMITTEES

Detailed composition of the mandatory Board committees
namely Audit Committee, Credit, Investment & Raising
Capital Committee, Risk Management Committee,
Nomination, Remuneration, Ethics & Compensation
Committee, Stakeholders Relationship Committee,
Customer Service Committee, Special Committee of the
Board for monitoring and follow up of cases of frauds,
Information Technology & Operations Committee, Human
Resource Committee, Corporate Social Responsibility
Committee and the Review Committee of the Board on
Identification of Wilful Defaulters and the number of
meetings of the Board and its committees held during the
year under review and other related details are set out in
the Corporate Governance Report which forms part of this
Integrated Annual Report.

20. AUDIT COMMITTEE OF THE BOARD (ACB)

The composition, role and functions of the ACB is provided
in the Report on Corporate Governance, which forms part of
this Integrated Annual Report. During financial year 2025¬
26, the Board has accepted all the recommendations made
by the ACB and hence, no further explanation towards this
is required to be provided, in this Report.

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

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

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

The updated Compensation Policy of the Bank is available
on the Bank's website at www.federal.bank.in/documents/
10180/816529059/Comprehensive Compensation
Policy.pdf/d845a44c-33d8-fd0d-9c35-1ffef66de995?t=
1713416984471

22. BOARD EVALUATION

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

The Bank had engaged Egon Zehnder, an external agency,
to conduct a comprehensive performance evaluation of
individual Directors, Committees and the Board as a whole.

The parameters for evaluation of the performance of
the Board, its Committees, individual Directors and
the Chairperson are provided in the Code of Corporate
Governance of the Bank which can be accessed on the
Bank's website athttps://www.federal.bank.in/shareholder-
information#governance-policies

23. FAMILIARIZATION PROGRAMMES FOR
INDEPENDENT DIRECTORS

The details of familiarization programmes for FY 25-26
are disclosed on the Bank's website, www.federal.bank.in/
shareholder-information.

24. ENVIRONMENT, SOCIAL AND GOVERNANCE
(ESG) PRACTICES

The Bank's ESG framework is given in the Corporate
Governance Report which forms part of this Integrated
Annual Report. Details of the ESG initiatives undertaken
by the Bank during the Financial Year is included in the
Integrated Annual Report as part of the ESG section/
Business Responsibility and Sustainability Report.

25. CORPORATE SOCIAL RESPONSIBILITY

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

Pursuant to the provisions of Section 135 of the Act,
read with the Companies (Corporate Social Responsibility
Policy) Rules, 2014 (CSR Rules), as amended, the Bank
has constituted the CSR Committee of the Board. The
composition of the CSR Committee, CSR policy and projects
/ programs approved by the Board are available on the
website of the Bank at www.federal.bank.in.

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

The details of the CSR initiatives undertaken during the
financial year ended March 31, 2026, and other details
required to be given under section 135 of the Companies
Act, 2013 read with rule 8(1) of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 are given in
Annexure A forming part of this Report.

26. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

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

27. BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT

In terms of Regulation 34(2)(f) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, Business Responsibility
and Sustainability Report (BRSR) is mandatory for the top
1000 listed companies, based on market capitalization. The
disclosure requirement in BRSR is based on the 9 principles
of the National Guidelines on Responsible Business Conduct,
which is divided into 2 (two) parts i.e. Essential Indicators (to
be reported on a mandatory basis) and Leadership Indicators
(to be reported on a voluntary basis).

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

28. CORPORATE GOVERNANCE

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

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

In line with Companies Act 2013, sharholders approval is
required for altering the Bank's MOA & AOA.

In line with Companies Act 2013, a Director can be held
personally liable without any limitation of liability as may be
prescribed by law.

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

29. RELATED PARTY TRANSACTIONS

All related party transactions entered into during the
financial year were at arm's length basis and in the ordinary
course of business except the transaction mentioned in
AOC -2 which is annexed as Annexure -B. During the year
under review, the Bank has not entered into any materially

significant transaction with its related parties, which could
lead to a potential conflict of interest between the Bank
and these parties.

