Integrated Report 2019-20

Nurturing Growth through Sustainability NURTURING GROWTH THROUGH SUSTAINABILITY

At IndusInd Bank, growth and sustainability As a custodian of public trust, IndusInd Bank continues to goes hand-in-hand. In its 25-year long journey, IndusInd Bank takes cognisance of its deepen its market coverage responsibility to provide seamless, and demonstrate robust the Bank has always viewed growth through a best-in-class financial services and performance. This shifted to a holistic prism and has maintained a relentless solutions to customers. Aligned with higher gear this year, as the Bank the ‘Digital India’ mission, the Bank is made sustainability a business focus on prioritising sustained value creation deploying next generation technologies imperative, through its new 4D+S over unbounded ambitions. into its operations and offerings to strategy. The result of this is an deliver simplicity and convenience even stronger focus on embedding while bringing a vast section of India’s Environmental, Social, and underbanked population into the Governance (ESG) parameters into economic mainstream. its own operations and lending decisions, to drive quality growth, Propelled by a prudent 4D strategy a risk-mitigated portfolio and long- – digitise to differentiate, diversify, term value. and maintain domain leadership,

1 About this Report Contents APPROACH TO REPORTING ALIGNMENT WITH REPORTING FRAMEWORKS IndusInd Bank Ltd. has been This integrated report is prepared in accordance with the International Message from the MD & CEO 04 APPROACH TO SUSTAINABILITY voluntarily reporting its Integrated Reporting Framework outlined by the International ESG Highlights and Recognition 06 Sustainability Framework 48 sustainability performance Integrated Reporting Council (IIRC). This report has been prepared in and Performance since 2011, to communicate accordance with the GRI Standards: Core option [GRI:102-54]. its triple bottom line focus to Environment 53 Note: IndusInd Bank also publishes a separate annual report prepared in its stakeholders. Mindful of a accordance with the following : CORPORATE OVERVIEW Social 60 changing operating environment and the emerging megatrends, About IndusInd Bank Ltd. 10 People 84 the Bank has, over the years, Products and Services 12 Governance 92 responded by ensuring that its Companies Act, 2013 (and the rules made thereunder) business and operations imbibe Geographical Presence 14 the philosophy of integrated Securities and Exchange Board of India (Listing Obligations and Board of Directors and 16 thinking. Disclosure Requirements) Regulations, 2015 Sustainability Governance ANNEXURES Indian Accounting Standards Key Financial Performance Indicators 18 IndusInd Bank became one I – GRI Content Index 98 of the first organisations in Secretarial Standards issued by the Institute of Company Digitalisation 20 II – DJSI Mapping 101 India to adopt Integrated Secretaries of India Marketing and Communications 26 III – Independence Assurance Statement 103 Reporting by publishing its first integrated report in The FY 2019-20 annual report can be found at: 2017. Since then, the Bank has www.indusind.com/content/dam/indusind-corporate/ continued to annually publish investor-resource/latest-annual-report/annual-report-2019-20.pdf INTEGRATED APPROACH TO integrated reports that provide VALUE-CREATION a holistic view of its strategy, performance, relationships and Our Capitals 30 value-creation efforts, including ASSURANCE Value-creation Model 32 its Environmental, Social and IndusInd Bank follows a dual In the reporting year, the Bank Opportunity Landscape 34 Governance (ESG) approach. assurance process, with its appointed its new MD & CEO. Board (as Those Charged With The Bank also added to its physical Stakeholder Engagement 36 Governance) undertaking the infrastructure as outlined in the Materiality Assessment 38 responsibility of the integrity of chapter on Geographic Presence REPORTING SCOPE AND information presented in this on page 14 of the report. The Core Strategy 40 BOUNDARY report, together with an external Executive Committee and top Risk Management 42 This integrated report assurance objectively verifying management too underwent presents information about the document and its contents. changes. Sustainability performance IndusInd Bank’s pan-India The Integrated Report 2019-20 of the Bank’s subsidiary Bharat operations across various has been externally assured by Financial Inclusion Limited (BFIL) business verticals. It covers KPMG, an independent third party is not a part of the report’s information pertaining to the that has no financial interest in scope and boundary. period from April 1, 2019 to the operations of IndusInd Bank There are no restatements of March 31, 2020. The last report other than for the assessment information provided in the was published for the period and assurance of this report. integrated report as there were April 1, 2018 - March 31, 2019. The assurance statement thus no changes in the nature of The report may be viewed here. issued is part of the annexures on business, measurement methods page 103 of the report. etc. during the reporting year. There were no significant changes in the organisation’s supply chain during the reporting year. [GRI: 102-1, 102-5, 102-10, 102-45, 102-48, 102-49 102-50, 102-51, 102-52,]

For more details, visit our website www.indusind.com

2 3 Message from the MD & CEO

participate in the recovery of the fifth three-year planning cycle (PC-5), Environmental, Social, and momentum lost due to the pandemic. following a strongly rewarding PC-4 Governance (ESG) with our Strategic Growth, under the broad theme of improving credit/lending business, project As markets attempt to reprise ‘Market Share with Profitability’. finance, and advisory services growth and ambition in the emerging offered to our wholesale, corporate, new normal, we are seeing newer The period under PC-4 i.e. FY 2016-17 and investment banking clients. Sustainable Performance opportunities take shape. It boosts to FY 2019-20 saw our revenues Our wholesale banking segment our confidence in a post-digital grow 23%, our net worth by 19%, our too, is focused on aspects such future and our role in it as a bank deposits by 17%, and our advances as impact financing, clean energy working to drive financial inclusion by 22%. Our Net Interest Margin and renewables, green and social through technology-based solutions. (NIM) grew by 26 basis points and infrastructure, inclusive and The emerging scenario validates our we reduced the cost-to-income microfinance, and more. long-held vision at IndusInd Bank. ratio by 370 basis points, enhancing We will continue to deliver by moving our profitability. We are mainstreaming formal ahead in our chosen direction. credit through microfinance. We are These gains have accrued from collaborating with communities to We will be committed to A powerful strategy that translates focused efforts towards the four build interventions that help them into performance pillars of the PC-4 strategy: the realise their ambitions while helping generating sustainable value 4Ds of Digitise to Differentiate, to conserve what they value. Performance Diversify, and Create Domain for our stakeholders by We have clocked significant Leadership, and Double the As an organisation, we are scaling growth during FY 2019-20, from a following the triple bottom Bank. It drives us to continuously our efforts to reduce our carbon year-on-year standpoint. Our Net strengthen our investments in our footprint even as we expand our line approach Interest Income grew 36% to touch digital backend (FY 2019-20 saw us physical footprint, by improving `12,059 crores; our total income invest `428 crores in technology our energy efficiency and waste also grew to `19,011 crores. and digital interventions), enhance management, among others. Topline growth was accompanied by our profitability and increase the healthy growth in profit levels – our granularity of our loan book. A purpose-driven team operating profit and post-tax profit that creates impact grew 34% and 35% respectively from Our strategy in its next leg, i.e. levels witnessed a year ago. The credit for our successes at PC-5, sees the addition of S for IndusInd Bank goes to our people. Sustainability as its fifth pillar. Dear Stakeholders, Despite the year being a challenging Our culture of learning and Therefore, we will be committed to one, we have succeeded in delivering innovation drives us to constantly I am pleased to share with you and ensuring that all channels of panic and then into steep adaptation generating sustainable value for our stronger returns and witnessed enhance our capacities and build IndusInd Bank’s Integrated report banking remained operational. mode. At IndusInd Bank, we have stakeholders by following the triple capital reserves grow. We also our capabilities. We ensure overall for FY 2019-20. This has served to strengthen stood in solidarity with the frontline bottom line approach. While striving reduced our non-performing assets well-being through policies that drive our customer relationships workers and we continue to do to deliver consistent growth in profits, (NPAs) to 0.91% from 1.21% diversity and inclusion, engagement For over 25 years, the Bank has across the board. so, with several efforts aimed at the Bank will conduct its business during the previous year, boosting driven by values, and focused been committed to delivering value providing support. by converging social impact and profitability. Our portfolio remains initiatives to empower our people. for our customers through several As the Bank’s newly appointed environmental responsibility. This will well-diversified, with customer pioneering innovations and robust MD and CEO, I feel very proud As India enacted among the most see the Bank intensify its focus banking accounting for 50% of Committed to creating value customer solutions through our to belong to and lead a team stringent lockdowns anywhere in on sustainable investing and the our fee income. ‘best-in-class’ banking platforms. that is distinguished by its the world, our responsibility towards reduction of its carbon footprint. At IndusInd Bank, our belief in In my 12 years of service with performance and its commitment to our customers became our priority ourselves is backed by the belief We continue to innovate keeping IndusInd Bank, I am proud of what customer-centricity. at IndusInd Bank. We lost no time in At IndusInd Bank, we recognise of our millions of customers in our customers’ needs in mind. we have achieved as an organisation. rolling out a Business Continuity Plan. that sustainability will be a key our services. It is the source of our We introduced cutting-edge products As a part of the overarching strategy A challenging year Our continued strategic investments driver of our growth. conviction. We are committed and such as the Nexxt Credit Card and of the Bank, the management team in technology have helped to ensure fully geared to help our customers FY 2019-20 had been witnessing the 3-in-1 account with a digital-first and I will focus on ‘sustainability’ the uninterrupted delivery of services. Sustainability, the fifth pillar reap the benefit of opportunities challenges even before the pandemic share and trading platform Upstox, to as a theme to drive long-term The Bank’s focus on sustainability emerging with the new normal. broke out. Demand had been muted offer greater value to the customer. stakeholder value. A calibrated opening up during is led by overall governance at the We will continue to support our and trade volumes were lower than The positive response these garnered April-end was followed by the Bank. IndusInd Bank features on customers and our people, to create expected. The credit scenario too had has provided the bright silver As I am writing to you, India announcement in May 2020 of the ‘A list’ of the Carbon Disclosure lasting value for all our stakeholders. been conservative. These were effects lining to the year. is prudently rising from the a `20 lakh crore economic relief Project (CDP), a mark of superior of a sanitisation within the financial unprecedented challenges posed by package. The measure taken by environmental transparency Yours sincerely, services sector made necessary by Strategy the COVID-19 pandemic to the society the Government of India to provide and performance. the preceding liquidity crisis. Our sustainable performance is the and the economy. As an organisation, support to small businesses is among Sumant Kathpalia outcome of our systematic approach IndusInd Bank responded The pandemic impacted two key the many expected to set the ground Our Environmental and Social MD & CEO towards long-term planning and exceedingly well amidst the crisis by ecosystems – healthcare and for economic recovery. At the Bank, Management System (ESMS) strategising for the Bank’s growth. being responsive to our stakeholders financial – plunging them first into we see several opportunities to integrates the aspects of The year marks our entry into our

4 Integrated Report 2019-20 IndusInd Bank 5 ESG Highlights and Recognition More than ~24,000 14 lakh 7,292 hours Bharat Money Kirana training man-hours of volunteering in 27,000 Our achievements across Environment (E), Stores where small achieved for children in municipal environmental and shopkeepers and retailers 5.77 lakh participants schools supported social activities are onboarded to act with mid-day meals Social (S), and Governance (G) as banking agents

ENVIRONMENT

Emissions from air travel decreased 4,000 solar ~7% of infra 4,096 MW GOVERNANCE streetlights installed in portfolio attributed of renewable by 42.31% 30 villages to green lending projects financed compared to the th nd Dow Jones Sustainability Index years of reporting on year of year of previous year 11 4 2 (DJSI) Ranking Improved sustainability initiatives Integrated Reporting externally assured Integrated Reporting to from Emission intensity Fuel emissions from 72 63 `5,324 crores 59,000 trees decreased by Company vehicles green and climate planted in FY 2019-20 and decreased finance exposure over 1 lakh since 17.53% to Leadership in Carbon Disclosure Project (CDP) for the inception of the of total 3.77 MT CO2e/crore by ~10% 6 consecutive years; IndusInd Bank among the 39.44% afforestation programme of total revenue lending is ESG focused 7 Indian companies to secure Band A- and be a part of CDP Rising Stars

SOCIAL Awards

~10 lakh 3,000+ `30 crores 93.5 lakh women beneficiaries customers funded under worth of relief items Base of the Pyramid Has witnessed highest growth in brand value of CSR activities the Kisan Credit Card distributed to the (BoP) beneficiaries ‘Spirit of scheme by the Bank’s COVID-19 impacted through microfinance among top retail agri-business Innovation’ for IndusCorp, Duo Card and Nexxt global banks, Credit Card at Finnoviti 2020 3 according to The Banker’s Top 500 28 lakh 7 lakh m + 2,760 ATMs ~130% increase Banking Brands 2020 report active users of water storage audio-enabled with in rural customers on ‘IndusMobile’ capacity created through braille keypads over the previous year water conservation under the business CSR programmes correspondents route through microfinance ‘Best Bank CSR Times Award’ Awards 2019 10 lakh 1,278 MT `30 lakh ~37% of the total in the mid-sized bank category at the for Best Corporate in the Environment, customers on of waste collected through worth of employee portfolio comprises 24th edition of the Business Today - Climate, Forest Category WhatsApp banking the waste management donations to partner NGOs social, livelihood, and Money Today Financial Awards CSR programme inclusive lending

6 Integrated Report 2019-20 IndusInd Bank 7 CORPORATE OVERVIEW IndusInd Bank is one of India’s fastest-growing new generation banks. A spirit to innovate and serve governs the Bank’s efforts to provide millions of Indians from the underbanked and unbanked sections of the society with access to finance through a variety of tailored banking solutions.

[GRI:102-1, 102-5] CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

About IndusInd Bank Limited Banking Solutions for an Emerging India Mission IndusInd Bank in Numbers We will consistently add value to all our stakeholders and emerge Vision as India’s most convenient Bank IndusInd Bank’s with best-in-banking financial vision is to become: parameters together with the A Nifty 50 doubling of our loan book, crore 1 A relevant business 4 Engaged with all our 2.5 44:56 clients and profits within the Company Total customer base Corporate-to-retail and banking stakeholders and next three years. portfolio ratio partner to its clients deliver sustainable and compliant returns

2 Customer-responsive, 5 A change agent for striving at all times to financial inclusion in collaborate with clients India, following the 1,911 751 2,760 in providing solutions for Branches across India Geographic locations ATMs across India merger of Bharat their banking needs Financial Inclusion Limited with the Bank 3 A forerunner in the marketplace in terms of profitability, productivity and efficiency

[GRI:102-7] [GRI:102-7, 102-16]

10 Integrated Report 2019-20 IndusInd Bank 11 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Products and Services Driven by Innovation

IndusInd Bank is committed to delivering products and services at par with Digital Offerings the highest standards of quality in the global banking industry. In addition to its standard suite of offerings, the Bank is innovating to provide targeted IndusInd Bank employs digital technology to provide a variety solutions for rural development, financial inclusion, green and climate lending, of services to its customers. and livelihood generation through microfinance.

Key Product and Client Groups IndusMobile Video Branch The all-in-one banking app by the Bank, which A facility offered by the Bank to allow its customers to GLOBAL TRANSACTION provides 100+ services to its customers for interact directly with their respective Branch Managers MARKETS Product Groups BANKING banking on-the-go through video conferencing Indusnet – NetBanking Safe, dedicated online platform for service delivery anywhere, anytime Client Groups

CONSUMER BANKING CORPORATE BANKING

Vehicle Finance Corporate and Investment Banking IndusAssist – Voice Banking On-the-go Banking on Alexa A suite of business banking services, offered Retail Liabilities Commercial Banking through Facebook Taking convenience to the next level, customers can now link their bank accounts with Amazon’s Alexa for voice banking IndusForex Banking Channel Financial A one-stop online portal to service forex needs of Management and Services Institutions Group customers, including multi-currency travel cards

Business Banking Public Sector Units IndusSmart An online mutual fund and wealth management platform to help account holders learn, invest and plan Wealth Management and for their investment goals Third-party Distribution WhatsApp Banking The Bank uses Natural Language Retail Assets Processing embedded within WhatsApp platform to resolve customer queries

BUSINESS UNITS

[GRI:102-2, 102-5] [GRI:102-2]

12 Integrated Report 2019-20 IndusInd Bank 13 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Geographical presence Expanding Reach

IndusInd Bank has a wide-ranging physical presence across both urban and rural markets and is focused on expanding its footprint to offer its services to wider consumer segments. It also has representative offices in London (UK), Dubai and Abu Dhabi (UAE) and a strategic alliance in Doha (Qatar).

1 1,911 Corporate Branches office across India One Indiabulls Centre, Mumbai 1,761 branches and 3 150 BC banking outlets Representative offices overseas 435 428 Semi-urban Rural branch network branches Includes 150 BC banking outlets

London 46 7 Back offices* Pioneer branches Dubai Abu Dhabi 3 Green buildings 2,760 LEED Gold and Platinum ATMs rated corporate offices

*1 branch in Gujarat International Finance Tec-City (GIFT) to cater to As on March 31, 2020 overseas customers

[GRI:102-4, 102-6, 102-7] [GRI:102-4, 102-6, 102-7]

14 Integrated Report 2019-20 IndusInd Bank 15 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Board of Directors and Sustainability Governance Experience, Expertise and Foresight SUSTAINABILITY GOVERNANCE

The Board of Directors at IndusInd Bank brings a diverse set of experiences CSR & Sustainability Sustainability Council Sustainability Team Committee of Board and wide-ranging expertise to guide the Bank in the overall strategic direction • Sustainability strategy, goals and • Management and implementation • Agree, review and evaluate the performance of strategies and its key priorities. It also maintains a keen oversight of the key result areas, sustainability strategy of the Bank • Align sustainability policies with • Dedicated Head of Sustainability acting as ‘Those Charged With Governance’ for the Bank. • Provide industry perspective to the Business Units drives the agenda the sustainability agenda of the • Review compliance with respect • Business and functional Bank to sustainability coordination Duties and Responsibilities

CSR & SUSTAINABILITY COMMITTEE

Mr. Arun Tiwari Mr. Shanker Annaswamy Dr. T. T. Ram Mohan Mrs. Akila Krishnakumar Mr. Rajiv Agarwal Mr. Sanjay Asher Mr. Sumant Kathpalia Chairman Director Director

SUSTAINABILITY COUNCIL

Mrs. Akila Krishnakumar Mr. Rajiv Agarwal Mr. Sanjay Asher Mr. Sumant Kathpalia Mr. Arun Khurrana Mrs. Roopa Satish Mr. Sanjay Mallik Mr. Zubin Mody Director Director Director (MD & CEO) (Deputy CEO & Head – Global (Head – Corporate and (Head – Investor Relations, (Chief HR Officer) Markets, Transaction Banking Investment Banking, Strategy and Portfolio and Financial Institutions and Sustainable Banking) Management – Public Sector) Wholesale Banking)

Mr. Sanjeev Asthana Mrs. Bhavna Doshi Mr. Sumant Kathpalia Mr. Ramaswamy Mr. S.V. Parthasarathy Mr. Sanjeev Anand Mr. Adwait Hebbar Mr. Soumitra Sen (MD & CEO) Director Director Meyyapan (Head – Consumer Finance) (Head – Commercial and (Head – Corporate (Head – Consumer (Chief Risk Officer) Rural Banking) Services) Banking) BOARD DIVERSITY AND EXPERIENCE

7 2 38 years Independent Directors Women Directors Average experience

[GRI:102-18, 102-19, 102-20, 102-22, 102-23, 102-24] [GRI:102-18, 102-19, 102-20, 102-22, 102-23, 102-24]

16 Integrated Report 2019-20 IndusInd Bank 17 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Key Financial Performance Indicators Consistent Performance

Strong Delivery over the Past 5 Years

Return on Assets (%) Return on Equity (%) Earnings per Share (`) Book Value per Share (`)

FY 2019-20 1.54 FY 2019-20 14.53 FY 2019-20 63.75 FY 2019-20 495.57

FY 2018-19 1.39 FY 2018-19 13.25 FY 2018-19 54.90 FY 2018-19 437.38

FY 2017-18 1.90 FY 2017-18 16.48 FY 2017-18 60.19 FY 2017-18 391.18

FY 2016-17 1.86 FY 2016-17 15.26 FY 2016-17 48.06 FY 2016-17 338.90

FY 2015-16 1.91 FY 2015-16 16.78 FY 2015-16 39.68 FY 2015-16 289.40

Net Interest Margin (%) Cost to Income (%) Revenue (` in crores) Tax Performance

Particulars FY 2019-20 FY 2019-20 4.14 FY 2019-20 43.33 FY 2019-20 19,010.05 Earnings before tax (` in crores) 6,120.61 FY 2018-19 3.80 FY 2018-19 44.19 FY 2018-19 14,492.90 Reported taxes (` in crores) 1,702.70 Effective tax rate (%) 27.81 FY 2017-18 3.99 FY 2017-18 46.65 FY 2017-18 12,247.55 Cash taxes paid (` in crores) 2,061.36 FY 2016-17 3.99 FY 2016-17 46.74 FY 2016-17 10,234.09 Cash tax rate (%) 33.67

FY 2015-16 3.81 FY 2015-16 47.00 FY 2015-16 7,813.52

[GRI:201-1] [GRI:201-1]

18 Integrated Report 2019-20 IndusInd Bank 19 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Digitalisation Technology to Enhance Recent Initiatives In FY 2019-20, the Bank invested ~`428 crores in technology and digital interventions aimed at enhancing customer journeys for the retail and corporate sectors and Customer Experiences strengthening security.

