THE SOUTH INDIAN BANK LIMITED Head Office: SIB House, T.B

Private & Confidential – For Private Circulation Only (This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus). This Disclosure Document is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No.. LAD- NRO/GN/2008/13/127878 dated June 06, 2008 as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide Circular No. LAD-NRO/GN/2012-13/19/5392dated October 12, 2012 as amended. Dated: 29.09.2015

THE SOUTH INDIAN BANK LIMITED Head Office: SIB House, T.B. Road, Mission Quarters, Thrissur 680 001, Kerala, India. CIN:L65191KL1929PLC001017 Tel: +91-487-2420020, 2420058, 2420113; Fax: +91 487 2442021 E-mail: [email protected]; Website::www.southindianbank.com

DISCLOSURE DOCUMENT FOR THE PRIVATE PLACEMENT OF NON-CONVERTIBLE, REDEEMABLE, UNSECURED, BASEL III COMPLIANT TIER 2 BONDS, FOR INCLUSION IN TIER 2 CAPITAL OF THE BANK IN THE NATURE OF DEBENTURES OF THE FACE VALUE OF RS. 10,00,000/- (RUPEES TEN LAKHS) EACH (“BONDS”) AT PAR AGGREGATING UPTO Rs. 300 CRORES (RUPEES THREE HUNDRED CRORES ONLY) WITH AN OPTION TO RETAIN AN OVER-SUBSCRIPTION AGGREGATING UPTO Rs. 200 CRORES (RUPEES TWO HUNDRED CRORES ONLY) AGGREGATING TO A TOTAL ISSUE SIZE OF Rs. 500 CRORES (RUPEES FIVE HUNDRED CRORES ONLY).

GENERAL RISK For taking an investment decision, investors must rely on their own examination of the Issue and the Disclosure Document including the risks involved. The Issue has not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document.

The Bonds are Capital Instruments and not deposits of the Bank and they cannot be used as Collateral for any loan made by the Bank or any of its Subsidiaries or Affiliates. The Bonds are different from Fixed Deposits and are not covered by Deposit Insurance. Unlike the Fixed Deposits where Deposits are repaid at the option of Deposit Holder, the Bonds are not redeemable at the option of the Bondholders or without the prior consent of RBI. The Bonds carry Loss Absorption Features applicable to such instruments as are prescribed by RBI and may impact the payment of interest and principal. CREDIT RATING The Bonds proposed to be issued by the Bank have been assigned a rating of “CARE A+” by CARE vide its letter no. CARE/CRO/RL/ 2014-15/1298dated 16.03.2015 and re -emphasized vide letter dated Sept 16th2015 and “IND A+”with stable outlook by India Ratings & Research Private Limited vide its letter dated Sept16th2015 The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agency and should be evaluated independently of any other ratings. Please refer to Annexure I & II for the above ratings. LISTING The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) segment of BSE. Issue Opens on Issue Closes on Date of Allotment

Sept29th2015 Sept30th2015 Sept30th2015

The Bank reserves its sole and absolute right to modify (pre -pone/ postpone) the above issue schedule without giving any reasons or prior notice. The Bank also reserves its sole and absolute right to change the deemed date of allotment of the above issue and/or reserves the right to keep multiple Deemed Date(s) of Allotment, change the issue size without giving any reasons or prior notice

Sole Arranger& Escrow Agent Debenture Trustee Registrar & Transfer Agent

5th floor , 27BKC, C 7, G Block, Asian Building, Ground Floor,17, M S Complex, 1st Floor,Plot No.8, R.Kamani Marg, Ballard Estate, BandraKurla Complex, Bandra (E), SastriNagar,Near RTO / 200 Feet Mumbai - 400 051 Mumbai-400001 Road,Kolathur, Chennai–600099

Private and Confidential – Not for Circulation

Table of Contents Disclaimers: ...... 5

1. General Disclaimer: ...... 5

2. Disclaimer of Securities & Exchange Board of India (SEBI): ...... 6

3. Disclaimer of Arranger to the Issue: ...... 7

4. Disclaimer of Stock Exchange: ...... 10

5. Disclaimer of Rating Agencies: ...... 10

6. Disclaimer of Debenture Trustees: ...... 13

Forward Looking Statements ...... 14

Definitions and Abbreviations ...... 15

A. Risk Factors ...... 20

B. Issuer Information ...... 37

a. Name and address of the following:- ...... 37

i. Registered Office of the Issuer ...... 37 ii. Corporate Office of the Issuer ...... 37 iii. Compliance Officer of the Issuer ...... 38 iv. CFO of the Issuer ...... 38 v. Arrangers ...... 38 vi. Trustee of the Issue ...... 39 vii. Registrar of the Issue ...... 39 viii. Credit Rating Agencies ...... 39 ix. Auditors of the Issuer as on 30/06/2015 ...... 40 x. Legal counsel to the issue ...... 40 b. A brief summary of the business/ activities of the Issuer and its line of business containing at- least following information:- ...... 41

i. Overview ...... 41 ii. CRAR of the Bank ...... 48 iii. Corporate Structure...... 49 iv. Key Operational and Financial Parameters for the last 3 Audited Years ...... 53 v. Project Cost and means of financing, in case of funding of new projects ...... 54 c. A brief history of the Issuer since its incorporation giving details of its activities:- ...... 54

Private and Confidential – Not for Circulation

i. Details of Share Capital as on 30th June 2015 ...... 57 ii. The details of share capital and share premium account (before and after the issue ...... 57 iii. Changes in its capital structure as on30th June 2015, for the last five years:- ...... 58 iv. Equity Share Capital History of the Company as on last quarter end, for the last five years:- 59 v. Details of any Acquisition or Amalgamation in the last 1 year:- ...... 60 vi. Details of any Reorganization or Reconstruction in the last 1 year:- ...... 60 d. Details of the shareholding of the Company as on30th June 2015:- ...... 61

i. Shareholding pattern of the Company as on30th June 2015:- ...... 61 ii. List of top 10 holders of equity shares of the Company as on 30th June 2015 ...... 61 e. Following details regarding the directors of the Company:- ...... 62

i. Details of the current directors of the Bank as on 30th June 2015 ...... 62 ii. Details of change in directors since last three years:- ...... 65 f. Following details regarding the auditors of the Company:- ...... 66

i. Details of the auditor of the Company as on 30th June 2015: ...... 66 ii. Details of change in auditor since last three years:- There was no change in auditor since last three years...... 67 g. Details of borrowings of the Company, as on30th June 2015:- ...... 67

i. Details of Loan Facilities:- ...... 67 ii. Details of Deposits as on 30th June 2015:- ...... 67 iii. Details of NCDs:- ...... 68 iv. List of Top 10 Subordinated Tier II Bonds (Series 2009) Holders as on30th June 2015:- ...... 68 v. The amount of corporate guarantee issued by the Issuer along with name of the counterparty (like name of the subsidiary, JV entity, Group Company, etc.) on behalf of whom it has been issued...... 68 vi. Details of Certificate of Deposit: - The total Face Value of Certificate of Deposit Outstanding as on 30th June 2015 ...... 68 vii. Details of Commercial Paper: - The total Face Value of Commercial Papers Outstanding as on the latest quarter end to be provided and its breakup in following table- Not Applicable .... 69 viii. Details of Rest of the borrowings (including hybrid debt like FCCB, Optionally Convertible Bonds /Preference Shares) as on30.06.2015: ...... 69 ix. Details of all default/s and/or delay in payments of interest and principal of any kind of term loans, debt securities and other financial indebtedness including corporate guarantee issued by the Company and including any statutory dues, in the past 5 years ...... 69

Private and Confidential – Not for Circulation

x. Details of any outstanding borrowings taken/ debt securities issued where taken / issued (i) for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or (iii) in pursuance of an option; ...... 69 h. Disclosures with regards to the interest of directors, litigation etc ...... 70

i. Any financial or other material interest of the directors, promoters or key managerial personnel in the offer and the effect of such interest in so far as it is different from the interests of other persons ...... 70 ii. Details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against any promoter during the last three years immediately preceding the year of the circulation of the Information Memorandum and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action...... 70 iii. Details of director’s remuneration ...... 70 iv. Related party transactions entered during the last three financial years immediately preceding the year of circulation of offer letter including with regard to loans made or, guarantees given or securities provided ...... 70 v. Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years immediately preceding the year of circulation of offer letter in the case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter and if so, section-wise details thereof for the company and all of its subsidiaries ...... 70 vi. Details of acts of material frauds committed against the company in the last three years, if any, and if so, the action taken by the company...... 70 i. Details of Promoters of the Company:- ...... 71

Abridged version of Audited Consolidated (wherever available) and Standalone Financial Information (Profit & Loss statement, Balance Sheet and Cash Flow statement) for last three years and auditor qualifications ...... 71 j. Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company...... 79 k. Abridged version of Latest audited / Limited Review half yearly/quarterly consolidated (wherever applicable) and Standalone Financial Information (like Profit & Loss statement, and Balance Sheet) and auditor’s qualifications, if any...... 80 l. Any material event/ development or change having implications on the financials/credit quality (e.g. any material regulatory proceedings against the Issuer/Promoters, Tax litigations resulting in material liabilities, corporate restructuring event etc.) at the time of issue which may affect the issue or the investor’s decision to invest / continue to invest in the debt securities...... 86 m. Names of the Debentures Trustees and Consents thereof ...... 86

iii

Private and Confidential – Not for Circulation

n. Rating and Rating Letter ...... 88

o. If the security is backed by a guarantee or letter of comfort or any other document /letter with similar intent, a copy of the same shall be disclosed. In case such document does not contain detailed payment structure (procedure of invocation of guarantee and receipt of payment by the investor along with timelines) ...... 88

p. Name and address of the valuer who performed the valuation of the security offered- Not Applicable...... 88

q. Stock Exchange where Bonds are proposed to be listed ...... 88

r. Other Details ...... 88

i. DRR Creation ...... 88 ii. Issue/instrument specific regulations ...... 88 iii. Application Process ...... 89 C. Issue Details ...... 103

a. Summary term sheet: ...... 103

b. Cash Flow: ...... 111

Declaration ...... 113

Annexure – I: Credit Rating Letter from CARE ...... 114

Annexure – II: Credit Rating Letter from India Ratings ...... 116

Annexure - III: Letter of Consent from Debenture Trustee ...... 118

Annexure – IV: Letter of consent from Registrar ...... 121

Annexure – V: In-Principle Approval of the Stock Exchange ...... 122

Annexure – VI: Application Form ...... 123

Private and Confidential – Not for Circulation

Disclaimers:

1. General Disclaimer: This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/20 08/13/127878 dated June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended. This Disclosure Document does not constitute an offer to public in general to subscribe for or otherwise acquire the Bonds to be issued by (“The South Indian Bank Ltd”/ “SIB”/ the “Issuer”/ the “Bank”). This Disclosure Document is for the exclusive use of the addressee and it should not be circulated or distributed to third party (ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the Issuer. This bond issue is made strictly on private placement basis. Apart from this Disclosure Document, no offer document or prospectus has been prepared in connection with the offering of this bond issue or in relation to the issuer.

This Disclosure Document is not intended to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the bonds issued by SIB. This Disclosure Document has been prepared to give general information regarding parties proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such party may require. SIB believes that the information contained in this Disclosure Document are true and correct as of the date hereof.

SIB does not undertake to update this Disclosure Document to reflect subsequent events and thus prospective subscribers must confirm about the accuracy and relevancy of any information contained herein with SIB. However, SIB reserves its right for providing the information at its absolute discretion. SIB accepts no responsibility for statements made in any advertisement or any other material and anyone placing reliance on any other source of information would be doing so at his own risk and responsibility. Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscriber to have obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and purchase the Bonds. It is the responsibility of the prospective subscriber to verify if they have necessary power and

Private and Confidential – Not for Circulation competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscribers should conducttheir own investigation, due diligence and analysis before applying for the Bonds. Nothing in this Disclosure Document should be construed as advice or recommendation by the Issuer or by the Arrangers to the Issue to subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers to the Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe for the bonds. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownership and redemption of these Bonds and matters incidental thereto.

This Disclosure Document is not intended for distribution. It is meant for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being issued on private placement Basis and this offer does not constitute a public offer/ invitation.

The Issuer reserves the right to withdraw the private placement of the bond issue prior to the issue closing date(s) in the event of any unforeseen development adversely affecting the economic and regulatory environment or any other force majeure condition including any change in applicable law. In such an event, the Issuer will refund the application money, if any, along with interest payable on such application money, if any.

Nothing in this Information Memorandum constitutes an offer of securities for sale in the United States of America or any other jurisdiction where such offer or placement would be in violation of any law, rule or regulation. No action is being taken to permit an offering of the bonds in the nature of debentures or the distribution of this Information Memorandum in any jurisdiction where such action is required. The distribution/taking/sending/ dispatching/transmitting of this Information Memorandum and the offering and sale of the Bonds may be restricted by law in certain jurisdictions, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

2. Disclaimer of Securities & Exchange Board of India (SEBI): This Disclosure Document has not been filed with Securities & Exchange Board of India (“SEBI”). The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document. It is to be distinctly understood that this Disclosure Document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for

Private and Confidential – Not for Circulation which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Disclosure Document. The Issue of Bonds being made on private placement basis, filing of this Disclosure Document is not required with SEBI.

3. Disclaimer of Arranger to the Issue: The role of the Arranger in the assignment is confined to marketing and placement of the Bonds on the basis of this Information Memorandum as prepared by the Company. The Arranger has neither scrutinized nor vetted nor reviewed nor has it done any due- diligence for verification of the contents of this Information Memorandum. The Arranger shall use this Information Memorandum for the purpose of soliciting subscription(s) from Eligible Investors in the Bonds to be issued by the Company on a private placement basis. It is to be distinctly understood that the aforesaid use of this Information Memorandum by the Arranger should not in any way be deemed or construed to mean that the Information Memorandum has been prepared, cleared, approved, reviewed or vetted by the Arranger; nor should the contents to this Information Memorandum in any manner be deemed to have been warranted, certified or endorsed by the Arranger so as to the correctness or completeness thereof.

The Issuer has prepared this Information Memorandum and the Issuer is solely responsible and liable for its contents. The Issuer will comply with all laws, rules and regulations and has obtained all regulatory, governmental, corporate and other necessary approvals for the issuance of the Bonds. The Company confirms that all the information contained in this Information Memorandum has been provided by the Issuer or is from publicly available information, and such information has not been independently verified by the Arranger. No representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Arranger or their Affiliates for the accuracy, completeness, reliability, correctness or fairness of this Information Memorandum or any of the information or opinions contained therein, and the Arranger hereby expressly disclaims any responsibility or liability to the fullest extent for the contents of this Information memorandum, whether arising in tort or contract or otherwise, relating to or resulting from this Information Memorandum or any information or errors contained therein or any omissions there from. Neither Arranger and its affiliates, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of this document. By accepting this Information Memorandum, the Eligible Investor accepts terms of this Disclaimer Clause of Arranger, which forms an integral part of this Information Memorandum and agrees that the Arranger will not have any such liability.

Private and Confidential – Not for Circulation

The Eligible Investors should carefully read this Information Memorandum. This Information Memorandum is for general information purposes only, without regard to specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation and the Eligible Investors are not to construe the contents of this Information Memorandum as investment, legal, accounting, regulatory or Tax advice, and the Eligible Investors should consult with its own advisors as to all legal, accounting, regulatory, Tax, financial and related matters concerning an investment in the Bonds. This Information Memorandum should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities mentioned therein, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

This Information Memorandum is confidential and is made available to potential investors in the Bonds on the understanding that it is confidential. Recipients are not entitled to use any of the information contained in this Information Memorandum for any purpose other than in assisting to decide whether or not to participate in the Bonds. This document and information contained herein or any part of it does not constitute or purport to constitute investment advice in publicly accessible media and should not be printed, reproduced, transmitted, sold, distributed or published by the recipient without the prior written approval from the Arranger and the Company. This Information Memorandum has not been approved and will or may not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India. This document may not be all inclusive and may not contain all of the information that the recipient may consider material.

Each person receiving this Information Memorandum acknowledges that:

a. Such person has been afforded an opportunity to request and to review and has received all additional information considered by it to be necessary to verify the accuracy of or to supplement the information herein; and

b. Has not relied on the Arranger and/or its affiliates that may be associated with the Bonds in connection with its investigation of the accuracy of such information or its investment decision.

Issuer hereby declares that the Issuer has exercised due-diligence to ensure complete compliance of applicable disclosure norms in this Information Memorandum. The Arranger: (a) is not acting as trustee or fiduciary for the investors or any other person; and (b) is under no obligation to conduct any "know your customer" or other procedures in relation to any person. The Arranger is not

Private and Confidential – Not for Circulation responsible for (a) the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Issuer or any other person in or in connection with this Information Memorandum; or (b) the legality, validity, effectiveness, adequacy or enforceability of this Information Memorandum or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with this Information Memorandum; or (c) any determination as to whether any information provided or to be provided to any investor is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

The Arranger or any of their directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this document. By accepting this Information Memorandum, investor(s) agree(s) that the Arranger will not have any such liability.

Please note that:

a. The Arranger and/or their affiliates may, now and/or in the future, have other investment and commercial banking, trust and other relationships with the Issuer and with other persons ("Other Persons");

b. As a result of those other relationships, the Arranger and/or their affiliates may get information about Other Persons, the Issuer and/or the Issue or that may be relevant to any of them. Despite this, the Arranger and/or their affiliates will not be required to disclose such information, or the fact that it is in possession of such information, to any recipient of this Information Memorandum;

c. The Arranger and/or their affiliates may, now and in the future, have fiduciary or other relationships under which it, or they, may exercise voting power over securities of various persons. Those securities may, from time to time, include securities of the Issuer; and

d. The Arranger and/or their affiliates may exercise such voting powers, and otherwise perform its functions in connection with such fiduciary or other relationships, without regard to its relationship to the Issuer and/or the securities.”

Private and Confidential – Not for Circulation

4. Disclaimer of Stock Exchange: As required, a copy of this Disclosure Document will be submitted to BSE Limited (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the Disclosure Document withBSE or hosting the same on its website should not in any way be deemed or construed that the Disclosure Document has been cleared or approved by BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure Document; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

5. Disclaimer of Rating Agencies: CARE- CARE's ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned Bank facilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating assigned by CARE is based on the capital deployed by the partners/ proprietor and the financial strength of the firm at present. The rating may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/ proprietor in addition to the financial performance and other relevant factors.

Ratings assigned by India Ratings & Research (Ind-Ra) are opinions based on established criteria and methodologies that Ind-Ra is continuously evaluating and updating. Therefore, ratings are the collective work product of Ind-Ra and no individual, or group of individuals, is solely responsible for a rating. Ratings are not facts, and therefore cannot be described as being "accurate" or "inaccurate". Users should refer to the definition of each individual rating for guidance on the dimensions of risk covered by such rating.

Private and Confidential – Not for Circulation

Ind-Ra' opinions are forward looking and include analysts' views of future performance. In many cases, these views on future performance may include forecasts, which may in turn (i) be informed by non-disclosable management projections, (ii) be based on a trend (sector or wider economic cycle) at a certain stage in the cycle, or (iii) be based on historical performance. As a result, while ratings may include cyclical considerations and typically attempt to assess the likelihood of repayment at "ultimate/final maturity", material changes in economic conditions and expectations (for a particular issuer) may result in a rating change.

Credit ratings do not directly address any risk other than credit risk. Credit ratings do not comment on the adequacy of market price or market liquidity for rated instruments, although such considerations may affect Ind-Ra' view on credit risk, such as access to capital or likelihood of refinancing.

Ratings are relative measures of risk; as a result, the assignment of ratings in the same category to entities and obligations may not fully reflect small differences in the degrees of risk. Credit ratings, as opinions on relative ranking of vulnerability to default, do not imply or convey a specific statistical probability of default, notwithstanding the agency's published default histories that may be measured against ratings at the time of default. Credit ratings are opinions on relative credit quality and not a predictive measure of specific default probability.

Ratings are opinions based on all information known to Ind-Ra, including publicly available information and/or non-public documents and information provided to the agency by an issuer and other parties. Publication and maintenance of all ratings are subject to there being sufficient information, consistent with the relevant criteria and methodology, to form a rating opinion.

In issuing and maintaining its ratings, Ind-Ra relies on factual information it receives from issuers and underwriters and from other sources Ind-Ra believes to be credible. Ind-Ra conducts a reasonable investigation of the factual information relied upon by it in accordance with its rating methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction.

The manner of Ind-Ra' factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals,

Private and Confidential – Not for Circulation actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors.

Users of Ind-Ra ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Ind-Ra relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Ind-Ra and to the market in offering documents and other reports. In issuing its ratings Ind-Ra must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed. If any such information should turn out to contain misrepresentations or to be otherwise misleading, the rating associated with that information may not be appropriate. The assignment of a rating to any issuer or any security should not be viewed as a guarantee of the accuracy, completeness, or timeliness of the information relied on in connection with the rating or the results obtained from the use of such information.

If a rating does not benefit from the participation of the issuer/originator, but Ind-Ra is satisfied that "minimum threshold" information for the given criteria is available from public information and other sources available to Ind-Ra, then the non-participatory issuer, as with all issuers, will be afforded the opportunity to comment on the rating opinion and supporting research prior to it being published.

Ratings do not constitute recommendations to buy, sell, or hold any security, nor do they comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of any payments of any security. Ind-Ra does not have a fiduciary relationship with any issuer, subscriber or any other individual. Nothing is intended to or should be construed as creating a fiduciary relationship between Ind-Ra and any issuer or between the agency and any user of its ratings. Ind-Ra does not provide to any party any financial advice, or legal, auditing, accounting, appraisal, valuation or actuarial services. A rating should not be viewed as a replacement for such advice or services.

Private and Confidential – Not for Circulation

Ratings may be changed, qualified, placed on Rating Watch or withdrawn as a result of changes in, additions to, accuracy of, unavailability of or inadequacy of information or for any reason Ind-Ra deems sufficient.

The assignment of a rating by Ind-Ra shall not constitute consent by the agency to use its name as an expert in connection with any registration statement, offering document or other filings under any relevant securities laws.

6. Disclaimer of Debenture Trustees: Investors should carefully read and note the contents of the Information Memorandum/Disclosure document Each Prospective investor should make its own independent assessment of the merit of the investment in NCDs/Bonds and the issuer Bank. Prospective Investor should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the NCDs and should possess the appropriate resources to analyse such investment and suitability of such investment to such investor's particular circumstance. Prospective investors are required to make their own independent evaluation and Judgment before making the investment and are believed to be experienced in Investing in debt markets and are able to bear the economic risk of investing in such instruments.

Private and Confidential – Not for Circulation

Forward Looking Statements The Bank has included statements in this Disclosure Document which contain words or phrases such as “will”, “would”, “aim”, “aimed”, “will likely result”, “is likely”, “are likely”, “believe”, “expect”, “expected to”, “will continue”, “will achieve”, “anticipate”, “estimate”, “estimating”, “intend”, “plan”, “contemplate”, “seek to”, “seeking to”, “trying to”, “target”, “propose to”, “future”, “objective”, “goal”, “project”, “should”, “can”, “could”, “may”, “will pursue”, “our judgement” and similar expressions or variations of such expressions, that are “forward-looking statements”. Actual results may differ materially from those suggested by the forward- looking statements due to certain risks or uncertainties associated with the Bank’s expectations with respect to, but not limited to, the actual growth in demand for banking and other financial products and services, its ability to successfully implement its strategy, including its use of the Internet and other technology and its rural expansion, its ability to integrate recent or future mergers or acquisitions into its operations, its ability to manage the increased complexity of the risks the Bank faces following its rapid international growth, future levels of impaired loans, its growth and expansion in domestic and overseas markets, the adequacy of its allowance for credit and investment losses, technological changes, investment income, its ability to market new products, cash flow projections, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions the Bank is or will become a party to, the future impact of new accounting standards, its ability to implement its dividend policy, the impact of changes in banking regulations and other regulatory changes in India and other jurisdictions on the Bank, including on the assets and liabilities of SIB, a former financial institution not subject to Indian banking regulations, its ability to roll over its short-term funding sources and its exposure to credit, market and liquidity risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains, losses or impact on net interest income and net income could materially differ from those that have been estimated.