All Related Party Transactions were placed before the
Audit Committee of the Board for approval/ratification.
Prior omnibus approval for transactions which are of
repetitive nature is obtained from the Audit Committee
and accordingly the required disclosures are made to the
Committee on quarterly basis in terms of the approval
of the Committee.

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

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

30. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Bank has through the years developed and stabilized
an effective internal control system calibrated to the risk
appetite of the Bank and aligned to the scale, size, and
complexity of its operations. The scope and authority of the
internal audit function is defined in the Internal Audit Policy
of the Bank, duly approved by the Board of Directors. In
order to help Bank in achieving its mission of adopting the
best professional practices prevailing in the industry, while
framing the policy, substantial inputs are taken from - RBI
guidance note on Risk Based Internal Audit, 'The internal
audit function in banks' published by Basel Committee
on Banking Supervision and RBI Circular on 'Concurrent
Audit System.' Internal Audit Policy is reviewed annually.
Policy is reviewed considering various guidelines of RBI,
Basel Committee recommendations, ICAI guidelines, other
statutory / regulatory guidelines, directions of Board /
Audit Committee of the Board issued from time to time
and periodic internal guidelines / instructions issued by the
Bank. Risk based Audit framework is reviewed in line with
the present business model and industry best practices. At
the enterprise level, the Internal Audit Department, on a
continuous basis, assesses and monitors the effectiveness
of the control systems and its adequacy to meet the growing
complexities. The audit function essentially validates
the compliance of Bank's processes and operations with
regulatory guidelines, accounting procedures and Bank's
own internal rules and guidelines. A department level group
meets on periodical intervals to discuss latest internal /
RBI / regulatory guidelines for ensuring that the required
changes are implemented for making the audit function
updated and dynamic.

The Bank has a robust system towards escalating the audit
findings to appropriate levels in the hierarchy of Management
and discussions in various committees towards suggesting
corrective action and its follow up. Chief Internal Auditor
of the Bank directly reports to the MD & CEO of the Bank.

Audit Committee of the Board reviews the adequacy and
effectiveness of the Internal Audit Function.

The Bank has various types of audits which inter-alia include
Risk Based Internal Audit, Information System Audit, Vendor
Audit, Offsite Audit (audit through use of technology and
data analysis), Concurrent Audit, Credit Audit, Gold Loan
Audit and Management Audit. Branches / Departments are
risk rated and the frequency of Risk Based Internal Audit
/ Management Audit is decided based on the Risk Rating
of the unit. Significant Audit findings and observations are
presented to Internal Audit Review Committee of Executives
(IARCE) and a report on the meetings of IARCE along with
significant audit findings, directions /suggestions of the
Committee and action taken in such cases are placed to the
Audit Committee of the Board for review periodically. Other
findings are placed before a department level committee
called the 'Internal Audit Department Review Committee'
(IADRC) for review and its observations are placed before
IARCE. A team of executives at Internal Audit Department
called the “Special Surveillance Cell” meet at least once in a
month to examine significant irregularities reported in audits
for indications of fraud and for further scrutiny or any other
action as deemed necessary, to study frauds / malpractices/
penalties imposed by RBI reported in the Bank or in the
banking Industry as a whole for bringing necessary changes
in the Audit Function based on the learning. The progress
in implementation of the recommendations shall be tracked
periodically by the Cell.

Internal Audit Department conducts structured meetings at
minimum quarterly intervals with the Zonal Heads, Heads of
Zonal Credit Administration Department, Regional Business
Heads of Corporate and Institutional Banking Department
and Regional Business Heads of Commercial Banking
Department to discuss the audit comments that have arisen
during the quarter, actions to minimise such audit comments
and the progress in rectification of audit comments. MD
& CEO, EDs and Heads of relevant Departments / Head
of Branch Banking /Business Heads shall be permanent
invitees to such meetings.