INDUSSTOX FOR ONLINE TRADING RSA ADAPTIVE AUTHENTICATION CASH MANAGEMENT SYSTEM Over the years, IndusInd Bank has gained recognition as a pioneer in digital In partnership with Upstox, a The Bank has implemented the RSA The Bank upgraded its Cash innovations. With industry-first initiatives such as Alexa Voice Banking, Video leading exchange trading and Risk Engine, which uses AI and ML Management System for a broking platform, the Bank to understand end-user behaviour. superior performance by adding Branch and the ‘Duo’ card (combining the benefits of debit and credit cards), has launched an industry-first The system also enhances security functionalities such as e-payments it has led the way in enhancing the customer experience. Customers have partnership product called by analysing user patterns and and e-collections. The product the 3-in‑1 account. It offers intelligently creating a step-up covers collections, payments appreciated the Bank’s innovative value-additions such as choice in picking customers three benefits in one: authentication using different and printing and supports bank account numbers as well as that of bills at ATMs. an IndusInd Savings Account, an factors or denies login. cash processing for receivables Upstox Demat Account and an and collections. Upstox Trading Account. It can be LCR COMPUTATION The Bank continues to improvise to deliver best-in-class solutions. upgraded to a full-fledged trading AUTOMATED SYSTEM CORPORATE BANKING and Demat account. Liquidity Coverage Ratio (LCR) is a DIGITISATION INDUSCORP – regulatory ratio that indicates the CURRENT ACCOUNT OPENING WHATSAPP BANKING short-term liquidity resilience of An assisted app-based platform SUPPORTED BY NLP the Bank. The Bank has completely (DIGICA) has been introduced to IndusMobile IndusInd Bank is the first of its automated the process of make opening a current account The all-in-one banking app continues to be the key kind to integrate NLP with its computation of LCR by integrating seamless and hassle-free for WhatsApp Banking services. in real time with the source systems customers. Going forward, this channel for customer services and transactions. Customers can chat with the Bank for asset and liabilities. process will enable the Bank The app offers 100+ services that help customers using conversational language to open current accounts for IndusConnect is a portal on WhatsApp. Services for the proprietorships, partnerships, experience banking-on-the-go. for CFD dealers, enabling Consumer Finance Division (CFD), limited liability partnerships, them to boost relationships, Current Accounts and Savings and private and public increasing transparency and Accounts (CASA), and non-resident limited companies. IndusMobile App improving efficiency. customer base went live during FY 2019-20. SME DIGITAL LENDING PLATFORM (DLP) ONLINE FIXED DEPOSIT SERVICE The Bank launched a IndusInd Bank has launched a comprehensive solution to augment 2.8 Mn platform for opening fixed deposit/ its Business Loan and Loan Against savings account online. This reduces Card Receivable products, through a registered users customers’ dependence on physical digital lending platform available to branches and accelerates their existing as well as new customers. digital banking journey. It is also It facilitates instant disbursement expected to serve as a key customer based on the organisation’s profile acquisition tool, increase granularity and its risk assessment, following and improve risk‑mitigation. 10 Mn the process of loan application, transactions/month integrated underwriting and more, in real time. The Bank rolled out an online platform for CFD loan repayment called ClickPay, facilitated through 1 Mn debit card, net banking, and UPI (both QR and collect request). registered users on WhatsApp banking

[GRI:102-2]

20 Integrated Report 2019-20 IndusInd Bank 21 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

01010101010101010101010010101010101010101010101010101010101010101010101010101 ENTERPRISE DATA WAREHOUSE 01010101010101010101010010101010101010101010101010101010101010101010101010101 WITH ANALYTICS AND POWER BI 01010101010101010101010010101010101010101010101010101010101010101010101010101 Nexxt Credit Card The Bank identified the need for a 01010101010101010101010010101010101010101010101010101010101010101010101010101 platform to support the demand for 01010101010101010101010010101010101010101010101010101010101010101010101010101 business growth and data. This led 01010101010101010101010010101010101010101010101010101010101010101010101010101 01010101010101010101010010101010101010101010101010101010101010101010101010101 to the building of an enterprise In November 2018, IndusInd Bank launched the ‘Nexxt Credit Card’, data warehouse on cloud (Azure) 01010101010101010101010010101010101010101010101010101010101010101010101010101 which integrates more than 50 01010101010101010101010010101010101010101010101010101010101010101010101010101 the first of its kind in the Indian banking sector. It is interactive and banking systems. It generates 01010101010101010101010010101010101010101010101010101010101010101010101010101 enables the user to opt for their preferred mode of payment (credit, 01010101010101010101010010101010101010101010101010101010101010101010101010101 business insights from the churning reward points or EMI) at the point of sale, merely with the push of a of terabytes of data, helping to 01010101010101010101010010101010101010101010101010101010101010101010101010101 shape up Business Intelligence (BI). 01010101010101010101010010101010101010101010101010101010101010101010101010101 button embedded in the card. With this technology, the Bank is 01010101010101010101010010101010101010101010101010101010101010101010101010101 able to achieve: 01010101010101010101010010101010101010101010101010101010101010101010101010101 01010101010101010101010010101010101010101010101010101010101010101010101010101 • A better understanding of 01010101010101010101010010101010101010101010101010101010101010101010101010101 customer spending patterns 01010101010101010101010010101010101010101010101010101010101010101010101010101 ~ 01010101010101010101010010101010101010101010101010101010101010101010101010101 • Improved customer 60,000 01010101010101010101010010101010101010101010101010101010101010101010101010101 segmentation and profiling 01010101010101010101010010101010101010101010101010101010101010101010101010101 Nexxt Credit Cards • Increased cross-selling of products 01010101010101010101010010101010101010101010101010101010101010101010101010101 issued till date 01010101010101010101010010101010101010101010101010101010101010101010101010101 • Better fraud 01010101010101010101010010101010101010101010101010101010101010101010101010101 detection and prevention 01010101010101010101010010101010101010101010101010101010101010101010101010101 • Improved risk assessment, 01010101010101010101010010101010101010101010101010101010101010101010101010101 compliance and reporting 01010101010101010101010010101010101010101010101010101010101010101010101010101 01010101010101010101010010101010101010101010101010101010101010101010101010101 • Improved real-time analysis and 01010101010101010101010010101010101010101010101010101010101010101010101010101 response to customer feedback 01010101010101010101010010101010101010101010101010101010101010101010101010101 01010101010101010101010010101010101010101010101010101010101010101010101010101

INDUSIND FASTAG AADHAAR VAULT FASTag enables automatic IMPLEMENTATION deduction of toll charges, enabling The Bank has implemented customers to effortlessly pass VPA Creation and Account the Aadhaar Data Vault on a through toll plazas on the national Linkage, Real Time Account state-of-the-art Hardware Security highways. The Bank takes the Balance, Transaction History, Send Module (HSM) solution. It acts as toll file or online API message as Money (VPA, Account + IFSC and a centralised storage for all the input from the toll plazas, checks Mobile MMID), Receive Money, Aadhaar numbers collected by the the validity of tags, performs Collect Request Raise/Authorise, Bank for specific purposes under toll fare calculation and sends Payment Authorisation, and the Aadhaar Act and Regulations, the transactions to the National Merchant Self-boarding. 2016. It is a highly secure system Electronic Toll Collection (NETC) that only stores the UID token; system. The Bank is responsible IDENTITY ACCESS MANAGEMENT the Aadhaar number is neither for collecting funds from the NETC (IDAM) 2.0 stored nor accessible within the settlement and posting the funds in Using advanced robotics for IDAM Bank’s applications. the bank accounts of toll plazas. 2.0, the Bank now handles user data validation, notifications, actions and UNIFIED PAYMENTS INTERFACE ONE-TOUCH INSURANCE reporting at a fraction of the manual (UPI) 2.0 OneTouch is an online effort required previously and with The Bank has aligned its India’s first interactive platform for CFD customers to higher accuracy. Payment Service Providers buy/renew insurance policies Credit Card with buttons (PSPs) with UPI 2.0 upgrade (health, standalone and vehicles) along with other major banks. online. It is integrated with the Existing features of the facility insurance provider’s core system for include Registration/Deregistration, immediate policy issuance.

[GRI:102-2]

22 Integrated Report 2019-20 IndusInd Bank 23 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Future of Digital Banking STRONG COMMITMENT TO SECURITY

The Bank’s technology strategy is part of its digital banking roadmap for the next three years. It will act IndusInd Bank is ISO 27001: 2013 as the stepping stone to becoming the Bank of Tomorrow, which has embraced digital processes, digital (Information Security Management channels and digital products. System) certified, which includes 100% of the Bank’s IT infrastructure comprising data centres and The technology interventions for FY 2020-21 Simultaneously, the Bank’s IT Disaster Recovery (DR) sites. are aimed at significantly enhancing roadmap will cater to the following consumer experience through: enterprise dimensions: There is Board-level oversight of the Bank’s IT and digital infrastructure. The Board of Directors is engaged in the information security / cybersecurity strategy and review process. The IT strategy committee Offering a Pursuing an Business to consumer Business to business is a Board committee that oversees differentiated omnichannel cyber security strategy. It is chaired customer experience delivery model by Mr. Shanker Annaswamy, who has a rich experience and background in IT, information security / cybersecurity. The Chief Security Officer (CSO) is responsible for the implementation of cybersecurity within the Bank. Making digital channels Delivering smart Business to government Enterprise IT the key banking banking solutions services to business All employees are assigned the mandatory E-learning channel for customers Information Security Practices Information Security Awareness Information security and cybersecurity are part of the employee Training module, to be cleared performance evaluation (e.g., disciplinary actions). Strict warnings and on a yearly basis through the disciplinary actions are initiated if their conduct is found in violation Bank’s Learning Management of security policies. Simulated phishing exercises are conducted System (LMS). Considering the periodically to assess the awareness levels of employees and those who importance of cybersecurity fail the simulated tests are provided additional training. awareness among the IT staff, Enhancing deposits and Focusing on Cyber security specific role-based training lending platforms MSMEs and modules are also made available financial inclusion through the LMS. Information Security Breaches FY 2017-18 FY 2018-19 FY 2019-20 An enterprise-wide comprehensive ‘Customer Awareness Framework’ Number of information security breaches or 1 0 2 was developed during 2019. It other cybersecurity incidents resulted in various customer-facing Number of information security breaches 0 0 0 initiatives including the spread of involving customers’ personally identifiable information security awareness information through various communication Amount of fines/penalties paid in relation 0 0 0 channels such as online portals, to information security breaches or other onboarding communications on cybersecurity incidents digital platforms, customer welcome kits, monthly account statements, weekly awareness SMSes and emails, posters / digital displays at ATMs and branches, and so on.

24 Integrated Report 2019-20 IndusInd Bank 25 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Marketing and communications Campaigns that Connect

IndusInd Bank has been at the forefront of developing unique offerings that can maximise customer value. The Bank’s marketing and communications activities are aimed at engaging with customers to make them aware of the unique features of its products and services. UPDATED CORPORATE WEBSITE During the year, the Bank has also enhanced its corporate website by upgrading it with new-age technology platforms. Key initiatives for FY 2019-20 NEW ALLIANCES AND TIE-UPS The Bank has added to its strategic #JUST25 alliances with various service The IndusInd Bank celebrated its providers in sectors such as travel, silver jubilee in 2019. The event was lifestyle, food and beverage and commemorated with its multimedia health and wellness, to provide campaign #Just25. It garnered better value and extensive services over 27 crore impressions across to its customers. social media sites and 1.5 crore TVC views as well as over 5 lakh BRANDING METRO STATIONS microsite visits. IndusInd Bank signed up for a five-year strategic branding initiative, which included the semi-naming of two metro rail properties in Noida and Mumbai. Branding at Metro Stations

REINFORCING BRAND IMAGE

Just 25 The Bank has extended significant support to the fields of art, music, LAUNCH OF ‘CELESTA’ sports and environment through CREDIT CARD sponsorships and collaborations IndusInd Bank announced the with Sanctuary Asia, Sahachari launch of a super-premium credit Foundation, Secure Giving card ‘Celesta’. The card offers Foundation, Indradhanush best-in-class rewards and benefits Foundation and Uttung Sanskrutik. and has been created keeping in The Bank supports the sport of mind the discerning needs of senior polo through the Maharaja Jiwaji professionals and businessmen who Rao Scindia Gold Cup. are always on the go.

‘PIONEER’ING BANKING ALWAYS ON ‘PIONEER’ Banking is IndusInd’s Always On is a campaign targeting wealth management platform customers looking for foreign that caters to high net worth exchange solutions, activated Our Brand individuals. Its offerings were across all major digital marketing Note: showcased at two large-scale platforms. It has proved successful IndusInd Bank believes in transparent communications with its customers, among others. However, there were two marketing communications events in Mumbai and Delhi, in helping the Bank onboard breaches reported in FY 2019-20, both of which are under investigation. following a mega digital and several new customers. print campaign. [GRI:417-1, 417-2] [GRI:417-1, 417-2, 417-3]

26 Integrated Report 2019-20 IndusInd Bank 27 ANNEXURES

INTEGRATED APPROACH TO VALUE CREATION IndusInd Bank focuses on long-term business viability and success by responding to the external environment, delivering on its planning cycle priorities, investing in digital and connecting with more customers every day. CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Our Capitals Creating Lasting Stakeholder Value IndusInd Bank strives to create value for its stakeholders by optimising its key outcomes across six broad capitals.

Natural Capital The Bank believes in preserving and enhancing the natural capital through Intellectual Capital investment in and The Bank uses a adoption of renewable Social and Financial Capital knowledge-based and energy sources and Relationship Capital The Bank delivers inter-unit collaborative Human Capital environmental risk The Bank prioritises approach to provide assessment and GHG customers through superior value to its The Bank delivers stakeholders through customised solutions. emissions mitigation. client-centric engagement Investments in value to its employees The Bank also works and intervention, and excellence in corporate through a culture and retail banking, new-age digital towards integrating through initiatives to platforms and of transparency, positive environmental enhance ease-of-business microfinance and Infrastructure communication, vehicle finance. Capital technologies help the action in its business. across the board. The Bank enhance the benefits and Bank contributes towards The Bank invests in efficiency of its internal rewards as well as the development of increasing its physical processes and its capacity building the community at large presence across customer experience. and engagement by targeting certain India and creating programmes. key areas such as the sustainable physical creation of scalable and value through green sustainable livelihood buildings and opportunities. IT systems.

30 Integrated Report 2019-20 IndusInd Bank 31 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Value-creation Model

IndusInd Bank follows an integrated business model to consistently Geared for Sustainable create and enhance value for all its stakeholders. It represents the various resources and relationships that are material to the Bank, with key considerations of the external environment, corporate credos, Value-creation governance, risk management and more.

Inputs Business model Outputs and Outcomes

Financial Capital Mission Strategy Vision Financial Capital Equity capital – `693.54 crores Net Interest Margin (NIM) – 4.14% (Ref. Page 11) Domain Leadership (Ref. Page 11) Gross debt – `60,753.55 crores Digitize to Differentiate Return on Assets (ROA) – 1.54% Assets – `3,07,057.55 crores Diversify Return on Equity (ROE) – 14.53% Deposits – `2,02,039.81 crores Double the Bank Capital adequacy – 15.04% Fees & commissions – `5,786 crores Sustainability Corporate and commercial advances – 2,06,783 crores Infrastructure Capital Infrastructure Capital Increased network of ATMs and branches across India Branches – 1,761 Increased banking accessibility in remote areas Banking outlets – 150 Rural branches – 428 ATMs – 2,760 Asset and wealth Wholesale and LEED Gold and Platinum rated offices Corporate offices and other locations 47– management and retail lending Overseas offices – 3 advisory services services Investors Intellectual Capital Pioneer branches – 7 Enhanced customer experience and increased Green buildings – 3 productivity – Data centres – 2 Customers 1 crore digital transactions/month

A Benefits and features of digitisation extended to Intellectual Capital s c rural India Digital infrastructure expenditure – `428 crores s t Employees

e i Registered users on the IndusMobile app – 28 lakh New technology partnerships Transactional v

n i

i Registered users on Whatsapp banking – 10 lakh

Conducive and customer-centric processes banking services t

s i

Robust risk management framework and project scrutiny e

u Suppliers

s Human Capital Customer data security analytics and robotics B Collaboration with fintechs and start-ups Average learning hours/employee – 45.64 Employee turnover – Regulators 18.6% Human Capital Absentee rate – 2.57% Permanent employees – 30,674 Global Depository Women participation in workforce – 18.26% Contract employees – 23,254 market services services Communities Training expenditure – `739.71 lakhs Natural Capital Training programmes – 1,553 Funded renewable energy projects of 4,096 MW Man-hours worked – 546.26 lakhs GHG emissions intensity (Scope 1+2) decreased by 17.53% Natural Capital GHG emission savings – 2,609.32 MTCO e Electricity consumption – 7,61,32,215.32 kWh 2 Fuel consumption – 1,103.08 kl External Environment Green and impact lending portfolio – 2.57 % Paper consumption – 1,725.77 mt GHG mitigation through afforestation Water consumption – 3,63,383.82 kl Customer Global Technology Investor Policy Volatility – 14,387.79 MTCO2e behaviour economic trends sentiments changes in the Social and Relationship Capital environment markets Social and Relationship Capital Customer base – 2.5 crore Growth in customer base – 13.64% Rural customers – 67.72 lakhs Beneficiaries of CSR projects –9,95,662 Bharat Money Kirana stores – 24,000 Customer satisfaction score – 69% CSR expenditure – `108.15 crores BoP beneficiaries through microfinance 93.5– lakh

Creating value for our stakeholders over time Data as on March 31, 2020 [GRI:102-7, 102-8] [GRI:201-1]