In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this Disclosure Document include, but are not limited to, the monetary and interest rate policies of India and the other markets in which the Bank operates, natural calamities, general economic, financial or political conditions, instability or uncertainty in India, southeast Asia, or any other country, caused by any factor including terrorist attacks in India or elsewhere, military armament or social unrest in any part of India, inflation, deflation, unanticipated turbulence in interest rates, changes or volatility in the value of the rupee, instability in the subprime credit market and liquidity levels in the foreign exchange rates, equity prices or other market rates or prices, the performance of the financial markets in general, changes in domestic and foreign laws, regulations and taxes, changes in the competitive and pricing environment in India, and general or regional changes in asset valuations.

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Definitions and Abbreviations AY Assessment Year Allotment/ Allot/ The issue and allotment of the Bonds to the successful Applicants in the Issue Allotted Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in full or in part A person who makes an offer to subscribe the Bonds pursuant to the terms of Applicant/ Investor this Disclosure Document and the Application Form The form in terms of which the Applicant shall make an offer to subscribe to Application Form the Bonds and which will be considered as the application for allotment of Bonds in the Issue Any person or entity holding the Bonds and whose name appears in the list of Bondholder(s) Beneficial Owners provided by the Depositories Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Beneficial Owner(s) Bond(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996) Board/ Board of The Board of The South Indian Bank or Committee thereof, unless otherwise Directors specified Non-Convertible, Redeemable, Unsecured Basel III compliant Tier 2 Bonds for inclusion in Tier 2 Capital in the nature of Debentures of face value of Rs. 10 Bond(s) lacs each at par aggregating uptoRs. 300 Crores (Rupees Three Hundred Crores Only) with an option to retain an over-subscription aggregating uptoRs. 200 Crores (Rupees Two Hundred Crores Only) aggregating to a total issue size of Rs. 500 Crores (Rupees Five Hundred Crores Only). CARE Credit Analysis & Research Ltd. CAR Capital Adequacy Ratio CDSL Central Depository Services (India) Limited Coupon / Interest The date as may be specified in the Summary Term Sheet of this Disclosure Payment Date Document Non-Convertible debt securities which create or acknowledge indebtedness and include debenture, bonds and such other securities of a body corporate or Debt Securities any statutory body constituted by virtue of a legislation, whether constituting a charge on the assets of the Bank or not, but excludes security bonds issued by Government or such other bodies as may be specified by SEBI, security

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receipts and securitized debt instruments The cut-off date declared by the Bank from which all benefits under the Bonds Deemed Date of including interest on the Bonds shall be available to the Bondholder(s). The Allotment actual allotment of Bonds (i.e. approval from the Board of Directors or a Committee thereof) may take place on a date other than the Deemed Date of Allotment A Depository registered with SEBI under the SEBI (Depositories and Depository Participant) Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant A Depository participant as defined under Depositories Act This document dated September 29,2015 for private placement of Non- Convertible, Redeemable, Unsecured Basel III compliant Tier 2 Bonds for Disclosure inclusion in Tier 2 Capital in the nature of Debentures of face value of Rs. 10 Document lacs each at par aggregating uptoRs. 300 Crores (Rupees Three Hundred Crores Only) with an option to retain an over-subscription aggregating uptoRs. 200 crores (Rupees Two Hundred Crores Only) aggregating to a total issue size of Rs. 500 Crores (Rupees Five Hundred Crores Only) (“Bonds”). DP Depository Participant DRR Bond/ Debenture Redemption Reserve EPS Earnings Per Share FIs Financial Institutions FIIs Foreign Institutional Investors Financial Year/ FY Period of twelve months ending March 31, of that particular year GoI Government of India/ Central Government Trustees for the Bondholders in this case being IDBI Trusteeship Services Trustees Limited Issuer / SIB / Bank The South Indian Bank I.T. Act The Income Tax Act, 1961, as amended from time to time Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 and Amendments to Simplified Debt Listing Agreement for Debt Listing Agreement Securities issued by Securities and Exchange Board of India vide circular no. SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 and Amendments to Simplified Debt Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no.

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SEBI/IMD/DOF-1/BOND/Cir-1/2010dated January 07, 2010and Amendments to Simplified Debt Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide vide Circular no.CIR/IMD/DF/18/2013 dated October 29 2013. Loss Absorbency The Bonds shall be subject to loss absorbency features applicable for non-

equity capital instruments vide Master Circular No. DBR.No.BP.BC.1/21.06.201/2015-16 dated July 01, 2015 issued by the Reserve Bank of India on Basel III capital regulations covering terms and conditions for issue of debt capital instruments for inclusion as Tier II Capital (Annex 5 of the Master Circular) and minimum requirement to ensure loss absorbency of non-equity regulatory capital instruments at the Point of Non Viability (PONV) (Annex 16 of the Master Circular) read along with RBI Circular No. DBRNO.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on Master Circular – Basel III Capital Regulations Amendments.Accordingly, the Bonds may, at the option of the RBI, be permanently written off upon occurrence of the trigger event called the “Point of Non Viability Trigger”. PONVtrigger event shall be as defined in the RBI Regulations and shall be determined by the RBI.

MF Mutual Fund MoF Ministry of Finance NSDL National Securities Depository Limited BSE Bombay Stock Exchange Limited PAN Permanent Account Number PONV The Bonds may, at the option of the RBI, be permanently written off upon occurrence of the trigger event called the “Point of Non Viability Trigger” (“PONV Trigger”) PONV Trigger Event The PONV Trigger event shall be the earlier of:

Private and Confidential – Not for Circulation a) a decision that the write off, without which the Bank would become non-viable, is necessary, as determined by the Reserve Bank of India; and b) the decision to make a public sector injection of capital, or equivalent support, without which the Bank would have become non-viable, as determined by the relevant authority. Such a decision would invariably imply that the write-off consequent upon the trigger event must occur prior to any public sector injection of capital so that the capital provided by the public sector is not diluted.

For the purpose of these guidelines, a non-viable bank will be a bank which, owing to its financial and other difficulties, may no longer remain a going concern on its own in the opinion of the Reserve Bank of India unless appropriate measures are taken to revive its operations and thus, enable it to continue as a going concern. The difficulties faced by a bank should be such that these are likely to result in financial losses and raising the Common Equity Tier 1 capital of the bank should be considered as the most appropriate way to prevent the bank from turning non-viable. Such measures may include write off of the Bonds in combinationwith or without other measures as considered appropriate by the Reserve Bank of India.

In rare situations, a bank may also become non-viable due to non- financial problems, such as conduct of affairs of the bank in a manner which is detrimental to the interest of depositors, serious corporate governance issues, etc. In such situations raising capital is not considered a part of the solution and therefore, may not attract provisions of this framework.

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GIR General Index Registration Number Rs. / INR Indian National Rupee RBI Reserve Bank of India Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015on Basel III Capital Regulations issued by the Reserve Bank of India on Basel RBI Norms / RBI III capital regulations covering terms and conditions for issue of debt Guidelines capital instruments for inclusion as Tier 2 capital as updated/modified from time to time RTGS Real Time Gross Settlement Record Date As may be specified in the Summary Term Sheet Registrar to the Issue, in this case being M/s.BTS Consultancy Services P Registrar Ltd The Securities and Exchange Board of India, constituted under the SEBI SEBI Act, 1992 Securities and Exchange Board of India Act, 1992, as amended from time SEBI Act to time Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD- SEBI Debt NRO/GN/2008/13/127878 dated June 06, 2008, as amended and Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD- NRO/GN/2012-13/19/5392dated October 12, 2012, as amended TDS Tax Deducted at Source The Companies Act The Companies Act, 2013 as amended from time to time Private Placement of Non-Convertible, Redeemable, Unsecured Basel III compliant Tier 2 Bonds for inclusion in Tier 2 Capital in the nature of The Issue/ The Debentures of face value of Rs. 10 lacs each at par aggregating up to Rs. Offer/ Private 300 Crores (Rupees Three Hundred Crores Only) with an option to retain Placement an over-subscription aggregating up to Rs. 200 Crores (Rupees Two Hundred Croresonly) aggregating to a total issue size of Rs. 500 Crores (Rupees Five Hundred Crores Only) (“Bonds”).

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A. Risk Factors Prospective investors should carefully consider the risks and uncertainties described below, in addition to the other information contained in this Disclosure Document before making any investment decision relating to our Basel III Compliant Tier II Bonds. The occurrence of any of the following events, or the occurrence of other risks that are not currently known or are now deemed immaterial, could cause our business, results of operations, cash flows, financial condition and prospects to suffer and which may lead to PONV and you may lose all or part of your investment.

Prior to making an investment decision, prospective investors should carefully consider this section in conjunction with the information contained in this Disclosure Document, including the financial statements prepared in accordance with Indian GAAP and included in this Preliminary Placement Document.

These risks and uncertainties are not the only issues that the Bank faces. Additional risks and uncertainties not presently known to the Bank or that the Bank currently believes to be immaterial may also have a material adverse effect on its financial condition or business. Unless specified or quantified in the relevant risk factors, the Bank is not in a position to quantify the financial or other implications of any risk mentioned herein below.

If any one of the following stated risks actually occurs, the Bank’s business, financial conditions and results of operations could suffer and, therefore, the value of the Bank’s Debentures could decline and/or the Bank’s ability to meet its obligations in respect of the Debentures could be affected. More than one risk factor may have simultaneous effect with regard to the Debentures such that the effect of a particular risk factor may not be predictable. In addition, more than one risk factor may have a compounding effect which may not be predictable. No prediction can be made as to the effect that any combination of risk factors may have on the value of the Debentures and/or the Bank’s ability to meet its obligations in respect of the Debentures. Potential investors should perform their own independent investigation of the financial condition and affairs of the Bank, and their own appraisal of the creditworthiness of the Bank. Potential investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations with respect to the Debentures. Potential investors should thereafter reach their own views prior to making any investment decision.

The Bank believes that the factors described below represent the principal risks inherent in investing in the Debentures, but the inability of the Bank, as the case may be, to pay principal or other amounts on or in connection with any Debentures may occur for other reasons and the Bank does not represent that the statements below regarding the risks of holding any Debentures are exhaustive.

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Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein.

Risks Relating to our Business

Our results of operations and cash flows depend to a great extent on our net interest income. Volatility in interest rates and other market conditions could materially and adversely impact our cash flows and results of operations.

Our results of operations largely depend on our net interest income. For the financial year2015, our net interest income (i.e. gross interest income minus interest expense) represented 23.62% of our total income.Our interest-earning assets comprised both fixed interest rate assets and floating interest rate assets, while the majority of our interest-bearing liabilities had fixed interest rates. Any decrease in the interest rates applicable to our assets, without a corresponding decrease in the interest rates applicable to our liabilities, will result in a decline in our net interest income and consequently reduce our net interest margin.

Interest rates are sensitive to many factors beyond our control, including India’s GDP growth, inflation, liquidity, the RBI’s monetary policy, deregulation of the financial sector in India, domestic and international economic and political conditions and other factors. We cannot assure you that we will be able to adequately manage our interest rate risk in the future. Volatility and changes in market interest rates could disproportionately affect the interest we earn on our assets as compared to the interest we pay on our liabilities.

Furthermore, in the event of rising interest rates, our borrowers may not be willing to pay correspondingly higher interest rates on their borrowings and may choose to repay their loans from us if they are able to switch to more competitively priced advances. In the event of falling interest rates, we may face more challenges in retaining our customers if we are unable to switch to more competitive rates as compared to other banks in the market. Any inability to retain customers as a result of changing interest rates may also adversely impact our earnings and cash flows in future periods.

In addition, under the regulations of RBI, we are required to maintain a minimum specified percentage, currently 21.5% statutory liquidity ratio (“SLR”), of our net demand and time liabilities in Government or other approved securities. Yields on these investments, as well as yields on our other interest earning assets, are dependent to a large extent on interest rates. In a rising interest rate environment, especially if the increase was sudden or sharp, we could be adversely affected by the decline in the market value of our Government securities portfolio and other fixed income securities and may be required to further provide for depreciation in the “available for sale” (“AFS”) and “held for trading” (“HFT”) categories.

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The value of collateral may decrease or we may experience delays in enforcing the sale of collateral when borrowers default on their obligations to us, which may result in failure to recover the expected value of collateral security, exposing us to a potential loss.

As of March 31, 2015, 59.72% of our loans to corporate customers were secured by assets, including property, plant and equipment. Our loans to corporate customers also include working capital credit facilities that are typically secured by a first lien on inventory, receivables and other current assets. In some cases, we may have taken further security of a first or second lien on fixed assets or a pledge of financial assets like marketable securities. As of March 31, 2015, 51.07% of our loans to retail customers were also secured by assets, predominantly gold, property and vehicles.

We use a technology-based risk management system and follow strict internal risk management guidelines on portfolio monitoring, which include periodic assessment of loan to security value on the basis of conservative market price levels, limits on the amount of margin, ageing analysis and pre-determined margin call thresholds. However, we may not be able to realize the full value of our collateral as a result of, among other factors:

 delays in bankruptcy and foreclosure proceedings;

 defects or deficiencies in the perfection of collateral (including due to inability to obtain approvals that may be required from third parties);

 fraud by borrowers;

 decreases in value of the collateral, which may be particularly relevant in the case of gold and traded securities;

 an illiquid market for the sale of the collateral; and

 Current legislative provisions or changes thereto and past or future judicial pronouncements.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (the “SARFAESI Act”), the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 and the RBI’s corporate debt restructuring (“CDR”) mechanism have strengthened the ability of lenders to resolve NPAs by granting them greater rights to enforce security and recover amounts owed from secured borrowers. Although special tribunals have been set up for expeditious recovery of debts due to banks, any proceedings brought may be subject to delays and administrative requirements that may result in, or be accompanied by, a decrease in the value of the collateral.

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In addition, the RBI’s guidelines on CDR specify that for debt amounts of ₹ 100.0 million and above, 60.0% of the creditors by number and 75.0% of the creditors by value can decide to restructure the debt and that such a decision would be binding on the remaining creditors. If we own 25.0% or less of the debt of such a borrower, we could be forced to agree to an extended restructuring of debt, which may not be in our best interests

As a result of the foregoing factors, we may not be able to realise the full value of collateral, which could have an adverse effect on our financial condition and results of operations.

If we are not able to control the level of NPAs in our portfolio effectively or if we are unable to improve our provisioning coverage as a percentage of gross NPA, our business may be adversely affected.

Various factors, including a rise in unemployment, a sharp and sustained rise in interest rates, developments in the Indian economy, movements in global commodity markets and exchange rates and global competition may cause an increase in the level of NPAs and have an adverse impact on the quality of our loan portfolio. The RBI regulates some aspects of the recovery of non-performing loans, such as the use of recovery agents. Any limitation on our ability to recover, control and reduce non-performing and restructured loans as a result of these guidelines or otherwise may affect our collections and ability to foreclose on existing NPAs.

As of March 31, 2015, our provision coverage as a percentage of NPAs was 60.63%. However, there can be no assurance that there will be no deterioration in the provisioning coverage as a percentage of gross NPAs or otherwise or that the percentage of NPAs that we will be able to recover will be similar to our past NPA recovery experience. If we are not able to control or reduce the level of our NPAs, the overall quality of our loan portfolio may deteriorate, which may have a material adverse effect on our financial condition and results of operations.

A portion of our advances are unsecured. If we are unable to recover such advances in a timely manner or at all, our financial condition and results of operations may be adversely affected.

While we have been selective in our lending policies and strive to satisfy ourselves with the credit worthiness and repayment capacities of our customers, there can be no assurance that we will be able to recover the interest and principal advanced by us in a timely manner. Any failure to recover the unsecured advances given to our customers would expose us to a potential loss, which could adversely affect our financial condition and results of operations.

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The level of restructured advances in our portfolio may increase and the failure of such restructured advances to perform as expected could adversely affect our financial condition and results of operations.

As a result of a slowdown in economic activity, rising interest rates and the limited ability of corporations to access capital due to the volatility in global markets, there has been an increase in restructured advances in the banking system as well as in our loan portfolio for financial year 2014 and financial year 2015. We may not be able to control or reduce the level of restructured advances in our project and corporate finance portfolio.

In May 2013, the RBI issued final guidelines on the restructuring of advances. Pursuant to those guidelines, advances that are restructured (other than due to delays in project implementation under certain conditions and up to specified periods) from April 1, 2015 onwards would be classified as non-performing. The general provision required on restructured standard accounts would be increase to 3.5% from March 31, 2014, and further to 4.6% from March 31, 2015 and 5.0% from March 31, 2016. General provisions on standard accounts restructured after June 1, 2013 were increased to 5.0%. The guidelines also prescribe measures with respect to the terms of restructuring that may be approved for borrowers.

The combination of changes in regulations regarding unstructured advances, provisioning, and any substantial increase in the level of restructured assets and the failure of these restructured advances to perform as expected, could adversely affect our financial condition and results of operations.

We are required to lend a minimum percentage of our adjusted net bank credit (“ANBC”) to certain “priority sectors” and if we fail to meet these requirements, we must place the allocated amount by RBI based on shortfall in an account with Government-sponsored Indian development banks or with other financial institutions specified by the RBI. These deposits typically carry interest rates lower than market rates, which would result in reduced interest income on such advances. Any change in the RBI’s regulations relating to priority sector lending could have a material adverse impact on our financial condition and results of operations.

In accordance with current RBI guidelines, all banks in India, including us, are subject to directed lending regulations. We are required to lend 40.00% of our ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, to “priority sectors”. Out of the advances we are required to lend under the “priority sector”, at least 18.0% of our ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, must be lent to the agricultural sector and at least 10.0% of our ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, must be lent to weaker sectors.

In case of any shortfall by us in meeting the priority sector lending requirements, we would subsequently be required to place the allocated amount by RBI based on shortfall in priority sector lending in an account with the National Bank for Agriculture and Rural Development (“NABARD”) or with other financial institutions specified by the RBI. These deposits typically carry interest rates lower than market rates, which

Private and Confidential – Not for Circulation would result in reduced interest income on such advances. We have experienced instances of shortfalls in our directed lending to the priority sectors in the past and we cannot assure you that we will be able to meet the lending targets towards priority sectors in the future.

Further, any change in the RBI’s guidelines may require us to increase our lending to the priority sectors.

Banking is a heavily regulated industry and material changes in the regulations that govern us could cause our business to suffer.

Banks in India are subject to detailed supervision and regulation by the RBI. In addition, banks are generally subject to changes in Indian law, as well as to changes in regulation and government policies and accounting principles. Since 2005, the RBI has made several changes in regulations applicable to banking companies, including:

 risk-weights on certain categories of loans for computation of capital adequacy;

 general provisioning requirements for various categories of assets;

 capital requirements and accounting norms for securitisation;

 policy interest rates, cash reserve ratio, cessation of payment of interest on cash reserve balances;

 limits on investments in financial sector enterprises and venture capital funds; and

 Directed lending requirements.

The Banking Regulation Act imposes a number of restrictions, which affect our operating flexibility and investors’ rights, including:  We are subject to restrictions in the incorporation of subsidiaries, which may prevent us from exploiting emerging business opportunities in areas other than banking. We may not open branches in new places of business and transfer our existing places of business, which may hamper our operational flexibility.

 Our ability to build overseas asset portfolios and exploit business opportunities overseas is limited by the requirement to maintain assets in India of at least 75.0% of our demand and time liabilities in India.

 Our ability to produce documents and records for inspection is regulated.

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 The RBI is empowered to direct and generally advise us and may prohibit us from entering into certain transactions and agreements.

 We are required to obtain prior approval of the RBI before we appoint our Chairman, Managing Director and CEO and any other full-time Directors and fix their remuneration. The RBI has powers to remove managerial and other persons from office, and to appoint additional directors. We are also required to obtain approval of the RBI for the creation of floating charges for our borrowings, thereby hampering leverage.

Any changes in the regulatory environment under which we operate, or our inability to comply with the regulations, could adversely affect our business, financial condition and results of operations.

Our Bank has a regional concentration in Southern India and any adverse change in the economy of states in Southern India could impact our results of operations and cash flows. Additionally, we may not be successful in expanding our operations to other parts of India.

SIB has 828 branches as of June 30th2015 of which689 branches or 83.21% are located in Southern India (comprising the states of Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu and the union territory of Pondicherry). As of June 30th, 2014 and June 30th, 2015, 72%, 69% respectively, of our total advances and 77%, 79% respectively, of our total deposits were from Southern India.

As on 31st March 2015, SIB has 822 branches out of which 680 branches or 82.72 % are located in Southern India (comprising the states of Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu and the union territory of Pondicherry). The branch distribution in south India as on 31st March, 2014 and 31st March 2013 was 667 (84.20%) out of 794 and 622 (82.93%) out of 750 respectively . As of March 31 2013, March 31 2014 and March 31 2015, 74%, 72% and 70% respectively, of our total advances and 73%, 77% and 79% respectively, of our total deposits were from Southern India.

Any disruption, disturbance or sustained downturn in the economy of or any adverse geological, ecological or political circumstances in, the states in Southern India could adversely affect our business, financial condition and results of operations

Additionally, while we continue to expand our operation outside of Southern India, we face risks with our operations in geographic areas in which we do not possess the same level of familiarity with the economy, consumer base and commercial operations. In addition, our competitors may already have established operations in such areas and we may find it difficult to attract customers in such new areas. We may not be able to

Private and Confidential – Not for Circulation successfully manage the risks of such an expansion, which could have an adverse effect on our business, financial conditions and results of operations.

We may not be able to renew or maintain our statutory and regulatory permits and approvals required to operate our business.

We require certain statutory and regulatory permits and approvals to operate our business. We have a licence from the RBI, which requires us to comply with certain terms and conditions for us to continue our banking operations. In the event that we are unable to comply with any or all of these terms and conditions, or seek waivers or extensions of time for complying with these terms and conditions, it is possible that the RBI may revoke this licence or may place stringent restrictions on our operations. This may result in the interruption of all or some of our operations.

Further, under certain of our contractual arrangements, we are required to hold all necessary and applicable approvals and licences from authorities such as the RBI and the IRDA.

Failure by us to renew, maintain or obtain the required permits or approvals, including those set out above, may result in the interruption of our operations or delay or prevent our expansion plans and may have a material adverse effect on our business, financial condition and results of operations

If we are unable to comply with the capital adequacy requirements stipulated by the RBI, our business, financial condition and results of operations may be materially and adversely affected.

We are subject to regulations relating to the capital adequacy of banks, which determine the minimum amount of capital we must hold as a percentage of the risk-weighted assets on our portfolio, or capital-to-risk asset ratio (“CRAR”). Although we have been maintaining a CRAR under the Basel III standards, which was 12.01% as of March 31, 2015 and 11.46% as of June 30, 2015, as compared to the regulatory minimum requirement of 9.0%, we cannot assure you that we will be able to maintain our CRAR within the regulatory requirements. Further, any adverse developments could affect our ability to continue to satisfy the capital adequacy requirements, including deterioration in our asset quality, decline in the values of our investments or applicable risk weight for different asset classes.

The RBI has issued the guidelines on Basel III capital regulations on May 2, 2012, pursuant to the Monetary Policy Statement 2012-13. These guidelines become effective from April 1, 2013 in a phased manner. The Basel III capital ratios will be fully implemented on March 31, 2019. The RBI Basel III Capital Regulations require, among other things, higher levels of Tier I capital, including common equity, capital conservation buffers, deductions from common equity Tier I capital for investments in subsidiaries (with minority interest), changes in the structure of debt instruments eligible for inclusion in Tier I and Tier II capital and preference shares in Tier II capital, criteria for classification as common shares, methods to deal

Private and Confidential – Not for Circulation with credit risk and reputational risk, capital charges for credit risks, introduction of a leverage ratio and criteria for investments in capital of banks, financial and insurance entities (including where ownership is less than 10.0%). The RBI Basel III Capital Regulations also stipulate that additionalTier I and Tier II capital should have loss absorbency characteristics, which require them to be written down or be converted into common equity upon the occurrence of a pre-specified trigger event.

With the implementation of the Basel III guidelines, we may be required to improve the quality, quantity and transparency of Tier I capital, which will now have to be predominantly equity shares. We may be required to apply regulatory deductions against core capital as opposed to Tier I and Tier II capital and a minimum capital ratio may be set, among other suggested changes. In addition, these changes may result in the incurrence of substantial compliance and monitoring costs. Furthermore, with the implementation of Basel III guidelines, our ability to support and grow our business could be limited by a declining capital adequacy ratio, if we are unable to access or face difficulty in accessing the capital or have difficulty in obtaining capital in any other manner.