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

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

31. PLAN AND STATUS OF IND AS IMPLEMENTATION

The Ministry of Corporate Affairs (MCA), Government of
India notified the Companies (Indian Accounting Standards)

Rules, 2015 on February 16, 2015. Further, a press release
dated January 18, 2016, was issued by the MCA outlining
the roadmap for implementation of IFRS converged Ind AS
for banks. This roadmap required banks to prepare Ind AS
based standalone & consolidated financial statements for
the accounting periods beginning April 01, 2018 onwards,
with comparatives for the periods ending March 31, 2018
or thereafter. RBI, through its notification dated February
11, 2016, required all scheduled commercial banks to
comply with Ind AS for financial statements from the
stated periods and also stated that early adoption of Ind AS
is not permitted.

The implementation of Ind AS by banks requires certain
legislative amendments to make the format of financial
statements, prescribed in the Third Schedule to Banking
Regulation Act, 1949, compatible with accounts under Ind
AS. Considering the amendments needed to the Banking
Regulation Act, 1949, as well as the level of preparedness of
several banks, RBI, through its Statement on Developmental
and Regulatory Policies dated April 05, 2018, had deferred
the implementation of Ind AS by a year.

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

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

• A steering committee was formed by MD & CEO
with ED as its Chairman with members from all cross¬
functional departments. The Committee oversees
the progress of Ind AS implementation in the Bank
and provides guidance on critical aspects of the
implementation such as Ind AS technical requirements,
systems and processes, business impact, people and
project management.

• The implementation of IT solution procured to
automate the computation of Expected Credit Losses
(ECL), Effective Interest Rate, Fair valuation and
other accounting changes required under Ind AS is
completed and Bank is generating extracts from the
system on a half yearly basis.

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

• The Bank is continuing to submit the quarterly progress
report on the status of Ind AS implementation to the
Audit Committee of the Board.

• The Bank is submitting half yearly Proforma Ind

AS financial statements to the RBI within the

stipulated timeline.

• Training to the employees is imparted in

a phased manner.

The key impact areas during the implementation of Ind AS
for the Bank include effective interest rate accounting, fair
valuation inputs, methodologies and assumptions, specific
valuation considerations in many instruments, expected
credit losses, employee stock options and implementation
of technology systems.

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

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

32.1 Conservation of Energy:

The Bank has undertaken various initiatives for the
conservation of energy and have taken efforts to contribute
to low carbon economy which includes the following:

Steps taken / impact on conservation of energy:

• Electric vehicle (EV) charging infrastructure has
been established at key office locations, including
Federal Towers (Head Office, Aluva), Ashokapuram
Currency Chest, Federal Towers - New Delhi Zonal
Office, Bengaluru Zonal Office, and Akshaya Shanti -
Chennai Zonal Office.

• The Bank has implemented energy-efficient, inverter-
based air conditioning systems using eco-friendly
refrigerants such as R32 and R410A for all new
installations as well as replacements.

• All Bank offices have been fully upgraded to 100% LED
lighting, thereby improving overall energy efficiency.

• Rainwater harvesting systems have been installed
across multiple locations, with a combined capacity of
approximately 1.39 lakh litres.

• Sewage Treatment Plants (STPs) with a total water
recycling capacity of 40 kilolitres per day is operational
at two office locations in Aluva.

• IoT-enabled energy management devices have
been deployed in air conditioning units across 350
ATM sites to enable monitoring and optimization of
energy consumption.

• The Bank has achieved IGBC Green Interior
certification for 5.5% of its total occupied area,
enhancing resource efficiency and ensuring optimal
utilization of energy and materials.

Steps taken by the Bank for utilizing alternate sources of
energy:

• Bank has developed an in-house solar power generation
capacity of 570 KW.