32 Integrated Report 2019-20 IndusInd Bank 33 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Opportunity Landscape

The COVID-19 Impact Prospects to Bank on Emerging Stronger Post the Pandemic The impact of COVID-19 on countries and their The Bank is balancing deposit outflows through: economies across the world has been unprecedented. The pandemic hit Indian shores in the last week of • Longer duration refinance / forex borrowings India is one of the fastest growing financial markets in the world. In this January, 2020, and started spreading by mid-February. swapped to INR The Central and State governments acted decisively • Bank CD and term money borrowings dynamic market, IndusInd Bank continues to trace a trajectory of strong to implement the nationwide lockdown which began growth, harnessing opportunities, and providing customer-centric financial from mid-March. This helped contain the spread to a • Repo of excess SLR/Non-SLR securities reasonable extent, giving authorities and healthcare • Call money (both interbank borrower and lender as a solutions. systems time to prepare. balancing figure) The country’s credit ecosystem is characterised by underpenetrated semi‑ The easing of the lockdown in May was accompanied ENSURING CONTINUITY by the announcement of a ₹20 lakh crore economic IndusInd Bank has responded to the pandemic with urban and rural markets. In line with this, the government is consistently package (Aatmanirbhar Bharat), equivalent to 10% of agility, ensuring minimal impact on its ability to service driving various policy measures aimed at increasing financial inclusion. These the India’s GDP. A shot in the arm for the MSME sector its consumers. In the wake of the COVID-19 scenario, the impacted by the lockdowns, it hailed India’s spirit to Bank invoked its robust business continuity plan (BCP) to have led financial institutions to expand their reach into these markets by achieve self-sufficiency. Despite the economic outlook shift seamlessly to remote working while continuing to using new-age technology that optimises costs while enhancing the customer predicting a de-growth of almost a year, the economy is serve its customers. steadily on the mend. experience. Thus, prospects for growth, for both the customer and the It ramped up its digital channel facilitation since the financial institutions, are strong. In this context, India’s financial sector remains a lockdown, including online KYCs, in the anticipation of bright spot for the global investor community faced a surge in self-serve banking, while making sure that with a grim global scenario overall. Potential demand its branches, contact centers, and ATMs remained For IndusInd Bank, this is an opportunity to drive impact. The Bank’s growth fueled by changing demographics and fully operational. Planning Cycle-5 (PC-5) strategy lends it the agility to identify, analyse, and growing consumer base is driving investor confidence. The underpenetration of infrastructure and services As a result, the Bank’s daily digital NTBs (New-to-Bank) comprehensively respond to changes that mark the evolution of the market. along with a stable political and regulatory environment, have doubled, online FDs have quadrupled and payments act as sustained enablers to this. / digital partners’ volumes are 1.5x of pre-lockdown levels. The Bank is constantly monitoring the situation and will INDUSIND BANK’S RESILIENT PERFORMANCE continue to take all possible steps to safeguard the valued TRENDS DRIVING SECTORIAL systems, giving way to a large making India a US$5 trillion The Bank believes itself more resilient today, having interests of customers and employees. GROWTH opportunity for digital-first banks. economy. India’s manufacturing weathered macro challenges in the past, including the Push for digital: Customers are sector has the potential to touch • Rural business models are global financial crisis of 2008, the taper tantrum of increasingly looking to digitally US$ 1 trillion by 2025 given being redefined in the wake of 2013, demonetisation in 2016, and GST implementation empower themselves in a the Government’s push for ‘IndiaStack’- a set of APIs that in 2017, among others. Making it stronger today are trend driven by fintech players. ‘Make In India’. allows governments, businesses, the aspects of a healthy balance sheet, consistent Through the use of data-driven startups, and developers to utilise profitability and performance excellence, led by an analytics and real-time solutions, During FY 2020-21, in a bid to a unique digital infrastructure to experienced management. it is transforming the customers’ help COVID-19 impacted MSMEs, accelerate financial inclusion. expectations from conventional the government rolled out a `20 With a set of baseline assumptions, the Bank has banking institutions, pushing for • The use of cloud computing and lakh crore package under the forecasted a short-term impact on select loan portfolios, fast-paced adoption of digital robotic process automation is Aatmanirbhar Bharat Abhiyan. with minimal asset quality implication. The Bank expects technologies across the board. enabling banking operations to This will drive demand for a ~11% dip in its deposits in the near-term as the This is being reflected in the way: become leaner and faster as well organised lending in the economy, immediate effect of the pandemic, while recovery is on as more profitable. ease borrowing costs and enable the cards driven by macro opportunities. • The Central and State domestic banks to fill in the vacuum Targeting economic revival: Governments have started created by capital withdrawal of The Central government aims to early adoption of new payment multinational banks. encourage focused efforts towards

Read more on IndusInd Bank’s PC-5 strategy and its digital focus on page 40-41

34 Integrated Report 2019-20 IndusInd Bank 35 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Stakeholder Engagement Understanding Stakeholder Perspectives IndusInd Bank has developed a detailed, comprehensive process for a sustained and meaningful engagement with stakeholders. The Bank takes proactive steps to communicate its intent and actions taken to various stakeholders in a timely and transparent manner, earning and enhancing trust.

Regular, Transparent Communication with Stakeholders

INVESTORS CUSTOMERS EMPLOYEES SUPPLIERS REGULATORS COMMUNITIES

• Strong operational • Data privacy and security • Benefits and • Fair treatment • Compliance to regulations • Rural development, performance with a focused • Grievance mechanism remuneration • Procurement from • Solid ESG performance • Financial literacy and growth strategy • Ease of access for • Grievance redressal local suppliers and integration inclusion • Risk management banking facilities and timely response • Service delivery and quality • CSR and reporting • Support for livelihoods • Compliance to regulations • Training and • Operational efficiency • Socio-economic • Building a responsible value career development upliftment chain • Work-life balance • Job creation Topics of interest of Topics • Solid ESG performance interest of Topics and integration

The Bank communicates with The Bank maintains a The Bank has ongoing The Bank interacts with its The Bank engages with The Bank is committed to investors and shareholders continuous ongoing interaction regular communication suppliers through supplier regulators through one-to-one uplift the societies in which during investor meets, through with customers through with its employees meets, techno-commercial meetings, emails and submission it operates. It engages investor grievance channels, digital channels such as video through townhall discussions and supplier of performance reports. regularly with the at roundtables, quarterly conferencing, customer care, meetings, appraisal sustainability assessments. The Bank strives to be a good community through its CSR conference calls, face-to-face satisfaction and loyalty survey, process, newsletters The Bank subscribes to corporate citizen and complies team. Community meetings, annual general and social media platforms to and other channels to responsible procurement with applicable regulations and meetings are held to meetings and more. These are understand their requirements understand and support practices and invests in building plays its role in developing and understand their needs aimed at providing relevant and create better solutions, them with their concerns longstanding relationships with implementing public policies. and play an active role in information as well as seeking products and services for them. and ensure they are its suppliers. supporting them. their perspectives on the Bank’s aligned with the Bank’s Interaction and engagement approach performance and strategy. strategic priorities. Interaction and engagement approach

Solid financial performance Happy customers and The Bank strives to create IndusInd bank The Bank The Bank is focused on giving irrespective of volatility and trustworthy relations Career development an empowered group of consistently supports back to the society with its CSR changing dynamics and employee suppliers which contributes to government endeavours programmes, in the areas of well-being a responsible supply chain with and abides by the laws of environment, education, skill better practices. the land, leading by example and livelihood development, Embracing the value created Embracing the value created and reducing risk. healthcare, arts and sports.

[GRI:102-21, 102-40, 102-42, 102-43, 102-44] [GRI:102-21, 102-40, 102-42, 102-43, 102-44]

36 Integrated Report 2019-20 IndusInd Bank 37 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Materiality Assessment Evaluating Key ESG Matters Focused Stakeholder Dialogue

IndusInd Bank conducted its first materiality assessment in FY 2016-17 and IndusInd Bank makes pool was approached, which regulators. The dialogue helped constant efforts to understand included internal employees to gather their views to help has continued to report on its Environmental, Social and Governance (ESG) and listen to the concerns constituting all management prioritise issues for the Bank. of its external as well as levels as well as contract issues ever since. With a view to continuously monitor its performance Based on the combined inputs internal stakeholders. This employees and external against material topics, the Bank conducted a materiality assessment again in from stakeholder dialogue and year, the Bank launched a stakeholders, including view of the Senior Leadership FY 2019-20. The results brought to the fore changes that have occurred in the strategic dialogue involving customers and clients, Team, a materiality matrix was both internal and external Indian and international industry over the past three years, and highlighted the emerging challenges. developed. stakeholders. A stakeholder investors, suppliers, NGOs and The Bank has taken a fresh look at the issues most material to its performance. The process has provided important inputs for the sustainability strategy at the Bank and its approach to value creation. Materiality Matrix The Bank identified 20 material issues. These are prioritised based on a combined review of inputs from internal and external stakeholders as per their priority for stakeholders on Y-axis and their impact on the Bank on X-axis. Financial inclusion and Supporting communities are two issues Assessment Process deeply internalised by the bank. The details of the work undertaken are provided in the ‘Creating Social Impact through Investing’ section. Hence we have prioritised the rest of the issues. The process of materiality assessment began of international frameworks and rating agencies with a benchmarking exercise aimed at [e.g., DJSI, Morgan Stanley Capital International understanding the core topics of concern for

(MSCI), CDP] and assessed for contribution to High Stimulating diversity the banking industry. This was followed by United Nations Sustainable Development Goals and equality Environmental risk populating potential ESG issues. Stakeholders (UN SDGs) and the Bank’s investor ESG criteria. Responsible associated with Financial were approached for providing a scoring of the The final list of issues and prioritisation was investment & financing transactions potential ESG issues. The scoring presented the arrived at which resulted in the development of inclusion Compliance & importance of these issues for IndusInd Bank. Talent attraction & the materiality matrix. corporate governance These were then analysed with the core issues retention Digitalisation Ethics, integrity & Climate Social impact of fair dealing The process of arriving at the Materiality Matrix change products and services Client data protection & Supporting cyber security communities Customer experience

Viable business model

Management of social risk Environment footprint of transactions Identify potential Define Establish topics stakeholder materiality groups matrix Human rights Environment compliance IMPORTANCE TO STAKEHOLDERS

Facilitate transition to a Define purpose Assess Stakeholder sustainable-circular economy and scope impact engagement for prioritisation IMPACT ON BUSINESS Low Low High Environment Social Governance

Based on the materiality matrix, the top issues for the Bank are highlighted in bold.

[GRI:102-47] [GRI:102-47, 102-49] 38 Integrated Report 2019-20 IndusInd Bank 39 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Strategy Priorities for the Coming Three Years

FY 2019-20 marked the completion of IndusInd Bank’s three-year strategy STRENGTHENING THE LIQUIDITY PROFILE RURAL BANKING The Bank is further improving its liquidity profile with With the integration of Bharat Financial, IndusInd Bank Planning Cycle 4 (PC-4) largely delivering on all its stated objectives. Housed initiatives on retailisation and growth of deposits. has an indomitable presence in rural India across 1.23 under the broad umbrella of ‘Market Share with Profitability’, the Bank’s core It will also feature longer term durable liquidity lakh villages. Powered by an innovative service model, it from borrowings, besides targeting an appropriate will be the next frontier of growth for the Bank strategy was titled ‘4D’ which stands for ‘Digitize To Differentiate’, ‘Diversify’, Credit-Deposit ratio DIGITISATION ‘Create Domain Leadership’ and ‘Double The Bank’. Build the borrowings book with stable long-term sources of funding through refinance and term To create a differentiated client experience across During FY 2019-20, as part of its Planning Cycle 5 (PC-5), the Bank enhanced its borrowings from domestic and overseas banks and customer journeys and client segments, the Bank from multilateral agencies will draw on its investments in digital. Further, it will strategy to include ‘4D+S’, reflecting the erstwhile ‘4Ds’ with the addition of ‘S’ for continue to build completely digital models across Consistently operate with Liquidity Coverage lending, payments, wealth and trade/forex sustainability. PC-5 will be in force for the next three years, i.e., until FY 2023-24. Ratio at a level which is 15-20% higher than the and data analytics The strategic plan of the Bank is closely linked to the framework on strategic risk regulatory minimum management, which analyses the likelihood of failure of its key strategies and the STRENGTHENED WHOLESALE RISK AND PORTFOLIO IMPROVING THE LOAN BOOK PROFILE MANAGEMENT impact of failure as a consequence. Loan mix to continue to change somewhat Sharp focus on being prudent and continuously in favour of retail by reducing larger widening our base to mitigate existing and emerging concentration risk exposures risks Hold exposures to sectors more sensitive to the macroeconomic outlook The Bank has identified the following key Improve the provision coverage ratio (PCR) to create focus areas that will contribute to realising buffers. We have raised PCR from 43% in FY 2019-20 its 4D+S ambitions.. to 63% in FY 2019-20 and expect to raise it further RETAILISATION OF DEPOSITS Separate unit for portfolio monitoring across the Bank, focusing on granularity, annuity, The Bank’s Multi-pronged consumer bank retailisation diversification, tenures and improvement in return initiatives, including scaling up client new strategic on risk-weighted assets. acquisition, ramping up pioneer (affluent) framework symbolised and NRI segments, etc. by ‘4D+S’ recognises Granularisation of deposits and MAINTAINING COMFORTABLE LEVELS OF CAPITAL reducing concentration sustainability as a core The Bank is well capitalised at a Capital to imperative. Continuing the focus on government Risk-weighted Asset Ratio (CRAR) of 15.04% as clients and reaping the benefits of of March, 2020. However, given the uncertainty investments made in facilitating the due to COVID-19, the Bank will maintain higher government’s business capital adequacy The Bank may explore various avenues for boosting LIABILITY-LED ASSET GROWTH WITH CRAR such as equity capital or AT1 or Tier 2 IMPROVED CD RATIO depending on the market conditions Given the weak operating environment, the loan The Bank will also focus on improving the growth is expected to be lower than the historical risk-weighted asset density across segments / business run rates. However, the Bank will focus on ramping units for better capital utilisation up deposits, which are expected to grow faster than the loans. As a result, the CD ratio is expected to improve going forward.

40 Integrated Report 2019-20 IndusInd Bank 41 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Risk Management

The Bank is proactive in mitigating risks through measures such as: (i) risk analytics and data mining, (ii) B-score model development for retail loan book, (iii) development of rating models for assessing borrower risk for newer Managing Externalities segments introduced and (iv) implementation of software for assessment of various risks such as credit risk, market risk, operational risk, Asset Liability Management, reputation risk, etc. and more.

Operating in a dynamic macroeconomic environment means the Bank is CORE RISKS AND APPROACH TO MITIGATION exposed to different types of risks. Its objective is to continually evaluate the Credit risk risk exposure to manage these effectively by adopting global best practices. Source Default on debt resulting in loss of principal and interest Description Transaction risk and portfolio risk The Bank has established an Enterprise-wide Risk Management Framework responsible for the Potential impact Erosion of capital identification, measurement, monitoring and controlling of risks across various segments. Estimated financial This is a function of Loss Given Default implications RISK GOVERNANCE Risk Management Taskforce Structure Likelihood of Depends on the probability of default and concentration of portfolio The Bank has put in place a occurrence comprehensive policy on Internal Methods of • The Bank uses a robust risk rating framework for evaluating the credit risk of the management borrowers. The Bank uses segment-specific rating models that are aligned to the target Capital Adequacy Assessment Managing Director Process (ICAAP), which presents segment of the borrowers. • Risks on various counter-parties such as corporates and banks are monitored through a holistic view of the material counter-party exposure and are also governed by country risk exposure limits in the case risks faced, control environment, of international trades. risk management processes, risk Chief Risk Officer • The Bank manages risks at the portfolio level, too, with portfolio-level prudential exposure measurement techniques, capital limits to mitigate concentration risk. adequacy and capital planning. The Bank has articulated several risk policies specifying the various risks Market risk Head – Risk and techniques for measurement Source Performance of financial markets Management and control. These policies too are Description Interest rate risk, foreign exchange risk, price risk, volatility risk and commodity risk periodically reviewed and revised. All relevant reports are submitted to Potential impact Erosion of capital the top management and the Board. Estimated financial Replacement cost equivalent to mark-to-market implications Likelihood of Depends on the deterioration of the value of assets due to any unfavourable movement in occurrence market variables Credit Risk Market Risk Operational Risk Asset Liability Methods of Market risk is effectively managed through a comprehensive framework that supports various Management Management Management Management management measures such as mark-to-market, sensitivity analysis, value-at-risk and monitoring through operational limits such as stop-loss limits, exposure limits, deal-size limits, maturity ladder, among others. Asset-Liability Management risk Committees Maintaining Oversight on Risk Management Source Assets and liabilities mismatch Description Mismatch between assets and liabilities either due to change in interest rates or liquidity (ability to meet its liabilities either by borrowing or converting assets) Credit Risk Management Potential impact Erosion of capital Committee (CRMC) Estimated financial Depends on the cost of funds to be generated to mitigate the mismatch implications Asset Liability Management Likelihood of Mismatch in future buckets managed, therefore very less likely occurrence Committee (ALCO) Methods of • Limits prescribed for mismatch in time buckets facilitate efficient management of Asset Liability Risk Management management Management (ALM) risk. Interest rate sensitivity is monitored on earning perspective and Committee (RMC) economic value perspective through prudential limits for rate-sensitive gaps, modified duration Market Risk Management and other risk parameters. Committee (MRMC) • Interest rate risk on the investment portfolio is monitored through value at risk and risk sensitivities on a daily basis. Optimum risk is assumed through duration, to maintain a balance Operational between risk containment and profit generation from market movements. Risk Management Committee (ORMC) [GRI:102-11, 102-15] [GRI:102-15]

42 Integrated Report 2019-20 IndusInd Bank 43 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Brand and reputation risk Operational risk Source Market/public perception, nature and volume of frauds/customer complaints, and more. Source Identify, assess, monitor and report the risks due to inadequate or failed processes, people or systems Description Negative change in market and stakeholder perception due to frauds, complaints, and more. Description Inadequate or failed processes, people or systems Potential impact Erosion of capital

Potential impact Erosion of capital Estimated financial • Depends on the volume of frauds and replacement cost of deposits due to adverse Estimated financial Value of actual loss incidents and provisions implications reputational event implications • Loss of stakeholder confidence Likelihood of Depends on the probability of operational loss incidents Likelihood of Minimal – The Bank has adequate corporate governance and a professional management occurrence occurrence team in place Methods of Managed effectively through regular training, awareness, process enhancements, insurance Methods of The Bank has maintained its asset quality while achieving growth in balance sheet size. The management premium, outsourcing and automation. The Bank has implemented various operational management Bank has been able to raise capital at regular intervals and has maintained its external rating. risk management tools such as Risk and Control Self Assessment (RCSA), KRIs monitoring and loss data collection (Basel 8X7 matrix) including near-miss events and Operational Risk Climate-change risks Assessment Process (ORAP) framework. The Bank has adopted a business continuity policy to ensure timely recovery of its critical operations and services in the event of any crisis. Source Physical risk due to natural disasters Regular mock drills are carried out to ascertain BCP preparedness. Description Extreme weather events such as rising sea levels, floods, cyclones, tsunami as well as natural disaster and pandemics Liquidity risk Potential impact Erosion of capital Source Poor management of credit lending and withdrawals along with asset quality Estimated financial • Credit costs for agriculture, infrastructure and real estate sectors Description Funding gap risk and market liquidity risk implications • Decreased asset quality • Damage to the Bank’s infrastructure and technological assets Potential impact Erosion of capital Likelihood of Moderate Estimated financial Depends on the cost of funds to be generated to mitigate the liquidity gap occurrence implications Methods of • Revised policy of funding Likelihood of Funding gap risk is managed through the management of Liquidity Coverage Ratio (LCR) and management • Having a well-diversified portfolio across various industries and segments occurrence adequate investment in high quality liquid assets; therefore, the occurrence of the risk is less • Implementation of a Business Continuity Plan likely. • Digitalisation of processes for employees and clients Market liquidity risk shall depend on the liquidity conditions in the financial market.