If we fail to meet capital adequacy requirements, the RBI may take certain actions, including restricting our lending and investment activities and the payment of dividends by us. These actions could materially and adversely affect our business, financial condition and results of operations.

We are required to maintain cash reserve and statutory liquidity ratios and any increase in these requirements could materially and adversely affect our business, financial condition and results of operations.

Under the RBI regulations, we are subject to a CRR requirement under which we are currently required to keep 4.0% of our net demand and time liabilities in a current account with the RBI. We do not earn interest on cash reserves maintained with the RBI. The RBI may further increase the CRR requirement as a monetary policy measure and has done so on numerous occasions. Increases in the CRR requirement could materially and adversely affect our business, financial condition and results of operations.

In addition, under the Banking Regulation Act and the RBI regulations, our liabilities are subject to an SLR requirement, according to which 21.5% of our net demand and time liabilities need to be invested in Government securities, state government securities and other securities approved by the RBI from time to time. In our experience, these securities generally carry fixed coupons. When interest rates rise, the value of these fixed coupon securities depreciates. We cannot assure you that investments in such securities will provide returns better than other market instruments. Further, any increase in the CRR and SLR requirements would reduce the amount of cash available for lending, which may materially and adversely affect our business, financial condition and results of operations.

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We face maturity mismatches between our assets and liabilities. Our funding is primarily through short-term and medium-term deposits, and if depositors do not roll over deposited funds on maturity or if we are unable to continue to increase our deposits, our business could be adversely affected.

Most of our funding requirements are met through short-term and medium-term funding sources, primarily in the form of deposits. A portion of our assets have long-term maturities, creating a possibility for funding mismatches.

In our experience, a substantial portion of our customer deposits have been rolled over on maturity and have been, over time, a stable source of funding. However, if a significant portion of our depositors do not roll over deposited funds upon maturity or do so for a shorter maturity than that of our assets, which tend to have medium to long-term maturities, our liquidity position could be adversely affected. We may be forced to pay higher interest rates in order to attract or retain further deposits.

Our ability to raise fresh deposits and grow our deposit base depends in part on our ability to expand our network of branches.Branch expansion plans can be undertaken subject to the fulfilment of the conditions stipulated by RBI.There is no assurance that we will be able to comply with conditions to meet our requirement of branch expansion to achieve the desired growth in deposit base.

If we fail to sustain or achieve the growth rate of our deposit base, including our CASA base, our business, liquidity position and financial condition may be adversely affected

We have concentrations of loans to and deposits from certain customers, which expose us to risk of defaults by these borrowers and premature withdrawal of deposits by these depositors that could materially and adversely affect our business, financial condition and results of operations.

As of March 31, 2015 our advances to the 20 largest borrowers accounted for approximately 13.50% (i.e. 5962.53 Crores) compared to March 31, 2014 our advances to the 20 largest borrowers accounted for approximately 17.02% (i.e. 6,194.37 Crores). We cannot assure you that there will not be any default or delay in payments of interest or principal from these borrowers.

As of March 31, 2015 our deposits from the 20 largest depositors accounted for approximately 8.93% (i.e.4634.12 Crores) of our total deposits, compared to March 31, 2014 our deposits from the 20 largest depositors accounted for approximately 10.77% (i.e.5,112.88Crores) of our totaldeposits respectively. We cannot assure you that there will not be any premature withdrawals or non-renewal of deposits from these depositors.

In the event that any of the above risks materialise, our financial condition and results of operations may be adversely affected.

Private and Confidential – Not for Circulation

Deterioration in the performance of any industry sector in which we have significant exposure may materially and adversely affect our financial condition and results of operations.

Our total exposure to borrowers is dispersed across various industry sectors, the most significant of which are infrastructure; basic metal and metal products; and textiles

Despite monitoring our level of exposure to sectors and borrowers, any significant deterioration in the performance of a particular sector driven by events not within our control, such as natural calamities, regulatory action or policy announcements by central or state government authorities, would adversely impact the ability of borrowers within that industry to service their debt obligations to us. As a result, we would experience increased delinquency risk, which may materially and adversely affect our business, financial condition and results of operations.

We cannot assure you that we will be able to diversify our exposure over different industry sectors in the future. Failure to maintain diverse exposure resulting in industry sector concentration may adversely impact our business, financial condition and results of operations, in case of any significant deterioration in performance of such industry sector.

Materialization of contingent liabilities could adversely affect our financial condition.

The contingent liabilities have arisen in the normal course of our business and are subject to the prudential norms as prescribed by the RBI. If any of these contingent liabilities materialize, our business, financial condition and results of operations could be materially and adversely affected.

We could be subject to volatility in income from our treasury operations, which could have a material adverse effect on our results of operations, cash flows and our business.

Our treasury operations contributed 22.8%, of our total income during the financial year2015. Our income from treasury operations comprises interest and dividend income from investments, profit from sale of investments and income from our foreign exchange operations. Our treasury operations are vulnerable to changes in interest rates, exchange rates, equity prices and other factors. Although we have operational controls and procedures in place for our treasury operations, such as counterparty limits, position limits, stop loss limits and exposure limits, that are designed to mitigate the extent of such losses, there can be no assurance that we will not incur losses in the course of our proprietary trading on our fixed income book held in the HFT and AFS portfolios. Any such losses could adversely affect our business, financial condition and results of operations.

Internal or external fraud and misconduct by our employees could adversely affect our reputation, business, results of operations and financial condition.

Private and Confidential – Not for Circulation

In the past, we have experienced acts of fraud and misconduct committed by our employees. For further details in relation to the fraud and misconduct please refer page 70 of this Disclosure Document. Misconduct by our employees could include binding us to transactions that exceed authorised limits or present unacceptable risks or hiding unauthorised or unlawful activities from us.

Employee misconduct could also involve the improper use or disclosure of confidential information, which could result in regulatory sanctions and serious reputational or financial harm, including harm to our brand. It is not always possible to deter misconduct by employees and the precautions we take and the systems we have put in place to prevent and deter such activities may not be effective in all cases. Any instances of such misconduct or fraud could adversely affect our reputation, business, results of operations and financial condition.

Weaknesses, disruption or failures in IT systems could adversely impact our business.

We are heavily reliant on IT systems in connection with financial controls, risk management and transaction processing. The increasing size of our operations, which use automated control and recording systems for record keeping, exposes us to the risk of errors in control and record keeping. Given our high volume of transactions, certain errors may be repeated or compounded before they are discovered and successfully rectified. Our dependence upon automated IT systems to record and process transactions may further increase the risk that technical system flaws will result in losses that are difficult to detect. As a result, we face the risk that the design of our controls and procedures may prove inadequate thereby causing delays in detection or errors in information.

Our on-line delivery channels are subject to various risks such as network connectivity failure, information security issues and browser compatibility issues. We may also be subject to disruptions of our IT systems, arising from events that are wholly or partially beyond our control (including, for example, damage or incapacitation by human error, natural disasters, electrical or telecommunication outages, sabotage, computer viruses, hacking, cyber-attacks or similar events, or loss of support services from third parties such as internet backbone providers). So far, we have not experienced widespread disruptions of service to our customers, but there can be no assurance that we will not encounter disruptions in the future due to substantially increased number of customers and transactions, or for other reasons. In the event we experience systems interruptions, errors or downtime (which could result from a variety of causes, including changes in customer use patterns, technological failure, changes to systems, linkages with third party systems and power failures), this may give rise to deterioration in customer service and to loss or liability to us and may materially and adversely affect our business, financial condition and results of operations.

We have established and maintain a comprehensive disaster recovery centre in Bengaluru as part of our risk management measures. However, if for any reason the switch over to the back-up system does not take place or if a calamity occurs in both Kochi and Bengaluru such that our business is compromised at both centres, our operations would be materially and adversely affected.

Private and Confidential – Not for Circulation

Further, we are dependent on various external vendors for certain non-core elements of our operations, including implementing IT infrastructure and hardware, branch roll-outs, networking, managing our data centre and back-up support for disaster recovery and are exposed to the risk that external vendors or service providers may be unable to fulfil their contractual obligations to us (or will be subject to the same risk of fraud or operational errors by their respective employees) and the risk that their (or their vendors’) business continuity and data security systems prove to be inadequate. Failure to perform any of these functions by our external vendors or service providers could materially and adversely affect our business, financial condition and results of operations.

Our risk management policies and procedures may not adequately address unidentified or unanticipated risks.

We have devoted significant resources to develop our risk management policies and procedures and aim to continue to do so in the future. Despite this, our policies and procedures to identify, monitor and manage risks may not be fully effective. Some of our risk management systems are not automated and are subject to human error. Some of our methods of managing risks are based upon the use of observed historical market behaviour. As a result, these methods may not accurately predict future risk exposures, which could be significantly greater than those indicated by the historical measures.

To the extent any of the instruments and strategies we use to hedge or otherwise manage our exposure to market or credit risk are not effective, we may not be able to mitigate effectively our risk exposures in particular market environments or against particular types of risk. Further, some of our risk management strategies may not be effective in a difficult or less liquid market environment, where other market participants may be attempting to use the same or similar strategies to deal with the difficult market conditions. In such circumstances, it may be difficult for us to reduce our risk positions due to the activity of such other market participants. Other risk management methods depend upon an evaluation of information regarding markets, clients or other matters. This information may not in all cases be accurate, complete, up-to-date or properly evaluated.

Our investment and interest rate risk are dependent upon our ability to properly identify, and mark-to-market changes in the value of financial instruments caused by changes in market prices or rates. Our earnings are dependent upon the effectiveness of our management of changes in credit quality and risk concentrations, the accuracy of our valuation models and our critical accounting estimates and the adequacy of our allowances for loan losses.

To the extent our assessments, assumptions or estimates prove inaccurate or not predictive of actual results, we could suffer higher than anticipated losses. See also “−If we are not able to control the level of NPAs in our portfolio effectively or if we are unable to improve our provisioning coverage as a percentage of gross NPA, our business may be adversely affected” above.

Private and Confidential – Not for Circulation

Management of operations, legal and regulatory risks requires, among other things, policies and procedures to properly record and verify a large number of transactions and events, and these policies and procedures may not be fully effective. As we seek to expand our operations, we also face the risk that we may be unable to develop risk management policies and procedures that are properly designed for new business areas or to manage the risks associated with the growth of our existing businesses. Implementation and monitoring may prove challenging with respect to businesses that we plan on developing. If we are unable to develop and implement effective risk management policies, it could materially and adversely affect our business, financial condition and results of operations.

If we fail to effectively manage our growth, it may adversely impact our business.

In the past, we have witnessed rapid growth in both our business and our branch network. The number of branches has grown from 750 as of March 31, 2013 to794 as of March 31, 2014 and to 822 as of March 31, 2015. Our total assets have grown from 49,795.03 crores as of March 31, 2013 to 54,985.97 crores as of March 31, 2014and to 59,116.32 crores as of March 31, 2015

Our ability to effectively manage our growth depends primarily upon our ability to manage key issues, such as selecting and retaining skilled manpower, establishing additional branches, achieving cost efficiencies, maintaining an effective technology platform that can be continually upgraded, developing profitable products and services to cater to the needs of our existing and potential customers, improving our risk management systems, developing a knowledge base to face emerging challenges and ensuring a high standard of customer service.

A significant reduction in our credit rating could adversely affect our business, financial condition, cash flows and results of operations.

Our debt is rated by various agencies. India Ratings has rated SIB Bonds 2009 issued by us in the form of a subordinated debt instrument as “IND A+”. CARE Ratings has also rated SIB Bonds 2009 as “CARE A+.” Further, the Bonds proposed to be issued by the bank have been assigned a rating of “CARE A+” by CARE and “IND A+” by India Ratings & Research Private Limited. Any downgrade in our credit ratings may increase interest rates for refinancing our outstanding debt, which would increase our financing costs, and adversely affect our future issuances of debt and our ability to raise new capital on a competitive basis, which may adversely affect our business, financial condition, cash flows and results of operations.

The Indian banking industry is intensely competitive and our inability to compete effectively may adversely affect our business.

We face intense competition from Indian and foreign commercial banks in all our products and services. Some Indian banks have larger customer and deposit bases, larger branch networks and wider capital base than we have. Further, some banks have recently experienced higher growth, achieved better profitability and increased their market shares relative to us. We also face competition in some or all of our products and services from NBFCs, mutual funds and other entities operating in the financial sector.

Private and Confidential – Not for Circulation

Liberalisation of the Indian financial sector could also lead to a greater presence or new entries of Indian and foreign banks offering a wider range of products and services, which could adversely affect our competitive environment. The RBI has recently issued the Guidelines on Licensing of New Banks in the Private Sector and intends to issue licences on an on-going basis, subject to the RBI’s qualification criteria. Thus far, the RBI has granted “in-principle” approval to two applicants to set up new banks under these guidelines. Further guidelines for licensing of small banks in private sector and licensing of payment banks was released by RBI on 27th November 2014.So far RBI had received 72 applications for small bank license and 41 applications for payment bank license. The issuance of new banking license may increase competition in banking sector and which my adversely affect our business.

We also compete with foreign banks with operations in India. These competitors include a number of large multinational banks and financial institutions. In November 2013, the RBI released a framework for the setting up of wholly owned subsidiaries in India by foreign banks. The framework encourages foreign banks to establish a presence in India by granting rights similar to those received by Indian banks, subject to certain restrictions and safeguards. Under the current framework, wholly-owned subsidiaries of foreign banks are allowed to raise Rupee resources through issue of non-equity capital instruments. Further, wholly-owned subsidiaries of foreign banks may be allowed to open branches in Tier 1 to Tier 6 centres (except at a few locations considered sensitive on security considerations) without having the need for prior permission from RBI in each case, subject to certain reporting requirements. The guidelines may result in increased competition from foreign banks.

In addition, the moderation of growth in the Indian banking sector is leading to greater competition for business opportunities. We may face attrition and difficulties in hiring at senior management and other levels due to competition from existing Indian and foreign banks, as well as new banks entering the market. Due to such intense competition, we may be unable to execute our growth strategy successfully and offer competitive products and services, which may materially and adversely affect our business, financial condition and results of operations.

We are involved in various legal proceedings, which if determined against us, could have an adverse impact on our financial condition, cash flows and results of operations.

Our Bank is involved in various civil, criminal, taxation and regulatory proceedings. Most of these proceedings are incidental to our business and banking operations and have generally arisen in relation to recovery of dues from our borrowers, claims and consumer complaints from our customers and in relation to certain claims from dismissed employees.

We cannot assure you that these legal proceedings will be decided in our favour. In addition, should any developments arise, such as changes in Indian law or rulings against us by the regulators, courts or tribunals, we may need to make provisions in our financial statements, which could increase our expenses and current liabilities. If we fail to successfully defend our claims or if our provisions prove to be inadequate, our financial condition and results of operations could be adversely affected.

Private and Confidential – Not for Circulation

We are exposed to fluctuations in foreign exchange rates.

We undertake various foreign exchange transactions to hedge our customers’ business and for proprietary trading, which exposes us to various kinds of risks, including credit risk, market risk and exchange risk. We have adopted a market risk management policy, which is also articulated in our asset liability management policy, to mitigate risks through various risk limits such as counterparty limits, country wide exposure limits, daylight limits, overnight open position limits, aggregate gap limits and value at risk limits. Adverse movements in foreign exchange rates may also impact our borrowers negatively, which may in turn impact the quality of our exposure to these borrowers. Volatility in foreign exchange rates could materially and adversely affect our financial condition and results of operations.

We are exposed to possible losses arising out of derivative transactions, which could have a material adverse effect on our financial condition and results of operations.

We undertake foreign exchange forward contracts for our customers and hedge them with other banks. We are also engaged in the proprietary trading of foreign exchange forward contracts.

Our proprietary derivative transactions are subject to regular monitoring by our risk assessment committee to ensure compliance with limits prescribed by the RBI. However, we cannot assure you that we will be able to anticipate the movement in foreign exchange or at all. Failure to anticipate the foreign exchange movement could cause us to incur losses in such derivatives or forward contracts, thereby adversely affecting our financial condition and results of operations.

We lease most of our business premises and any failure to renew such leases or their renewal on terms unfavourable to us may affect our business, financial condition and results of operations.

Most of our business premises are leased. A failure to renew these lease agreements or a failure to renew these lease agreements on terms favourable to us may require us to relocate operations. If we are required to relocate operations, this may cause a disruption in our operations or result in increased costs, or both, which may adversely affect our business, financial condition and results of operations.

We may also face the risk of being evicted in the event that our landlords allege a breach on our part of any terms under these lease agreements. This may cause a disruption in our operations or result in increased costs, or both, which may adversely affect our business, financial condition and results of operations.

We may face labour disruptions that would interfere with our operations and have an adverse impact on our business, financial condition, cash flows and results of operations.

Private and Confidential – Not for Circulation

We are exposed to the risk of strikes and other industrial actions. Most of our employees up to Scale IV are unionised and are members of South Indian Bank Officer’s Association and South Indian Bank Employees Association. While our relations have been good with our employees, we cannot guarantee that our employees will not undertake or participate in strikes, work stoppage or other industrial action in the future. Any such event could disrupt our operations, possibly for a significant period of time, result in increased wages and other benefits or otherwise have an adverse effect on our business, financial condition, cash flows and results of operations.

We depend on the accuracy and completeness of information about customers and counterparties and any misrepresentation, errors or incompleteness of such information could cause our business to suffer.

In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information furnished to us by or on behalf of customers and counterparties, including financial statements and other financial information. We may also rely on certain representations as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit, we may assume that a customer’s audited financial statements conform to generally accepted accounting principles and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer.

The difficulties associated with the inability to accurately assess the value of collateral and to enforce rights in respect of collateral, along with the absence of such accurate statistical, corporate and financial information, may decrease the accuracy of our assessments of credit risk, thereby increasing the likelihood of borrower default on our loan and decreasing the likelihood that we would be able to enforce any security in respect of such a loan or that the relevant collateral will have a value commensurate to such a loan.

Difficulties in assessing credit risks associated with our day-to-day lending operations may lead to an increase in the level of our non-performing and restructured assets, which could materially and adversely affect our business, financial condition and results of operations.

Our introduction of new products and services may not be successful and, as a result our reputation could be harmed.

We may incur substantial costs to expand our range of products and services and cannot guarantee that such new products will be successful once they are offered as a result of circumstances beyond our control, such as general economic conditions, or due to inherent shortcomings of such products and services. In addition, we may not correctly anticipate our customers’ needs or desires, which may change over time. In the event that we fail to develop and launch new products or services successfully, we may lose any or all of the investments that we have made in promoting them, and our reputation with our customers would be harmed. In addition, if our competitors are better able to anticipate the needs of those individuals in our target market, our market share could decrease and our business could be adversely affected.

Private and Confidential – Not for Circulation

Our insurance coverage could prove inadequate to satisfy potential claims. If we were to incur a serious uninsured loss or a loss that significantly exceeds the limits of our insurance policies, it could have a material adverse effect on our financial condition and results of operations.

We have taken out insurance within a range of coverage consistent with industry practice in India to cover certain risks associated with our business. We cannot assure you that our current insurance policies will insure us fully against all risks and losses that may arise in the future. Even if such losses are insured, we may be required to pay a significant deductible on any claim for recovery of such a loss, or the amount of the loss may exceed our coverage for the loss.

In addition, our insurance policies are subject to annual review, and we cannot assure you that we will be able to renew these policies on similar or otherwise acceptable terms, or at all. If we were to incur a serious uninsured loss or a loss that significantly exceeds the limits of our insurance policies, it could have a material adverse effect on our financial condition and results of operations.

B. Issuer Information

a. Name and address of the following:- i. Registered Office of the Issuer The South Indian Bank Ltd SIB House, T.B. Road, Mission Quarters, Thrissur- 680 001, Kerala, India. Ph: +91-487-2420020, 2420058, 2420113; Fax: +91 487 2442021 Email: [email protected]; [email protected]

ii. Corporate Office of the Issuer The South Indian Bank Ltd SIB House, T.B. Road, Mission Quarters, Thrissur- 680 001, Kerala, India. Ph: +91-487-2420020, 2420058, 2420113;

Private and Confidential – Not for Circulation

Fax: +91 487 242442021 Email: [email protected]; [email protected] iii. Compliance Officer of the Issuer Shri. Jimmy Mathew Company Secretary The South Indian Bank Ltd Corporate Office, SIB House, Mission Quarters, Thrissur -680 001, Kerala, India. Ph No. 0487 – 2429333 Fax No. 0487 - 2424760 Email: [email protected] iv. CFO of the Issuer Shri. Gireesh C. P Chief Financial Officer (CFO) The South Indian Bank Ltd Corporate Office, SIB House, Mission Quarters, Thrissur -680 001, Kerala, India. Ph No. 0487 – 2429628 Fax No. 0487 - 2442021 Email: [email protected] v. Arrangers& Escrow Agent Kotak Mahindra Bank Limited Contact Person: Ram S, Senior Vice President, DCM 27BKC, Plot No. C-27 G-Block, BandraKurla Complex Mumbai-400051

Private and Confidential – Not for Circulation

Maharashtra, India Email: [email protected]

vi. Trustee of the Issue IDBI Trusteeship Services Ltd. Asian Building, Ground Floor, 17, R.Kamani Marg, Ballard Estate, Mumbai-400001 Tel: +91-22-4080 7000 Fax: +91-22-6631 1776 Email: [email protected] Website: www.idbitrustee.com vii. Registrar of the Issue BTS Consultancy Services Pvt. Ltd M S Complex, 1st Floor, Plot No.8, Sastri Nagar, Near RTO / 200 Feet Road, Kolathur, Chennai–600099 Phone: 044–2556 5121 Fax No: 044 – 2556 5131 Email: [email protected] viii. Credit Rating Agencies Credit Analysis & Research Limited India Ratings & Research 4th Floor, Godrej Coliseum, S 206, Manipal Centre, Somaiya Hospital Road Dickenson Road, Off Eastern Express Highway, Bangalore 560 042. Sion(E), Mumbai- 400 022 Ph: +91 80 4206 6191/92 Ph: +91-22-6754 3456 Fax: +91 80 4206 6194

Private and Confidential – Not for Circulation

Fax: +91-22-6754 3457 Email. www.indiaratings.co.in Email: [email protected] ix. Auditors of the Issuer as on 30/06/2015

M/s S.R. Batliboi& Associates LLP Chartered Accountants 6th& 7th Floor – “A” Block, Tidel Park, (Module 601,701 & 702) No. 4, Rajiv Gandhi Salai, Taramani, Chennai – 600 113, India. Tel : +91 44 6654 8100 Fax : +91 44 2254 0120

Note: As per the RBI policy of compulsory rotation of auditors, M/s S.R. Batliboi& Associates LLP,Chartered Accountantsare not eligible for reappoint as they have completed the permissible term of 4 years. The shareholders of SIB during the 87th AGM held on 15.07.2015 have appointed the M/s Deloitte Haskins & Sells, Chartered Accountant as the statutory auditors of the Bank for the next 4 years.

M/s Deloitte Haskins & Sells Chartered Accountants Chennai India x. Legal counsel to the issue M/s Khaitan& Co One Indiabulls Centre 13th Floor, Tower1 841 SenapatiBapat Marg Mumbai 400 013 Tele No 022 – 66365000

Private and Confidential – Not for Circulation

b. A brief summary of the business/ activities of the Issuer and its line of business containing at-least following information:-

i. Overview We were incorporated on January 25, 1929 in Thrissur, Kerala, with the goal of providing a safe, efficient and service- oriented repository of savings to the local community and to reduce the dependence of the business community on moneylenders by providing need-based credit at a reasonable rate of interest. We became a scheduled bank in 1946.

We are one of the leading scheduled commercial banks in South India and offer a wide range of products and services to corporate and retail customers through a variety of delivery channels. We have a pan-India presence and as of June 30th, 2015, we had 828 branches and 1200 ATMs, located in 27 states and three union territories. As on March 31, 2015 we had no subsidiaries.

We have three main business lines:

 Retail Banking;

 Corporate Banking; and

 Treasury Operations.