The capital investment on energy conservation equipment:

• Bank has invested a total of Rs 12.32 Crore/- GST as
capital investment on energy conservation equipment's
this year.

32.2 Technology Absorption:

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

Leveraging Banking Technologies and AI Adoption

The Bank is placing AI and advanced analytics at the core
of its transformation—shifting from reactive servicing to
predictive, proactive engagement. A unified enterprise
data platform will deliver a real-time, single customer view,
enabling faster, smarter decision-making at scale. On this
foundation, AI-driven models will anticipate customer needs
and drive next-best actions—personalised offers, financial
insights, and risk interventions. A key differentiator is the
Hyper-Personalisation Engine, acting as a central decision
layer to enable real-time, one-to-one engagement across
channels. This is further strengthened by omnichannel
orchestration, ensuring seamless, consistent, and contextual
customer experiences.

CRISIL ICON enables end-to-end digital credit rating
through unified model hosting, configurable workflows, and
enhanced risk parameters—strengthening credit decisioning
and risk management. The API Gateway, aligned with the
Bank's API-first strategy, delivers secure, standardized, and
reusable integrations across internal systems and partners—
reducing complexity, accelerating time to market, and
supporting scalable transaction growth.

Together, these initiatives enhance system resilience,
scalability, and governance, enabling faster product
launches, optimized resource utilization, and advancing the
Bank's long-term digital-first vision.

Security Across Digital Channels

• Instant Threat Containment: Real-time monitoring
systems enable immediate alerts and automated
blocking of suspicious transactions.

• Multi-Channel Analysis: Advanced analytics, including
Graph Neural Networks, detect complex fraud
patterns across accounts, devices, and channels.

• Adaptive Intelligence: AI/ML-driven systems
continuously learn and adapt to emerging fraud
typologies without manual rule updates.

• Behavioural Profiling: Silent biometrics (e.g., typing
patterns, navigation behavior) identify unauthorized
access even with valid credentials.

The Bank has implemented a multi-layered fraud risk
management framework, leveraging advanced FRM
solutions to monitor financial and non-financial transactions
across all channels, including CBS, cards, UPI, internet,
mobile, and corporate banking.

The Bank is also integrating cloud infrastructure, automation
and AI-driven solutions to improve customer experience,
analytics capabilities and decision-making

Strengthening Digital Capabilities through Cloud, AI, and
Automation

• Cloud Infrastructure: Adoption of modern cloud
technologies enables scalable, secure, and resilient
operations, supporting faster deployments, seamless
integrations, and rapid digital innovation.

• Automation for Efficiency: Intelligent automation,
including RPA and workflow tools, streamlines
processes, reduces turnaround time, minimizes errors,
and enhances operational productivity.

• AI-Driven Solutions: AI-powered tools, including
chatbots and generative AI, deliver personalized
customer experiences, automate insights, and improve
decision-making across credit and lending.

• Advanced Analytics: Integrated data platforms enable
real-time insights, predictive analytics, and targeted
engagement through a unified view of customer and
operational data.

32.3 Foreign Exchange Earnings and Outgo:

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

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

Technology and Digital updates

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

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

The governance of IT is effectively supervised by the Board
of Directors through the IT & Operations Sub-Committee
consisting of minimum three Directors with at least one

Independent Director. All members of the Committee
have extensive experience in IT & Operations and are
able to provide effective guidance and direction to the
management team.

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

The Bank has a well-defined Information System
Security Policy and a Cyber Security Policy. The effective
implementation of these policies is supervised by the
Information Security Committee and by the IT & Operations
Committee of the Board.

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

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

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

With the increasing adoption of Artificial Intelligence
(AI) across banking operations, Bank is in the process
of establishing a comprehensive AI Governance
Framework and Policy.

This initiative aims to ensure that the implementation and
use of AI technologies are responsible, secure, transparent,
and compliant with regulatory requirements. The framework
will define guidelines for data usage, model governance,
risk management, ethical considerations, and auditability,
thereby enabling controlled and sustainable AI adoption
across the enterprise.