Methods of Liquidity risk is monitored through structural liquidity gaps, dynamic liquidity position, liquidity Occupational health and safety risk management coverage ratios, liquidity ratio analysis and behavioural analysis, with prudential limits for Source On the Bank premises and external negative gaps in various time buckets. Description Health and safety issues related to indoor air quality, ergonomics, physical infrastructure (lifts, stairs, railing, etc.), health issues due to pandemics & other natural calamities Regulatory risk Potential impact Low Source National and international regulatory bodies Estimated financial Lower productivity, absenteeism and delayed completion of tasks Description Compliance with new regulatory guidelines implications Low Potential impact Erosion of capital Likelihood of occurrence Estimated financial Compliance with regulatory guideline and penalties/fines levied in case of violations/ Methods of • The Bank has sophisticated technology and automated operations, leading to lower implications non-compliances management operational risk exposure Likelihood of Minimal – The Bank has a well-defined Compliance Department, which oversees the • The Bank’s staff is trained from time to time on health and safety occurrence compliance function. The Bank staff is adequately educated on the compliance issues and • Regular checks and signages in place to educate staff about health and safety in offices knows how to deal with customers and regulatory issues. and branches Methods of • Qualitative checks and controls management • Having a well-diversified portfolio across various industries and segments resilient to individual industry cycles

[GRI:102-15] [GRI:102-15]

44 Integrated Report 2019-20 IndusInd Bank 45 ANNEXURES

APPROACH TO SUSTAINABILITY With specific targets across the business its Environmental, Social and Governance (ESG) facets, the Bank is operating responsibly while striving to enable inclusive growth and give back to nature. As a result, the Bank also contributes directly and indirectly to 12 UN SDGs. CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Sustainability Framework and Performance In for the Long Term

At a time when the financial sector in India is undergoing a series of changes, Sustainable Financing IndusInd Bank remains bullish on its strategy of growing with the nation IndusInd Bank has developed credit credit facilities and other lines of of credit business (lending book) and its people. Towards this end, the Bank has interlinked its strategic business lines based on the ESG performance credit, with floating rates tied to of this banking segment was of companies. The loans provided the issuer’s performance on an `2,06,783 crores during FY 2019-20. priorities and its sustainability focus areas. under this portfolio have revolving ESG evaluation. The total volume The Bank’s sustainability framework is in accordance with its Sustainability Policy, reinforcing the Bank’s commitment to best-in-class sustainability practices Sustainable Finance Lending covering environmental and social initiatives and projects within the Bank. Sustainable Finance Verticals FY 2017-18 FY 2018-19 FY 2019-20* Green and climate finance (%)# 1.72 2.25 2.57 Sustainability Commitments Advances (`in crores) 2,493 4,194 5,324 Social, livelihood and inclusive finance (%)# 33.81 38.67 36.86 In FY 2019-20, the Bank announced its ESG targets for FY 2020-21. These targets drive its focus on the Bank’s ESG Wholesale/corporate advances (` in crores) 13,325 portfolio, especially green lending, generation of sustainable livelihoods, and social lending. Incremental progress Retail Advances (`in crores) 62903 is being monitored and reported on a yearly basis to all stakeholders. Total advances (`in crores) 49,012 72,071 76,228 Grand total advances (`in crores) 1,44,954 1,86,394 2,06,783 ESG Targets for FY 2020-21 *To be audited ASPECTS TARGETS # Percentages as compared to total (retail + corporate) asset base

Green and Climate Finance Portfolio 5% of loans through distinctive lending themes Wholesale Banking ESG Credit Lines

Total Monetary Value Main ESG Product Categories Offered GHG Emissions Intensity and E-footprint 15% reduction in carbon intensity (CO2/Cr revenue) (` in FY 2019-20) Product category 1: Green and climate finance wholesale / corporate advances 5,323.58 crores Participation in ESG Indices Maintain A-Rank or higher in CDP Submit to DJSI Product category 2: Social, livelihood and inclusive finance wholesale / corporate advances 13,325.07 crores with a score >70 Total volume of green/ESG-based credit lines in wholesale/corporate/investment banking segment 18,648.65 crores Total volume of credit business (lending book) of wholesale/corporate/investment banking segment 91,334 crores Sustainable Procurement in Supply Chain 80% of vendors have ESG policies in place; vendor

ENVIRONMENT sustainability assessments in place Percentage of Green/ ESG-based credit lines versus total credit/loan business 20.42%

Social, Livelihood and Inclusive 45% of all loans Product/service Categories Included Finance Portfolio Green and Climate Finance Sectors Social, Livelihood and Inclusive Finance Sectors • Renewable Energy • Education • Social Infrastructure Women’s Participation in Workforce Expand to 22% • Energy Efficiency • Healthcare • Agribusiness • Clean Energy • Affordable Housing • Inclusive Finance SOCIAL Participation in ESG Indices Employee engagement with external benchmarking • Green Buildings • Impact NBFC • Water, Sanitation, and Hygiene Participation in Community and In addition: bank-wide volunteering of 10 hr/staff & Outreach Activity e-Learning (on sustainability) Retail Banking ESG Credit Lines Corporate Governance Score Rating Corporate governance score in a Total Monetary Value leadership category Main ESG products categories offered (` in FY 2019-20) Total value of green/ESG-based credit lines or mortgages 62,903 crores ESMS Lending Filters Expand ESMS to cover all corporate loans with external assurance Total value of your credit/loan facilitation business (lending book) 1,15,449 crores Percentage of green/ESG-based mortgages and credit lines versus total value of credit/loan 54.48% ESG Disclosure and Integrated Reporting Have external accredited agencies verify facilitation business ESG/integrated reports & disclosures GOVERNANCE Formulation and Compliance to ESG Policies External disclosure of ESG policies. and CDP Program [GRI:102-6, 102-13]

48 Integrated Report 2019-20 IndusInd Bank 49 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Exclusion List Responsible Investing through ESG Integration 6 Businesses with a substantial 1 Production or trade in any product 3 Gambling, casinos and equivalent IndusInd Bank has established an Environmental and Social Management System (ESMS) to ensure investments stake in the porn industry or activity deemed illegal enterprises balance economic growth with socioeconomic sustainability. 7 Production or trade in explosives 2 Production or trade in substances 4 Production or trade in products and/or fireworks primarily meant THE POLICY skilling, education and energy Accordingly, relevant compliances that are internationally banned, involving forced labour or harmful for non-industrial use The ESMS Policy sets the context efficiency. Its wholesale banking related to energy efficiency, waste including, but not limited to, child labour and overarching principles for segment focuses on ESG aspects water treatment and afforestation, wildlife products, products 8 Production or trade in tobacco 5 Businesses owning factories or safeguarding the Bank against including impact financing unit, among others, are checked at regulated under Convention on or any of its derivate products, workplaces that have inadequate credit and reputational risks. agribusiness, healthcare, education the authority level as applicable International Trade in Endangered including, but not limited to, safety mechanism when dealing The Policy is governed at the and micro finance. under the respective development Species (CITES) and illegal cigarettes, gutka, etc. with known industrial carcinogens macro level by key stakeholders, control regulations. narcotics, among others including Board members, business DUE DILIGENCE heads and the CEO. Through this Through the ESMS, the Bank has Potential gaps between the outcome ALIGNMENT WITH INTERNATIONAL FRAMEWORKS system, the Bank evaluates its integrated Environment and Social of the E&S evaluation and applicable The Bank’s ESMS Policy draws from E&S guidelines are applicable for the The Bank aligns its corporate clients on various ESG parameters Due Diligence (ESDD) with the overall local environmental and social laws, several international frameworks, corporate loan book (entire CCBG banking, including project finance and identifies risks. The IndusInd credit risk assessment framework. applicable International Finance including the Principles of the also including BFIL). All proposals business, with the Equator ESMS integrates ESG aspects in its Using this framework for corporate Corporation (IFC) Performance UN Global Compact (UNGC), UN are screened against the basic Principles and ensures compliance. credit/lending business, project clients, Bank identifies underlying Standards are addressed by the Principles for Responsible Investing ESMS criteria, which is the exclusion It is also compliant with other ESG finance and advisory services to its environmental and Social (E&S) risks borrower by implementing an (UNPRI), the International Standards list, before being further screened frameworks. In FY 2019-20, the wholesale/corporate/investment and ensures that wider impacts of environmental and social action plan, Organization (ISO) environment against detailed sector-specific Bank’s Project Finance Team has banking clients. Through this lending activities lie within a set of as satisfactory to the lender. management guidelines, the checklists. This exclusion list, reviewed six projects in line with the system, all proposals are evaluated international and national standards. Equator Principles and other accessible to all employees, and Equator Principles. for ESG criteria with detailed The ESMS ensures that ESG risks are 100% of corporate credit/lending applicable national regulations. is applicable to the corporate sector-specific checklists. factored in the client due diligence clients are informed about ESG-related banking portfolio. process. The Bank has a zero risks and opportunities. All proposals IMPLEMENTATION tolerance policy for non-compliance are screened against the basic ESMS Three examples of projects for which the ESMS Policy was applied in order to comply with the Bank’s The Bank’s Relationship Managers, and as a demonstration of its criteria (which is the exclusion list) with ESG framework are described below: tasked with the implementation of commitment to the ESMS process, about three-fourths of all proposals the ESMS Policy, undergo rigorous the Bank has delayed disbursements being screened against detailed capacity building to appropriately until all non-compliance issues are sector-specific checklists. All proposals Example 1 assess all proposals, identify gaps addressed by clients. The Bank are subjected to an exclusion check IndusInd Bank evaluated a transmission line project alternate route that can avoid bypassing the forest and maintain transparent reporting carries out diligence to ensure as the first step while checking involving the transmission of electricity produced through area and eco-sensitive zone and wildlife sanctuary. through the digital-filling systems. that the projects it sanctions have environmental and social risks. renewable energy sources to the demand site. During the Thus, assessment of the impact on biodiversity became The Bank has set up a multilateral been approved by competent IndusInd Bank strictly does not do E&S risk assessment, it was found that the route of the an imperative for the chosen route. IndusInd Bank advisory desk that invests in planning authorities of the State. business with any excluded entity. transmission line was to pass through a bird sanctuary, has stipulated that a Biodiversity Impact Assessment areas such as renewable energy, which is an eco-sensitive zone. report shall be obtained prior to disbursement. Moreover, obtaining wildlife and forest the clearances Transmission lines might have a negative impact on birds was critical to the viability of the project as part of the RESPONSIBLE BANKING: ESMS POLICY due to collisions and electrocutions. When transmission conditions stipulated at the time of sanction of the loan lines cut through flyways and migration corridors of birds, by the Bank. In case of any adverse impact on the viability The primary objective of IndusInd Bank’s Environment and Social Management System (ESMS) is to mainstream environmental it can result in a considerable number of avian collisions. of project, IndusInd Bank reserves the right to withhold and social considerations into business activities, to safeguard customer investments from credit and reputational risk. The International Finance Corporation Environment, disbursement of the facility at any time. Healthy and Safety (IFC EHS) Guidelines have suggested Managing the impact of Align with external that transmission corridors be aligned to avoid such Example 3 Customer investments stakeholders critical habitats or ensure control measures to minimise One out of six elements of a transmission line project was Understanding the E&S (investors and avian and bat collisions. As a mitigation measure, to pass through a wildlife sanctuary in an eco-sensitive risks present in our lending multilateral agency IndusInd Bank suggested a detour to the project zone and forest area measuring 10.03% of the project portfolio lenders’ requirements) developer which would steer clear of the eco-sensitive length. There were no economically viable alternatives. Promoting zone. The line now includes a stretch of ~0.9% of total While projects such as setting up of transmission Environmental and Social project length to pass through a wildlife sanctuary and lines have an essential role to play in the country’s Principles Encouraging borrowers to be ~1.5% other forest area. As a caveat, the Bank decided to social infrastructure, they can have an impact on the more responsible and cap disbursement at certain levels unless timely wildlife environment and the biodiversity. Therefore, the Bank sustainable – create an and forest clearances were obtained by the company. stipulated that the developer obtains wildlife and forest understanding of E&S risks clearances on a timely basis. Building internal associated with their Practicing Example 2 capabilities operations sustainability In a transmission line project, some of the proposed Consequently, the disbursement under the facility was to assess and Promote sustainable transmission lines were to pass through a forest area restricted to a lower debt equity ratio until all the forest mitigate E&S risks banking by adopting measuring ~33% of the total project length and wildlife and wildlife-related clearances for the project are in place internationally sanctuary and eco-sensitive zone measuring 4.0% of the and Lender’s Independent Engineer (LIE) confirmation is recognised (multilateral) total project length. The feasibility study for alternative obtained. Further, during the initial period, the Bank also lending standards routes provided justification for the chosen route. stipulated that a Biodiversity Assessment Report be made It also highlighted the lack of any economically viable available prior to availing subsequent disbursements.

50 Integrated Report 2019-20 IndusInd Bank 51 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

IndusInd Bank Initiatives Contributing Directly to UN SDGs Environment Business initiatives CSR initiatives Preserving Environmental

Livelihood financing Livelihood financing Lending in healthcare Microfinance Legal and financial literacy, Improving health care access: Value Rural banking skilling and rehabilitation Mini health clinics, sanitation Enhancing access to education programme for women and support for cancer- The Bank has forayed into green and climate investing projects and energy- affected children Midday meal programme efficient operational controls. It also participates in global disclosure platforms such as the Carbon Disclosure Project (CDP) and Dow Jones Sustainability Index (DJSI), thus driving the global sustainability agenda forward.

The Bank understands its responsibility Lending in education Equal opportunity employer Lending in infrastructure and towards enabling a positive impact on Energy Efficiency the environment through its investment Legal and financial literacy, Microfinance housing decisions. It aims at controlling the risks skilling and rehabilitation Water stewardship Water Rural banking associated with investment in companies programme for women Management Enhancing access to education with a high environment impact. Midday meal programme IndusInd for Sports The Bank’s ESMS helps ensure that Promoting digital literacy Legal literacy, skilling and investments balance financial growth ENVIRONMENT rehabilitation programmes with socio-environmental sustainability. Resource Conservation for women During the year, there were no fines FOCUS AREAS or non-monetary sanctions due to non-compliance with environmental Emissions laws and regulations. The Bank Mitigation reports environmental indicators such as electricity use, energy use, GHG emissions, paper waste and e-waste for Waste Management Solar ATMs Digitisation Financial inclusion 100% of its operations. Renewable and Financial inclusion Lending in infrastructure ENVIRONMENTAL TARGETS clean energy financing Rural banking Microfinance The Bank monitors its performance Schools on rooftop solar Stree Swabhimaan initiative Rural banking for all major environmental Solar streetlights Enhancing access to education indicators covering energy, GHG GHG Emissions Energy Consumption IndusInd for Sports emissions, water and waste for all its operations and aims at minimising 15% reduction* in 15% reduction in energy its environmental impact. The Bank Scope 1 and Scope 2 GHG consumption intensity has surpassed its Emissions Intensity emissions intensity target of 4.4 mtCO2e/revenue ` ( crores) by 2021. *Base year is FY 2017-18

Microfinance Lending in affordable housing Livelihood financing EMISSIONS Promoting digital literacy Areas of special interest: Microfinance (Scope 1+2 in MTCO e)/Total Revenue (` crores) (Scope 1+2 in MTCO e)/Full-time Employee Preserving heritage, 2 2 Rural banking Rural banking arts and culture Enhancing access to education Solid waste management Urban afforestation FY 2019-20 3.77 FY 2019-20 2.33 IndusInd for Sports FY 2018-19 4.60 FY 2018-19 2.387 FY 2017-18 5.20 FY 2017-18 2.510

[GRI:102-12] [GRI:102-11, 102-11, 307-1]

52 Integrated Report 2019-20 IndusInd Bank 53 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Energy Efficiency (EE): These approved by the Bureau of Energy water management/ treatment Creating Environmental Impact through Investing projects include retrofitting/ Efficiency (BEE). projects, distribution, desalination. replacement for reducing energy It also includes other projects that consumption; industrial EE WASH (Water, Sanitation and ensure accessibility, drinkability improvement; EE in commercial Hygiene) Programme: and security of water; sanitation The Bank facilitates funding of specific sectors that contribute towards a positive environmental impact, through buildings, municipal projects, These are projects that provide infrastructure projects; and efficient one of the sustainable finance themes. The Bank is increasing its green and climate finance portfolio through residential buildings, agricultural basic sanitation and safe drinking water management technologies sectors such as renewable energy, energy efficiency, water and sanitation, alternate fuels and others. equipment and transportation water, Sewage Treatment Plants such as smart sensors, IT tools, etc. as well as manufacturing of (STPs), industrial and municipal energy-efficient products wastewater treatment plants, Water, Sanitation and Hygine (WASH)

Case Study Renewable Energy IndusInd Bank has provided funding to a global water solution provider with market leadership through innovation and technology for sustainable water management in over 20 countries. It has global R&D centres located in Europe and India with over 90 patented technologies. It is recognised in the league of Top Green 3 water solution providers globally. Its range of solutions in water include sewage water treatment, drinking Financing Clean Energy water treatment, industrial water treatment, industrial wastewater treatment, desalination and recycling.

Value creation through business • Over 21,500 million litres of municipal and industrial wastewater treated per day Green Buildings • 10.36 lakh kWh of carbon-free wind power generation • 5,857 kgs of waste paper recycled

Energy Efficiency

Addressing Climate Change through Operations

Renewables: Renewable energy technology, natural gas for Total green building IndusInd Bank measures and The Bank has also implemented a currently features in the ‘A’ list of projects include solar, wind, industrial or transportation or projects exposure monitors carbon footprint covering climate change mitigation strategy the CDP, a platform that is widely biomass or biogas and small domestic applications and electric all its businesses and operations to reduce its GHG emissions. referred by global investors, for the hydro projects, renewable energy mobility (vehicles, charging `1,236.53 crores in India, annually, as per the IndusInd Bank is a signatory to the sixth consecutive year. products (i.e., solar panels, infrastructure and technology) are GHG Protocol. These are verified Carbon Disclosure Project (CDP) turbines) and renewable energy part of clean energy. Renewable energy externally by an independent where carbon footprint and GHG production/transmission and projects financed (capacity) third party. Limited assurance inventory data are voluntarily distribution. As on March 31, Green infrastructure: The Bank (as per the ISAE 3410 Assurance disclosed, to be made available 2020, the Bank sanctioned credit finances real estate developers that standard) is provided on GHG data. in the public domain. The Bank of `1,6251.1 crores for setting directly provide products/services 4,095.88 MW up renewable energy projects of for infrastructure projects with 4,095.88 MW capacity. certifications such as LEED/ GRIHA/ ENERGY MANAGEMENT the following initiatives for ensuring and streamlining IT operations as IGBC or equivalent certification. Electricity and fuel are the two most energy efficiency: part of the ‘Green IT’ vision Clean energy: Non-renewable It also provides financing for consumed resources at IndusInd clean energy sources such as retrofitting/replacement in existing • Sourcing electricity for operations Bank. Cognisant of the impact • Incorporation of energy-efficient waste-to-energy, clean-coal buildings for becoming eligible for from renewable sources, including of these inputs on the natural technologies and systems into eco-certifications. solar, wind and hydropower. environment, mainly through GHG offices and branch building design emissions, the Bank is committed • Regular auditing of energy costs • Upgradation of existing to reducing its environmental to identify gaps and initiate Green Infrastructure Financing physical infrastructure with footprint. It is progressively long-term solutions certified energy-efficient and Total Monetary Value decarbonising its electricity and Main ESG Product Categories Offered low-carbon equipment, including • Promoting awareness on energy (` in FY 2019-20) fuel consumption by employing solar-powered ATMs conservation among employees. Total value of green and/or sustainable infrastructure projects financed 5,323.58 crores low-carbon alternatives across all Total value of infrastructure finance 80,680.95 crores operations. The Bank has identified • Regular upgradation of hardware, Percentage of green/sustainable infrastructure finance versus total value of infrastructure finance 6.59% deployment of new technologies,

54 Integrated Report 2019-20 IndusInd Bank 55 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Energy Consumption (EC) Emissions Summary (MTCO2e): FY 2019-20 Scope 1: FY 2019-20 Scope 2: FY 2019-20 (%) (%) (%) FY FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 15 11 18 15 14 Source of Type of Energy EC (MWh) EC (GJ) EC (MWh) EC (GJ) EC (MWh) EC (GJ) EC (MWh) EC (GJ) Energy Non- Direct energy - Diesel 13,485.21 48,546.76 11,426.04 41,133.74 11,187.97 40,276.69 10857.55 39088.27 renewable Direct energy – Petrol 503.68 1,813.25 304.23 1,095.23 222.25 800.10 190.34 685.23 Direct energy – CNG 3.11 11.20 ------Direct energy - Total 13,992.00 50,371.20 11,730.27 42,228.97 11,410.22 41,076.79 11047.88 39773.50 Indirect energy (electricity) 62,032.21 22,3315.96 70,588.81 2,54,119.72 74,076.87 2,66,676.51 76132.2 274083.65 74 67 86 Total non-renewable energy 76,024.21 2,73,687.16 82,319.08 2,96,348.69 85,487.09 3,07,753.30 87,180.10 3,13,857.15 consumption Scope 1 Company cars Electricity (offices and branches) Renewable energy (solar) 255.26 918.94 245.28 883.01 255.80 920.88 252.40 908.67 Scope 2 Generator sets Offsite ATMs Grand total 76,279.47 2,74,606.10 82,564.36 2,97,231.70 85,742.89 3,08,674.18 87,432.50 3,14,765.81 Scope 3 Refrigerant leaks (HVAC) Total costs of energy consumption in FY 2019-20 = `55.51 crores