Our retail banking portfolio consists of savings, demand and time deposit services, housing loans, auto loans, educational loans, other personal loans, loans backed by gold, and other personal banking products. We also provide agricultural loans. We offer our customers a suite of technological products, including global debit cards, “anywhere banking” facilities, mobile banking, a Real-Time Gross Settlement System (“RTGS”), National Electronic Fund Transfer (“NEFT”) and Internet banking. We also distribute third party financial products, such as insurance (life and non-life) and mutual fund products. In addition, we provide depository services and are a depository participant for CDSL. We also sell gold bars and coins through our branches in Kerala, Tamil Nadu, Karnataka and Andhra Pradesh.

Private and Confidential – Not for Circulation

Our customer base is geographically and economically diverse, although most of our customers are in South India. We also serve the NRI market. We have remittance facilities for NRIs by way of draft-drawing arrangements and speed remittance facilities under the name SIB EXPRESS. We also provide managerial support to four exchange houses in the UAE to facilitate instantaneous credit of remittances from overseas by electronic transmission. OurSIB PravasiSwagath loan scheme caters for NRIs returning to India on a permanent basis.

We offer various banking products to our corporate and commercial customers, including term loans, short term loans, cash credit, working capital finance, export credit, bill discounting, line of credit, letters of credit and guarantees.

Our treasury operations comprise liquidity management by seeking to maintain an optimum level of liquidity, while complying with the CRR and the SLR. We maintain the SLR through a portfolio of central Government, state Government and Government-guaranteed securities that we actively manage to optimise yield and benefit from price movements. We are also involved in the trading of debt securities, equity securities and foreign exchange within permissible limits.

We have received numerous awards. Some of our more recent awards include Best Bank (Private Sector) in the BFSI (Banking, Financial Services and Insurance) Awards 2015 instituted by ABP News,prestigious Banking Technology Excellence Award (tenth Edition - 2014) for “Best It Team’ from IDBRT, Inspiring Work Places award from Banking Frontiers in 2014, Award from the Sunday Standard, instituted by the New Indian Express Group, for Best Banker (mid- sized) 2013, Best Private Sector Banker, Best Banker – All Round Expansion and Best Banker – Efficiency and Profitability. We also received the Prestigious IBA Banking Technology Award 2012-2013, the Business Excellence Award 2012-2013 instituted by the Trivandrum Chamber of Commerce and Industry. From the Institute for Development and Research in Banking Technology at its Banking Technology Excellence Awards, we received the “Best Bank Award among Small Banks for IT Implementation and Management” in 2011 and the “Best Bank Award among Small Banks for Managing IT Risk” in 2012. We also received awards for “Asset Quality” and “Priority Sector Lending” at the Dun & Bradstreet Banking Awards 2010-2011. We were named “India's Best Bank, 2010” in the small bank category (balance sheet size less than Rs. 300,000.0 million) by Business World and PricewaterhouseCoopers Best Banks Survey, 2010

Private and Confidential – Not for Circulation

Performance:

Our gross advances plus deposits aggregated were Rs. 83,894.19 crores, Rs. 89638.13crores and total assets were Rs. 54,985.97 crores, Rs. 59116.32 crores as of March 2014 and 2015 respectively. Our total income was Rs. 5383.53 crores and Rs. 5783.29crores for the financial years 2014 and 2015 respectively. Our net profit (after tax) was Rs. 507.50crores and Rs. 307.20crores for the financial years 2014 and 2015, respectively.

Deposits

Total Deposits of the bank grew by Rs. 4421.40 crores from Rs. 47,491.09 crores as on 31.03.2014 to Rs. 51,912.49 crores as on 31.03.2015 registering a growth of 9.31%. Of the total growth in Deposits, Term Deposit increased by Rs. 3560.00crores from Rs.37666.19crores as on 31.03.2014 to Rs.41226.19 crores as on 31.03.2015, which registered a growth of 9.45% in percentage terms and CASA Deposits increased by Rs. 861.39crores from Rs. 9,824.90 crores as on 31.03.2014 to Rs. 10,686.29crores as at 31.03.2015 registering a growth of 8.77%.

Advances

Gross Advances of the bank grew by Rs. 1322.54 crores from Rs. 36403.10 crores as on 31.03.2014 to Rs. 37725.64 crores as on 31.03.2015 registering a growth of 3.63%.

Income:

Total Income. Our total income increased by 7.43% to Rs.5783.29crores for the financial year 2015 from Rs. 5,383.53 crores for the financial year 2014as a result of a 5.41% increase in interest earned as well as 34.90% increase in other income.

Interest Earned. Our interest earned increased by 5.41% to Rs. 5286.22crores for the financial year 2015 from Rs. 5015.06crores for the financial year 2014. The primary reasons for this increase are discussed below.

Private and Confidential – Not for Circulation

Interest received and discounts on advances and bills increased by 5.15% to Rs. 4152.97crores for the financial year 2015 from Rs. 3949.74crores for the financial year 2014, due to a 9.65% increase in average advances to Rs. 35,272.74crores for the financial year 2015 from Rs. 32168.97crores for the financial year 2014, which was partially offset by a decrease in average yield on advances to 11.77% during the financial year 2015 from 12.28% during the financial year 2014.

 Income from investments increased by 10.40% to Rs. 1053.73crores for the financial year 2015 from Rs. 954.48crores for the financial year 2014, which was mainly due to a 11.05% increase in average investments toRs. 14638.79crores for the financial year 2015 from Rs. 13182.24crores for financial year 2014, in spite of decrease in the average yield on investments from 7.24% for the financial year 2014 to 7.20% for the financial year 2015.

 Interest on other inter-bank funds decreased by 28.25% to Rs. 79.53crores for the financial year 2015 from Rs. 110.85crores for the financial year 2014. This decrease was primarily due a 18.18% decrease in average inter-bank funds to Rs. 980.08crores for the financial year 2015 from Rs. 1,197.83crores for the financial year 2015, which was mainly due todecrease in the average yield on average inter-bank funds from 9.25% for the financial year 2014 to 8.11% for the financial year 2015.

Other Income. Our other income increased by 34.90% to Rs.497.07crores for the financial year 2015 from Rs. 368.46 crores for the financial year 2014. The primary reasons for this increase are discussed below.

 Miscellaneous income increased by 18.37% to Rs. 255.34crores for the financial year 2015 from Rs. 215.74 crores for the financial year 2014. This increase was primarily due to a 16.93 % increase in transaction related income (such as loan syndication fees and other transaction charges) from Rs.107.70 crores in financial year 2014 to 125.94 crores in financial year 2015 and a 26.13% increase in income from technology products (primarily due to card operation) from Rs. 67.76 crores in financial year 2014to 85.47crores in financial year 2015 and a 903.33% increasein interest income from IT refund from Rs. 0. 90 crores in financial year 2014 to9.03crores in financial year 2015.

 Net profit on foreign exchange transactions decreased by 9.45% to Rs. 31.59crores for the financial year 2015 from Rs. 34.89crores for the financial year 2014, which was primarily due to revaluation loss and decrease in the volume of foreign exchange transactions.

Private and Confidential – Not for Circulation

 Net profit on sale of investments increased by 135% to Rs.163.99crores for the financial year 2015 from Rs. 69.88 crores for the financial year 2014, which was primarily due to increased profit on sale of Government securities during the financial year 2014-15 on account of favourable yield movement.

 Commission income decreased by 1.25% to Rs. 46.55crores for the financial year 2015 from Rs. 47.15crores for the financial year 2014 due to adecrease in business volumes.

Expenditure

Our total expenditure increased by 12.31% to Rs. 5476.09 crores for the financial year 2015 from Rs. 4,876.03 crores for the financial year 2014 as a result of a 8.40% increase in interest expended, a 11.15% increase in operating expenses, a 166.43% increase in provisions (other than tax) and contingencies, which was partially offset by 27.41% decrease in provision for tax.

Interest Expended. Our interest expended increased by 8.40% to Rs 3,919.99 crores for the financial year 2015 from Rs.3,616.29crores for the financial year 2014. The primary reasons for this increase are discussed below.

 Interest paid on deposits increased by 6.08% to Rs. 3661.78 crores for the financial year 2015 from Rs. 3,451.82 crores for the financial year 2014, which was primarily due to a 8.17% increase in average deposits to Rs. 47151.34crores for the financial year 2015 from Rs. 43588.38crores for the financial year 2014, which was partially offset by the decrease in the average cost of deposits from 7.92% for the financial year 2014 to 7.77% for the financial year 2015.

 Interest paid on RBI / inter-bank and other borrowings increased by 29.61% to Rs. 121.04crores for the financial year 2015 from Rs. 93.39crores for the financial year 2014, which was due to a 25.28% increase in average RBI / inter-bank and other borrowings to Rs. 2381.90crores for the financial year 2015 from Rs. 1901.29 crores for the financial year 2014 and an increase in the average cost of average RBI / inter-bank and other borrowings from 8.65% for the financial year 2014 to 10.84% for the financial year 2015.

Operating Expenses.Our operating expenses increased by 11.15% to Rs. 981.30 crores for the financial year 2015 from Rs. 882.89 crores for the financial year 2014. The primary reasons for this increase are discussed below.

Private and Confidential – Not for Circulation

 Payments to and provisions for employees increased by 19.80% to Rs.633.69crores for the financial year 2015 from Rs. 528.96 crores for the financial year 2014. The primary reasons for this increase was due to an increase in the number of employees to 7825 as of March 31, 2015 from 7,111 as of March 31, 2014 as well as increases in salaries and retirement benefits for employees due to the Xthbipartite settlement.

 Our other operating expenses decreased by 1.79% to Rs. 347.60crores for the financial year 2015 from Rs. 353.93 crores for the financial year 2014, which was mainly due to reversal ofexcess depreciation due to change in accounting policy as follows :-

. 56.59 % decrease in printing and stationery to Rs. 10.52crores for the financial year 2015 from Rs. 24.24crores for the financial year 2014.

Provisions and Contingencies. Our provisions and contingencies increased by 52.53% to Rs.574.60crores for the financial year 2014 from Rs. 376.84 crores for the financial year 2014. The primary reasons for this increase are discussed below

Our Provisions (Other than Taxes) and Contingencies. Our provisions (other than tax) and contingencies increased by 166.43% to Rs414.05crores for the financial year 2015 from Rs. 155.41 crores for the financial year 2014. The primary reasons for this increase are discussed below.

 Our provision for NPAs/NPI’s increased by 63.06% to Rs. 223.58crores for the financial year 2015 from Rs. 137.12 crores for the financial year 2014. Our provision coverage ratio decreasedto 60.63% as of March 31, 2015 from 62.71% as of March 31, 2014. Our gross NPA ratio has increasedto 1.71% as of March 31, 2015 from 1.19% as of March 31, 2014 and our net NPA ratio has also increased to 0.96% as of March 31, 2015 from 0.78% as of March 31, 2014.

 Our provision for standard assets increased by 0.90% to Rs. 31.37crores for the financial year 2015 from Rs. 31.09 crores for the financial year 2014. The primary reason for this increase was in Advance portfolio as compared to FY 2014.

Private and Confidential – Not for Circulation

 Our provision for restructured assets increased by 235.70% to Rs. 32.55crores for the financial year 2015 from Rs. 9.70 crores for the financial year 2014. The primary reason for this is on account of higher incremental restructured advance in 2015 as compared to that of FY 2014.

 Our provision for depreciation in the value of investments in the financial year 2015 has increased to Rs 13.72 crores,compared to write back during the previous financial year 2014Rs 28.46 crores, which was due to lower provision requirement on account of favourable market movement in the financial year 2014 compared to FY 2015.

Provision for TaxOur total provision for tax decreased by 27.41% to Rs. 160.75croresfor the financial year 2015from Rs. 221.44 croresfor the financial year 2014. This decrease was primarily due to our provision for current tax decreasedby 16.71% to Rs. 201.89crores in the financial year 2015 from Rs. 242.38 crores in the financial year 2014, which was primarily due to an 38.87% decrease in our profit before tax to Rs. 445.60crores for the financial year 2015 from Rs. 728.94 crores for the financial year 2014,.

Profit

As a result of the above, our net profit decreased by 39.47% to Rs.307.20crores for the financial year 2015 from Rs.507.50crores for the financial year 2014.

Capital Adequacy

The Bank is subject to the capital adequacy guidelines stipulated by RBI, which are based on the framework of the Basel Committee on Banking Supervision. As per Basel III guidelines, the Bank is required to maintain a minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9% {11.5% including Capital Conservation Buffer (CCB)}, with minimum Common Equity Tier I (CET1) of 5.5% (8% including CCB) as on 31st March 2019. These guidelines on Basel III are to be implemented beginning 1st April 2013 in a phased manner, the minimum capital required to be maintained by the Bank for the year ended 31st March 2014 is 9% with minimum Common Equity Tier 1 (CET1) of 5%.

The bank is following standardized approach, Standardized Duration approach and Basic Indicator approach for measurement of capital charge in respect of credit risk, market risk and operational risk respectively. Besides, computation of CRAR under the Pillar I requirement, the Bank also periodically undertakes stress testing in various risk

Private and Confidential – Not for Circulation

areas to assess the impact of stressed scenario or plausible events on asset quality, liquidity, profitability and capital adequacy. The bank conducts Internal Capital Adequacy Assessment Process (ICAAP) on annual basis to assess the sufficiency of its capital funds to cover the risks specified under Pillar- II of Basel guidelines. The adequacy of banks‟ capital funds to meet the future business growth is also assessed in the ICAAP document. ii. CRAR of the Bank CRAR of the Bankunder Basel II Guidelines dipped from 12.53% as on 31.03.2014 to 12.06% as on 31.03.2015 this was mainly due to increase in credit risk weighted assets on account of increase in advance portfolio and restructured accounts and also on account of increase in capital charge for market risk due to change in investment portfolio. The Capital Adequacy Ratio of the Bank under Base III guidelines stands at 12.01 % as at 31.03.2015.

Private and Confidential – Not for Circulation

iii. Corporate Structure

The Corporate Structure of the Bank as on June 30, 2015 is as follows

ORGANISATION CHART AS ON 30.06.2015

BOARD

M D & C E O Mr.V.G.Mathew

S V P (ADMIN) S V P (OPERATIONS) C G M G M (Vigilance) Mr. Joseph George Kavalam Mr.Varughese A G Mr. Thomas Joseph K Mr. Bobby James

Secretary to MD Mr. George K Varghese 49

Private and Confidential – Not for Circulation

S V P (ADMIN) Mr. Joseph George Kavalam

G M A G M (Security) G M A G M G M (ADMIN.) D G M (S T C) D G M (C (Inspection & Capt.ArvindKum (MARKETING) (Secretarial) Mr. Paul V L Mr.Mohanan K. F M) Vigilance) arKamboj Mr. Raphael T J Mr. Jimmy Mr. Bobby James Mathew Mr.Gi reesh

C P

DGM D G M (2) A G M (Inspection) (Marketing) A G M (2) (C F M) Mr. Jose P Mr. Sony A (Personnel) Mr. Paul Varghese Ms Usha L Mr. Roy Dominic P Antony

Mr. Jacob M P Maliakal

A G M (2) (Marketing) C M (2) A G M Mr. Jose M T (S T C) (Inspection) Mr.Raghunath A Mr.Rajan P V C M

C M (2) C M (2) (C F M) (Personnel) (S W D) C M C M (6) (Vigilance) (Marketing)

C M (2) C M (Inspection) (OMT) 50

Private and Confidential – Not for Circulation

S V P (OPERATIONS) Mr.Varughese A G

G M (ADMIN.) D G M G M G M D G M

Mr.Paul V L (Compliance) (Treasury) (DICT) A G M (Hadi) (IRMD) Ms.Chithra H Mr.Murali N A Mr. Raphael T J Mr. Paul A F Mr.Sibi P M

D G M D G M A G M (2) D G M (2) A G M (P & M) (P & D) (Treasury) (DICT) (IRMD) Mr. Jose Paul P Mr. Jose Mr.Chandramgethen K K Mr.Shibu K Thomas Mr.Biju E

Manuel Mr.Purushothaman K S Mr.SreekumarChengath Punnachalil

A G M (2)

A G M (Compliance) A G M A G M (2) (P & D) Mr. Jose K L (IBD) (DICT) Mr.Santhosh Mr. Jacob E T Mr. Peter C A Mr. Davis Jose Thettayil Arnold John M Mr. Jose Sebastian E

C M (IRMD)

C M C M (3) (P & M) C M (2) (Compliance) C M (12) (P & D) (DICT)

Private and Confidential – Not for Circulation

CGM Mr. Thomas Joseph K

GM (Marketing) DGM (Legal) Mr. Raphael T J Mr. Mohan T M

DGM DGM RECOVERY AGM (Legal) GM CORPORATE Mr.Biby Augustine (Retail Hub) Mr. Paul Thaliath Ms.Usha L Mr.Benoy Varghese

CM (5) DGM CORPORATE GM RETAIL AGM RECOVERY AGMMONITORING (Retail Hub) Mr. Ram Mohan V Mr.Balakrishnan K Mr. John Thomas Ms.Geetha K N

CM C M RECOVERY CM SANCTION (2) CM LAM SM SAM CDMC

AGM MSME DGM PS& EXP Mr. Prakash M K Mr.Krishnadas P B

AGM-CREDIT, MARK. & INTEL. CM CM PS, CM-CPPI Mr.Babu T L OTHERRETAIL MIS&GOVTSCHEME

Private and Confidential – Not for Circulation

iv. Key Operational and Financial Parameters for the last 3 Audited Years

Key Operational and Financial Parameters of the Bank for the last 3 Audited years and Unaudited Results up to 30.06.2015 on a standalone basis are as under (Rs.incrore)

For FY For FY For FY For FY Particulars Up to 30.06.2015 2014-15 2013-14 2012-13 2011-12 Capital 135.02 135.02 134.39 133.85 113.37 Reserves & Surplus 3519.72 3,454.39 3233.65 2869.76 2054.11 Net worth 3360.93 3294.87 3123.94 2726.09 1884.23 52,323.75 51,912.49 47491.09 44262.3 36500.53 Deposits 0 Borrowings 1,660.43 2,232.47 2730.78 1284.55 588.19 Other Liabilities & 1301.50 1,381.95 1396.06 1244.57 1113.85 Provisions (including employees stock option outstanding) Cash and Balances 2,417.08 2,441.58 2200.81 1696.70 1571.84 with Reserve Bank of India Balances with Banks 824.66 1,153.50 1017.12 2639.20 1068.70 and money at call and short notice 15,994.37 16,717.16 14351.78 12523.4 9399.87 Investments 7 38,242.97 37,391.64 36229.86 31815.5 27280.74 Advances 3 478.43 479.05 412.20 396.12 377.50 Fixed Assets

982.92 933.39 774.20 724.01 671.40 Other Assets

21006.74 27,220.07 19134.96 10583.3 5458.05 Contingent Liabilities 6

588.07 554.44 696.25 479.14 425.89 Bills for Collection 1,376.68 5,286.22 5015.06 4434.29 3583.42 Interest earned

103.83 497.07 368.46 334.93 247.07 Other Income

1,036.34 3,919.99 3616.29 3153.46 2561.69 Interest expended

263.28 981.30 882.89 767.17 617.29 Operating expenses

Private and Confidential – Not for Circulation

Provisions and 115.60 574.80 376.84 346.31 249.86 contingencies (including tax) Net Profit for the 65.29 307.20 507.50 502.27 401.66 Period 1.85 1.71 1.19 1.36 0.97 Gross NPA (%)

1.21 0.96 0.78 0.78 0.28 Net NPA (%)

Tier I Capital 10.04 10.43 10.79 12.05* 11.54* Adequacy Ratio (Basel III (%) Tier II Capital 1.43 1.58 1.63 1.86* 2.46* Adequacy Ratio (Basel III) (%) * As per Basel II Norms

Gross Debt: Equity Ratio of the Company :-( Based on figures as on 30thJune 2015)

Before the issue After the issue of Particulars of bonds bonds 1,660.43 Total Borrowing (Rs. Crore) 2160.43

Net worth (Rs. Crore) 3360.93 3360.93 Borrowings / Equity Ratio 0.49 0.64 Note: Borrowings does not include deposits

v. Project Cost and means of financing, in case of funding of new projects

The funds being raised by the Issuer through present issue of Tier II bonds are not meant for financing any particular project. The Bank shall utilize the proceeds of the issue for augmenting its Tier II and overall capital base and for the purpose of its regular business activities & other associated business objectives.

c. A brief history of the Issuer since its incorporation giving details of its activities:-

The South Indian Bank Limited was incorporated on January 25, 1929, under the Companies Act 1913 by a group of prominent enterprising citizens of Thrissur town in Kerala. The Bank came into being during the Swadeshi movement. The establishment of the bank was the fulfilment of the dreams of a group of enterprising men who joined together at Thrissur, a major town (now known as the Cultural Capital of Kerala), in the erstwhile State of Cochin to provide for the people a safe, efficient and service oriented

Private and Confidential – Not for Circulation

repository of savings of the community on one hand and to free the business community from the clutches of greedy money lenders on the other by providing need based credit at a reasonable rates of interest.

It is one of the leading scheduled commercial banks in the Private Sector, with a good track record and pan India presence. In 1960 when there was crisis in the banking industry SIB took over 15 other Banks. Over the years, SIB has steadily grown and as at 30th June 2015 the bank has a network of 828branches and 1200 ATMs spanning 27 states and 3 Union Territories.SIB has been following a policy of upgrading technologies, expanding and modernizing its network of branches to meet the growing demands of customer service and reach. SIB is the first amongst all the Private Sector banks in Kerala to open a currency chest on behalf of Reserve Bank of India.

A team of dedicated and qualified staff is managing the day-to-day affairs of SIB. In order to keep its employees abreast of the changes in banking and trade scenario, SIB regularly conducts staff training programs through its own staff training college. In addition SIB deputes its officers for training at Banker's Training College, RBI Training College (College of agriculture banking,Pune), National Institute of Bank Management, Pune etc.

SIB has successfully completed its public issue in October 1998, and rights issue during September 2004, which led to its paid up capital expanding to 47.68 crores. During 2005- 06, 2.27 crores equity shares were issued by way of FPO on account of which the paid up share capital was increased to Rs. 70.40 crores. In 2007-08, Qualified Institutional Placement of equity shares 2 crores took the share capital to 90.41 crores. In 2008-09, bank had issued 2.26 crores bonus shares to raise the capital to Rs. 113.01crores. During FY 2012-13, the bank again raised its paid up share capital by Rs.20 crores by way of qualified Institutional Placement, on account of this the paid up share capital increased to Rs133.85 crores. Presently the paid up share capital of the bank as on 30.06.2015 comes Rs 135.02 crores

Translating the vision of the founding fathers as its corporate mission, the bank has during its long sojourn been able to project itself as a vibrant, fast growing, service oriented and trend setting financial intermediary.

Milestones

1929 South Indian Bank was established at Trichur, Kerala State. 1941 First branch outside Kerala (Coimbatore) was opened. 1946 First private sector Bank in Kerala to become a scheduled Bank. The Bank took over the assets and liabilities of the Kshemavilasam Banking Co., Ltd., 1963 Trichur, and the Ambat Bank Private Ltd., Chittur, Cochin.

The Following banks were taken over: Public Bank, Ltd., Pudukad; Subarban Bank (P) Ltd., Trichur; Vijaya Lakshmi Bank (P) Ltd., N. Parur; Chalakudy Bank, Ltd., Chalakudy; Mukkattukara Catholic Bank, Ltd., Mukkattukara; Assyrian Charities Banking Co., Ltd., Trichur; Catholic Syrian Christian Bank, Ltd., Kanjany; Malabar Bank, Ltd., Trichur; Bharatha Union Bank, Ltd., Trichur; Kozhuvanal Bank, Ltd., Kozhuvanal. The business 1964 of the Bank crosses Rs. 10 Crore.

Private and Confidential – Not for Circulation

1970 The business of the Bank crosses Rs. 25 Crores 1977 The business of the Bank crosses Rs. 100 Crores mark 1986 Total business crosses Rs. 500 Crores. The Bank made an entry into merchant banking activities by supporting underwriting 1990 to 99 New Issues.