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

34. BUSINESS RISK MANAGEMENT

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

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

The Integrated Risk Management Department (IRMD) of
the Bank co-ordinates and administers the risk management
functions in the Bank. The Department has four divisions
for managing the main risk streams, Credit risk, Market risk,
Operational risk and Information Security Division. Dedicated
teams within the divisions are responsible for assessment,
monitoring and reporting of various material risks. Default
risk and asset quality of loan portfolio are monitored and
managed by the Credit Risk Division. Market Intelligence
Unit (MIU) formed for the purpose of monitoring large value
accounts is linked to Credit Risk Division. The Bank has
established an independent Mid Office as part of Market
Risk Division for monitoring and management of risks in
Bank's Treasury portfolios. A dedicated ALM team manages
the liquidity risk and interest rate risk. A dedicated E&S/ESG
team is also established as part of the IRMD. Operational
Risk Management, Business Continuity Management, Third
Party Risk Management are taken care by Operational
Risk Division. Governance, Risk and Compliance related to
Information and Cyber Security is handled by Information
Security Division. All the divisions are independent of
business operations and coordinate with representatives of
the business units to implement the Bank's risk management
Policies and frameworks. Executive level risk management
Committees namely, Credit Risk Management Committee,
Asset Liability Management Committee, E&S Committee,
Operational Risk Management Committee and Information

Security Committee and Information Security Steering
Committee (ISSC) regularly assess the respective risks
and direct corrective actions wherever required. The risk
management functions are coordinated by a Senior Executive
designated as Chief Risk Officer who reports directly to the
Managing Director & CEO. All material risks of the Bank
emerging in the course of its business are identified, assessed
and monitored in the Internal Capital Adequacy Assessment
Process (ICAAP). In our view, all the material risks of the Bank
are identified, assessed and managed adequately.

35. AUDITORS

35.1 Statutory Auditors

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

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

As per the requirement of the Companies Act, 2013,
M/s. Suri & Co, Chartered Accountants and M/s. M S K
A & Associates, Chartered Accountants have confirmed
that their appointment if made would be within the limits
specified under Section 141(3) (g) of the Act and they are not
disqualified to be appointed as statutory auditor/s in terms
of the provisions of the proviso to Section 139(1), Section
141(2) and Section 141(3) of the Act and the provisions of
the Companies (Audit and Auditors) Rules, 2014.

RBI vide letter Ref CO. DOS. RPD. No.

S3601/08.09.005/2025-26 dated August 05, 2025,
had granted approval for appointment of M/s. Suri & Co,
Chartered Accountants (FRN 004283S) and M/s. M S K A &
Associates, Chartered Accountants (FRN 105047W) as the
Joint Statutory Auditors of the Bank for FY 2025-26.

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

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

The present Statutory Auditors of the Bank, M/s. Suri &
Co, Chartered Accountants (Registration No. 004283S),
Chennai, and M/s. M S K A & Associates, Chartered
Accountants (Registration No. 105047W), Mumbai are
retiring at the conclusion of this 95^th Annual General
Meeting after completion of their term for three years.

Based on the recommendations of the Audit Committee at
its meeting dated March 20, 2026, the Board of Directors of
the Bank at its meeting dated March 27, 2026, recommended
the appointment of 1) M/s. Price Waterhouse LLP, Kolkata
(ICAI Firm Reg. No. 301112E/E300264) and 2) M/s. K

5 Aiyar & Co, Mumbai, (ICAI Firm Reg. No 100186W) as
Joint statutory auditors of the bank. RBI vide its letter dated
May 13, 2026, has granted approval for the appointment of
M/s Price Waterhouse LLP (FRN 301112E/E300264) and
M/s K S Aiyar & Co (FRN 100186W) as the Joint Statutory
Auditors of the Bank for the FY 2026-27, for their first year.