25.78% Reduction in Energy Consumption (EC) for FY 2019-20 RENEWABLE ENERGY • emissions due to (%) 0.3 0.2 The largest contributor to the Bank’s Measuring, monitoring, and carbon footprint is purchased reducing GHG emissions Scope 1 Emissions (MTCO2e) Scope 2 Emissions (MTCO2e) business travel 12.5 electricity, which accounts for associated with its more than 74.39% of the total operations across India FY 2019-20 8,831.6 FY 2019-20 62,785.67 GHG emissions. The Bank has • Transforming its operations implemented various initiatives to FY 2018-19 5,299.4 FY 2018-19 60,907.97 % to achieve carbon neutrality 9.72 utilise solar energy in its operations. over the long term FY 2017-18 5,777.3 FY 2017-18 57,801.35 Reduction in fuel In FY 2019-20, renewable energy emissions from 87 consumption was 252.4 MWh. • Investing in renewables for meeting its energy requirements Company vehicles Scope 3: FY 2019-20 EMISSION MITIGATION and in energy-efficient solutions Non - Renewable Indirect Energy IndusInd Bank considers climate (%) (Electricity) • Divesting from fossil fuel interests change to be the most pertinent Goods & Services Paper 60 Business Travel–Hotel Stays 1.22 Non - Renewable - Direct Energy • issue of our times. Educating its employees on Goods & Services Transactional ATMs 21 Business Travel–CFD Rail Reimb. 0.27 (Diesel) climate change and encouraging Renewable Energy Business Travel–Air 9 Goods & Services–Data Centres 0.27 The Bank has put in place them to be partners in Non - Renewable - Direct Energy Employee Commute 4 Business Travel–Bus 0.25 comprehensive strategies, for the implementation of its (Petrol) Business Travel–CFD Bus Reimb. 3 Business Travel–Rail 0.06 reducing its carbon footprint: mitigation strategies Business Travel–Car Hire 2

17.53% 42.31% 10.95% Scope 3 Emissions Break-up Emission Intensity/unit Air travel emissions Scope 3 emissions GHG Emissions (MTCO2e) FY2016-17 FY2017-18 FY2018-19 FY2019-20 revenue for Scope 1 + 2 decreased decreased Paper 3,013.43 3,562.91 9,060.16 7,619.53 decreased Employee commute 184.61 239.59 273.6 479.83 Business travel 1,933.61 1,995.06 2,413.58 1,226.65 Business travel–Reimbursement - - 119.54 653.33 Absolute Emissions Hotel stays - - 67.55 156.51 Data centre - - 70.72 34.30 GHG Emissions (MTCO e) FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 2 Transaction-based offsite ATMs - - 2,345.14 2,608.99 Direct GHG Scope 1 5,937.57 5,777.28 5,299.38 8,831.60 Scope 3 Total 5,131.66 5,797.56 14,350.29 12,779.14 Indirect GHG Scope 2 51,141.22 57,801.35 60,907.97 62,785.67 Total GHG (Scope 1+2) 57,078.79 63,578.63 66,207.35 71,617.26 IndusInd Bank is promoting paper products, these initiatives four new categories to our Scope the concept of online meetings, have contributed to paper emission 3 emission calculations, namely Scope 3 5,131.66 5,797.56 14,350.29 12,779.13 which has resulted in a decrease reduction of ~16% as compared to business travel–reimbursment, hotel Grand Total (Scope 1+2+3) 62,210.45 69,376.19 80,557.64 84,396.39 in business travel emissions by last year. Overall Scope 3 emissions stays, data centre, transaction-based over 25.78% compared to the decreased by over 10.95% as offsite ATMs since the past two years. previous year. Due to an increase in compared to the previous year. purchase/consumption of recycled This decrease is in spite of adding

[GRI:302-1, 305-4] [GRI:302-1, 305-1, 305-2, 305-3]

56 Integrated Report 2019-20 IndusInd Bank 57 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Emission intensity/unit revenue for Scope 1 and Scope 2 decreased by 17.53%. The decrease can be attributed to the various emission reduction activities implemented by the Bank in FY 2019-20, including reducing the average WASTE MANAGEMENT size of new branches, installing thin clients, energy conservation programmes by green champions and the use Effective waste management is a A total of 47,097.7 kg of hazardous of solar energy. key focus area with IndusInd Bank, e-waste and 35,200 kg of Specific Emissions Intensity and waste generation comprises non-hazardous paper waste electronic waste (e-waste) and were generated and disposed of FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 paper waste. The Bank is working during FY 2019-20. Total GHG emissions (Scope 1+2) 57078.79 63578.63 66207.35 71617.26 towards sustainable management Specific GHG emissions (Scope 1+2) per crore of revenue 5.58 5.19 4.57 3.77 of e-waste as per government Waste segregation bins have been Specific GHG emissions (Scope 1+2) per FTE 2.25 2.51 2.39 2.26 regulations. It is also working to placed in the pantries of Corporate reduce the use of paper in its Offices and Dry Waste is sent for processes. The Bank is shifting all its recycling while Wet Waste at few Emission saving Initiatives processes to the digital mode. facilities is converted into compost.

GREEN IT ROADMAP Emission-saving activities IndusInd Bank has developed a green Emissions Quantity Electricity IT roadmap aimed at transforming its Initiative Reduced (Numbers) Saved (kWh) IT infrastructure towards achieving (MTCO2e) greater operational efficiency. Thin clients 771 2,19,428.00 180.96 It contributes to reduction of the Virtual servers 485 27,91,214.74 2,301.89 Bank’s environmental impact. Timers 155 1,53,360.00 126.47 Total Waste Disposed Total Waste Managed The Bank aims to reduce power (in MT) (%) 47,097.7 kg consumption of data centres and Gold and Platinum certifications, A total of 1 lakh trees have been E-waste recycled disaster recovery centres by 20%, respectively. The Bank’s office facility planted till date since the inception of optimise space requirements at Karapakkam in Chennai is certified the Urban Afforestation Programme. 56.16 through authorised and move from physical to virtual with LEED Gold rating. 43 e-waste vendors servers. Server virtualisation allows businesses to migrate data from CARBON SEQUESTRATION 36.4 35.2 57 physical servers to software-based IndusInd Bank, in association with kg virtual machines. Virtualisation is the Centre for Environmental 35,200+ Number of Trees Planted 24.05 a futuristic technology fast gaining Research & Education (CERE), has Paper waste generated ground. The Bank is also aligning planted 59,000 trees in and around its IT architecture with foundational major cities such as Delhi, Noida, Total waste used/ recycled/ sold

transformations such as Network Gurgaon, Hyderabad, Kolkata, 59,000 Total waste disposed Virtualisation and Security Platform Nagpur, Nashik, Pune, Aurangabad, (NSX) and Hybrid Cloud to ensure Bengaluru, Chennai and Mumbai that its data centres are increasingly with a Carbon Sequestration energy efficient. Potential (CSP) of 1,4387.79 MT of FY 2017-18 FY 2018-19 FY 2016-17 carbon dioxide (CSP estimated value FY 2019-20 over a tree’s life span of 15 years) in 25,861 FY 2019-20 with an aim to promote urban afforestation. It achieved a 8,557 3,582 Emissions from data centres tree survival rate of greater than 75% 3,000 as only native species are planted. WATER MANAGEMENT have gone down by The Bank’s water consumption is sprinkler filters that help save urinals into a completely waterless limited to the use of water at its ~2,500 litres per device per day and system. Thus, ~3 litres of water is 51.5% offices; it is working to minimise its male urinals are fitted with bio-blocks. saved per flush. consumption of water. Washbasin FY 2017-18 FY 2018-19 FY 2015-16 FY 2016-17 These work as a replacement of water because the space allocated FY 2019-20 taps have been installed with Aerator flushes converting existing flush based to the Bank’s servers at the Emissions Reduced Chennai Data Centre has gone Emissions Quantity Electricity Saved Initiatives Reduced (Numbers) (kWh) Water consumption FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 down from (MTCO e) 2 Total water use (million cubic meters) 0.2802 0.2799 0.3071 0.363 14% to 1.29% Solar energy generated at Karapakkam, 45,620.86 37.62 Chennai Solar energy generated at IBL House, 15,983.00 13.18 Mumbai GREEN BUILDINGS Solar ATMs 159 1,90,800.00 157.35 The Bank is working towards CSP of trees planted 59,000 PRE Stage 14,387.79 converting its buildings into green Carbon dioxide Sequestration structures. The Palm Spring office - Before at Gurgaon and the IBL House Replantation in Mumbai have achieved LEED [GRI:306-2]

58 Integrated Report 2019-20 IndusInd Bank 59 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Social Creating Value for Stakeholders

CSR Priorities and KPIs Priority SDG Alignment Description Business Benefit KPI Social/ Environmental Benefit KPI IndusInd Bank views stakeholder value creation as a function of its Priority 1: Goal 3: Ensure Certain districts The Bank’s work at the The Bank ensures access to relationships with customers, communities, governments, employees and Good Health healthy lives and are categorised as grassroots level has created highly subsidised and affordable suppliers. The Bank collaborates with its stakeholders to enhance its social and Well-being promote aspirational districts goodwill. The community primary healthcare and well-being for while some are identifies the brand and medicines for 2,00,000 people and relationship and brand value. Being a responsible corporate citizen, it also all at all ages determined as difficult connects with it. This per year belonging to poor and contributes to the growth of the community through targeted initiatives as terrain geographies. reflects in the credit-deposit lower income families. These The Banks operates in ratio, which on an average people are from some of the well as customised products and services. The Bank reports social indicators such difficult terrains is ~200% in the states we most backward and aspirational and aspirational operate in. districts as identified by the for 100% of its operations. During FY 2019-20, there were no fines or non- districts in five states. Niti Ayog. monetary sanctions due to non-compliance with laws and regulations in the Priority 2: Goal 11: Cities like Mumbai, Working with the The Bank has planted 59,000 social and economic areas. Sustainable Make cities Gurgaon, Bengaluru, communities at the ground indigenous trees in FY 2019‑20. Cities and and human Chennai, Hyderabad, level brings synergies and This is expected to have a Communities settlements Ahmedabad, Noida and creates a win-win situation carbon sequestration potential inclusive, safe, Delhi are all business for us and the society at of approximately 26,700 MTCO e Community Relations 2 resilient and hubs that are worst large. The outcome of (offset over 15 years). IndusInd Bank partners with the sustainable affected by pollution. the Bank’s interventions communities around its operations, The Bank has targeted are visible not just in the which are also its customers. urban spaces to increase in the number of The Bank’s Corporate Social create mini forests to accounts but also in the Responsibility (CSR) Policy guides mitigate the ill effects deepening of books. the Bank to undertake need-based of pollution. community efforts and its Board CSR Committee is responsible Priority 3: Goal 6: Ensure The Bank Relationships with business The Bank will make additional for its implementation. The Bank Clean Water availability and acknowledges the correspondents in rural water of more than 700 million recognises national priorities and and Sanitation sustainable importance of safe clusters have become litres or 7,00,000 m3 available supports government programmes. management drinking water and stronger. The deposits through various conservation of water and started working in an continue to grow. and restoration initiatives The Bank’s community efforts are sanitation for all area where it has an by 2024. Watersheds will be based on a participatory approach extensive network developed over 3,600 hectares looking to understand the needs of of Microfinance of land. the community, evaluated for their Institutions (MFIs). The Bank will ensure the social and environmental impact. These areas had availability of affordable, contaminated and RO-purified drinking water to high Total Dissolved 1,60,000 people from rural The Bank involves the community Solids (TDS) water areas. through training and capacity levels. The Bank works building to drive ownership. Inaugaration of the Restored Badshapur Corridor in Gurugram with communities to Village-level institutions and educate them about Self-Help Groups (SHGs) implement the importance of these efforts, following which, drinking clean water. projects are handed over to the beneficiary community while being monitored for a certain [GRI:203-1, 413-1, 419-1] [GRI:203-1, 413-1] amount of time.

60 Integrated Report 2019-20 IndusInd Bank 61 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

The Bank collaborated with Bharat Financial Inclusion Limited (BFIL). on two projects, i.e., Sanjeevani and Pragat, A. Environment-focussed social initiatives aggregating to `11.91 crores spend in FY 2019-20. A.1.2 Spring-shed Management The project aims to conserve The Sectoral Spend Analysis for FY 2019-20 [GRI:203-1] and utilise the streams that The amount spent on various sectors in FY 2019-20 was are a perennial source of `108.15 crores. water for farmer communities in Odisha. Their challenges include damage to the catchment 2 Environment (water) 8 12 area by either soil erosion, Other environment initiatives Philanthropic Contributions 13 Education deforestation, encroachment 14 Healthcare Areas of Contribution Percentage of Total Costs or human intervention 8 Sports Charitable donations 8 (agricultural/industrialisation). Skill development & livelihood Community investments 92 16 Donations Commercial initiatives 0 27 Admin & capacity building Total 100

CSR Project-wise Beneficiaries Training the community on sustainable farming practices through the Watershed Management Programme in Maharashtra Sr. No. CSR Focus Areas Male Female Total provided through the Watershed 1 Education initiatives (assisted learning, 52,156 38,836 90,992 A.1.1 WATER Organisation Trust (WOTR) – Pune. academic excellence, midday meal etc.) Watershed Management 2 Environment: water stewardship initiatives 4,16,383 Programme During FY 2019-20, nearly 5,576 (access to safe drinking water, watershed and Piloted in FY 2018-19, this project is hectares of land area was treated, spring-shed, restoration of water bodies such one of the flagship initiatives of the accompanied by construction of as lakes and drains, and more) Bank. Soil and water conservation harvesting structures. This resulted A check dam constructed for farmers in Odisha 3 Healthcare initiatives (access to primary 45,845 2,02,377 2,48,222 assessment was carried out for in the creation of water storage healthcare, support for treatment and 63 villages in six districts across capacity of 7,15,154 m3. Most of the infrastructure for cancer, cataract surgeries, four states, namely Maharashtra, The intervention is planned for work done here will witness its first support for congenital defects, among others) Madhya Pradesh, Odisha and the next five years and shall monsoon in 2020, after which its 4 Sports with inclusion of the differently-abled 464 131 595 Jharkhand. It has benefited more enhance agricultural productivity impact on groundwater levels will and women for excellence than 48,000 people in all. and farmer income by preventing be seen through monitoring wells. 5 Skill development and livelihood 871 2126 2,997 the degradation of soil and water. Major components of the study During the year, four irrigation 6 Other environment initiatives: (afforestation, 2,36,473 Structures built before monsoon were soil and water conservation structures were constructed–one solid waste management, renewable energy (and during the pilot) have through structural barriers and in village Sursobondel of Thuamul in villages, schools and other institutions, seen groundwater levels rise afforestation, and agricultural Rampur block of Kalahandi and more) incrementally by 2-4 metres. development through training of district and three in Sandhimaha, Total beneficiaries 9,95,662 In addition to these benefits, farmers and community on adopting Budabearmaha and Pandhalaju the community will also receive sustainable practices. of Kothagarh block of Kandhamal training and support on district. These benefited 170 agri-productivity and income, Projects were planned in households by extending irrigation E10,815 lakhs helping build their resilience against consultation with and close to the farmers and providing water climate change impact. CSR spend for coordination with Self-Help for domestic purposes. FY 2019-20 Groups, Samyukta Mahila Samitis, Village Development Committees (VDCs) and Vasundhara Sevaks. E30.66 lakhs Youth Village Volunteers were 7 lakhs+ trained in the technical aspects to 3 CSR cash carry out the maintenance work. m water storage capacity contributions A team of 517 SHGs, 580 members was created with water from 63 VDCs and 100+ Vasundhara conservation structures in Sevaks are implementing the work. the community 7,292 hours Technical support is also being Employee volunteering Shollinganallur Lake, Chennai [GRI:203-1, 413-1] [GRI:203-1, 413-1]

62 Integrated Report 2019-20 IndusInd Bank 63 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

A.1.3 REJUVENATION OF URBAN The Badshahpur drain, has been A.2 URBAN AFFORESTATION A.3 SOLAR LAKES AND PONDS cleaned and over 5,000 trees The Bank’s Urban Afforestation A.3.1 SCHOOLS ON SOLAR The Bank is working to restore have been planted along its Project (UAP) aims to create green The Bank initiated the ‘Schools existing water bodies, primarily in periphery. The rejuvenated drain spaces for developing urban on Solar’ project aimed at helping the urban and peri-urban spaces, has helped increase groundwater flora-fauna habitats and create a schools adopt renewable energy. as they play an important role levels along with creating public common area for communities Solar panels have been installed at in mitigation of the impact of space. This also gave the Bank’s to meet, interact and experience. 10 schools and other institutions floods that these areas witness employees an opportunity to With this view, plantation of trees is across Mumbai, Saphale, Alandi, during the monsoon. vounteer in the activity of planting underway for urban areas. Pune, Panvel and Thane this year. trees on the bunds. Benefits of solar energy has now During FY 2019-20, 20 lakes in five This year, the Bank has planted been made a part of the curriculum cities, namely Ahmedabad, Hubli, 59,000 trees across 13 cities to create awareness among the Trivandrum, Coimbatore and taking the total number of trees next generation. Vijayawada, have been rejuvenated, planted to 1 lakh. It has opted by treating over 200 hectares of for traditional plantation and A.3.2 SOLAR MICROGRID IN THE land and creating capacities of followed the Miyawaki technique, SUNDERBANS over 7,000 lakh litres of water, one that helps build dense, native The project is aimed at providing benefiting close to 1.5 lakh people. forests. It involved its employees reliable power to the remote IndusInd Bank has pledged to and witnessed a participation of villages in the Sunderbans in West restore 50 lakes over a period of over 700 of its people. The Bank Bengal. The initiative provides four years starting FY 2018-19. aims to plan 3 lakh more trees decentralised renewable supply in three years. of energy in these highly remote areas, since the town here sees a 20 lakes restored meagre and inconsistent supply of in five cities to create 7,000+ 1 lakh+ conventional energy. lakh litres of water storage trees planted to create The Bank initiated the solar-based capacity, benefiting urban green spaces and microgrid project in partnership 1.5 lakh+ people with the World Wide Fund for Inaugaration of the Schools on Solar Project Rainwater harvesting system replicate forest diversity Nature (WWF) during FY 2019-20. A solar microgrid system with a A.3.3 SOLAR STREETLIGHTS to households; the collection, capacity of 25 kWp of electricity Streetlighting has been a need transportation, storage, segregation, A.1.4 CLEARING UP OF A.1.5 ROOFTOP RAINWATER generation has been installed. Biodiversity Conservation of the villages in the Pali district recycling, composting and disposal STORMWATER DRAINS HARVESTING This provides power to nearly – Miyawaki Technique of Rajasthan. IndusInd Bank has of waste along with creating The Bank took up the responsibility Launched in FY 2018-19, 200 households and five rural installed 4,000 solar-powered awareness; and the execution of of fixing two severely contaminated rainwater harvesting is crucial institutions (schools, panchayat The Miyawaki technique streetlights across 30 villages the entire waste management storm water drains in Gurugram, to ensure continuous supply of office, community building, etc.) was employed benefiting over 3 lakh people. process. It is active in eight villages during the past two years. drinking water and water for along with 20 streetlights near the at Aurangabad, Further, the community has been of the Bhogpur Cluster in Dehradun It restored the Wazirabad drain domestic use in the rural areas of embankments in Kumirmari island. Bengaluru and Chennai. trained in the maintenance of these District, benefiting around 19,000 in FY 2018-19 followed by the Rajasthan. Continuing its efforts Through this technique, solar panels. The intervention has residents and collecting 1277.5 MT Badshahpur drain in FY 2019-20. from the last year, the Bank has In the current year nearly 1,000 mini forest areas are enhanced mobility of the villagers waste annually. The Uttarakhand created 400 rooftop rainwater people have been benefited. and security for the residents. state in general and Dehradun These stormwater drains were harvesting structures across 30 created, which become The programme will also help district, in particular, have a thriving constructed to channelise the villages covering nearly 40,000 self-sustainable and reduce human-wildlife conflict. tourism industry. excess water from the Aravalli Hills. beneficiaries. It aims to create over replicate forest diversity. The provision of lights in wee hours However, over a period of time 1,200 structures in order to reach These have a combination is expected to improve visibility and 4,000 The Bank plans to extend the they became sewage and garbage more than 1 lakh beneficiaries in of intertwining plant reduce such conflicts. solar powered streetlights initiative this year and the next dumping places. This impacted the the next year. and tree species to to two more clusters having environment, as a result of hygiene across 30 villages create a small biodiverse A solar microgrid system five villages each. Further, the hazards and flooding during times ecosystem. They develop has been installed to Panchayati Raj plans to own the of excessive rains. 400 over a period of one to five power an island, providing programme and scale up after A.4 WASTE MANAGEMENT rainwater harvesting years and then host birds, the Bank exits in a few years. electricity for households, IndusInd Bank is the first and, structures created in insects and other species. The project will be scaled up to schools, community spaces currently, the only private 30 villages another 15 villages in FY 2020-21. and streetlighting in the partner for the implementation Sunderbans delta. of ‘Jagmagaata Uttarakhand’ programme. This includes distribution of segregation bins [GRI:203-1, 413-1] [GRI:203-1, 413-1]