The bank was selected by RBI to open and operate a currency chest on its behalf, the first private sector bank in Kerala. The FIRST bank in Kerala to develop an in-house, a fully integrated branch automation software in addition to the in-house partial automation solution operational. The first private sector bank to open NRI Branch. The first among the Kerala based banks to offer Credit Card to customers. Total 1992 business crosses Rs. 1000 crores mark 1993 The first bank in the private sector to start an Industrial Finance Branch. The FIRST among the private sector banks in Kerala to open an "Overseas Branch" to cater exclusively to the export and import business. 1998 Bank went Public with an IPO. 2000 The business of the Bank crosses Rs. 5000 Crores The Bank launched its comprehensive and centralised banking solution, Sibertech, 2001 which will run on Finacle platform provided by Infosys Technologies of Bangalore. The Bank entered into new alliances with three exchange houses in the Gulf. Ties up with insurance player for the distribution of the products of the insurance 2002 company. Offers VRS to permanent eligible employees of the bank. Sets up an ATM in Kovai, which is its first online ATM outside its home, Kerala. Launches its Internet Banking Facility, Sibernet, to provide better services for 2003 customers. Enters into an agreement with Master Card International to Launch Maestro, the global ATM - Debit card. The total business crosses Rs. 10000 crores mark. 2006 Raised capital through Follow on Public Offer 13 2007 Achieved 100% implementation of Core Banking Solution among branches. 2008 Raised capital by way of Qualified Institutional Placement 2009 Completes successful existence of 80 years and crossed Rs. 30000 Crores business. The face value of shares was sub divided from Rs.10each to 10 equity shares of Rs.1 2010 each 2011 Total Business crossed the land mark of Rs. 50,000 crores . Networth Crossed Rs.2000 Crores and Equity offering of Rs.442.60 Crores to QIBS 2012 through the QIP route 2013 Achieved target of Rs.500 crores in Net Profit, Business Exceeded Rs. 75,000 Crores 2014 Authorised Capital Increased from Rs.160 Crores to Rs. 250 Crores.

The growth of the Bank over the No. of Branches Deposits Net Advances years is given below (Rs. in crore) Year ended 1929 1 0.03 N.A 1939 5 0.06 N.A

Private and Confidential – Not for Circulation

1950 15 1.21 N.A 1960 29 4.97 3.25 1970 83 14.48 10.62 1975 149 39.51 24.25 1980 257 124.58 70.82 1985 286 287.48 168.46 1990 300 492.40 247.18 1995 333 1515.53 742.77 2000 369 3885.36 2021.08 2001 368 4668.55 2468.36 2002 376 5919.70 3231.05 2003 386 6861.27 3612.94 2004 405 8280.02 4196.82 2005 425 8492.31 5365.26 2006 446 9578.66 6370.23 2007 471 12239.21 7918.91 2008 496 15156.12 10453.75 2009 526 18092.33 11852.03 2010 580 23012.00 15822.92 2011 641 29721.07 20488.73 2012 700 36500.53 27280.74 2013 750 44262.30 31815.53 2014 794 47491.09 36229.86

2015 822 51912.49 37391.64

i. Details of Share Capital as on 30th June 2015 Share Capital Rs in crores Authorized Share Capital 250.00 Issued, Subscribed and Paid-up Share Capital 135.02 ii. The details of share capital and share premium account (before and after the issue Particulars Before the issue After the issue

(as at30.06.2015)

Share Capital 135.02 135.02

Share Premium 956.34 956.34 account

Private and Confidential – Not for Circulation

iii. Changes in its capital structure as on30th June 2015, for the last five years:-

Date of Change Amount (Increase) Particulars ( AGM/EGM)* Rs in crores 15.07.2011 Capital 25.00 Authorized Capital of the Bank is increased from Rs.125 Crore (Rupees One hundred and twenty five Crore only) to Rs.160 Crore (Rupees One hundred and sixty crore only) by creation of additional 35,00,00,000 (Thirty five crore) shares of Rs. 1/- each. 2011-12 Capital 0.37 Increase in Issued, Subscribed and paid-up share Capital pursuant to allotment of Premium 4.93 Equity shares in various tranches under SIB ESOS Scheme 2008. 2012-13 Capital 20.00 Increase in Issued, Subscribed and paid-up Premium 422.60 share Capital pursuant to allotment of Equity shares by way of Qualified Institutional Placement 2012-13 Capital 0.48 Increase in Issued, Subscribed and paid-up share Capital pursuant to allotment of Equity shares in various tranches under SIB ESOS Scheme 2008. Premium 6.41 2013-14 Capital 0.54 Increase in Issued, Subscribed and paid-up share Capital pursuant to allotment of Equity shares in various tranches under SIB ESOS Scheme 2008. Premium 7.24 16.07.2014 Capital 90.00 Authorized Capital of the Bank is increased from Rs.160 Crore (Rupees One hundred and sixty Crore only) to Rs.250 Crore (Rupees Two hundred and Fifty crore only) by creation of additional 90,00,00,000 (Ninety crore) shares of Rs. 1/- each.

2014-15 Capital 0.62 Increase in Issued, Subscribed and paid-up share Capital pursuant to allotment of Equity shares in various tranches under SIB ESOS Scheme 2008. Premium 8.34 Up to 30th June 2015 Capital 0.0015 Increase in Issued, Subscribed and paid-up share Capital pursuant to allotment of Equity shares in various tranches under SIB ESOS Scheme 2008. Premium 0.0342

Private and Confidential – Not for Circulation

iv. Equity Share Capital History of the Company as on last quarter end, for the last five years:- Consi Cumulative derati Face on Natu No. Of Equity Equity No. Of Issue Date of Valu (Cash, re of Equity Share Share Equity Price Remarks Allotment e other Allot Shares Capital Premium Shares (Rs.) (Rs.) than ment (Rs. Crore) (Rs. Crore) cash, etc.) Equi 11301134 27/09/2011 48500 1 Cash 113.01 ESOS 14.37 ty 00 511.36 Equi 16/02/2012 3636030 1 Cash ty 11337494 ESOS 14.37 30 113.37 516.22 Equi 06/05/2012 1202627 1 cash ty 11349520 ESOS 14.37 57 113.49 517.82 Equi 06/08/2012 565440 1 Cash ty 11355174 ESOS 14.37 97 113.55 518.58 Equi 20000000 ty 0 13355174 Qualified Institutional 07/09/2012 1 22.13 Cash 97 133.55 941.18 Placement Equi 702927 1 Cash ty 13362204 ESOS 17/11/2012 14.37 24 133.62 942.12 Equi 600 1 Cash ty 13362210 ESOS 17/11/2012 27.75 24 133.62 942.12 Equi 2313015 1 Cash ty 13385340 ESOS 06/02/2013 14.37 39 133.85 945.21 Equi 4350 1 Cash ty 13385383 ESOS 06/02/2013 27.75 89 133.85 945.23 Equi 1786596 1 Cash ty 13403249 ESOS 05/05/2013 14.37 85 134.03 947.61 Equi 1200 1 Cash ty 13403261 ESOS 05/05/2013 27.75 85 134.03 947.62 Equi 603614 1 Cash ty 13409297 ESOS 13/08/2013 14.37 99 134.09 948.42 Equi 1222552 1 Cash ty 13421523 ESOS 18/11/2013 14.37 51 134.22 950.06 Equi 1100 1 Cash ty 13421534 ESOS 18/11/2013 27.75 51 134.22 950.06 Equi 1794010 1 Cash ty 13439474 ESOS 18/02/2014 14.37 61 134.39 952.46 Equi 100 1 Cash ty 13439475 ESOS 18/02/2014 27.75 61 134.39 952.46 Equi 13460528 2105300 1 Cash ESOS 13/05/2014 14.37 61 134.61 955.28

Private and Confidential – Not for Circulation

Equi 1050 1 Cash ty 13460539 ESOS 13/05/2014 26.80 11 134.61 955.28 Equi 1860690 1 Cash ty 13479146 ESOS 08/08/2014 14.37 01 134.79 957.77 Equi 6750 1 Cash ty 13479213 ESOS 08/08/2014 27.75 51 134.79 957.78 Equi 9250 1 Cash ty 13479306 ESOS 08/08/2014 26.80 01 134.79 957.81 Equi 600 1 Cash ty 13479312 ESOS 08/08/2014 23.50 01 134.79 957.81 Equi 2205350 1 Cash ty 13501365 ESOS 11/11/2014 14.37 51 135.01 960.76 Equi ty 13501402 11/11/2014 3650 1 27.75 Cash 01 135.01 960.77 ESOS Equi ty 13501429 11/11/2014 2700 1 26.80 Cash 01 135.01 960.77 ESOS Equi ty 13501444 11/11/2014 1500 1 20.80 Cash 01 135.01 960.78 ESOS Equi 09/02/2015 3560 27.75 ty 13501479 ESOS 1 Cash 61 135.01 960.79 2575 Equi 13501505 09/02/2015 1 26.80 Cash ty 36 135.02 960.79 ESOS Equi 13501520 09/02/2015 1500 1 20.80 Cash ty 36 135.02 960.80 ESOS 13501558 36 3800 Equi ESOS 05/05/2015 1 26.80 Cash ty 135.02 960.81 13501597 11 3875 24.05 Equi ESOS 05/05/2015 1 Cash ty 135.02 960.82 7800 Equi 13501675 ESOS 05/05/2015 1 20.80 Cash ty 11 135.02 960.83

v. Details of any Acquisition or Amalgamation in the last 1 year:-

There was no Acquisition or Amalgamation in the last 1 year

vi. Details of any Reorganization or Reconstruction in the last 1 year:-

Type of Event Date of Date of Details Announcement Completion There was no Reorganization or Reconstruction in the last 1 year

Private and Confidential – Not for Circulation

d. Details of the shareholding of the Company as on30th June 2015:- i. Shareholding pattern of the Company as on30th June 2015:-

Total Total No. of No. of Shares in Shareholding as a Sr. No. Particulars Equity Shares Demat Form % of total no. of equity shares (A) Shareholding of Promoter and Promoter Group Financial Institution/Banks 0 0 0 (B) Public shareholding 1 Institutions (a) Mutual Funds/UTI 72607751 72607751 5.38 (b) Financial Institutions / Banks 38535443 38535443 2.85 (c) Central Government/State Government(s) 0 0 0 (d) Insurance Companies 62849084 62849084 4.65 (e) Foreign Institutional Investors 380203749 380203749 28.17 (f) Qualified Foreign Investor 0 0 0 Sub Total (B)(1) 554196027 554196027 41.05 2 Non-institutions (a) Bodies Corporate 59518554 56097544 4.41 (b) Individuals Individuals - shareholders holding nominal i) share capital up to Rs 1 Lakh 364245686 291794093 26.98 Individual shareholders holding nominal share ii) capital in excess of Rs. 1 Lakh 104738333 100658783 7.76 (c) Qualified Foreign Investor 869453 869453 0.06 (d) Any Other (specify) (d-i) Non Resident Indian 81663558 68709348 6.05 (d-ii) Trusts 893718 893718 0.07 (d-iii) Foreign National 0 0 0 (d-iv) Clearing Member 2481696 2481696 0.18 (d-v) others 181560486 180815796 13.44

Sub Total (B)(2) 795971484 702320431 58.95 Total Public Shareholding (B)=(B)(1)+(B)(2) 1350167511 1256516458 100.00 Shares held by Custodians and against which (C) Depository Receipts have been issued 0 0 0 GRAND TOTAL (A)+(B)+(C) 1350167511 1256516458 100.00

Note: There are no shares pledged or encumbered by the promoters of the Bank.

ii. List of top 10 holders of equity shares of the Company as on 30th June 2015

No. of shares Total Shareholding as Sr. Total no. of Name of the shareholders in demat % of total no. of no. equity shares form equity shares

Private and Confidential – Not for Circulation

66544763 66544763 4.93 1 FIRST CARLYLE VENTURES MAURITIUS 59739424 59739424 4.42 2 LIFE INSURANCE CORPORATION OF INDIA YUSUFFALI MUSALIAM VEETTIL ABDUL 49999998 49999998 3.70 3 KADER . 3.21 4 GKFF VENTURES 43322329 43322329 43128583 43128583 3.19 5 CX SECURITIES LIMITED DEUTSCHE SECURITIES MAURITIUS 34986189 34986189 2.59 6 LIMITED 29719091 29719091 2.20 7 IVA INTERNATIONAL FUND KOTAK MAHINDRA (INTERNATIONAL) 28500000 28500000 2.11 8 LIMITED 27606634 27606634 2.04 9 THE PABRAI INVESTMENT FUND IV, LP 24985520 24985520 1.85 10 ACACIA PARTNERS, LP

Brief particulars of management of Bank

Sri.AmitabhaGuha Sri.AmitabhaGuha, aged 66 years, is the non-executive Chairman of the Bank. Sri.V.G.Mathew Sri.V.G.Mathew, aged 61 years, is the Managing Director and CEO of the Bank. Sri. Mohan EAlapatt Sri. Mohan EAlapatt, aged 51 years, is the non-executive independent director of the Bank. Sri. K.Thomas Jacob Sri. K.ThomasJacob, aged 62 years,is the non-executive independent director of the Bank. Dr. John JosephAlapatt, aged 61 years, is the non-executive independent director of the Dr. John JosephAlapatt Bank. Sri.FrancisAlapatt Sri.FrancisAlapatt, aged 62 years, is the non-executive independent director of the Bank. Sri SalimGangadharan, aged 61 years, is the non-executive independent director of the Sri SalimGangadharan Bank Sri.CheryanVarkey Sri.CheryanVarkey,aged 63 years, is the non-executive director of the Bank. Smt.RanjanaSivanandSalgaoc Smt.RanjanaSivanandSalgaocar,aged 60 years is the non-executive independent director of ar the Bank. Sri. Parayil George John Sri. Parayil George John Tharakan,aged 54 years,is the non-executive independent director Tharakan of the Bank

e. Following details regarding the directors of the Company:- i. Details of the current directors of the Bank as on 30th June 2015

Sr. Age Director of the Name, Designation and DIN Address Details of other directorships no. (yrs.) Bank since

1. Sri.AmitabhaGuha 1. M/s.Xpro India Ltd., (Non- Executive DL-182, 1st Floor, New Delhi Chairman) 66 Sector- 2, Salt Lake 31.08.2010 2. Gangavaram Port Kolkata -700 091 DIN–02836707 Ltd., Hyderabad

Occupation: Retired 3. M/s. Power Mech

Private and Confidential – Not for Circulation

Banker Projects Limited

4. M/s. Ramkrishna Forgings Limited Kolkata

2. Sri.V.G.Mathew Variathukala, Vi (Managing Director & A,Willow Heights, CEO) Skyline Apartment, 61 GosaiKunnu,Kuriachira, 01.10.2014 NIL DIN–05332797 Thrissur, 680006, Kerala, India Occupation: Service

3. Sri. MohanEAlapatt

Non-Executive No. 503, Golf Manor, 126 Independent Director, Nal Wind Tunnel Road, 01.03.2010 51 Off Airport Road, NIL DIN–00025594 Bangalore-560 017 Occupation: Professional Service

4. Sri. K.Thomas Jacob 1. Spotmarkets Securities P Ltd. Non-Executive Independent Director, Kalappilayil, Tc. 5/2548(2), Golf Links 2. Syncon 31.08.2010 62 Road, Krishna Gardens, DIN–00812892 Management Kowdiar. Po, Trivandrum, Consultants P Ltd. 695003, Kerala, India Occupation: Professional Service

5. Dr. John JosephAlapatt

Non-Executive T-4, Nithyadhan Independent Director, Apartments, Padma 1. JanakshemamKurie Layout, Trichy Road, 24.09.2012 61 s P Ltd. DIN– 00021735 Coimbatore, 641045, Tamil Nadu, India Occupation: Professional Service

6. Sri.FrancisAlapatt 1. CII Guardian International Ltd Non-Executive H.No.37/3166, Independent Director, Palathingal, Bank Road 2. Alapatt Properties 62 KaloorErnakulam, 01.11.2013 Private Limited DIN–01419486 682017, Kerala, India

Occupation: Business

7. Sri SalimGangadharan C-26, Rnp Lane,, Non-Executive Sasthamangalam P.O, Independent Director, Vellayambalam,, M/s IFMR Rural Channels 61 16.01.2014 Trivandrum, 695010, and Services Ltd DIN–06796232 Kerala, India

Occupation: Retired (Ex-

Private and Confidential – Not for Circulation

Principal Chief General Manager, RBI)

8. Sri.CheryanVarkey Sam Villa, Non-Executive Director, PadinjarethalaAngadi, NIL Paravattani P.O., DIN–06884551 63 28.05.2014 Thrissur, 680005, Kerala, Occupation:Retired India Banker

9. Smt.RanjanaSivanandSalg 1. Achintya Real Estate Pvt. aocar Ltd. HiraVihar, Airport Road, Chicalim, Non-Executive 01.10.2014 2. Dhanistha Real Estates Independent Director, 60 MorgugoaTaluka, Goa – Pvt. Ltd. 403711 DIN–00120120 3. Ganadev Real Estate Pvt. Ltd. Occupation: Business 4. Ganapal Real Estates Pvt. Ltd.

5. Ganaraj Real Estates Pvt.

Ltd

6. Medini Real Estates Pvt.

Ltd.

7. Pyramid MetallicsPvt.

Ltd.

8. Pyramid SoftechPvt. Ltd.

9. Salgaocar Real Estates &

Properties Pvt. Ltd.

10. Sandstone Real Estates

Pvt. Ltd.

11. Shinzawa Chemicals Pvt. Ltd

12. Shivranjani Investments

Pvt. Ltd.

13. Sumedha Plantations Pvt. Ltd

10 Sri. Parayil George John Tharakan AyanatParayil, Non-Executive Thykattussery Post, Independent Director, NIL 54 25.11.2014 Alleppey District DIN–07018289 Kerala – 688 528 Occupation: Agriculture

Private and Confidential – Not for Circulation

Note: None of the current Directors of the Bank appear in the RBI’s Defaulters’ List or ECGC’s Default List

ii. Details of change in directors since last three years:- Director of Date of the Bank Sr. Name, Designation and Appointment since (in Reason / Remarks no. DIN / Cessation / case of Resignation Cessation / Resignation)

Dr. John Joseph Alapatt, Appointed as Additional Director Non-Executive on September 24, 2012. 1. 24.09.2012 Independent Director, Appointed as Independent DIN- 00021735 Director w.e.f. 1st April 2014.

Demitted office of Directorship Sri. Jose Alapatt, Non- w.e.f. May 11, 2013 on Executive Independent completing 8 years of 2. 11.05.2013 11.05.2005 Director, Directorship as stipulated under DIN-00043444 the Banking Regulation Act, 1949.

Sri H. Suresh Prabhu, Non-Executive Demitted office of Directorship 3. 02.11.2013 01.12.2010 Independent Director, w.e.f. 2nd November, 2013. DIN - 03359835

Appointed as Additional Director Sri Francis Alapatt, Non- on 1st November, 2013. 4. Executive Independent 01.11.2013 Appointed as Independent Director, DIN- 01419486 Director w.e.f. 1st April 2014.

Sri SalimGangadharan, Appointed as Additional Director Non-Executive on 16th January, 2014. 5. 16.01.2014 Independent Director, Appointed as Independent DIN - 06796232 Director w.e.f. 1st April 2014.

Dr. N.J. Kurian, Non- Demitted office of Directorship 6. Executive Independent 25.04.2014 23.05.2007 w.e.f. April 25, 2014 on attaining Director, DIN - 01646207 70 years of age.

7. Sri. CheryanVarkey, Non- 28.05.2014 Appointed as Additional Director Executive Director DIN on May 28, 2014. Appointed as

Private and Confidential – Not for Circulation

06884551 Non-Executive Director w.e.f. 16th July 2014.

Demitted office of Directorship w.e.f. 30th September 2014 Sri. Paul Chalissery, Non- upon completion of his 8 year 8. Executive Independent 30.09.2014 30.09.2006 term, in accordance with Section Director, DIN - 00836980 10A(2A) of Banking Regulation Act 1949.

Demitted office of Directorship Sri. Mathew L. Chakola, w.e.f. 30th September 2014 Non-Executive upon completion of his 8 year 9. 30.09.2014 30.09.2006 Independent Director, term, in accordance with Section DIN - 00633502 10A(2A) of Banking Regulation Act 1949

Demitted office of the Managing Director & CEO of the Bank Dr. V.A Joseph, Managing w.e.f. September 30, 2014 (after 10. Director & CEO, DIN - 30.09.2014 05.06.2005 closure of business hours) on 00181554 expiry of his current tenure granted by RBI.

Appointed as the Managing Sri. V.G. Mathew, Director & CEO of the Bank for a 11. Managing Director & 01.10.2014 period of 3 (three) years w.e.f. CEO, DIN - 05332797 October 01, 2014.

f. Following details regarding the auditors of the Company:- i. Details of the auditor of the Company as on 30th June 2015: Name Address Auditor since S. R Batliboi& 6th& 7th Floor – “A” Block, Tidel Park, (Module September Associates LLP* 601, 701 & 702), No.4, Rajiv Gandhi Salai, 2011 Taramani, Chennai – 600 113, India Tel : +91 44 6654 8100 Fax : +91 44 2254 0120

Private and Confidential – Not for Circulation

Note: As per the RBI policy of compulsory rotation of auditors, M/s S.R. Batliboi& Associates LLP,Chartered Accountantsare not eligible for reappoint as they have completed the permissible term of 4 years. The shareholders of SIB during the 87th AGM held on 15.07.2015 had appointed the M/s Deloitte Haskins & Sells, Chartered Accountant as the statutory auditors of the Bank for the next 4 years.

ii. Details of change in auditor since last three years:-There was no change inauditor since last three years.

g. Details of borrowings of the Company, as on30th June 2015:- i. Details of Loan Facilities:-

Borrowings as on 30.06.2015 (Rs. crores): I. Borrowings in India (i) Reserve Bank of India - - (ii) Other Banks - - (iii) Other Institutions and Agencies NABARD 618.49 (iv) Others - - (v) Capital Instruments - - a. Innovative Perpetual Debt - - Instruments (IPDI) b. Subordinated Debt - - TOTAL 618.49 II. Borrowings outside India (i) Borrowings and Refinance outside Foreign Currency 763.74 India Borrowings * TOTAL 763.74 GRAND TOTAL 1382.23 Secured borrowings included in I & II above Nil *Foreign Currency Borrowings USD 120 Mio

ii. Details of Deposits as on 30th June 2015:- Sr. no. Particulars Amount (Rs. crores) Cumulative (Rs. crores) I. Demand Deposits 2033.74 i. From Banks 1.19 ii. From Others 2032.55 II. Savings Bank Deposits 9622.33 III. Term Deposits 40667.68

i. From Banks 1556.78 From Others (including Certificate ii. of deposit of Rs. 4403.96crores) 39110.90

Private and Confidential – Not for Circulation

Total 52323.75 Deposits of Branches in India 52323.75 Deposits of Branches outside India 0.00 Total 52323.75 iii. Details of NCDs:- Not Applicable iv. List of Top 10 Subordinated Tier II Bonds (Series 2009) Holders as on30th June 2015:- Sr. Name of Holders Amount No. in crores 1 LIFE INSURANCE CORPORATION OF INDIA 135.00 2 THE SOUTH INDIAN BANK EMPLOYEES' PROVIDENT 22.00 FUND 3 BANGIYA GRAMIN VIKASH BANK 10.00 4 CORPORATION BANK 10.00 5 SYNDICATE BANK 5.00 6 ALLAHABAD BANK 5.00 7 RAJKOT NAGARIK SAHAKARI BANK LIMITED 5.00 8 THE FEDERAL BANK EMPLOYEES' PROVIDENT FUND 3.00 9 THE SOUTH INDIAN BANK EMPLOYEES GRATUITY TRUST 3.00 FUND 10 THE BANK OF RAJASTHAN LTD. EMPLOYEE'S PROVIDENT 2.00 FUND v. The amount of corporate guarantee issued by the Issuer along with name of the counterparty (like name of the subsidiary, JV entity, Group Company, etc.) on behalf of whom it has been issued.