Based on the RBI approval, the Audit Committee
through Circular Resolution approved on June 22, 2026
recommended to the Board and the Board at its meeting
dated June 25, 2026 approved the appointment of M/s. Price
Waterhouse LLP Kolkata, and M/s K S Aiyar & Co, Mumbai,
as the Joint Statutory Auditors of the Bank for a period of
three years commencing from financial year 2026-27.

As per the requirement of the Companies Act, 2013,
M/s. Price Waterhouse LLP, Kolkata, and M/s K S Aiyar &
Co, Mumbai have confirmed that their appointment if made
would be within the limits specified under Section 141(3) (g)
of the Act and they are not disqualified to be appointed as
statutory auditor/s in terms of the provisions of the proviso
to Section 139(1), Section 141(2) and Section 141(3) of
the Act and the provisions of the Companies (Audit and
Auditors) Rules, 2014.

Accordingly, approval of the members is requested for
appointment of 1) M/s. Price Waterhouse LLP, Kolkata (ICAI
Firm Reg. No. 301112E/E300264) and 2) M/s. K S Aiyar

6 Co, Mumbai, (ICAI Firm Reg. No 100186W) for a period
of 3 years as Joint Statutory Auditors of the Bank from the
conclusion of 95^th AGM till the conclusion of 98^th AGM,
subject to the approval of the RBI every year. The aggregate
audit fee payable to the proposed Joint Statutory Auditors
for the first year of their appointment shall be ^400 Lakh
(Rupees Four Hundred Lakh only), exclusive of applicable
taxes and reimbursement of out-of-pocket expenses. The
Members are further requested to authorize the Board
of Directors of the Bank, including any Committee of the
Board thereof, to consider and approve any revision or
enhancement in the audit fees for the second and third
years of their tenure, as well as to determine and approve
the fees payable for any additional certificates, reports,
attestations or other services required to be issued or
rendered by the Joint Statutory Auditors which are not
covered under the terms of the engagement and to do all
such acts, deeds, matters and things as may be necessary or
expedient in this regard, without being required to seek any
further consent or approval of the Members of the Bank.
The remuneration paid to the Statutory Auditors will be
disclosed in the Corporate Governance Report as well as the
Annual Financial Statements of the Bank on an annual basis.

As required under the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, M/s. Price
Waterhouse LLP, Kolkata, and M/s K S Aiyar & Co, Mumbai,
have confirmed that they hold a valid certificate issued by
the Peer Review Board of ICAI.

Price Waterhouse LLP, established in 1949 and converted
into a limited liability partnership in 2020, is a firm of
Chartered Accountants registered with the Institute of
Chartered Accountants of India (ICAI) (Firm Registration
No. 301112E/E300264). The firm is headquartered in
Kolkata and has a presence across 16 cities in India. It is a
member firm of Price Waterhouse & Affiliates, a network of
independent Indian CA firms registered with ICAI (Network
Registration No. NRN/E/14). It has a total of 113 Partners,
as at March 31,2026. The firm primarily provides audit and
assurance services and holds a valid peer review certificate,
with extensive experience in auditing companies listed on
Indian stock exchanges, including those in the Financial
Services sector. The firm is having 22 years of experience as
Statutory Central Auditors for Banks as at March 31,2026.

K S Aiyar & Co., established in 1897, is a partnership firm
registered with the Institute of Chartered Accountants of
India (ICAI) (Firm Registration No. 100186W). The firm is
headquartered in Mumbai and has a presence across key
cities including Hyderabad, Chennai, Bengaluru, Kolkata,
and Coimbatore. It has a total of 21 partners, K S Aiyar &
Co. provides a wide range of professional services including
assurance, direct and indirect taxation, and consultancy,
and is empanelled with regulatory authorities such as RBI,
SEBI, and IRDAI. The firm is having 15 years of experience
as Statutory Central auditors for Banks.