64 Integrated Report 2019-20 IndusInd Bank 65 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

B. Education B.5 SCHOLARSHIPS FOR ENGINEERING AND MEDICAL STUDENTS B.1 SUPPORTING QUALITY Launched in FY 2019-20, the Bank EDUCATION is supporting 25 scholars pursuing IndusInd Bank has joined hands engineering and medical degrees with Cashpor, a microfinance for four years across Andhra institution, to provide better Pradesh, Gujarat, Karnataka, Kerala, education to the community. Madhya Pradesh, Maharashtra, Six districts of Uttar Pradesh and Orissa, Tamil Nadu, Telangana and Jharkhand with high school drop-out Uttar Pradesh in partnership with rates have been identified and the Foundation for Excellence. group tuition programmes are The NGO extends scholarships to conducted to enable students to these meritorious students from pass secondary school. underprivileged backgrounds. The programme runs on a unique The programme has been scaled to concept of ‘pay-it-forward’ model, Early Grade Reading Program in partnership with the Government Of Haryana and LLF 317 centres in FY 2019-20, bringing Education of underprivilaged children at Purkal Midday Meals Program through the Akshaya wherein every scholar undertakes a the total educational centre count Youth Development Society School, Dehradun Patra Foundation in Odisha pledge to support the education of to 717. Over 18,000 students from B.3 ROAD TO SCHOOL B.4 MIDDAY MEAL PROGRAMME at least two other students through grade 1 to grade 10 have enrolled. The project aims to bring about In partnership with the Akshaya a contribution to the foundation The programme also entails capacity a change in delivering education Patra Foundation, midday meals are whenever they are able to. building for teachers and outreach to the children from government provided to children in municipal to parents through both, field visits schools in partnership with schools in Odisha. Midday meals B.6 YOUNG INDIA FELLOWSHIP and meetings at the centres. Learning Links Foundation (LLF). are a source of encouragement IndusInd Bank supports deserving While focusing on enhancing to children for attending schools meritorious students through The programme has witnessed learning outcomes, improving regularly. This programme has a the Young India Fellowship (YIF) improvement in knowledge, attendance and curtailing dropouts, two-pronged approach – not to let programme in partnership with the comprehension and analytical the Road to School Programme will any child go hungry to school and Ashoka University. YIF is a one-year abilities across subjects. also support health and hygiene and to ensure the child is well fed, to aid full-time residential programme wellness education in government concentration. renowned for creating the next B.2 EARLY LEARNING OUTCOMES schools along with reaching out to generation of leaders and change The state of Haryana has adopted the parents and families through agents. IndusInd supports the a well-defined Early Learning community outreach. Through the 27,000+ course fees of Fellows who are from Literacy (ELL) Framework, thereby programme, IndusInd Bank is children in 437 municipal poor socio-economic background. prioritising early learning. reaching out to 10,915 children and schools of Bhubaneshwar and Ashoka University is partnering The Bank is working to improve 125 teachers from 42 government with globally reputed educational ELL outcomes in Haryana. schools and 10,000+ community Puri in Odisha provided with institutions such as the University The beneficiaries will be 1,00,000 members of Khordha district midday meals this year of Pennsylvania, University of Grade 1 and 2 students and of Odisha. Every year, the Bank California, University of Michigan, about 7,000 teachers and teacher plans to add 30-40 schools to London Trinity College, Dublin, and educators across seven districts the programme. Yale University and provides access and 3,200 schools of Haryana. to education at an affordable cost. are women and 60% of the predominantly from villages near By the end of the programme, it total pass-outs have joined the Dehradun and other parts of is envisaged that the students will As many as 20 students are corporate sector (Aditya Birla Uttarakhand. The Bank takes care of have fluency to read grade-level provided support annually Retail, BCG, RBL Bank, Toshiba their academic expenses, along with text by the end of grade 2. under the IndusInd Fellowship etc.), 30% are engaged in the meals, learning support (library, This project has been taken Programme. This programme not-for-profit sector and 10% have books, awareness programmes), up for a period of three years. started in 2016 and envisages become entrepreneurs. field visit expenses, arts and These outcomes are in alignment helping 100 students to complete sports (theatre, skill development, with Haryana state and NCERT their post-graduate studies at B.7 INDUSIND SCHOLARS AT counselling), and laboratory and learning outcomes. Ashoka University over a period PURKAL hostel expenses. of five years. Over these years of IndusInd Bank has been supporting support, Fellows came in from 22 80 children at Purkal School at states and 92 cities in India. 48% of Dehradun. These children have Fellows are from non-metros, 52% the academic potential and are

Preventive healthcare initiatives under the Road to School Programme

[GRI:203-1, 413-1] [GRI:203-1, 413-1]

66 Integrated Report 2019-20 IndusInd Bank 67 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

C. Skill Development and Livelihoods D. Sports, Arts and Culture

C.1 SKILL TRAINING CENTRES IndusInd Bank contributes The Bank not only promotes D.2 INDUSIND BLIND CRICKET IndusInd Bank is providing skill to Sahapedia in their Frames these athletes and para-sports, PROGRAMME training for youth across areas Photography Grant, which actively but also intends to change the This programme was implemented such as microfinance management, encourages documentation of social perception about the in association with the Cricket customer relationship management cultural heritage. The Bank has been differently-abled. These athletes Association for the Blind in India and training to become unarmed supporting Sahapedia since 2017 have won about 170 gold, 82 silver (CABI), the cricketing arm of security guard. It has established towards the Heritage Fellowship and 59 bronze medals in various Samarthanam, which governs Indian training centres in Rajasthan in Program (Sahapedia Frames competitions, both national and cricket tournaments for the blind. association with Ambuja Cement Photography Grant) – FRAMES. international. CABI is the apex body organising Foundation, featuring courses This grant is to support about 25 cricket for the blind and is affiliated that are in line with the National photographers by giving them an with World Blind Cricket Ltd. (WBC). Skills Development Corporation opportunity to document cultural (NSDC) guidelines. spaces, themes and practices of IndusInd Bank is the principal their interest in subjects related to supporter for 26 players in Skill Development Training Centre for Youth in rural Rajasthan Three such batches with 30 culture, arts and heritage. the Indian Blind Cricket Team. candidates each were conducted are sent to SUPPORT’s Vocational units further engage 6-8 women, The programme gives exposure, in FY 2019-20. The programme Skills Training Programme. thus creating livelihood for So far, 40 candidates have been infrastructure and training to targets 90% placement for the 450 over 1,800-2,000 women in all. selected from a total of 579 the visually impaired to practice candidates enrolled. Once placed, The programme has trained Apart from providing affordable applications (combined figures this sport on a larger scale. the candidates are given further and placed nearly 40 youth with sanitary products to women, the 2018 and 2019). Almost all Para athlete Anandan Gunasekaran The team won the ODI Blind warming up guidance for a year if needed. 100% placement. The programme initiative is also an endeavour to candidates who have been grantees Cricket World Cup against Pakistan operates at a centre in Saphale, effect behaviour change towards are working either full-time as in Sharjah and the 5th ODI World The Bank’s ‘Indus Saksham’ Palghar, Maharashtra. Few of the issue of menstrual hygiene in photographers, writers, researchers Championship in Dubai. The team programme in Assam aims to the rehabilitated boys have been the community. or curators or working in fields won ODI series played in Jamaica enhance livelihoods by skilling local absorbed by the NGO on their directly related to photography, in July 2019 and January 2020 in unemployed youth. It has initiated rolls. This has given them immense social work and journalism. Nepal. Further, the Nagesh IndusInd skills training programme in three confidence and motivation 350 trophy was instituted so that more trades , viz. Banking, Financial to lead a life free from drugs. enterprises set up at the The Bank’s sports initiatives have such talent could be identified. Services and Insurance (BFSI); Many candidates are re-united village-level to manufacture been conferred a ‘Honorable The tournament for the Nagesh Hospitality and Retail at Guwahati, with their families and some mention’ by the Ministry of Trophy was played in November, Assam where 400 youth are are weaned in group homes. sanitary pads across 100 Corporate Affairs under their and December, 2019 and witnessed being trained. The programme This programme has been the districts in 16 states ‘Contribution to the National Priority 60 matches in 12 states. aims at providing 100% biggest recipient in the Share2Care Areas – Promotion of Sports’. placement for the youth. programme of the Bank. Para athelete Sandeep Mann in a competition C.4 INCLUSION OF PEOPLE WITH D.1 INDUSIND PARA-CHAMPIONS C.2 SKILL DEVELOPMENT FOR C.3 STREE SWABHIMAN DISABILITIES PROGRAMME DRUG REHABILITATED YOUTH LIVELIHOOD PROGRAMME This programme supports training IndusInd Bank, in association The Bank is working to support Under the Stree Swabhimaan and placement of 250 young with Go-Sports Foundation, drug rehabilitated youth through initiative, around 4,500 girls have men and women with disabilities, encourages sportspersons skill training. Having a reliable been provided with supplies of hailing from marginalised with special needs. The sports livelihood prevents them from sanitary pads in Madhya Pradesh communities. It helps them become scholarship programme covers going back to drugs. IndusInd Bank through the business correspondent economically and functionally their travel, injury management, has partnered with ‘SUPPORT,’ an ‘Samhita’. Awareness workshops independent. The programme rehabilitation strength training, NGO offering long-term residential were conducted at schools was conducted in partnership medical support needs, and more. rehabilitation programme for street and communities to help them with Association of People with Para-athletes are selected through children/youth. understand the importance of Disability (APD) and domain-based a structured assessment. The Bank health and menstrual hygiene. training opportunities in Retail, has supported 45 para athletes to The programme has a two-tiered BPO and Hospitality domains participate in various national and approach that involves rehabilitation With this distribution, the Bank were extended to 13 districts international events. (medical and psychological) from has developed the understanding of Karnataka. The training is substance abuse and then skill that the supply of the pads was completely residential and spans a development for employability. a major challenge. It undertook period of 8-12 weeks. APD ensures While in rehabilitation, based on to set up 350 village-Level 100% employability and trainees their age, children are enrolled into enterprises to manufacture are allowed access to various formal school and youth who have sanitary pads across 100 districts government, social security and already crossed the age of schooling in 16 states. These manufacturing entitlement schemes.

Members of the Indian Blind Cricket Team supported by IndusInd Bank [GRI:203-1, 413-1] [GRI:203-1, 413-1]

68 Integrated Report 2019-20 IndusInd Bank 69 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

E. Healthcare

D.4 NURTURING RURAL medical care, injury and recovery CHAMPIONS PROGRAMME management, among others. E.1 MINI HEALTH CLINICS E.2 CANCER CARE IN ASSAM E.3 SUPPORT FOR CANCER- Mann Deshi Foundation runs a The focus is on select disciplines, IndusInd Bank is setting up IndusInd Bank has partnered AFFECTED CHILDREN robust sports initiative that has viz. Wrestling, Track and Field, mini-health clinics in partnership with TATA Trusts to support an The Bank has partnered with produced champions and is being Athletics and Hockey. The training with the microfinance institution intervention for reducing the Bhagwan Mahaveer Cancer Hospital supported by IndusInd Bank. In line of these players is carried out at Cashpor to provide affordable burden of cancer patients and to and Research Centre (BMCHRC) in with the Bank’s excellence and Mann Deshi Champions Sports primary healthcare to low income provide care, treatment, awareness Jaipur, Rajasthan, to support the inclusive approach for sports, 55 Academy equipped with the latest group families in Uttar Pradesh. and prevention services under the treatment of 50 children suffering young athletes, i.e., 15 national-level training facilities. These Outpatient Department bigger umbrella of the Government from cancer every year in rural An athelete of the IndusInd Rural Champions and 40 state-/district-level athletes, (OPD) clinics are visited by of Assam’s Cancer Programme. Rajasthan, whose parents cannot Programme at Khelo India Games are being provided support in experienced medical professionals afford the treatment. the form of training, nutrition, on a fortnightly basis and deliver D.3 INDUSIND GIRL POWER The Bank is funding the treatment free of charge, with All the children are under 14 years PROGRAMME radiology equipment at the medicines priced at half rate. of age and are being treated for IndusInd Bank supports 60 girl Assam Medical College and different types of blood cancer. athletes from lower income strata IndusInd Bank has supported the These children come from remote from all across India. They get Hospital, Dibrugarh. Through setting up of 280 mini health clinics villages/towns of Rajasthan and access to world-class coaching Infrastructure intervention, in rural Uttar Pradesh in partnership have no access to medication or and training facilities at the Inspire with Cashpor. In FY 2019-20, more approximately 1,100 patients treatment. The Bank has made Institute of Sports (IIS). mini health clinics were set up, will receive treatment at significant impact by providing covering five states and 24 districts treatment to 117 children in The Bank has partnered with JSW this centre along with 3,800 with an outreach of about six lakhs FY 2019-20. Of these, 105 have Foundation’s Inspire Institute of patients in the Out-Patient and direct beneficiaries of over completed their treatment and have Sport (IIS), which is a world-class, 85,000 additional people. Department every year. been declared cancer-free. high-performance sport training facility at Vijaynagar, Karnataka, primarily to scout and train junior IndusInd Hockey for Her Excellence Program athletes. The long-term vision of the institute is to produce D.5 INDUSIND HOCKEY FOR HER coaches. These girls will be scouted Olympic and World Championship EXCELLENCE PROGRAMME from Odisha Government’s regional Projects in collaboration with Bharat Financial Inclusion Ltd (BFIL) medalists across the disciplines of The Hockey for Her Excellence grassroots centres. The existing Judo, Boxing, Wrestling, Track and Programme in partnership with high-performing hockey girl 1. BHARAT SANJEEVNI 2. PRAGAT - HOLISTIC VILLAGE Field, and Swimming. TATA Trusts is being carried players from across India will be Bharat Sanjeevani is an indigenously DEVELOPMENT out at Bhubaneshwar, Odisha. taken to the next level in terms implemented, award-winning Project ‘Pragat’ works towards Throughout the three-year project of coaching. Bovelander Hockey CSR initiative of Bharat Financial achieving better holistic growth phase, 40 high-performing girls Academy (Netherlands) will provide Inclusion Ltd. (BFIL) aimed to in under-developed villages that in the age group of 13-15 years coaching to players and coaches. provide rural households with suffer a lack of basic amenities. will be further trained and their The Excellence Programme will act livestock care. The project The project works across talent will be nurtured at the as a feeder for the Indian team and delivers qualified livestock care 12 villages in Gulbarga, Karnaraka, state-of-the-art Naval Tata Hockey state hockey teams. at the doorstep, eliminating the addressing a population of 65,000. Academy (NTHA), a centre of hassles and financial losses faced The key areas of intervention excellence in Bhubaneshwar, along by small and marginal farmers. include Healthcare, Education with building the capacity of 10 Toll-free numbers are set up and Water. BFIL involves the local for farmers to avail the service. government for sustainability A mobile app and integrated of the projects. technology connects the veterinary doctors and farmers. There is a robust tracking mechanism for the same. The project is implemented in three states and 67 districts with support from the animal husbandry departments of the Preventive healthcare initiatives through SHGs state governments. in Uttar Pradesh

Para shooter Sonia Sharma Atheletes of the IndusInd Rural Champions Programme at Khelo India Games [GRI:203-1, 413-1] [GRI:203-1, 413-1]

70 Integrated Report 2019-20 IndusInd Bank 71 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Share2Care Supplier Engagement

IndusInd Bank encourages employees to volunteer and `30 Cr contribute to the charitable Overall COVID-19 Relief Support cause of their choice. IndusInd Bank promotes sustainable and ethical procurement practices To promote this, the Bank through selection and onboarding criteria for vendors and suppliers. has instituted a payroll-giving `5 Cr `25 Cr It emphasises the importance of sustainability performance including scheme called Share2Care, Towards PM CARES Fund Towards support for states which allows employees to human rights, labour laws and adherence to standardised ESG norms by the contribute to NGOs working on various social and upstream and downstream supply chain partners. environmental issues. `18 Cr ``7 Cr In the past year, the Bank’s support for various For on-ground activities employees raised `30 lakhs for local governments through partners six NGOs, namely SUPPORT, SUSTAINABLE PROCUREMENT Nalandaway Foundation, POLICY Samarthanam, Aaranyak, The Bank’s Sustainable Procurement HelpAge India and Prayas. Policy guides the Bank’s Their donations have made procurement of software and a significant positive impact infrastructure-related hardware. in the areas of education for While priority is given to suppliers children, women empowerment, who have local presence, the Policy biodiversity conservation also commits to procuring raw and elderly care. materials at a fair price from the suppliers. It serves as a guideline for uniformity in the overall procurement process of the Bank, including transparency, safety and the inclusion of human rights.

SUPPLIER ASSESSMENT IndusInd Bank interacts with As the world combats the distressing its suppliers and subscribes to situation created by the COVID-19 pandemic, responsible procurement practices. Supplier audits IndusInd Bank stands in solidarity with the The Bank has a vendor onboarding nation and continues to pledge its support system and has also identified by donating: around 20-30 critical suppliers. Paper products and stationery are procured from the local vendors management, EHS, GHG emissions and 65% of the Bank’s products while envelopes, letter heads and management, etc. The Bank seeks and services are purchased locally. general forms at all the branches to associate with supply chain Materials procured include laptops, are procured centrally. entities willing to abide by standard desktops, printers, UPS and UPS and progressive labour practices batteries, paper products and ACs. The Bank has conducted while upholding basic human rights. There is a buy-back policy available sustainability assessments for to all the employees. Employees can its large volume of suppliers that LOCAL SUPPLIERS also deposit their laptop with 15,950 3,61,300 2,52,400 10,850 1,302 9,000 provide technology, equipment, IT Local suppliers for the Bank the admin team, which further PPE kits Face masks Pairs of gloves Dry ration kits and Thermal scanners/ Testing kits hardware, white goods manpower, deal with IT software/hardware, gets used internally as a standby. medical supplies infrared thermometers security and house keeping services. enhancements in existing The laptops that are not in working These suppliers were assessed software, IT software AMC condition are recycled. on their social and environment and IT support and services. practices, including health and Nearly 75% of the Bank’s spend safety, employee welfare, water relates to technology investments 13,350 (Ltr) 1,200 34 100 3,400 (Ltr) Sanitisers Viral Transport Thermal fogging Hospital Beds Soya oil to Media (VTM) kits face masks and mattresses community kitchens [GRI:203-1, 413-1] [GRI:102-9, 203-1, 413-1]

72 Integrated Report 2019-20 IndusInd Bank 73 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Client Engagement Creating Social Impact through Investing

IndusInd Bank has a segment-based customer engagement strategy executed and delivered through direct as well as digital routes.