There are no Corporate Guarantees issued by the Bank to counterparties including the Bank’s Subsidiaries, Joint Ventures, Group Companies, etc.; except Non Fund based facilities granted to its constituents in the form of Bank Guarantees, during the normal course of Business Operations. vi. Details of Certificate of Deposit: - The total Face Value of Certificate of Deposit Outstanding as on 30th June 2015 Maturity date Face Value (in Rs.) 01-Jul-2015 2,00,00,00,000.00 17-Jul-2015 1,00,00,00,000.00 31-Jul-2015 4,00,00,00,000.00 04-Aug-2015 4,00,00,00,000.00 07-Aug-2015 2,00,00,00,000.00 10-Aug-2015 2,00,00,00,000.00

Private and Confidential – Not for Circulation

17-Aug-2015 8,00,00,00,000.00 20-Aug-2015 2,00,00,00,000.00 21-Aug-2015 1,50,00,00,000.00 24-Aug-2015 7,75,00,00,000.00 27-Aug-2015 50,00,00,000.00 02-Sep-2015 2,00,00,00,000.00 03-Sep-2015 2,00,00,00,000.00 04-Sep-2015 1,25,00,00,000.00 07-Sep-2015 2,50,00,00,000.00 11-Sep-2015 2,00,00,00,000.00 TOTAL 44,50,00,00,000.00

vii. Details of Commercial Paper: - The total Face Value of Commercial Papers Outstanding as on the latest quarter end to be provided and its breakup in following table- Not Applicable

viii. Details of Rest of the borrowings (including hybrid debt like FCCB, Optionally Convertible Bonds /Preference Shares) as on30.06.2015: The Bank has not issued any hybrid debt like Foreign Currency Convertible Bonds (FCCBs), optionally Convertible Bonds /Debentures (OCBs) / Preference Shares etc.

ix. Details of all default/s and/or delay in payments of interest and principal of any kind of term loans, debt securities and other financial indebtedness including corporate guarantee issued by the Company and including any statutory dues, in the past 5 years.

There has been no default (s) and / or delay (s) in payments of interest and principal of any kind of term loans, debt securities and other financial indebtedness including corporate guarantee issued by the Bank and any statutory dues , in the past five years.

The Bank confirms that other than and to the extent mentioned elsewhere in this Disclosure Document, it has not issued any debt securities or agreed to issue any debt securities or availed any borrowings for a consideration other than cash , whether in whole or in part, at a premium or discount or in pursuance of an option since inception.

Private and Confidential – Not for Circulation

h. Disclosures with regards to the interest of directors, litigation etc i. Any financial or other material interest of the directors, promoters or key managerial personnel in the offer and the effect of such interest in so far as it is different from the interests of other persons NIL

ii. Details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against any promoter during the last three years immediately preceding the year of the circulation of the Information Memorandum and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action. NIL

iii. Details of director’s remuneration DETAILS OF REMUNERATION PAID TO DIRECTORS during Current Year and Last three FY Current Year upto 30th Particulars June 2015 2014-15 2013-14 2012-13 Gross Salary paid to MD & CEO 1500000 8216400 7923960 7039800 Honorarium paid to Chairman (Gross) 390000 1454500 1275000 1129667 Sitting Fee paid to Directors 2430000 7576000 4530000 3932000 Total 4320000 17246900 13728960 12101467

iv. Related party transactions entered during the last three financial years immediately preceding the year of circulation of offer letter including with regard to loans made or, guarantees given or securities provided NIL

v. Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years immediately preceding the year of circulation of offer letter in the case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter and if so, section-wise details thereof for the company and all of its subsidiaries NIL

vi. Details of acts of material frauds committed against the company in the last three years, if any, and if so, the action taken by the company. During the quarter ended September 30, 2012, the Bank has identified certain acts of fraud committed by its employees at one of the Branches amounting to Rs.34.15

Private and Confidential – Not for Circulation

Crores. Based on the Reserve Bank of India guidelines, the Bank has provided Rs.32.22 Crores (net of recoveries), and disclosed as an exceptional item.

i. Details of Promoters of the Company:- Details of Promoter Holding in the Bank as on 30th June 2015:- The bank has no identifiable promoter and the share holding pattern is well diversified with major holding by FIIs at 28.16% as at June 30, 2015

The South Indian Bank BALANCE SHEET Capital & Liabilities As on As on As on As on

31st March 31st March 31st March 31st March 2015 2014 2013 2012

Capital 135.02 134.39 133.85 113.37

Reserves and Surplus 3,454.39 3233.65 2869.76 2054.11

Deposits 51,912.49 47491.09 44262.30 36500.53

Borrowings 2,232.47 2730.78 1284.55 588.19

Other Liabilities and 1,381.95 1396.06 1244.57 1113.85 Provisions TOTAL 59116.32 54985.97 49795.03 40370.06

Assets

Cash & Balances with Reserve 2,441.58 2200.81 1696.70 1571.84 Bank of India Balances with banks & money 1,153.50 1017.12 2639.20 1068.70 at call & short notice Investments 16,717.16 14351.78 12523.47 9399.87

Advances 37,391.64 36229.86 31815.53 27280.74

Fixed Assets 479.05 412.20 396.12 377.50

Other Assets 933.39 774.20 724.01 671.40

TOTAL 59116.32 54985.97 49795.03 40370.06

Private and Confidential – Not for Circulation

Contingent Liabilities 27,220.07 19134.96 10583.36 5458.05

Bills for Collection 554.44 696.25 479.14 425.89

The South Indian Bank PROFIT & LOSS ACCOUNT Particulars Year ended Year ended Year ended Year ended 31st March 31st March 31st March 31st March 2015 2014 2013 2012

Income

Interest earned 5,286.22 5015.06 4434.29 3583.42

Other Income 497.07 368.46 334.93 247.07

TOTAL 5783.29 5383.53 4769.22 3830.50

Expenditure

Interest expended 3,919.99 3616.29 3153.46 2561.69

Operating Expenses 981.30 882.89 767.17 617.29

Provisions and contingencies 574.80 376.84 346.31 249.86

TOTAL 5476.09 4876.03 4266.95 3428.84

Profit

Net Profit for the year 307.20 507.50 502.27 401.66

Profit brought forward 39.86 36.96 23.18 18.47

TOTAL 347.06 544.46 525.46 420.13

Appropriations

Transfer to Statutory 76.81 126.88 125.57 100.42 Reserves Transfer to Other Reserves 3.86 220.00 240.00 211.52

Private and Confidential – Not for Circulation

Transfer to Capital Reserves 50.00 0.84 6.21 0.51

Proposed Dividend 30.00 125.79 109.41 79.14 (including Tax thereon) Transfer to/from Investment (6.79) 14.09 (5.69) (7.13) Reserve Account Transfer to Special Reserve 81.01 17.00 13.00 14.00 under Sec.36(1)(viii) of Income Tax Transfer from present value 16.95 (1.52) provision for ADWARD

Balance Carried over to 95.22 39.86 36.96 23.18 Balance Sheet TOTAL 347.06 544.46 525.46 420.13

The South Indian Bank CASH FLOW STATEMENT (Amount in Crore) PARTICULARS

31.03.201 31.03.201 31.03.201 31.03.201 31.03.201 31.03.201 31.03.201 31.03.201 5 5 4 4 3 3 2 2 Cash Flow 686.99 925.98 2698.93 1850.83 from Operating Activity Cash Flow (172.61) (1849.85) (1348.07) (1590.45) from Investing Activity Cash Flow (137.23) (194.10) 344.51 (85.96) from Financing Activity Net Change in Cash & Cash Equivalent

Cash & Cash 3217.93 4335.90 2640.54 2466.13 Equivalent at the beginning of the year Cash & Cash 3595.08 3217.93 4335.90 2640.54 Equivalent at the end of the year Net Change in Cash & Cash Equivalent

Cash Flow from Operating

Private and Confidential – Not for Circulation

Activity Net Profit 307.20 507.50 502.27 401.66 After Tax Add: Provision debited to P&L A/c : Provision for 160.75 221.43 153.58 170.69 Taxes Provision on 225.52 129.10 131.90 21.05 Non- Performing Assets Provision on 31.37 31.09 32.49 39.75 Standard Assets Provision for 11.78 (20.65) 11.24 13.38 Depreciation on Investment Other 145.38 15.67 17.10 5.00 Provisions Provision for 19.50 18.34 14.33 15.69 Amortisation - debited to Intt. Income Employee 22.49 28.23 33.59 40.91 Benefit Provisions Depreciation (1.11) 44.60 39.89 31.20 on Fixed Assets ESOS 1.63 0.95 0.82 1.31 Employee Compensation Expense Amortised (Profit)/Loss 0.42 (0.83) (0.48) (0.83) on sale of Land, Building and Other Assets Add: Interest 19.50 19.80 487.73 25.09 459.55 25.12 363.27 Paid on Bonds (being Financing Activity)

Les Tax Paid (274.98) (259.24) (185.59) (230.65)

Add: (Increase)/ (1438.23) (4553.15) (4685.40) (6817.24) Decrease in Advances (Increase)/ (2292.55) (42.31) (1865.76) 1027.25 Decrease in Investment

Private and Confidential – Not for Circulation

(Increase)/ (55.95) (55.33) (54.19) (26.69) Decrease in Other Assets Increase/ 4421.39 3228.79 7761.77 6779.46 (Decrease) in Deposits Increase/ (498.30) 1511.22 696.36 297.84 (Decrease) in Borrowings Increase/ (118.83) 17.52 100.77 189.99 69.92 1922.70 55.93 1316.55 (Decrease) in Other Liability & Provisions

Net cash Flow 686.98 925.98 2698.93 1850.83 from Operating Activity

Cash Flow From Investing Activity Purchase of (71.23) (70.03) (66.05) (59.29) fixed Assets Sale of fixed 2.74 3.86 1.38 1.26 Assets (Purchase)/Sal (104.12) (1783.68) (1849.85) (1283.40) (1348.07) (1532.42) (1590.45) e of Investments (Held to Maturity)

Cash Flow From Financing Activity Issue of Share 8.05 2.50 448.78 4.77 Capital Share Premium Dividend paid (125.79) (109.40) (79.14) (65.67) including tax Interest Paid (19.50) (22.20) (25.13) (25.06) on Bonds Repayment of - (137.23) (65.00) (194.10) 0.00 344.51 0.00 (85.96) Subordinate Bonds

Summary of reservations or qualifications or adverse remarks of auditors in the last five financial years immediately preceding the year of circulation of offer letter and of their impact on the financial statements and financial position of the company and the corrective steps taken and proposed to be taken by the company for each of the said reservations or qualifications or adverse remark

Private and Confidential – Not for Circulation

Extracts from Audit Report of Financial Year – 2014-15 Unqualified report for the FY 14-15

Extracts from Audit Report of Financial Year – 2013-14 ….

Our Statutory Auditors have included the following matters of emphasis in their audit report with respect to our financial statements for the financial year 2014:

We draw attention to Note 18.B.7 to the financial statements which describes the deferment of pension and gratuity liability relating to existing employees of the Bank to the extent of ₹ 156.53 crores and the unamortized liability of ₹ 22.49 crores as of March 31, 2014, pursuant to the exemption granted by the Reserve Bank of India and made applicable to the Bank vide Letter No. DBOD No.BP.BC.15896 /21.04.018 /2010-11 dated April 8, 2011, from the application of the provision of the Accounting Standards (AS) 15, Employee Benefits. Our opinion is not qualified in respect of this matter.

We draw attention to Note 18.B.5 to the financial statements, which describes creation of Deferred Tax Liability (“DTL”) on Special Reserve under section 36(1)(viii) of the Income Tax Act, 1961 pursuant to RBI’s Circular No. DBOD No.BP. BC.77/21.04.018/2013-14 dated December 20, 2013, whereby the DTL of ₹ 14.71 crores pertaining to period up to March 31, 2013 has been adjusted to the general reserve of the Bank and DTL of ₹ 5.78 crores on the special reserve created during the financial year ended March 31, 2014 has been charged to the profit and loss account. Our opinion is not qualified in respect of this matter.”

6. Opinion In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Bank as at March 31, 2014; (ii) in the case of the Profit and Loss Account of the profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Extracts from Audit Report for 2012-13

….

Private and Confidential – Not for Circulation

Qualified Audit Opinion

Our Statutory Auditors have qualified their opinion in their audit report with respect to our financial statements for the financial year 2013 as set out below:

“Basis for qualified opinion

6. Attention is invited to Note 18.A.26 to the financial statements regarding a non- performing advance of ₹ 150 crores and in respect of which a provision of ₹ 90 crores has been made by the management of the Bank based on special dispensation obtained from the Reserve Bank of India (RBI) vide RBI letter dated DBS (T) No. 674/02.05.06/2012-13 dated December 31, 2012 from complying with the “Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances” issued by the RBI. As the ultimate recoverability of the net carrying amount is uncertain, pending final determination thereof, we are unable to comment on the recoverability of the carrying amount and consequential effects of these matters on the financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter discussed in the basis for qualified opinion paragraph discussed above, the said accounts together with the notes thereon give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Bank as at 31st March 2013; (ii) in the case of the Profit and Loss Account of the Profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of cash flows for the year ended on that date.”

Our explanation for our Statutory Auditor’s qualified opinion above is set out below:

At the time of the finalisation of our financial statements for the financial year 2013, we were in ongoing negotiations with the borrower and we were hopeful of recovering some of the dues, thereby warranting a lower provision. Therefore, we made the provision as permittedbythe RBI in its letter to us dated December 31, 2012. If we had not received this dispensation from the RBI, we would have been required to make a provision of ₹ 150.00 crores for the NPA, which would have increased our provision for NPAs by ₹ 60.00 croresand

Private and Confidential – Not for Circulation would have reduced our net profit (after tax) for the financial year 2013 by ₹40.53 crores. Subsequently, the negotiations failed and we made an additional provision of ₹ 60.00 crores for this NPA for the financial year 2014. Therefore, this NPA wasfully provided for and, as such, our Statutory Auditors did not qualify their report on our financial statements for the financial year 2014.

Our Statutory Auditors have included the following matter of emphasis in their audit report with respect to our financial statements for the financial year 2013:

“We draw attention to Note 18.B.7 to the financial statements which describes the deferment of pension and gratuity liability relating to existing employees of the Bank to the extent of ₹ 156.53 crores and the unamortized liability of ₹ 50.72 crores as of March 31, 2013, pursuant to the exemption granted by the Reserve Bank of India and made applicable to the Bank vide Letter No. DBOD No.BP.BC.15896 /21.04.018 /2010-11 dated April 8, 2011, from the application of the provision of the Accounting Standards (AS) 15, Employee Benefits. Our opinion is not qualified in respect of this matter”.

…..

Extracts from Audit Report for 2011-12

…. Matters of Emphasis

Our Statutory Auditors have included the following matters of emphasis in their audit report with respect to our financial statements for the financial year 2012:

“Without qualifying our opinion, we draw attention to Note 18.B.6 to the financial statements which describes the deferment of pension and gratuity liability relating to existing employees of the Bank to the extent of ₹ 156.53 crores and the unamortized liability of ₹ 84.31 crores as of March 31, 2012, pursuant to the exemption granted by the Reserve Bank of India and made applicable to the Bank vide Letter No. DBOD No.BP.BC.15896 /21.04.018 /2010-11 dated April 8, 2011, from the application of the provision of the Accounting Standards (AS) 15, Employee Benefits.”

Opinion In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 1956, in the manner so required for the banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Bank as at March 31, 2012; (ii) in the case of the Profit and Loss Account of the profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Private and Confidential – Not for Circulation

Extracts from Audit Report for 2010-11

Without qualifying our opinion we draw attention to: a) Note No. A. 23 (b), Schedule 18, of the Financial Statements regarding disputed Income Tax liability of Rs. 116.05 Crores relating to earlier assessment years consequent to a decision of the Kerala High Court, now pending before the Supreme Court of India, and its treatment as Contingent Liability by the Bank. b) Note No. B. 7, Schedule 18, to the financial statements which describes deferment of pension and gratuity liability of the bank to the extent of Rs. 125.22 Crores pursuant to the exemption granted by the Reserve Bank of India and made applicable to the Bank vide Letter No. DBOD No.BP.BC.15896 /21.04.018 /2010-11 dated April 8, 2011, from the application of the provision of the Accounting Standard (AS) 15, Employee Benefits.

Note: The detailed financials is uploaded on the website of the bank and can be accessed at https://www.SIB.co.in/BalanceSheet.aspx

j. Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company. In the FY 2014-15, effective April 1, 2014, the Bank has changed its accounting policy for charging depreciation from Written Down Value ("WDV") method to Straight Line Method ("SLM") in respect of all fixed assets other than computers which were already being depreciated under SLM. The management believes that such change better reflects the actual use of assets acquired. On account of this change in accounting policy, the Bank has in the Q1 quarter of FY 2014, reversed an amount of 65.74 Crores representing the excess depreciation charge for the period up to March 31, 2014 and disclosed the same net of related tax effect of 22.35 Crores as an exceptional item. As a result of this change, the net profit for the Q1 quarter of FY 2014 is higher by 43.39 Crores.

Except as disclosed above, there is no other change in accounting policies during the last three years. Nil

Private and Confidential – Not for Circulation

k. Abridged version of Latest audited / Limited Review half yearly/quarterly consolidated (wherever applicable) and Standalone Financial Information (like Profit & Loss statement, and Balance Sheet) and auditor’s qualifications, if any.

South Indian Bank Ltd UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30th June 2015Rs. in Lakhs UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2015 Rs.in lakhs 3 months ended Year ended Particulars 30.06.2015 31.03.2015 30.06.2014 31.03.2015 Unaudited Audited # Unaudited Audited

1. Interest earned (a) + (b) + (c) + (d) 1,37,668 1,32,243 1,34,468 5,28,622 (a) Interest/discount on advances/bills 1,08,269 1,04,305 1,04,534 4,15,297 (b) Income on investments 28,024 26,828 26,491 1,05,373 (c) Interest on balances with Reserve Bank of India and other inter-bank funds 1,375 1,110 3,443 7,952

(d) Others - - - -

2. Other Income 10,383 12,194 12,116 49,707

3. Total income (1+2) 1,48,051 1,44,437 1,46,584 5,78,329

4. Interest Expended 1,03,634 97,534 1,00,380 3,91,999 5. Operating Expenses (i) + (ii) 26,328 30,405 24,110 1,04,704

(i) Employees cost 15,741 19,786 14,588 63,370 (ii) Other operating expenses 10,587 10,619 9,522 41,334 6. Total expenditure (4) + (5) excluding provisions and 1,29,962 1,27,939 1,24,490 4,96,703 contingencies 7. Operating Profit before Provisions and Contingencies (3) - 18,089 16,498 22,094 81,626 (6) 8. Provisions (other than tax) and Contingencies 7,951 13,774 9,463 41,405 9. Exceptional Items (Refer Note 2) - - (4,339) (4,339) 10. Profit from Ordinary Activities before tax (7)-(8)-(9) 10,138 2,724 16,970 44,560

11. Tax expense 3,609 1,092 4,305 13,840

Private and Confidential – Not for Circulation

12. Net Profit from Ordinary Activities after tax (10)-(11) 6,529 1,632 12,665 30,720 13. Extra ordinary items (Net of - Tax Expense) - - - 14. Net Profit for the period

(12+13) 6,529 1,632 12,665 30,720 15. Paid-up Equity Share Capital

(Face Value Rs.1) 13,502 13,502 13,461 13,502 16. Reserves excluding Revaluation Reserves 3,31,581 17. Analytical Ratios i) Percentage of shares held by Government of India Nil Nil Nil Nil ii) Capital Adequacy Ratio (%) - BASEL III 11.46 12.01 12.19 12.01 iii) Earning Per

Share (EPS) (a) Basic EPS - before and after Extraordinary items (Rs.)* 0.48 * 0.12 * 0.94 * 2.28 (b) Diluted EPS - before and after Extraordinary items (Rs.)* 0.48 * 0.12 * 0.93 * 2.27

iv) NPA Ratios (a) Gross NPA 71,383 64,345 51,730 64,345 (b) Net NPA 46,398 35,705 31,054 35,705 (c) % of Gross NPA 1.85 1.71 1.50 1.71 (d) % of Net NPA 1.21 0.96 0.91 0.96 (e) Return on Assets (Annualised) 0.45 0.12 0.93 0.56 18. Public Shareholding - No.of Shares (in Lakhs) 13,502 13,502 13,461 13,502 - Percentage of Shareholding 100% 100% 100% 100% 19. Promoters and promoter group Shareholding (a) Pledged/ Encumbered - Number of shares NIL NIL NIL NIL - Percentage of shares[as a % of the total shareholding of the promoter and promoter group] NIL NIL NIL NIL - Percentage of shares [as a % of the total share capital of the Company] NIL NIL NIL NIL (b) Non Encumbered - Number of shares NIL NIL NIL NIL - Percentage of shares[as a %

Private and Confidential – Not for Circulation of the total shareholding of the promoter and promoter group] NIL NIL NIL NIL - Percentage of shares [as a % of the total share capital of the Company] NIL NIL NIL NIL * Quarterly numbers are not annualised

Segmentwise Results Rs.in lakhs. 3 months ended Year ended 30.06.201 31.03.201 30.06.2014 31.03.2015 Particulars 5 5 Unaudite Audited Unaudited Audited d 1. Segment Revenue

a) Treasury 31,693 31,453 35,217 1,32,047 b) Corporate/ Wholesale Banking 67,482 63,808 58,910 2,45,164

c) Retail Banking 46,067 46,253 50,101 1,89,462 d) Other Banking Operations 2,809 2,923 2,356 11,656

Total 1,48,051 1,44,437 1,46,584 5,78,329

Less : Inter segment Revenue - - - - Net Income from Operations 1,48,051 1,44,437 1,46,584 5,78,329 2. Segment Results Profit(+)/Loss (-) before tax, exceptional item and after interest from each segment

a) Treasury (6,537) (10,939) (1,198) (14,148) b) Corporate/ Wholesale Banking 5,415 1,414 1,551 6,298

c) Retail Banking 8,951 9,939 10,309 38,525 d) Other Banking Operations 2,309 2,310 1,969 9,546

Total 10,138 2,724 12,631 40,221 Less: unallocated expenditure (exceptional item) - - (4,339) (4,339) Profit Before Tax and exceptional item 10,138 2,724 16,970 44,560 3.Capital Employed a) Treasury

Private and Confidential – Not for Circulation

1,03,063 1,09,954 1,02,050 1,09,954 b) Corporate/ Wholesale Banking 1,18,245 1,21,627 1,17,681 1,21,627

c) Retail Banking 68,311 72,943 77,892 72,943 d) Other Banking Operations - - - -

e) Un allocated 75,856 54,417 50,729 54,417

Total 3,65,475 3,58,941 3,48,352 3,58,941

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2015 Rs. in lakhs 3 months ended Year ended Particulars 30.06.2015 31.03.2015 30.06.2014 31.03.2015 Unaudited Audited # Unaudited Audited

1. Interest earned (a) + (b) + (c) + (d) 1,37,668 1,32,243 1,34,468 5,28,622

(a) Interest/discount on advances/bills 1,08,269 1,04,305 1,04,534 4,15,297 (b) Income on investments 28,024 26,828 26,491 1,05,373 (c) Interest on balances with Reserve Bank of

India and other inter-bank funds 1,375 1,110 3,443 7,952

(d) Others - - - -

2. Other Income 10,383 12,194 12,116 49,707

3. Total income (1+2) 1,48,051 1,44,437 1,46,584 5,78,329

4. Interest Expended 1,03,634 97,534 1,00,380 3,91,999 5. Operating Expenses (i) + (ii) 26,328 30,405 24,110 1,04,704

(i) Employees cost 15,741 19,786 14,588 63,370 (ii) Other operating expenses 10,587 10,619 9,522 41,334 6. Total expenditure (4) + (5) excluding provisions and contingencies 1,29,962 1,27,939 1,24,490 4,96,703 7. Operating Profit before Provisions and Contingencies (3) - (6) 18,089 16,498 22,094 81,626 8. Provisions (other than tax) and Contingencies 7,951 13,774 9,463 41,405

9. Exceptional Items (Refer Note 2) - - (4,339) (4,339) 10. Profit from Ordinary Activities before tax (7)-(8)-(9) 10,138 2,724 16,970 44,560

Private and Confidential – Not for Circulation

11. Tax expense 3,609 1,092 4,305 13,840 12. Net Profit from Ordinary Activities after tax (10)-(11) 6,529 1,632 12,665 30,720 13. Extra ordinary items (Net of Tax - Expense) - - - 14. Net Profit for the period (12+13)

6,529 1,632 12,665 30,720 15. Paid-up Equity Share Capital (Face

Value Rs.1) 13,502 13,502 13,461 13,502 16. Reserves excluding Revaluation Reserves 3,31,581 17. Analytical Ratios i) Percentage of shares held by Government of India Nil Nil Nil Nil ii) Capital Adequacy Ratio (%) - BASEL III 11.46 12.01 12.19 12.01 iii) Earning Per

Share (EPS)

(a) Basic EPS - before and after * * * Extraordinary items (Rs.)* 0.48 0.12 0.94 2.28

(b) Diluted EPS - before and after * * * Extraordinary items (Rs.)* 0.48 0.12 0.93 2.27

Private and Confidential – Not for Circulation

(b) Non Encumbered - Number of shares NIL NIL NIL NIL - Percentage of shares[as a % of the total shareholding of the promoter and promoter group] NIL NIL NIL NIL - Percentage of shares [as a % of the total share capital of the Company] NIL NIL NIL NIL * Quarterly numbers are not annualised

Segment wise Results Rs.In lakhs. 3 months ended Year ended 30.06.20 31.03.20 30.06.201 31.03.2015 Particulars 15 15 4 Unaudit Audited Unaudite Audited ed d 1. Segment Revenue

a) Treasury 31,693 31,453 35,217 1,32,047

b) Corporate/ Wholesale Banking 67,482 63,808 58,910 2,45,164

c) Retail Banking 46,067 46,253 50,101 1,89,462 d) Other Banking Operations 2,809 2,923 2,356 11,656

Total 1,48,051 1,44,437 1,46,584 5,78,329

a) Treasury (6,537) (10,939) (1,198) (14,148)

b) Corporate/ Wholesale Banking 5,415 1,414 1,551 6,298

c) Retail Banking 8,951 9,939 10,309 38,525 d) Other Banking Operations 2,309 2,310 1,969 9,546

Total 10,138 2,724 12,631 40,221 Less: unallocated expenditure (exceptional item) - - (4,339) (4,339) Profit Before Tax and exceptional

Private and Confidential – Not for Circulation item 10,138 2,724 16,970 44,560 3.Capital Employed

a) Treasury 1,03,063 1,09,954 1,02,050 1,09,954

b) Corporate/ Wholesale Banking 1,18,245 1,21,627 1,17,681 1,21,627

c) Retail Banking 68,311 72,943 77,892 72,943 d) Other Banking Operations - - - - e) Un allocated 75,856 54,417 50,729 54,417

Total 3,65,475 3,58,941 3,48,352 3,58,941 Notes of even date form an integral part of the financial results

Note: The detailed financials is uploaded on the website of the bank and can be accessed at https://www.SIB.co.in/BalanceSheet.aspx

Auditor’s Qualification: None

l. Any material event/ development or change having implications on the financials/credit quality (e.g. any material regulatory proceedings against the Issuer/Promoters, Tax litigations resulting in material liabilities, corporate restructuring event etc.) at the time of issue which may affect the issue or the investor’s decision to invest / continue to invest in the debt securities.