As required under the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, Price
Waterhouse LLP (ICAI Firm Reg. No. 301112E/E300264),
and K S Aiyar & Co (ICAI Firm Reg. No 100186W) have
confirmed that they hold a valid certificate issued by the
Peer Review Board of ICAI.

35.2 Secretarial Auditors

Pursuant to the provisions of Section 204 of The Companies
Act, 2013, the Bank has appointed SEP & Associates LLP,
Company Secretaries, Kochi as Secretarial Auditors to
conduct Secretarial Audit of the Bank for the FY 2025-26.
Accordingly, the Secretarial Audit Report for FY 2025-26
is annexed to this report as Annexure C. The Audit Report
issued by the Secretarial Auditors for the said Financial Year
forms part of this Report which is self-explanatory.

No offence of fraud was reported by the Secretarial Auditor
of the Bank under Section 143(12) of the Act.

Pursuant to Regulation 24A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 read with
SEBI Master Circular No. SEBI/HO/CFD/CFD-PoD-2/
CIR/P/2024/185 dated December 31, 2024, the Bank
has obtained Secretarial Compliance Report, certified
by CS Puzhankara Sivakumar, SEP & Associates LLP for
Financial Year ended March 31, 2026, on compliance of all
applicable SEBI Regulations and circulars/ guidelines issued
thereunder and the copy of the same was submitted with
the Stock Exchanges.

36. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Bank has established a robust Fraud Risk Management
Framework that provides comprehensive guidance on
identifying, assessing, and mitigating fraud risks. All
reported or detected cases are thoroughly investigated,

including root cause analysis and appropriate process
improvements and systemic controls are implemented to
prevent recurrence.

A combination of preventive, detective, and surveillance
measures are deployed to address both internal and
external fraud risks. Continuous sensitization initiatives for
employees and customers play a critical role in fostering a
culture of vigilance and risk awareness.

Vigilance Department conducts Preventive Vigilance
Workshops aimed at highlighting vulnerabilities commonly
exploited by fraudsters and equipping employees with
practical strategies to mitigate such risks. In addition,
Fraud Prevention Committee meetings are held regularly at
the branch level to enhance awareness of emerging fraud
trends, their modus operandi, and appropriate preventive
measures. Annual Preventive Vigilance Assessments are
undertaken in selected branches based on risk profiling to
strengthen internal controls.

The Bank remains committed to spreading awareness on
financial/ cyber frauds among the public through multiple
communication channels, including SMS alerts, emails,
branch displays, website messages, and internet banking
platforms. Particular emphasis is placed on cyber fraud
awareness. The “Twice is Wise” cybersecurity campaign,
launched in 2020, continues to serve as a key initiative in
promoting safe banking practices. Through this campaign, as
well as the dissemination of alerts, posters, and educational
videos via social media, television, and digital platforms,
the Bank actively educates customers on emerging cyber
threats and preventive measures.

The Bank has implemented a robust Whistle Blower Policy,
known as the Protected Disclosure Scheme (PDS). This
policy underscores our commitment to maintaining the
highest standards of ethics and integrity in all our operations
and aims to establish an effective vigil mechanism within
the Bank to identify and address aberrations at the earliest.

It serves as a robust mechanism through which directors,
employees, employee representative bodies, customers,
other stakeholders, Non-Govermental Organizations
(NGOs), and members of the public can report any unethical
practices or concerns. PDS ensures strict confidentiality
and offers protection to whistleblowers against any
form of retaliation, discrimination, or victimization. A
dedicated email ID is available for submitting disclosures
under this scheme. All complaints received are examined
thoroughly, and appropriate action is taken in accordance
with established procedures. The functioning of the
whistleblower mechanism, along with details of complaints
received and actions taken, is periodically reviewed by the
Audit Committee of the Board. No one has been denied
access to the Audit Committee to express concerns or
report grievances under the Whistle Blower Policy and / or
vigil mechanism.