The Bank facilitates funding in the Healthcare CUSTOMER EXPERIENCE CUSTOMER DATA PRIVACY During FY 2019-20, there were no development sector to make a positive Customer engagement IndusInd Bank is committed to complaints received from outside impact on society through one of the encompasses the client’s interaction protecting customers’ privacy parties and regulatory bodies or Education sustainable finance themes. The Bank has across all touchpoints, including during their visits and when they substantiated by the organisation identified sectors such as rural banking, digital channels, Relationship are using its website and online regarding breaches of customer microfinance, livelihood and inclusive Affordable Housing Managers and Service Managers. applications, and availing the privacy and losses of customer finance, agricultural and agri-allied Each channel has distinct KRAs products and services. The Bank data. There were no identified sectors, vehicle and non-vehicle lending, and objectives. recognises its responsibility to keep leaks, thefts or losses of customer education, affordable housing, healthcare the information provided by the data [GRI:418-1]. Impact NBFC and social infrastructure. IndusInd Bank The Bank is committed to creating customers, confidential at all times. has partnered with USAID to improve SOCIAL distinctive customer experience as CUSTOMER GRIEVANCE access to debt financing for hospitals a source of sustainable competitive The Bank follows a Board-approved REDRESSAL and other healthcare service providers Financial Inclusion advantage. Customer journeys Privacy Policy which is displayed The Bank follows a Board-approved in maternity and child care space. It also are being continuously redefined at all branches and also hosted on Grievance Redressal Policy, which offers debt solutions to social enterprises and made customer-centric the Bank’s website. The Policy is is displayed at all branches and operating in the water and sanitation Commercial Vehicle through digitisation, AI, applicable to personal information also hosted on the Bank’s website. space. Through these partnerships the Financing process re-engineering and and sensitive personal data or Customers can file complaints Bank intends to extend debt finance of improved client communication. information collected by the Bank. related to any services provided approximately `700 crores. Agribusiness The Bank’s aspiration is to ‘Redefine The Bank’s primary responsibility by the Bank or any outsourced Convenience’ with the key principles is to keep its financial information agency. The complaints can be of ‘Seamless, Easy, Fast and secured all the time. filed with the branch – branch Social Infrastructure Transparent’ imbibed in its culture, manager/complaints register or processes and technology solutions. can be submitted to the call centre. Read more about the Bank’s In cases where the branch or privacy policy at https:// The Bank regularly conducts contact centre is unable to resolve A. Financial Inclusion www.indusind.com/ content/ customer satisfaction the issue within seven working home/ footer/privacy-policy.html surveys and this year’s days, the same can be escalated to At IndusInd Bank, it is believed that the success of financial inclusion results the regional heads through Head – results show a 69% Employees are authorised to access Customer Care. from last-mile delivery of affordability, convenience, and flexibility. It is customers satisfied index Customer Information for business enabled by digital technologies. At of the end of FY 2019-20, the Bank notched for the responses received. purposes only. Employees are During FY 2019-20, 46,248 bound by a code of ethics that 10.8% market share in sustainable livelihood financing. customer complaints were requires confidential treatment of customer information and are reported, of which 45,441 Being socially responsible, through subject to disciplinary action in were resolved and 807 were The Bank has a wide-ranging IndusMobile app, customers case of any breach. If customers lakh ` crores under process as on March portfolio of financial inclusion 93.5 36,421 are provided with an option to so desire, the Bank can limit offerings such as microfinance, Women beneficiaries in the Bottom Total loan disbursal donate to a charitable trust for sharing of customer information. 31, 2020. 1.74% customer microenterprise segment on of Pyramid (BoP) segment de-addiction & rehabilitation A customer may contact the Bank complaints were pending as the asset side, and savings bank of substance-abusing children, at [email protected] if they on March 31, 2020 which will accounts, micro recurring deposits which is then matched by an would not like to be informed of the be resolved subsequently. and remittances, among a host of equal contribution from IndusInd offers available. `35,841 crores `16,249 crores value-added services. Bank. Additionally, the Bank Total loan disbursal to Total loan disbursal to engages with NGOs to facilitate The Bank treats every customer’s weaker sections microenterprises sector Read more on Grievance Redressal Digital solutions are facilitating & promote donations for many personal information as private Policy and Machanism at smooth transactions for the other social causes. and confidential and it is not https://www.indusind.com/in/en/ microfinance segment through the disclosed to any other entity personal/grievance-redressal.html use of IMPS, RTGS, NEFT and UPI unless otherwise authorised by `19,300 crores supported by Aadhaar Enabled the customer or the disclosure is Total loan disbursal to Payment System (AePS) /Biometric compelled by law as mentioned in agriculture and allied sectors Authentication System and more. the Customer Rights Policy. [GRI:203-1, 413-1, 418-1] [GRI:203-1, 413-1]

74 Integrated Report 2019-20 IndusInd Bank 75 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Impact of Financial Inclusion Initiatives Business Correspondent Model with Microfinance Institutions

Doorstep banking is provided to all customers, as per Microfinance is an integral part Since the start of the initiative in 67.72 lakhs Bharat Money Stores the doorstep banking requirements defined in the of IndusInd Bank’s financial May 2012, the programme has Active rural customers under Banking Codes and Standards Board of India (BCSBI) inclusion strategy. The Bank has, grown by leaps and bounds, and In a bid to provide last-mile banking, the code adopted by the Bank. The facility details therefore, launched its flagship is a testimony to the success of the Business Correspondent Bank has enrolled around 24,000 local are hosted on the bank’s website. Business Correspondent model the platform created by the Bank. model, as on March 31, 2020 village kirana stores as Bharat Money Stores with microfinance institutions. Through the programme, the Bank (BMS) at. It has enabled small shopkeepers The model offers commercial financed about 1,100 women-led and retailers to act as banking agents. Read more about doorstep banking https:// viability and customer engagement activities. It is a moment of pride They provide the Bank’s products and www.indusind.com/content/home/important-links/ and hence, is a win-win proposition for the Bank to look back on this services to the underserved populations, code-of-commitment.html for all stakeholders. achievement under the Pradhan driving financial inclusion goals. The model Mantri Mudra Yojana (PMMY), which Banker’s guide for customers with special needs and The Bank launched a programme reached more than 300% of the 29.62 lakhs further empower the shopkeepers as persons with disabilities is developed by the Bank they act both as merchants and service under which Joint Liability targets allotted. Rural customers added in and it is available at https://www.indusind.com/ Groups were formed, comprising points for the Bank. FY 2019-20 under the Business content/ home/inclusive-banking.html women from the unbanked Correspondent model, as on and underbanked segments. They also facilitate financial They received microloans under the March 31, 2020 (deposit/withdrawal) and non-financial programme, which benefited from (balance enquiry and service requests, continuous multi-layer monitoring among others) transactions for customers. and supervision undertaken at The BMS are in close proximity to the regular intervals. target community and are open virtually 24X7 to provide assistance. The Bank also introduced a specifically designed Access to Financial Services for Low-income Social Groups Micro Recurring Deposit (Micro RD) and Voluntary Savings Bank (SB) account facility Microfinance Loans Micro Enterprise Loans New Customer Enablement to customers to enable them to use their The microfinance programme A set of existing customers who For low-income groups, the Bank accounts more effectively. provides small loans to women have higher loan requirements onboards new customers and borrowers, with annual household as they aspire to expand their services them through its branches The biggest beneficiaries of this model income not exceeding `1 lakh in businesses are offered loans and business correspondents are women in remote villages whose rural areas and not exceeding `1.60 through this programme. The loan through mobile/micro single point for payment of utility bills, Website accessibility lakh in the urban and semi-urban sizes offered are up to` 2.5 lakhs for ATM applications. withdrawals, loan repayments and more areas, as defined by the RBI Since business purposes such as addition the inception of the model, the to capital assets (e.g., purchase is at the merchant’s point within their own Bank has been actively empowering of machinery), working capital village. It helps them save much of their Bank’s Website Accessibility Initiatives women to attain a sustainable requirements, etc. time which would otherwise have been As part of Web Content Accessibility Guidelines (WCAG) livelihood through microloans. spent travelling to the nearest town, not to for the Bank’s website, the following features are In all, 100% of its borrowers are mention the loss of a day’s wages. implemented on the website: women organised under Joint Liability Groups (JLGs) to ensure Colours - There is high contrast between the colour timely repayment. of the text presented and that of the background. The website ensures that colour is not the only prompt used to convey information. Access to Financial Services Financial literacy for Low-income Text - The text can be made larger without affecting for the Disabled the content or function of the page or site. Social Groups It is important for the Bank to serve people with Financial literacy is a great enabler of development in the society disabilities through its banking products and services. Images - All images have alternative (alt) text unless at large. A financially aware and literate customer is the one most In order to provide easy access, all the Bank’s ATMs are they are purely for decoration. able to truly participate in the development and progress of the audio-enabled and equipped with Braille keypad that community. IndusInd Bank has been actively involved in helping talks. The Bank had 2,760 ATMs as on March 31, 2020, communities become more financially literate, with initiatives all of which are equipped with these facilities. Many of specially aimed at women borrowers. the Bank’s ATMs feature ramps to facilitate people with disabilities. As on March 31, 2020, ramp facility was available in 893 ATMs of the Bank. [GRI:203-1] [GRI:203-1]

76 Integrated Report 2019-20 IndusInd Bank 77 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

These trainings involve sensitising women Financial and Digital Literacy Camps people such as drivers and people Case Study borrowers regarding: related to truck operations such as The Bank conducted ‘Financial and Digital cleaners, loaders, service station, When Laxman Jatav came to Jaipur, he Literacy Camps’ in rural locations where the mechanics and more. They are able was unemployed. He then acquired a cycle Risks of Mechanisms for target group consists of farmers, women, to mobilise the margin money and rickshaw on rent in Jaipur for plying; it over-indebtedness grievance redressal senior citizens and students. At least one come for a loan. was earning him a meagre `200 per day. outdoor camp is organised by the branches Then with the little savings he had, he in the neighbouring villages on a monthly They are the driver and owner and bought an e-rickshaw and started earning are able to repay the loan over a 3-4 Importance of Credit bureau basis. The Bank also conducted special `600 per day. After running that for three year tenure after selling the truck making loan track record camps during the financial literacy week. years, he bought an LPG vehicle and got the or getting refinance on the free repayment on time balance financed by IndusInd Bank. truck, which they use to procure Topics covered under the Bank’s Financial He is now earning Literacy Camps include: more trucks – so, from a driver he becomes a owner through the close to `1000 Rules and regulations Group understanding • Need for banking and saving products funding given to him. per day and has of the microfinance and ability to • Importance of borrowing loans from been paying his loan voluntarily cross regulated entities versus informal channels Similarly, in the small commercial EMI meticulously. guarantee their loans vehicles segment, loan is given He is now able to • Financial risk and fraudulent activity based on the guarantee of the provide a decent • Importance of Know Your Customer parents and the requirement for life to his children. (KYC) practices documents is minimal, such as Laxman now ration card. In such cases, the wants to buy one • Document requirements for account opening loans on autos create a livelihood and their relevance for these borrowers who are more vehicle and is planning to • Digital banking services typically auto drivers. give it on a rental • Use of banking services such as bank basis to earn branches, ATMs, Business Correspondent additional income.

• Mobile banking & internet banking Laxman with his rickshaw usage and benefits • PMJDY and RuPay card benefits, linking of Aadhaar C. Agri-finance • Highlighting the availability of social security schemes and their benefits Agriculture continues to play a Lending to Agri borrowers – from individuals to agri vital role in the Indian economy, corporates. For individual lending, with almost 60% of Indian Corporates female exposure may constitute Financial literacy workshop households depending on The Bank’s corporate agri book is ~25-30%. A total of 821 accounts agribusinesses or allied activities. equally diversified across all types of were opened in FY 2019-20 in the Thus, the Bank has prioritised the development of the entire value B. Loans for Commercial Vehicles chain for agribusinesses, from fields to markets.

The Bank’s Consumer Finance IndusInd Bank is planning to Case Study Division (CFD) offers loans to increase its strategic investments commercial vehicle operators. Poonam Saluja was a homemaker, in agribusiness over the next two A significant portion of the Bank’s whose husband used to work a years by improving access to quality borrowers are first-time borrowers part-time job in a shop. With her little farming equipment through its and have been running hired money, she arranged for a down tractor financing programmes; trucks or working as drivers. payment and bought an LPG auto providing corporate-linked On an average, it is said a truck agricultural finance, such as working for him. Her husband then started gives livelihood for around 20 capital loans; or financing rural people. CFD, through its funding, making a decent living. They bought roads and infrastructure projects to creates livelihoods for a number of one more auto and gave it to other facilitate logistics. drivers on a rental basis. Today, they have three LPG autos. Poonam with her rickshaw Tractor Loans

[GRI:203-1] [GRI:203-1]

78 Integrated Report 2019-20 IndusInd Bank 79 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Case Study Case Study corporate agribusiness. Addition of more benefiting primary producers and Agri segment, on the other The Bank has provided funding to a Company The Bank has provided funding to a food the ESMS system in the lending such as dairy farmers and rural hand, including corporate clientele, running India’s largest potato platform involved in distribution company that distributes fruits and process ensures compliance to women through on-lending from have to go through a detailed the entire potato ecosystem, including production vegetables, staples and branded food products to human rights clauses by use of a these corporates. The ABG also checklist certifying their compliance of seeds, selling of seeds to farmers, storage multiple end-use segments spanning small local checklist prior to loan disbursement. encourages PSL across corporate to the ESMS guidelines. and distribution. shops and modern retail outlets. The company and commercial banking segments, also has its own retail chain operating retail Corporate agribusiness has providing funding for regulator `161.92 crores Social value creation stores and mobile stores on trucks, along with developed a sustainable approach identified priority areas such as Agri corporate exposure partnerships with sister companies. for the business and is one of the education, housing, renewable • Supply of the right variety of tubers to more than major Priority Sector Lending (PSL) energy, MSMEs, etc. 12,000 farmers to improve crop efficiencies Social value creation contributing divisions of the Bank. • Assist farmers in maintaining the quality of their Two product categories, viz. `25,342.57 crores • For distribution of fresh produce, the stock and getting the highest price possible Food and Agri, a sub-vertical of Commodity Financing and Agri Agri retail exposure company works with 50,000 farmers, moving the Bank’s Agri Business Group Project Financing, have a simplified • 20-50% improvement in farmer income 150 tonnes of products per day across 13 (ABG) has ~50% exposure to dairy ESMS checklist approved by the cities. It networks with small farmers rather • Form SHGs and Joint Liability Groups with farmers clients such AMUL, Vadilal, and committee. Cases under the Food than larger establishments. About 45% of its • Enter into buyback and franchise agreement produce comes from farmers having less than with farmers to give them the commitment to two acres of land. buy a certain amount of potatoes grown • More than 10% savings for farmers due to • The company procures potatoes directly from higher net realisation farmers to ensure they get the right price Easier Credit for Farmers • More than 70% produce directly • The company works with leading insurance sourced from farmers With its retail agriculture companies to ensure easy and timely access to vertical, IndusInd Bank extends crop insurance for farmers short-term and long-term credit products to farmers from • Bridge the gap between technology and agriculture and agri-allied sectors. traditional farming methods Strategic expansion into rural markets over the next few years is central to IndusInd Bank’s strategy. The Bank’s Indus Kisan product is a key enabler in this regard. D. Educational Financing

and fund houses. The Bank has Indus Kisan is targeted at during the year to create In FY 2019-20, the retail a thriving presence in this sector. both small and marginal agriculture vertical of the awareness on KCC. farmers, including those The growth opportunity in the Bank witnessed a steady sector is due to the large population with disabilities. The Bank Every customer onboarded growth of approximately and low enrolment ratios. by The Retail Agri-business is offers loans to meet the 14%, with an expansion into The major reasons offered bundled savings accounts. financial requirements for new rural and semi-urban for the increasing investment in These enable multiple product crop cultivation and agri-allied the sector are steady cash flows, locations, by funding over offerings to each customer at a activities. recession-proof nature of the 3,000 customers under KCC low cost and improve customer business and negative working scheme across 489 approved retention and loyalty. Farmers are capital requirements. Kisan Credit card (KCC) simplifies branches in India. The also given training to familiarise credit delivery and screening outstanding book size for the them with mobile and internet The Bank looks at the education processes and provides farmers banking, and other digital year under retail agri-business sector as a ‘sunrise sector’ and flexible payment schedules, infrastructure. With its efforts, is `16.79 billion. a corporate responsibility area. dependent on the types of crops the Bank ensures a reduced It covers client segments across the being harvested. It also works need for travel and lower paper spectrum, including pre-primary, as a single credit facility, which The Bank believes in promoting consumption, with RuPay debit K12, degree courses and farmers can use to fulfil all their awareness about national schemes cards and Indus Mobile contributing professional courses. agricultural needs. and initiatives that are essential to its ‘going green’ efforts. for securing the livelihoods of With evolving business models such transformations across India and IndusInd Bank is lending to farmers. The Retail Agri-business as increasing private investments, the globe. The education sector players in this segment with vertical conducted more than 50 Public-Private Partnerships (PPP) comprises schools, universities, credibility and a good track record. farmer engagement programmes and government investments, the colleges, coaching institutes, Strong monitoring mechanisms education sector is witnessing rapid education assets-owning companies

[GRI:203-1] [GRI:203-1]

80 Integrated Report 2019-20 IndusInd Bank 81 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

In FY 2019-20, 19 disbursements Credit is also provided to etc. Additionally, the Bank has also Case Study were done in the education educational institutions that provide funded groups that are focused portfolio, of which 16 transactions provide education to people from on providing primary education The Bank has provided funding to an affordable housing finance company that provides financial assistance underwent checks under the ESMS. the lower economic strata by to children belonging to lower for home buying, home improvement, extension and construction to families from semi-formal and providing fee waivers, scholarships, socio-economic backgrounds. informal sectors. The company focuses on extensive ground presence, taking into account socio-economic indicators of the community to arrive at a credit score. For lead generation, it trains and operates a network of local women entrepreneurs through the Shakti programme. These women not only receive incentives but also become a beacon for other women. Thanks to its grassroots presence, the company tends to SOCIAL IMPACT know its borrower well and has not experienced any delinquencies in its portfolio. It is a shining example • Among the institutions funded were medical of how the vast unbanked populations in India’s hinterland can be profitably served with products tailored colleges, which provide education to health to their needs. professionals and have a positive social impact. Social value creation • Some institutions are offering vocational • All primary borrowers are women courses for entry-level skill development across industries. They have also partnered with the • 5,200 loans disbursed and 4,500 Shakti representatives trained National Skill Development Corporation (NSDC) • High emphasis on sanitation and hygiene with only borrowers having a functioning toilet at home considered for the same. eligible for loans. If not, then first tranche is mandated to be used for building a toilet and only after that is the remaining loan disbursed. • VG Education under Gems Group is offering education at a price point, which makes it affordable for families in the lower socio-economic strata.