During financial year 2014-2015, the Issuer has been served with show cause notices relating to alleged wrong availment of CENVAT credit for payment of service tax and taxability of certain transactions treated as non-taxable/exempted from service tax. The Issuer has taken/is in the process of taking appropriate action against the notices that are prejudicial to them. As per legal opinion, these notices are likely to be quashed. The total additional contingent liability that may have to be disclosed by the Issuerin respect of these matters amounts to Rs.18.95 crore. The Issuer does not expect the outcome of these proceedings to have a material adverse impact on their financial position.

m. Names of the Debentures Trustees and Consents thereof IDBI Trusteeship Services Ltd., Mumbai In accordance with the provisions of

(i) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended,

(ii) Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide Circular No. LAD-NRO/GN/2012- 13/19/5392 dated October 12, 2012, as amended,

Private and Confidential – Not for Circulation

The Issuer has appointed IDBI Trusteeship Services Ltdto act as Trustees to the Bondholder(s).

The address and contact details of the Trustees are as under:

IDBI Trusteeship Services Ltd. Asian Building, Ground Floor, 17, R.Kamani Marg, Ballard Estate, Mumbai-400001 Tel: +91-22-4080 7000 Fax: +91-22-6631 1776 Email: [email protected] Website: www.idbitrustee.com

Copy of letter from IDBI Trusteeship Services Ltdconveying their consent to act as Trustees for the current issue of Bonds is enclosed within the Annexure III in this Disclosure Document.

The Issuer hereby undertakes that a Debenture Trusteeship Agreement shall be executed by it in favour of the Trustees within three months permissible under applicable laws. Further, the Debenture Trusteeship Agreement shall not contain a clause which has the effect of

I. limiting or extinguishing the obligations and liabilities of the Trustees or the Issuer in relation to any rights or interests of the holder(s) of the Bonds, ii. limiting or restricting or waiving the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 and circulars, regulations or guidelines issued by SEBI iii. Indemnifying the Trustees or the Issuer for loss or damage caused by their act of negligence or commission or omission.

The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the holder(s) of the Bonds. Any payment made by the Issuer to the Trustees on behalf of the Bondholder(s) shall discharge the Issuer pro-tanto to the Bondholder(s). No Bondholder shall be entitled to proceed directly against the Issuer unless the Trustees, having become so bound to proceed, fail to do so.

The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the

Private and Confidential – Not for Circulation

Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty. n. Rating and Rating Letter Refer Annexure – I and Annexure II o. If the security is backed by a guarantee or letter of comfort or any other document /letter with similar intent, a copy of the same shall be disclosed. In case such document does not contain detailed payment structure (procedure of invocation of guarantee and receipt of payment by the investor along with timelines) Not Applicable p. Name and address of the valuer who performed the valuation of the security offered- Not Applicable q. Stock Exchange where Bonds are proposed to be listed The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) segment of BSE. BSE shall be the designated stock exchanges for the purpose of present Issue of the BASEL III compliant Tier II Bonds. r. Other Details i. DRR Creation

Creation of DRR is not applicable to the bank because the Ministry of Corporate Affairs, Government of India has vide circular no. 11/02/2012-CL- V(A) dated February 11, 2013 clarified that Banks need not create Debenture Redemption Reserve for Debentures issued by Banking Companies.

ii. Issue/instrument specific regulations The present issue of Bonds is being made in pursuance of RBI Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 01, 2015 on Basel III Capital Regulations issued by the RBI, covering Prudential Guidelines on Implementation of Basel III Capital Regulations in India covering Criteria for inclusion of Debt Capital Instruments as Tier II Capital (Annex 5) and Minimum Requirements to ensure loss absorbency of Additional Tier I instruments at pre-specified trigger and of all non-equity regulatory capital instruments at the PONV(Annex 16)

Private and Confidential – Not for Circulation

The present Issue of Bonds is being made pursuant to the approval by the Board of Directors at its meeting held on 15.07.2015, the Shareholders at their meeting held on 15.07.2015and the delegation provided there under. The current issue of bonds is within the overall borrowing limits. The Bank can issue the bonds proposed by it in view of the present approvals and no further internal or external permission/ approval(s) is/are required by it to undertake the proposed activity. iii. Application Process 1. Who Can Apply

The categories of investors who are eligible to apply for this Issue of Bonds are mentioned in the Term Sheet of this Disclosure Document. However, the prospective subscribers must make their own independent evaluation and judgment regarding their eligibility to invest in the Issue.

All applicants are required to comply with the relevant regulations/ guidelines applicable to them for investing in the issue of Bonds as per the norms approved by Government of India, RBI or any other statutory body from time to time.

However, out of the aforesaid class of investors eligible to invest, this Disclosure Document is intended solely for the use of the person to whom it has been sent by the Issuer for the purpose of evaluating a possible investment opportunity by the recipient(s) in respect of the securities offered herein, and it is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective investor receiving this Disclosure Document from the Issuer).

2. Documents to be provided by Investors Investors need to submit the certified true copies of the following documents, along-with the Application Form, as applicable: . Memorandum and Articles of Association/ Constitution/ Bye-laws/ Trust Deed; . Board Resolution authorizing the investment and containing operating instructions; . Power of Attorney/ relevant resolution/authority to make application; . Specimen signatures of the authorized signatories (ink signed), duly certified by an appropriate authority; . Government Notification (in case of Primary Co-operative Bank and RRBs); . Copy of Permanent Account Number Card (“PAN Card”) issued by the Income Tax Department; . Necessary forms for claiming exemption from deduction of tax at source on interest on application money, wherever applicable.

Private and Confidential – Not for Circulation

3. How to Apply

This being a private placement Issue, the eligible investors who have been addressed through this communication directly, only are eligible to apply. Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein.

Applications complete in all respects must be submitted before the last date indicated in the issue time table or such extended time as decided by the Issuer, at any of the designated collection centres, accompanied by details of remittance of the application money . The original Applications Forms (along with all necessary documents as detailed in this Disclosure Document), payment details and other necessary documents should be sent to the Corporate Office of the Bank through respective Arrangers on the same day.

The payment should be made by electronic transfer of funds through RTGS mechanism for credit as per details given hereunder:

Beneficiary Name The South Indian Bank Limited Name of the Banker Kotak Mahindra Bank Limited Account Name The South Indian Bank Ltd Current Escrow A/c Credit into EscrowA/c No. 6111648902 IFS Code KKBK0000958 Address of the Branch Mittal Court,224, Nariman Point, Mumbai - 400 021

Cheque(s), demand draft(s), Money orders, postal orders will not be accepted. The Bank assumes no responsibility for any applications lost in mail. The entire amount of Rs.10 lacs per Bond is payable on application.

Applications should be for the number of Bonds applied by the Applicant. Applications not completed in the said manner are liable to be rejected. The name of the applicant’s bank, type of account and account number must be filled in the Application Form. This is required for the applicant’s own safety and these details will be printed on the refund orders and interest/ redemption warrants.

The applicant or in the case of an application in joint names, each of the applicant, should mention his/her Permanent Account Number (PAN) allotted under the Income -Tax Act, 1961 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As

Private and Confidential – Not for Circulation

per the provision of Section 139A (5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the investor should mention his PAN/GIR No. In case neither the PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” nor in case the applicant is not assessed to income tax, the applicant shall mention ‘Not Applicable’ (stating reasons for non-applicability) in the appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and are liable to be rejected.

All applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Public/ Private/ Religious/ Charitable Trusts, Provident Funds and Other Superannuation Trusts and other investors requiring “approved security” status for making investments.

For further instructions about how to make an application for applying for the Bonds and procedure for remittance of application money, please refer to the Summary Term Sheet and the Application Form.

4. Terms of Payment

The full face value of the Bonds applied for is to be paid along with the Application Form. Investor(s) need to send in the Application Form and the details of RTGS for the full value of Bonds applied for.

5. Force Majeure

The Issuer reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment.

6. Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Issuer or to the Registrars or to such other person(s) at such other address(es) as may be specified by the Issuer from time to time through a suitable communication.

7. Application by Mutual Funds

Private and Confidential – Not for Circulation

In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

8. Application by Provident Funds, Superannuation Funds and Gratuity Funds

The applications must be accompanied by certified true copies of

a. Trust Deed / Bye Laws /Resolutions

b. Resolution authorizing Investment

c. Specimen Signatures of the Authorized Signatories

Those desirous of claiming tax exemptions on interest on application money are compulsorily required to submit a certificate issued by the Income Tax Officer along with the Application form. For subsequent interest payments, such certificates have to be submitted periodically.

9. Acknowledgements

No separate receipts will be issued for the application money. However, the Bankers to the Issue receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each Application Form.

10. Basis of Allocation

Beginning from the issue opening date and until the day immediately prior to the issue closing date, full and firm allotment against all valid applications for the Bonds will be made to applicants on a first -come- first-served basis, subject to a limit of the Issue size, in accordance with applicable laws. At its sole discretion, the Issuer shall decide the amount of oversubscription to be retained over and above the basic issue size. If and to the extent, the Issue (including the option to retain oversubscription as decided and finalized by the Issuer) is fully subscribed prior to the issue closing date; no applicationsshall be accepted once the Issue (including the option to retain oversubscription as decided and finalized by the Issuer) is fully subscribed.

Private and Confidential – Not for Circulation

Allotment will be done on “day-priority basis”. In case of oversubscription over and above the basic size inclusive of the option to retain oversubscription exercised by the Issuer, the allotment of such valid applications received on the closing day shall be on pro rata basis to the investors in the ratio in which they have applied regardless of investor category. If the proportionate allotment of Bonds to such applicants is not a minimum of one Bond or in multiples of one Bond (which is the market lot), the decimal would be rounded off to the next higher whole number if that decimal is 0.5 or higher and to the next lower whole number if the decimal is lower than 0.5. All successful applicants on the issue closing date would be allotted the number of Bonds arrived at after such rounding off.

11. Right to Accept or Reject Applications

The Issuer reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realization of the cheque(s)/ demand drafts(s)/RTGS credit in to the designated account till one day prior to the date of refund. The application forms that are not complete in all respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to:

a. Number of bonds applied for is less than the minimum application size;

b. Applications exceeding the issue size;

c. Bank account details not given;

d. Details for issue of Bonds in electronic/ dematerialized form not given;

e. PAN/GIR and IT Circle/Ward/District not given;

f. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant documents not submitted;

In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be refunded, as may be permitted.

Private and Confidential – Not for Circulation

12. PAN /GIR Number

All applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1961 and the Income Tax Circle/ Ward/ District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided.

13. Signatures

Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.

14. Nomination Facility

Only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Bonds shall vest in the event of his death. Non -individuals including holders of Power of Attorney cannot nominate.

15. Fictitious Applications

Any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the bonds, or otherwise induced a body corporate to allot, register any transfer of bonds therein to them or any other person in a fictitious name, shall be punishable under the extant laws.

16. Depository Arrangements

The Issuer has appointed BTS Consultancy Services Pvt. Ltdhaving its office at M S Complex, 1st Floor, Plot No.8, Sastri Nagar, Near RTO / 200 Feet Road,Kolathur, Chennai–600099as the Registrar for the present Bond Issue. The Issuer has entered into necessary depository arrangements with National Securities Depository Limited (“NSDL”) and Central Depository Services (India) Limited (“CDSL”) for dematerialization of the Bonds offered under the present Issue, in accordance with the Depositories Act, 1996 and regulations made there under. In this context, the Issuer has signed two tripartite agreements as under:

• Tripartite Agreement between the Issuer, NSDL and the Registrar for dematerialization of the Bonds offered under the present Issue.

Private and Confidential – Not for Circulation

• Tripartite Agreement between the Issuer, CDSL and the Registrar for dematerialization of the Bonds offered under the present Issue.

Bondholders can hold the bonds only in dematerialized form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.

17. Procedure for applying for Demat Facility a) Applicant(s) must have a Beneficiary Account with any Depository Participant of NSDL or CDSL prior to making the application. b) Applicant(s) must specify their beneficiary account number and depository participants ID in the relevant columns of the Application Form. c) For subscribing to the Bonds, names in the application form should be identical to those appearing in the account details of the Depository. In case of Joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository. d) If incomplete/ incorrect beneficiary account details are given in the Application Form which does not match with the details in the depository system, it will be deemed to be an incomplete application and the same be held liable for rejection at the sole discretion of the Bank. e) The Bonds shall be directly credited to the Beneficiary Account as given in the Application Form and after due verification, allotment advice/ refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Bonds to the applicant’s Depository Account will be provided to the applicant by the Depository Participant of the applicant. f) Interest or other benefits with respect to the Bonds would be paid to those bondholders whose names appear on the list of beneficial owners given by the depositories to the Issuer as on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever, the Issuer shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to the Issuer. On receiving such intimation, the Issuer shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.

Private and Confidential – Not for Circulation g) Applicants may please note that the Bonds shall be allotted and traded on the stock exchange(s) only in dematerialized form. ii. Others 1. Right of Bondholder(s)

Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege of shareholders other than those available to them under statutory requirements. The Bond(s) shall not confer upon the holders the right to receive notice, or to attend and vote at the General Meetings of the Issuer. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first.

Besides the above, the Bonds shall be subject to the provisions of the terms of this bond issue and the other terms and conditions as may be incorporated in the Debenture Trusteeship Agreement and other documents that may be executed in respect of these Bonds.

2. Modification of Rights

The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative against the Issuer where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Issuer.

3. Future Borrowings

The Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds or other securities in any manner with ranking as pari -passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and conditions as the Issuer may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.

4. Notices

All notices required to be given by the Issuer or by the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if

Private and Confidential – Not for Circulation

published in one English daily newspaper having nation -wide circulation and one regional language newspaper.

All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery to the Issuer or to such persons at such address as may be notified by the Issuer from time to time.

5. Minimum subscription

As the current issue of Bonds is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore the Bank shall not be liable to refund the issue subscription(s) / proceed (s) in the event of the total issue collection falling short of the issue size or certain percentage of the issue size.

6. Underwriting

The present issue of Bonds is not underwritten.

7. Deemed Date of Allotment

All benefits under the Bonds including payment of interest will accrue to the Bondholders from and including the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Bank reserves the right to keep multiple date(s) of allotment / allotment date(s) at its sole and absolute discretion without any notice. In case if the issue closing date/ pay in dates is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre -pond/ postponed) by the Issuer at its sole and absolute discretion.

8. Letter(s ) of Allotment / Bond Certificate(s ) /Refund Order (s)/ Issue of Letter(s ) of Allotment

The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 2 working days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.

9. Issue of Bond Certificate(s)

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Subject to the completion of all statutory formalities within time frame prescribed in the relevant Regulations/Act/ Rules etc., the initial credit akin to a Letter of Allotment in the Beneficiary Account of the investor would be replaced with the number of Bonds allotted. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialized form only.

10. Market Lot

The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialized form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

11. Trading of Bonds

The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of Rs.10 lacs each. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lacs and such trades shall be cleared and settled in recognized stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nationwide trading terminal or such other platform as may be specified by SEBI.

12. Mode of Transfer of Bonds

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/Depository Participant of the transferor/transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Bank.

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Transfer of Bonds to and from NRIs/ OCBs, in case they seek to hold the Bonds and are eligible to do so, will be governed by the then prevailing guidelines of RBI.

13. Common Form of Transfer

The Issuer undertakes that it shall use a common form/procedure for transfer of Bonds issued under terms of this Disclosure Document.

14. Interest on Application Money

Interest at the Coupon Rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re -enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds.

Such interest shall be paid for the period starting from and including the date of realization of application money in Issuer’s Bank Account up to one day prior to the Deemed Date of Allotment. The interest on application money will be computed as per Actual/Actual day count convention. Such interest would be paid on all valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of Bonds than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on refunded money.

The interest cheque(s)/ demand draft(s)/RTGS credit for interest on application money (along with Refund Orders, in case of refund of application money, if any) shall be dispatched by the Issuer within 10 days from the Deemed Date of Allotment and the relative interest warrant(s) along with the Refund Order(s)/RTGS credit, as the case may be, will be dispatched by registered post to the sole/ first applicant, at the sole risk of the applicant.

15. Interest on the Bonds

The Bonds shall carry a fixed rate of interest at the Coupon Rate from, and including, the Deemed Date of Allotment up to, but excluding the Redemption Date, payable on the “Coupon Payment Dates”, on the outstanding Principal Amount of Bonds till Redemption Date, to the holders of Bonds (the “Holders” and each, a “Holder”) as of the relevant Record Date. Interest on Bonds will cease from the Redemption Date in all events.

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16. Deduction of Tax at Source

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source out of interest payable on Bonds.

Interest payable subsequent to the Deemed Date of Allotment of Bonds shall be treated as “Interest on Securities” as per Income Tax Rules. Bondholders desirous of claiming exemption from deduction of income tax at source on the interest payable on Bonds should submit tax exemption certificate/ document, under Section 193 of the Income Tax Act, 1961, if any, with the Registrars, or to such other person(s) at such other address (es) as the Issuer may specify from time to time through suitable communication, at least 45 days before the payment becoming due. Regarding deduction of tax at source and the requisite declaration forms to be submitted, applicants are advised to consult their own tax consultant(s).

17. List of Beneficial Owners

The Issuer shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

18. Succession

In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Issuer shall recognize the executor or administrator of the deceased Bondholder or the holder of succession certificate or other legal representative as having title to the Bond(s).The Issuer shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.

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Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied:

. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder.

. Proof that the NRI is an Indian National or is of Indian origin.

. Such holding by the NRI will be on a non -repatriation basis

19. Joint – Holders

Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to provisions contained in the Companies Act, 1956 and the amendments there to.

20. Disputes & Governing Law

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof will be subject to the sole jurisdiction of courts of Thrissur, Kerala. Investor Relations and Grievance Redressal

Arrangements have been made to redress investor grievances expeditiously as far as possible. The Issuer shall endeavour to resolve the investor’s grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application and details of collection centre where the Application was submitted, may be addressed to the Compliance Officer at registered office of the Issuer. All investors are hereby informed that the Issuer has designated a Compliance Officer who may be contacted in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s),interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are given elsewhere in this Disclosure Document.

21. Material Contracts& Agreements involving Financial Obligations of the Issuer

By very nature of its business, the Bank is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements

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Private and Confidential – Not for Circulation involving financial obligations of the Bank. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Bank) which are or may be deemed to be material that have been entered into by the Bank. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the Head Office of the Bank between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.

A. Material Contracts& Documents

a. Letter appointing Registrars and copy of MoU entered into between the Bank and the Registrars.

b. Letter appointing Trustees to the Issue.

c. Board resolution of the meeting held on 15.07.2015authorizing issue of Bonds offered under terms of this Disclosure Document.

d. Shareholders resolution held on 15.07.2015

e. Letter of Consent from the Trustees to act as Trustees to the Issue.

f. Letter of Consent from the Registrars for acting as Registrars to the Issue.

g. Letter/Email granting In-principle Approval for listing of Bonds by BSE.

h. Letter from CARE and India Ratings conveying the credit rating for the Bonds.

i. Tripartite Agreement between the Issuer, NSDL and Registrars for issue of Bonds in dematerialized form.

j. Tripartite Agreement between the Issuer, CDSL and Registrars for issue of Bonds in dematerialized form.

k. Annual Report along with Audited financials and Audit Reports for the last three financial years

l. Limited Review financials for the quarter ended 30th June 2015

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C. Issue Details

a. Summary term sheet:

Security Name 10.25% SIB Basel III Tier 2 Bonds – October2025

Issuer The South Indian Bank Ltd Non-convertible, Redeemable, Unsecured, Basel III compliant Tier 2 Type of Instrument Bonds in the nature of debentures for augmenting Tier 2 capital of the Issuer with face value of Rs.10,00,000 each (Bond) Nature of Instrument Unsecured Claims of the Investors in the Instruments shall be:

(i) Senior to the claims of Investors in Instruments eligible for inclusion in Tier 1 Capital (ii) Subordinate to the claims of all Depositors and general Creditors of the Bank and Seniority of the (iii) These Bonds shall neither be secured nor covered by a Instrument guarantee of the Issuer or its related entity or other arrangement that legally or economically enhances the seniority of the claim vis -à-vis creditors of the Bank.

The claims of the bondholders shall be subject to the provisions mentioned in the point “Special Features”, “PONV” in the term sheet. Mode of Issue Private Placement The following class of investors are eligible to participate in the offer:

Mutual Funds, Public Financial Institutions as defined in section 4A of the Companies Act, 1956, Scheduled Commercial Banks, Insurance Companies, Provident Funds, Gratuity Funds, Superannuation Funds and Pension Funds, Co -operative Banks, Regional Rural Banks Eligible Investors authorized to invest in bonds/ debentures, Companies and Bodies Corporate authorized to invest in bonds/ debentures, Societies authorized to invest in bonds/ debentures, Trusts authorized to invest in bonds/ debentures, Statutory Corporations/ Undertakings established by Central/ State legislature authorized to invest in bonds/ debentures etc and any other person authorised and eligible to invest in the issue as per Regulatory guidelines.