During FY 2025-26, a total of 20 complaints were received
underPDS,allofwhichweredulyexaminedand addressed in line
with the Bank's policy framework. The Whistle Blower Policy
(PDS) is accessible on the Bank's official website and intranet:
https://www.federal.bank.in/documents/10180/45777/
Whistle Blower policy or PDS.pdf/558aea51-1335-
4546-9c9a-28c5030377a1?t=1719555373881

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

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

38. PARTICULARS OF EMPLOYEES

In terms of Section 136(1) of the Companies Act, 2013, the
copy of the financial statements of the Bank, including the
consolidated financial statements, the auditor's report and
relevant annexures to the said financial statements and
reports are being sent to the Members and other persons
entitled thereto, excluding the information in respect of
the employees of the Bank containing the particulars as
specified in Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014. The
statement containing particulars of employees as required
under Section 197(12) of the Act read with Rule 5 (2) of the
said Rules is available on the website:https://www.federal.
bank.in/shareholder-information. The said information is
available for inspection by the members at the registered
office of the Bank during business hours up to the date of
the ensuing AGM.

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

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

The Bank had constituted Internal Committee, as per
letter and spirit contained in the provisions of “The
Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013”, at 10 Zones and Head
Office to prevent and redress the complaints relating to
sexual harassment and to organize workshops/ awareness
programs to empower women employees while handling
cases relating to sexual harassment. Workshops/ awareness
programs regarding women empowerment were conducted
at various locations pan India. The data with regard to
the redressal of complaints by the Internal Committee
are as follows:

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

The Bank is in compliance with the provisions of Maternity
Benefit Act,1961. Further details are available in the
Business Responsibility and Sustainability Report of the
Bank which is part of this Integrated Annual Report of the
Bank and is also available on the Bank's website www.
federal.bank.in/shareholder-information.

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

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

42. POLICY ON BOARD DIVERSITY

The Bank has adopted Policy on Board Diversity and
emphasis is given to maintain diversity of thoughts,
experience, knowledge, education, skills, perspective,
culture, age and gender, while scrutinising a candidature for
appointment as a Director on the Bank's Board.

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

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

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

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

43. DIRECTOR’S RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the
information and explanations obtained to us, the Directors
make the following statements in terms of Section 134 (3)
(c) and 134(5) of the Companies Act, 2013:

i. that in the preparation of the annual financial
statements for the year ended March 31, 2026, the
applicable accounting standards have been followed
along with proper explanation relating to material
departures, if any;

ii. that such accounting policies as mentioned in the
Notes to the Financial Statements have been selected
and applied consistently and judgment and estimates
have been made that are reasonable and prudent so

as to give a true and fair view of the state of affairs of
the Bank as at March 31, 2026, and of the profit of the
Bank for the year ended on that date;

iii. that proper and sufficient care has been taken for
the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Bank and for
preventing and detecting fraud and other irregularities;

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

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

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

44. GENERAL

Your directors state that no disclosure or reporting is

required in respect of the following items as there were no

transactions on these items during the year under review:

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

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

• There were no revisions in the financial statements.

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

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

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

45. ACKNOWLEDGEMENT

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

The Board also takes this opportunity to express its sincere gratitude to the Government of India, the Reserve Bank of India, MCA,
SEBI and other statutory and regulatory authorities, financial institutions, registrar and share transfer agent, debenture trustees,
depositories and various State Governments, both in India and abroad for their continued guidance, support, and cooperation. We
are equally thankful to Investment Banks, Rating Agencies, and Stock Exchanges for their steadfast support.

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

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

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

Sd/-

Mr. Elias George

Date: July 17, 2026 Part Time Chairman & Independent Director

Place: Aluva (DIN - 00204510)

1

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

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

• Mr. Ramesh Sundararajan - Non-Executive -
Independent Director

• Mr. Sunil Satyapal Gulati - Non-Executive -
Independent Director