Neither the Bank nor any related party over which the Bank exercises Prohibition on control or significant influence (as defined under relevant Accounting Purchase/Funding in Standards) shall purchase the Bonds, nor would the Bank directly or Bonds indirectly fund the purchase of the Bonds. The Bank shall not grant advances against the security of the Bonds issued by it Listing Proposed on the Wholesale Debt Market (WDM) Segment of BSE Rating of the Instrument CARE A+ and India Ratings (IndA+) Trustees to the Issue IDBI Trusteeship Services Ltd. BTS Consultancy Services Pvt. Ltd Registrars of the Issue

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Issue Size 300 Crores Option to retain oversubscription 200 Crores Augmenting Tier 2 Capital, under Basel III Capital Regulations as laid out Objects of the Issue by RBI and overall capital of the Bank for strengthening its capital adequacy and for enhancing its long-term resources Details of the The proceeds of the issue are being raised to augment Tier 2 Capital utilization of the under Basel III Capital Regulations as laid out by RBI. The proceeds of proceeds issue shall be utilized for its regular business activities. Coupon Rate 10.25% p.a

Step Up/Step Down Not Applicable Coupon Rate Coupon Payment Every financial year end date being 31st March of that year and on Frequency maturity Refer table for dates and subject to “Special Features”, ”PONV” mentioned below. 1st Coupon Thursday, March 31, 2016 2nd Coupon Friday, March 31, 2017 3rd Coupon Monday, April 02, 2018 4th Coupon Monday, April 01, 2019 Coupon Payment 5th Coupon Tuesday, March 31, 2020 Dates 6th Coupon Wednesday, March 31, 2021 7th Coupon Thursday, March 31, 2022 8th Coupon Friday, March 31, 2023 9th Coupon Monday, April 01, 2024 10th Coupon Monday, March 31, 2025 Final Coupon and Maturity Friday, October 31, 2025

Coupon Type Fixed Rate Coupon Reset Process (including rates, spread, effective date, Not Applicable interest rate cap and floor etc.) Interest for each of the interest periods shall be computed as per Actual / Actual day count conversion on the face value of principal outstanding at the coupon rate rounded off to the nearest rupee.

Day Count Basis Interest Period means each period beginning on (and including) the deemed date of allotment(s) or any coupon payment date and ending on (but excluding) the next coupon payment date.

Interest at the coupon rate (subject to deduction of income tax/withholding tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) Interest on Application will be paid to the applicants on the application money for the Bonds for Money the period starting from and including the date of realization of application money in Issuer’s Bank Account up to one day prior to the Deemed Date of Allotment.

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For the application amount that has been refunded, the Interest on application money will be paid along with the refund orders and for the application amount against which Bonds have been allotted, the Interest on application money will be paid within ten working days from the Deemed /date of Allotment. Where an applicant is allotted lesser number of Bonds then applied for, the excess amount paid on application will be refunded to the applicant along with the Interest on refunded money, and Income Tax at Source (TDS) will be deducted at the applicable rate on Interest on application money. In case of a default in payment of Interest and/or principal redemption Default Interest Rate on the duedates, additional interest @ 2% p.a. over the documented rate will be payable bythe Bank for the defaulting period subject to prevailing regulatory environment Maturity / Tenor 10 Years, 1 months (121 Months)

Redemption Date 31thOctober 2025 Subject to the provisions mentioned in “Special Features”, “PONV” in the Redemption Amount Term Sheet, the Redemption Amount would be Rs. 10,00,000 per bond. Premium/Discount on Nil Redemption Issue Price, Along with At par (Rs.10 lacs per Bond) justification of price Discount at which security is issued and the effective yield as a Nil result of such discount Put Option Not Applicable

Put Option Price Not Applicable

Put Option Date Not Applicable

Put Notification Time Not Applicable

Call Option Not Applicable

Call Option Price Not Applicable

Call Option Date Not Applicable

Call Notification Time Not Applicable

Face Value Rs. 10 lacs per Bond as adjusted for the provisions mentioned in “Special Features”, “PONV” in the Term Sheet Minimum Application 10 (ten) Bonds and in multiples of 1(one) Bond thereafter

Issue Timing: Sept 29th2015 1. Issue Opening Date Sept 30th2015 2. Issue Closing Date Sept 29th2015- Sept 30th2015 3. Pay-in Date

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4. Deemed Date of Sept 30th2015 Allotment Issuance mode In Demat mode only Trading Mode In Demat mode only Payment of interest and repayment of principal shall be made by way of Settlement cheque(s)/interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/RTGS/ NEFT mechanism in INR Depository National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) Business Day” means a day (other than a, Sunday and any day which is a public holiday for the purpose of Section 25 of the Negotiable Instruments Act, 1881(26 of 1881)) or a Bank holiday) on which banks are open for general business in Mumbai.

Business Day Should any of the dates, other than the Coupon Payment Date including Convention the Deemed Date of Allotment herein, falls on day which is not a business day, the immediately preceding business day shall be considered as the effective date, Should the Coupon Payment Date, as defined herein, falls on day which is not a business day, the immediately next business day shall be considered as the effective date. However the Final Coupon Payment Date shall not exceed the Redemption Date

15 days prior to each Coupon Payment Date, and Redemption Date. Record Date In the event the Record Date for Coupon Payment Date falls on a day which is not a Business Day, the next Business Day will be considered as the Record Date. Security Unsecured The Bank has executed/ shall execute the documents including but not limited to the following in connection with the Issue: a) Letter appointing Trustee to the Bondholders b) Debenture Trusteeship Agreement c) Letter appointing Arranger to the issue d) Letter appointing Registrar e) Rating Letters from CARE and India Ratings f) Tripartite Agreement between the Issuer; Registrar and NSDL for issue of Bonds in dematerialized form Transaction g) Tripartite Agreement between the Issuer, Registrar and CDSL for Documents issue of Bonds in dematerialized form h) Application made to BSE for seeking its in-principle approval for listing of Bonds i) Listing Agreement with BSE. j) Certified true copy of resolution of the shareholders of the Issuer dated 15.07.2015 passed in accordance with Section 180(1)(c) of the New Companies Act; k) Certified true copy of resolution of the shareholders of the Issuer dated 15th July 2015 passed in accordance with Sections 42 of the New Companies Act; The subscription from applicants shall be accepted for allocation and allotment by the Bank, subject to the following: Conditions precedent a) Rating Letters from CARE and India Ratings not being more then to subscription of one month old from the date of issue opening date Bonds b) Consent Letter from the Trustees to act as Trustee to the Bondholder(s) c) Letter from BSE conveying In-Principle Approval for listing &

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trading of Bonds

The Bank shall ensure that the following documents are executed/ activities are completed as per terms of this Disclosure Document: a) Credit of Demat Account(s) of the Allottee(s) by number of Conditions Bonds allotted within 2 working days from the Deemed Date of subsequent to subscription of Bonds Allotment b) Making application to BSE within 15 days from the Deemed Date of Allotment to list the Bonds and seek listing permission within 20 days from the Deemed Date of Allotment Cross Default Not Applicable The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the Role and provisions of Section 20 of the Indian Trusts Act, 1882, shall not be Responsibilities of applicable to the Trustees. The Trustees shall carry out its duties and Trustees to the Issue perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty. The Bonds are governed by and shall be construed in accordance with Governing Law and the laws of India, as modified or amended from time to time. Any Jurisdiction dispute arising thereof will be subject to the sole jurisdiction of courts of Thrissur, Kerala. Delay in Listing: The Issuer shall complete all the formalities and seek listing permission within 15 days from the Deemed Date of Allotment. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest of 1.00% per annum over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).

Refusal for Listing: If listing permission is refused before the expiry of the 20 days from the Deemed Date of Allotment, the Issuer shall forthwith repay all monies received from the applicants in pursuance of the Disclosure Document along with penal interest of 1.00% per annum over the Coupon Rate from the expiry of 20 days from the Deemed Additional Covenants Date of Allotmenttill the date the Debentures are listed on the WDM of the BSE.

Default in payment of Interest and Principal: In relation to the principal amount and coupon payable in respect of the Bonds, in case the same is not paid on the respective Due Dates, the defaulted amounts shall carry further interest at the rate of 2% (Two Percent) per annum over and above the Coupon Rate, from the date of occurrence of such default up to the date on which the defaulted amounts together with default interest is paid.

The present issue of Bonds is being made in pursuance of Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 01, PONV 2015issued by the RBI, covering Prudential Guidelines on Implementation of Basel III Capital Regulations in India covering Criteria for Inclusion of Debt Capital Instruments as Tier 2 Capital(Annex 5) and

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Minimum Requirements to ensure loss absorbency of non-equity regulatory capital instruments at the PONV(Annex 16) read along with RBI circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015,onImplementation of Basel III Capital Regulations in India – Amendments and as amended from time to time).

As per the extant instructions issued by RBI, these Bonds, at the option of the Reserve Bank of India, shall be written off upon the occurrence of the trigger event, called the ‘Point of Non-Viability (PONV) Trigger’ set out below.

Once the principal of the Bonds have been written down pursuant to PNOV Trigger Event, the PONV Write Down amount will not be restored in any circumstances, including where the PONV Trigger Event has ceased to continue.

Further it is clarified that there shall be no residual claims on the Bank following a trigger event and when write-off is undertaken.

Special Features: (i) The PONV Trigger event is the earlier of: PONV Trigger a. a decision that a write-off without which the firm would become non-viable, is necessary, as determined by the Reserve Bank of India; and b. the decision to make a public sector injection of capital, or equivalent support, without which the firm would have become non-viable, as determined by the relevant authority.

For the purpose of the above, a ‘non-viable’ bank will be:

A bank which, owing to its financial and other difficulties, may no longer remain a going concern on its own in the opinion of the Reserve Bank unless appropriate measures are taken to revive its operations and thus, enable it to continue as a going concern. The difficulties faced by a bank should be such that these are likely to result in financial losses and raising the Common Equity Tier 1 capital of the bank should be considered as the most appropriate way to prevent the bank from turning non-viable. Such measures would include write-off / conversion of non-equity regulatory capital into common shares in combination with or without other measures as considered appropriate by the Reserve Bank

Criteria to determine PONV

The above framework of PONV will be invoked when the Bank is adjudged by Reserve Bank of India to be approaching the point of non- viability, or has already reached the point of non-viability, but in the views of RBI

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there is a possibility that a timely intervention in form of capital support, with or without other supporting interventions, is likely to rescue the bank; and if left unattended, the weaknesses would inflict financial losses on the bank and, thus, cause decline in its common equity level.

The purpose of write-off of non-equity regulatory capital elements will be to shore up the capital level of the bank. RBI would follow a two-stage approach to determine the non-viability of a bank. The Stage 1 assessment would consist of purely objective and quantifiable criteria to indicate that there is a prima facie case of a bank approaching non-viability and, therefore, a closer examination of the bank’s financial situation is warranted.

The Stage 2 assessment would consist of supplementary subjective criteria which, in conjunction with the Stage 1 information, would help in determining whether the bank is about to become non-viable. These criteria would be evaluated together and not in isolation

If the PONV Trigger Event ( as described above ) occurs, the Bank shall: decide whether rescue of the bank would be through write-off alone or write-off in conjunction with a public sector injection of funds; without the need for the consent of the Bondholders or the Trustee, write down the outstanding principal of the Bonds by such amount as may be prescribed by RBI and subject as is otherwise required by the RBI at the relevant time, The Bank will affect a write –down within 30 days of the PONV write down amount being determined and agreed with the RBI;

Permanent Write-off Features These instruments are subject to permanent write-down upon the occurrence of the PONV Trigger as determined by Reserve Bank of India.

The amount of non-equity capital to be written-off will be determined by RBI.

Treatment for the purpose of Dividend: When a bank breaches the PONV trigger and the equity is replenished through write-off, such replenished amount of equity will be excluded from the total equity of the bank for the purpose of determining the proportion of earnings to be paid out as dividend in terms of rules laid down for maintaining capital conservation buffer. However, once the bank has attained total Common Equity ratio of 8% without counting the replenished equity capital, that point onwards, the bank may include the replenished equity capital for all purposes.

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The trigger at PONV will be evaluated both at consolidated and solo level and breach at either level will trigger write-off.

Treatment in Bankruptcy / Liquidation The Bondholders shall have no rights to accelerate the repayment of future scheduled payments (coupon or principal) except in bankruptcy and liquidation of the Issuer.

If a bank goes into liquidation before these instruments have been written-down, these instruments will absorb losses in accordance with the order of seniority indicated above in this Term Sheet and as per usual legal provisions governing priority of charges.

If a bank goes into liquidation after these instruments have been written- down, the holders of these instruments will have no claim on the proceeds of liquidation.

Amalgamation of a banking company If a bank is amalgamated with any other bank before these instruments have been written-down, these instruments will become part of the corresponding categories of regulatory capital of the new bank emerging after the merger.

If a bank is amalgamated with any other bank after the non-equity regulatory capital instruments have been written-down permanently, these cannot be written-up by the amalgamated entity.

If the relevant authorities decide to reconstitute a bank or amalgamate a bank with any other bank under the Section 45 of BR Act, 1949, such a bank will be deemed as non-viable or approaching non-viability and both the pre-specified trigger and the trigger at the point of non-viability for write-down of these instruments will be activated. Accordingly, these instruments will be fully written-down permanently before amalgamation / reconstitution.

The order of write down of various instruments issued by the issuer and that may be issued in future shall be as under:

Additional Tier I debt instruments including perpetual and nan cumulative preference shares. These instruments shall be subordinate to other instrument and all other deposit holders, unsecured general Order of Write Down creditors;

The Write-off of any Common Equity Tier 1 (CET-1) capital shall not be required before the write off of any Non-Equity (Additional Tier-I and Tier 2) regulatory capital instrument.

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Lock-in-Period Not Applicable

The payment should be made by electronic transfer of funds through RTGS mechanism for credit as per details given hereunder: Beneficiary Name The South Indian Bank Limited Name of the Banker Kotak Mahindra Bank Limited Payment Mode Account Name The South Indian Bank Ltd Current Escrow A/c Credit into Escrow A/c 6111648902 No. IFS Code KKBK0000958 Address of the Branch Mittal Court,224, Nariman Point, Mumbai - 400 021 Narration Application Money for Bond Issue

The present issue of Bonds is being made in pursuance of Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 01, 2015 issued by the RBI, covering Prudential Guidelines on Implementation of Basel III Capital Regulations in India covering Criteria for Inclusion of Debt Capital Instruments as Tier 2 Capital(Annex 5) and Minimum Requirements to ensure loss absorbency of Additional Tier 1 instruments at pre-specified trigger and of all non-equity regulatory capital Applicable RBI instruments at the PONV(Annex 16) read along with RBI circular Guidelines DBOD.No.BP.BC.38/21.06.201/2014-15 dated September 1, 2014 on Implementation of Basel III Capital Regulations in India – Amendments (as amended from time to time).

This issue Bonds and the terms and conditions of the Bonds will be subject to the applicable guidelines issues by the Reserve Bank of India and the Securities and Exchange Board of India from time to time.

Note: The Bank reserves its sole and absolute right to modify (pre-pone/ postpone) the above issue schedule without giving any reasons or prior notice. The Bank also reserves its sole and absolute right to change the deemed date of allotment and issue size of the above issue without giving any reasons or prior notice. Consequent to change in Deemed Date of Allotment, the Coupon Payment Dates and/or Redemption Date may also be changed at the sole and absolute discretion of the Issuer.

b. Cash Flow: The South Indian Name of the Company Bank Ltd

Face Value 10,00,000 Date of Allotment Sept 30th2015 Redemption Date 31stOctober 2025 Coupon Rate 10.25% p a

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Every financial year Frequency of Interest end date being 31st Payment March of that year and on maturity Day Count Convention Actual/Actual

No. of Days in Amount (in Cash Flow Date Coupon Period Rupees) 31 March 2016 183 51,250.00 Interest 31 March 2017 365 1,02,500.00 Interest 02 April 2018 367 1,03,061.64 Interest 01 April 2019 364 1,02,219.18 Interest 31 March 2020 365 1,02,219.95 Interest 31 March 2021 365 1,02,500.00 Interest 31 March 2022 365 1,02,500.00 Interest 31 March 2023 365 1,02,500.00 Interest 01 April 2024 367 1,02,780.05 Interest 31 March 2025 364 1,02,219.18 Interest 31October 2025 214 60,095.89 Interest 31October 2025 10,00,000.00 Principal Note: The above example is for illustration purpose only and does not take into account the effect of holidays announced as well as the impact of the loss absorption features mentioned in the Term Sheet. The actual payment of interest shall be made as per the terms mentioned in the Information Memorandum.

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Declaration A DECLARATION BY THE DIRECTORS THAT (a) the company has complied with the provisions of the Act and the rules made thereunder; (b) the compliance with the Act and the rules does not imply that payment of dividend or interest or repayment of debentures, if applicable, is guaranteed by the Central Government; (c) the monies received under the offer shall be used only for the purposes and objects indicated in the Offer Document;

I am authorized by the Board of Directors of the Company vide resolution dated July 15th2015to sign this form and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been complied with. Whatever is stated in this form and in the attachments thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records maintained by the company

It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this form.

It is further declared that all the relevant provisions in the regulations/guideline issued by SEBI and other applicable laws have been complied with and no statement made in this Disclosure Document is contrary to the provisions of the regulations/guidelines issued by SEBI and other applicable laws, as the case may be. The information contained in this Disclosure Document is as applicable to privately placed debt securities and subject to information available with the Company. The extent of disclosures made in the Disclosure Document is consistent with disclosures permitted by regulatory authorities to the issue of securities made by the companies in the past.

For The South Indian Bank Limited

______Authorized Signatory Place: Thrissur Date: 28/09/2015

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Annexures

Annexure – I: Credit Rating Letter from CARE

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Annexure – II: Credit Rating Letter from India Ratings

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Annexure - III: Letter of Consent from Debenture Trustee

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Annexure – IV: Letter of consent from Registrar

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Annexure – V: In-Principle Approval of the Stock Exchange

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Annexure – VI: Application Form

THE SOUTH INDIAN BANK LIMITED Head Office: SIB House, T.B. Road, Mission Quarters, Thrissur 680 001, Kerala, India. Tel: +91-487-2420020, 2420058, 2420113 ; Fax: +91 487 2442021 E-mail: [email protected]; Website::www.southindianbank.com

Application Form Sr. No. Dear Sirs,

Having read and understood the contents of the Disclosure Document dated 29thSeptember2015 for Private Placement, we apply for allotment to us of the Unsecured, Redeemable Non-Convertible, Basel III Compliant Tier II Subordinated Bonds in the nature of Debentures. The amount payable on application as shown below is remitted herewith. On allotment, please place our name on the Register of Bond holders. We bind ourselves to the terms and conditions as contained in the Disclosure Document for Private Placement. We note that the Bank is entitled in its absolute discretion to accept or reject this application whole or in part without assigning any reason whatsoever. (PLEASE READ THE INSTRUCTIONS CAREFULLY BEFORE FILLING THIS FORM)

Form in which certificate is to be issued Demat NSDL [ ] CDSL [ ] DP NAME: DPID: CLIENT ID: We understand that in case of allotment of Bonds to us, our Beneficiary Account as mentioned above would be credited to the extent of Bonds allotted. In case the Bonds allotted to us cannot be credited to our Beneficiary Account for any reason whatsoever, we will accept physical Bonds certificates.

The application shall be for a minimum of 10 Bonds and in Multiples of 1 (One) Bond thereafter (Each bond of Rs. 10,00,000)

Remittance through Cheque/Draft No. of Bonds applied for (In figures ) No. of Bonds applied for (In words) Amount (Rs.) ______(in words) ______Date Cheque /Demand Draft No. Cheque /Demand Draft drawn on

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Remittance through RTGS No. of Bonds applied for (In figures ) No. of Bonds applied for (In words) Amount (Rs.) ______(in words) ______Remittance Particulars Mode of UTR No. Name of the Remitting Bank and Remittance Branch and Date of Remittance RTGS

We are applying as {Tick () whichever is applicable} 1 Company Body Corporate 2 Commercial Bank 3 Regional Rural Bank 4 Co-operative Banks 5 Financial Institution 6 Insurance Companies 7 Mutual Fund 8 Provident/Superannuation/ 9 Port Trusts Gratuity Funds 10 NBFC & Residuary NBFC 11 Association of Persons 12 Others (Please specify)

Application Details

First Applicant’s Name in Full (Block letters)

Second Applicant’s Name in Full (Block letters)

Third Applicant’s Name in Full (Block letters)

Mailing Address in Full (Do not repeat name. Post Box No. alone is not sufficient.)

Pin: Tel: Fax: Tax Details PAN or GIR No. IT Circle / Ward / District Not Allotted

Details of Bank Account of the First Applicant: Name of the Bank ______Branch______Account No: ______Nature of Account: SB/CA RTGS Code of Bank/ Branch ______

Tax Deduction Status: (Please tick one)

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( ) Fully Exempt (Please furnish exemption certificate): ______( ) Tax to be deducted at Source: ______

Specimen Signature Name of the Authorised Signatory Designation Signature 1. 2.

Acknowledgement Slip shall be given to the Investors as shown below the Instructions. ------Tear Here------

ACKNOWLEDGEMENT SLIP

The South Indian Bank Ltd Head Office: SIB House, T.B. Road, Mission Quarters, Thrissur 680 001, Kerala, India. Tel: +91-487-2420020, 2420058, 2420113 ; Fax: +91 487 2442021 E-mail: [email protected]; Website::www.southindianbank.com

Application Form Sr. No:

Receivedfrom______Address______an application for _____ Bonds along with Cheque/Demand Draft No. ______Dated ______Drawn on ______for Rs. ______(Rupees______only)

(Note: Cheques and Drafts are subject to realisation)

RTGS Remittance Particulars Mode of Date of Name of the Amount of Remittance Transfer Remittance Remitting Bank and Branch RTGS Rs. ______(Rupees ______)

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INSTRUCTIONS 1) Application Forms must be completed in BLOCK LETTERS IN ENGLISH. A blank space must be between two or more parts of the name. For Example: A B C D E L T D 2) Application forms duly completed in all respects must be lodged with the Bank at its head office, before the closure of the subscription. Cheques/Demand Drafts should be drawn in favour of The South Indian Bank Ltd. and crossed ‘Accounts Payee only’. Cheques / Demand Drafts may be drawn on any bank which is situated at and is a member of the Bankers’ clearing house situated at the Centers where the application form is submitted as mentioned elsewhere in the Information Memorandum. Investors may also remit the application money through RTGS (if remitted from branches of other Banks), with instructions to credit the same to the above account (A/c No.6111648902) maintained at Nariman Point Branch, of Kotak Mahindra Bank Ltd, Mittal Court,224, Nariman Point, Mumbai - 400 021Branch. 3) The branches of other Banks transferring the Application Money through RTGS to the credit of the above account shall send the money through RTGS Code No. KKBK0000958 4) As an abundant precaution, the investors are advised to send by fax the particulars of the remittances made through RTGS [like i) Name of the Investor ii) Number of Bonds applied for iii) Amount of Application Money remitted iv) Date of the remittance v) Bank and Branch through which the remittance is made etc.] to any of the Advisors, on the fax number mentioned elsewhere in the Document/Application Form. 6) Cash, outstation cheques/drafts, money orders, postal orders and stock invest will NOT be accepted. 7) As a matter of precaution against possible fraudulent encashment of interest warrants due to loss/misplacement, applicants are requested to mention the full particulars of their bank account as specified in the Application Form. Interest warrants will then be made in favour of the bank for credit to the applicant’s account. In case the full particulars are not given, cheques will be issued in the name of the applicant at his own risk. 8) Receipt of application will be acknowledged by the collecting Bank branch(es) in the “Acknowledgement Slip” appearing below the Application Form. No separate receipt will be issued. 9) All applicant(s) should mention their Permanent Account Number (PAN) or the GIR number allotted under the Income Tax Act, 1961 and the Income Tax Circle/Ward district. In case where neither the PAN nor GIR is allotted, the fact of non-allotment should be mentioned in the application form in the space provided for. 10) The Application would be accepted as per the terms and conditions of the Bonds outlined in the Information Memorandum of Private Placement. 11) Signatures should be made in English or in any other Indian language included in Schedule VIII of the Constitution of India. Thumb impression must be attested by an authorized official of a Bank or by a Magistrate/Notary Public under his/her official seal. 12) Those desirous of claiming tax exemptions on interest on Application Money are compulsorily required to submit a certificate issued by the Income Tax Officer / relevant declaration forms as per Income Tax Act, 1961 along with the Application Form. In case the above documents are not enclosed with the application forms, TDS will be deducted on interest on Application Money. For subsequent interest payments such certificates have to be submitted periodically.

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Application Form(s) can be submitted to the offices of the Arrangers or Bankers to the Issue or at the head office of The South Indian Bank mentioned in the Information Memorandum

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