F. Healthcare Solutions E. Infrastructure Financing Spanning across the biggest projects in Tier-1 metro cities that hospitals, diagnostic centres and are being developed by leading medical equipment manufacturers, developers in the micro-market the Bank aspires to provide with vintage. Therefore, the projects nuanced banking support to that ultimately end up for financing all major players in this unique are the ones that are backed by healthcare ecosystem. It caters to complete and proper technical hospitals and care units including approvals required for project super and multi-specialty, development. Since the financed diagnostic chains and other projects are mainly located in Tier-1 medical equipment manufacturing. cities where municipal corporations Swachh Bharat Abhiyaan and and competent planning authorities National Health Protection exist, the compliance of ESG Scheme are among the plethora aspects are verified by authorities of government initiatives aimed at competent on the subject. building a robust social healthcare infrastructure. All projects sanctioned by waste treatment, etc.) and model, IndusInd Bank has formed a value chain from growing medical IndusInd Bank are pre-approved Commencement Certificate (CC) Foreseeing the shift in the focus of dedicated and focused healthcare equipment manufacturers to large by competent planning authorities for project development. The Bank the government towards healthcare delivery team. Within a short span established hospital chains, from of the state. Accordingly, relevant ensures that the project has penetration (qualitatively and of time, it has gained good traction promoter-driven single vintage compliances related to energy due approvals before a lending The bank’s exposure to quantitatively) and building a in terms of asset building and hospitals to private equity backed efficiency, wastewater treatment, decision is taken. sustainable social infrastructure generating income for the Bank. young hospital chains. afforestation, etc. are checked at infrastructure in FY 2019-20 It has covered the entire healthcare the authority level as applicable The Bank integrates ESG aspects in was `39,588.55 crores while under the respective development its credit and lending business by that to real estate stood at control regulations before issuance financing only approved projects of of the Non-objection Certificate reputed developers with good track (NOC) (e.g., storm water drainage, record and conduct. Lending focus `47,728.60 crores pollution control, tree re-plantation, area is targeted towards financing

[GRI:203-1] [GRI:203-1]

82 Integrated Report 2019-20 IndusInd Bank 83 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

People FEMALE WORKFORCE BREAKUP

Diversity Indicator Percentage

Enriching Female share of total workforce Human Capital 18.75 Women in management positions, including junior, Junior management: 13.36 middle and senior management (as % of total Middle management: 4.6 At IndusInd Bank, human capital forms management workforce) Senior and top management: 0.79 the bedrock of its success. A talented and professional workforce enables the Bank Women in junior management positions, i.e., first level of management (as % of total junior management positions) 21.6 to grow from strength to strength and deliver best-in-class performance. Women in top management positions, i.e., maximum two levels away from the CEO or comparable positions (as a % of 2.9 total top management Highlights Women in management positions in revenue-generating functions (e.g., sales) as a % of all such managers (i.e., excluding 10.9 30,674 5,750 18.6% support functions such as HR, IT, Legal, etc.) Employees Women Employee employees turnover rate

Employee Development

IndusInd Bank invests in programmes for employee Business Benefits

2.57% 23,254 17 induction and development. This orientation programme provided new joinees Absentee rate Employees hired on a Permanent employees with adequate exposure to the Bank, its core executive temporary/contractual basis with disabilities During FY 2019-20, the Bank conducted 14,00,100 team, structure, business units and their roles and training man-hours for 5,77,612 participants through responsibilities, standardised operational processes 1,553 programmes. New training initiatives on business and policies, the Bank’s business products, future Employee Diversity communication skills, leadership development, art of agenda, code of conduct and requisite HR processes. Employee Count collaboration and interpersonal effectiveness were also • Helped new joinees get acquainted with the Bank IndusInd Bank is committed to Human capital at IndusInd Bank conducted in FY 2019-20. and get started on the job fostering a culture of diversity and is known not only for its diversity inclusivity. A diverse workforce in terms of age, gender, race Average amount spent on training and • Developed an understanding of the Bank’s and environment powers growth and cultural background but development per Full Time Employee (FTE) operational processes and products 30,674 and innovation. The Bank expects also for the different sets of - Total learning spend: `739.71 lakhs 27,739 Key Impacts all employees to treat others with skills and experience that foster - Average amount spend per FTE : `2,412 25,284 Better product knowledge for sales, lower operational dignity and respect. It believes creativity and offer a range of procedural errors, better knowledge of the Bank’s in creating a secure, fair, and perspectives and ideas. Average hours of training and structure, culture, vision, mission, etc. transparent workspace devoid of development per FTE [GRI:404-1] discrimination or harassment. - Total learning: 14,00,100 2. Technical Skills Programme - Average learning hours per FTE: 45.64 E-learning interventions to provide learning on Bank’s products, processes, compliance, risk, credit, Two of the key initiatives are summarised as treasury and more. follows: Business Benefits FY 2017-18 FY 2018-19 FY 2019-20 1. Orientation Programme In order to achieve the Bank’s business goals, there Permanent Employee Breakup as on March 31, 2020 Introducing employees from diverse backgrounds to is a need for a trained workforce on products, sales, the Bank’s structure, vision, strategy, functions, people, operational processes, technology, compliance, Male Female policies, value systems and code of conduct. The Bank domain skills pertaining to say Credit, Risk, Treasury, Age Group East West North South Corporate Total East West North South Corporate Total conducts a two-day exhaustive orientation programme etc. The Bank’s e-learning initiatives have effectively <30 729 1,850 2,675 1,522 496 7,272 297 951 989 550 364 3,151 across locations in India where new joinees are addressed the training needs of its workforce by 30-50 2,095 3,634 5,532 4,259 1,844 17,364 237 684 674 459 508 2,562 given a classroom orientation on the Bank’s business offering customised learning solutions on various >50 31 42 34 83 98 288 5 8 3 6 15 37 units structure, vision, business journey, technology technical and behavioural aspects. Total 2,855 5,526 8,241 5,864 2,438 24,924 539 1,643 1,666 1,015 887 5,750 platforms, operational processes and policies, HR policies, etc. Over 10,000 participants were covered [GRI:102-8] [GRI:102-8, 404-1] through these programmes in FY 2019-20.

84 Integrated Report 2019-20 IndusInd Bank 85 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Workforce Productivity

Employee Total Man-hours Worked in Total Days Worked in Total Missed Days in Category the Reporting Period the Reporting Period the Reporting Period Male Female Total Male Female Total Male Female Total Permanent 4,53,83,796 92,41,803 5,46,25,599 50,42,644 10,26,867 60,69,511 1,24,977 24,673 1,49,650 employees Contract 20,92,986 9,91,170 30,84,156 9,945 1,10,130 3,42,684 5,120 15,065 employees Total 4,74,76,782 1,02,32,973 5,77,09,755 52,75,198 11,36,997 64,12,195 1,34,922 29,793 1,64,715

Equal Opportunity Employer

The Bank’s HR policy describes the Bank as an equal Average Remuneration opportunity provider. The policy pertains to regular Employee training programme full-time employees and covers guidelines and policies relevant to employee welfare and benefits, work 0.38 0.37 0.37 Key Impacts - Standardised learning solutions environment and business ethics. The Bank seeks to 0.37 0.35 The business impact has been in terms of: associate with supply chain entities willing to abide 0.34 0.33

- Cost efficiency 0.32 by standard and progressive labour practices while • Sales Force and Relationship Managers are aware - Better Turnaround Time (TAT) of training delivery upholding basic human rights. The recruitment process of all the products. They gain confidence to have is a fair and transparent process. The Bank aspires an effective client interface and acquisition through - Cost of delivery is 10% of that of other to be the first employer and make an environment effective sales pitch and customer service. This has delivery channels. suitable for the talent to thrive and do better been a factor in growth of the Bank’s revenues - Managing scale and complexity. E-learning has helped irrespective of the age, religion, gender, race, caste and over the years. us offer learning solutions to the entire employee nationality. It is committed to being a company with a • Orienting new joinees, drawn from base (27,739), which would have otherwise involved strong respect for human rights, safe work conditions diverse organisations, into the ethos and a significant cost outlay and would have been a time and environmentally sound business practices culture of the Bank and resource consuming proposition. Around 95-100% for its employees. Junior Middle Senior Top of the workforce (FTEs) has been covered by • Reducing operational errors leading to higher management management management management e-learning interventions. efficiencies and customer satisfaction. On an Average basic pay/ remuneration: Male Female operational level, e-learning interventions help in: Median employee compensation for FY 2019-20 = `4,14,594

Employee Performance In FY 2019-20, 100% of employees received a performance appraisal, based on: Employee turnover IndusInd Bank employs a highly educated workforce, • Management by objectives: systematic use of agreed whose technical skills are greatly valued globally. measurable targets by line superior The Bank has witnessed a decline in attrition across Employee Turnover (%) The Bank follows a fair and transparent recruitment all employee levels and negligible attrition at strategic • Multidimensional performance appraisal (e.g. process. The Bank aspires to be a first employer and levels that provide strategic and functional leadership 360 degree feedback) create an environment suitable for talent to thrive and across various business units (BUs). Similar to 23 do better irrespective of their varied backgrounds. • Formal comparative ranking of employees within one industry trends, the attrition at the Junior and Middle 22.6 21.6 20.9 20.4 employee category Management levels is comparatively higher than that at 20.2 19.5

the top managerial level – mainly in the frontline sales 18.6 Employee Performance Reviews and branch operation roles.

Percentage (Employees Employees as on Employees Receiving Regular Employee Category receiving review/total no. of The Bank supports its employees through several March 31, 2020 performance Reviews employees) career development programmes and initiatives, Gender Male Female Total Male Female Total Male Female Total and providing employees with market-benchmarked Junior management 14,854 4,099 18,953 7321 1903 9,224 38.6 10 48.6 compensation, mentoring by seniors, learning Middle management 8,288 1,410 9,698 5,230 929 6,159 53.9 9.6 63.5 opportunities, career planning, as well as, employee Senior management 1,469 210 1,679 1,079 138 1,217 64.3 8.3 72.5 engagement. The average hiring cost/FTE for employees Top management 313 31 344 254 29 283 73.8 8.4 82.2 hired last year was `10,312, and 20% of open positions FY 2016-17 FY16-18 FY 2018-19 FY 2019-20 Total 24,924 5,750 30,674 13,884 2,999 16,883 45.3 9.8 55.1 were filled by internal candidates. Total employee turnover rate Voluntary employee turnover rate [GRI:404-3]

86 Integrated Report 2019-20 IndusInd Bank 87 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

New Hires Joining Left within 1 Year Age Gender East West North South Corporate Total East West North South Corporate Total Group Male 285 633 960 575 230 2,683 80 151 264 129 29 653 <30 Female 133 415 425 243 148 1,364 35 87 87 66 21 296 Total 418 1,048 1,385 818 378 4,047 115 238 351 195 50 949 Male 463 953 1,385 945 458 4,204 88 264 392 194 46 984 30-50 Female 41 163 147 119 117 587 8 40 28 26 21 123 Total 504 1116 1,532 1,064 575 4,791 96 304 420 220 67 1,107 Male 1 - - 2 6 9 - - - - 1 1 >50 Female ------Total 1 - - 2 6 9 - - - - 1 1

Employee Benefits and Welfare

Health and Well-being In FY 2019-20, the Bank conducted fire-safety training The Bank recognises that employees that are engaged Employee Benefits IndusInd Bank has a workplace health and safety sessions for about 11,500 employees; 150 women and satisfied perform better, and are an asset to policy to guide its actions. It looks beyond the policy to employees were trained through six women’s safety business. To this end, HR policies are designed to Benefits Cost Incurred assure their employees of their health being a priority. sessions, achieving 450 hours. attract and retain talented professionals by rewarding Life insurance `0.97 Cr The Bank drives several initiatives to help enhance and acknowledging employees’ efforts. This is Healthcare `39.19 Cr employee health and well-being. Employees in the The Bank’s Health and Safety Management System, implemented through performance management which Disability / invalidity coverage `0.78 Cr banking sector are exposed to some health risks and integrates safety in day-to-day operations, allowing includes review of individual performance, providing physical exertion from prolonged work hours including it to consistently identify and control its safety risks, performance counselling and developmental feedback, Long-term Incentive Programmes ill health, psychological stress, and ergonomic issues. reduce the potential for accidents, help achieve and identifying future leaders for driving the Bank’s The KRAs of employees include targets on business, compliance with safety legislations and continually business growth. The Bank also has a reward and people, process, compliance, and resource utilisation. IndusInd Bank manages these risks proactively. improve its performance. It has provided a systematic recognition programme building long term employee Rewards and recognition measures are based on Various health awareness campaigns and challenges way to identify workplace hazards and risks and to ownership and association. Additionally, the Bank tangible achievement of targets, which contributes are organised for our employees on topics of nutrition, set up a continual safety improvement programme to has instituted an Employee Stock Options Scheme to to performance on sustainability aspects as well. exercises, immunity, and others. implement suitable controls to manage risks. The Bank enable employees, including full-time Directors, to The Board has set up a Compensation Committee to participate in the future growth of the organisation. make recommendations on the issuance of the Bank’s This year IndusInd Bank organised ‘Leading the Run Certain benefits like healthcare (Mediclaim, group shares to its employees under the Employees Stock to the Moon’ contest and employee squat challenge. personal accident policy) and insurance are also offered Option Scheme, 2007. ZERO The ‘Leading the Run to the Moon’ contest, is an Incidents, injuries, occupational diseases or fatalities to full-time employees. employee engagement initiative, launched in 2017, recorded in FY 2019-20 under ‘IndusInd for Sports’. It has seen an increasing participation from the Bank’s various employees across cities. In FY 2019-20, ~8,500 employees under 26 cities Parental Leaves and Return to Work took part in the initiative. Nearly 20% of the participants Employees Who Employees Who were female employees. Employees Who Returned after Returned after Employees Employees Who Availed Parental Availing/Initiating Availing/Initiating Employee category Entitled to Took Parental Leave and Were Apart from these, IndusInd Bank created awareness, Parental Leave Parental Leave Parental Leaves Leave Employed even in the Current in the Previous this year, through mailers on a variety of health topics. after 12 Months Reporting Period Reporting Period Permanent employees 5,750 307 124 11 64 Safety and Security Contract employees 720 6 3 - - The Bank is committed to providing its employees a Total 6,470 313 127 11 64 safe and secure working environment. Periodic checks on the physical and mental health of the employees Note: Parental leave is only applicable for female employees. are routine. The Bank also conducts regular drills and trainings in first aid, fire safety and personal safety.

About 22,352 employees have been sensitised regarding workplace safety through the e-learning module and 14,378 through classroom sessions. Fire safety training [GRI: 401-1, 401-3] [GRI:403-1, 403-2, 403-3, 403-5, 403-9, 403-10]

88 Integrated Report 2019-20 IndusInd Bank 89 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

has a Fire Safety Manual, Security Manual, Facilities The Bank respects, protects and promotes the Human 100% of our employees, contractors, suppliers, The Bank allows employees to exercise the lawful right and Administration Manual and Workplace Health and Rights mandate that is recognised at the global levels. service providers and subsidiaries are covered of free association. However, the Bank does not have Safety Policy. It has formalised processes and systems that facilitate by the codes of conduct through written any collective bargaining agreements as there is no and uphold the principles of ethics and sustainability as acknowledgement and training. trade union or employee association in the Bank. The Bank’s Safety Management System comprises the they pertain to all stakeholders, including employees. following three components: It maintains an employment policy that applies to both IndusInd Bank has a highly educated workforce, itself and its business partners. This includes mandates Similarly, Group-level code of conduct has been whose technical skills are greatly valued globally. Workplace Health and Safety Policy on age verification and blanket prohibition on child instituted and made publicly available. It deals with Every employee has readily available access to many The Bank’s Workplace Health and Safety Polocy labour, forced or compulsory labour in all forms. aspects such as corruption and bribery, discrimination, internal tools to connect with the senior management. clearly communicates the management’s safety As part of the due diligence process, the following confidentiality of information, conflicts of interest, The Bank encourages transparency across its workforce commitment and safety related vision/ mission/ targets. identification activities with respect to human rights antitrust/anti-competitive practices, money-laundering and directly helps connect with leaders on myriad It is available online under Policies and Codes at are executed by the Bank: and insider trading/dealing, environment, health and issues including strategy and goals. The employees https://www.indusind.com/in/en/investors/ safety, whistleblowing and more. Training on code can also directly connect with the leaders through • Identification of where potential human rights investor-landing/investor-resources.html of conduct is also undertaken regularly to create online platforms such as Twitter, Facebook and issues could occur in its own operations awareness among the employees of the Bank, its more [GRI:102-41]. • Identification of where potential human rights The Health and Safety policy covers the subsidiaries, JVs and partners as well as the Board. issues could occur in its value chain or activities following elements: related to its business • Safety objectives and responsibilities • Identification of what actual or potential human • Risk management rights issues could be of concern. No loans are • Incident management given to customers/businesses involved in any Employee engagement • Consultation, communication and issue resolution activities employing child labour, juvenile labour • Emergency management deforestation, sand mining, coal mining wherever IndusInd for Sports • Bullying and workplace violence banned among others. The Bank is aligned with An employee engagement initiative, launched in • Alcohol and drug policy the UN Guiding Principles on Business and Human 2017, ‘Get Set Run’ under IndusInd for Sports has • Work policy Rights and other international standards. It has seen increasing participation from the Bank’s various devised company-specific policies accordingly. employees across cities. In FY 2019-20, ~8,500 Governance Structure on Fire and Safety These policies cover: employees under 26 cities took part in the initiative. The top management of the organisation allocates A statement of commitment to respect human Nearly 20% of the participants were female employees. responsibility, accountability and authority for rights in accordance with internationally development, implementation and performance accepted standards Green Champions Programme evaluation of the safety management system to achieve Requirements for its own operations IndusInd Bank’s Green Champion Programme is the desired safety objectives. (employees, direct activities, currently completing its 10th year. The year the products or services) programme recruited over 120 GCs from across the Workplace Safety Assessment Requirements for its suppliers country. Green Champion Team Meets (GCTMs) were Indus Marathon Workplace hazards have been identified and corrected Requirements for its partners held twice during the year in April-May, 2019 and at the Bank’s locations. Emergency prevention, Actions and procedures undertaken to meet October-November, 2019. The Programme involved preparedness and response arrangements have been its commitment different types of activities including campaigns, established in cooperation with external agencies as • Human rights reviews are being undertaken from awareness programmes and volunteer activities. applicable. Periodic audits, safety inspections and time to time in areas of hiring employees / contract Overall, the programme has been very successful. management review are conducted to determine the staff and during their life cycle, on an ongoing effectiveness of the system. basis, in terms of the HR policies of the Bank. A total of 206 activities were performed by 99 Green Champions this year. 52 of them sent reports Human Rights Practices The Bank ensures strict adherence to these policies whereas 47 others participated without reporting. The Bank has devised a comprehensive policy on which has resulted in achieving ‘Zero’ complaints of Total participation in all activities together was 58,131 human rights, diversity and inclusivity as well as on infringement of human rights. During the year, zero attendees, contributing to more than 7,292 man-hours prevention of sexual harassment, under the guidance cases of Child labour, forced labour, involuntary labour of work towards environmental and social causes. of the Board of Directors. and discriminatory employment were reported. While seven cases of sexual harassment were recorded, and Activity-wise Distribution of Volunteering all were resolved within the year itself. (%)

All these cases have been addressed in line with the Cleanup 10 statutory obligations laid down in the Prevention Tree plantation 28 of Sexual harassment (Prevention, Prohibition and E-Waste collection 5 Redressal) Act, 2013. The employees identified Paper recycling 4 for breach of law have also faced appropriate Urban afforestation project 26 punitive action. Waste challenge 8 Sustainability marathon 14 Blood donation 2 Other 3 Tree plantation by Green Champions Fire Safety Training [GRI:403-1, 403-2, 403-4, 403-5, 403-9, 403-10]

90 Integrated Report 2019-20 IndusInd Bank 91 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Governance

On the IndusInd Board, currently, 7 of the 9 Directors are Independent. The 7 Independent 99% Operating a Directors include 2 Woman Directors. Details of can average Board meeting be found at https://www.indusind.com/ content attendance by members /csr-home/our-approach/ meet-the-bank.html

Responsible Bank Role of CEO and chairman is split and chairman is small-scale industry. The Directors’ profiles can be non-executive but not independent. found online at https://www.indusind.com/in/en/ investors/investor-landing/board-of-director.html IndusInd Bank strives to maintain a strict BOARD EVALUATION The Board has formulated a Policy on Performance focus on its good governance practices and BOARD INDEPENDENCE Evaluation which details the various aspects to be IndusInd Bank has a single-tier system and its Board benchmarks itself against global norms. considered for evaluating the Directors including of Directors has 9 members including 1 Executive but not limited to attendance, participation in the Director, 7 Independent Directors, 1 Non-Executive meeting, contribution towards strategies of the Board THE BOARD OF DIRECTORS Director. The Independent Directors meet the criteria etc. The Policy provides a guideline for the individual of independence as laid down under SCHEDULE IndusInd Bank has always operated with a proactive Committee; (vii) Nomination and Remuneration Directors to evaluate the Board, its Committees and IV and Section 149 (6) of the Companies Act, 2013. governance framework, with significant emphasis Committee; (viii) Risk Management Committee; individual directors. The policy can be found online at The Independent Directors meet the criteria of on the independence of the Board, its diversity and (ix) Review Committee (Wilful Defaulters); https://www.indusind.com/in/en/investors/ Independence as laid down under Regulation 16 (1) (b) accountability. Though the Bank has been set up (x) Stakeholders Relations Committee; investor-landing/investor-resources.html and 17 (1) (a) of the Securities and Exchange Board of by an overseas entity, all directors of The Bank are (xi) Special Committee (for monitoring large India (Listing Obligation and Disclosure Requirements) resident Indians. value frauds); (xii) IT Strategy Committee; and The Board’s performance is evaluated on an annual Regulations, 2015. (xiii) Vigilance Committee. basis by an external agency, based on criteria Appointment of all Directors conforms to the ‘Fit and defined by the Bank’s Nomination and Remuneration BOARD MEETING ATTENDANCE Proper’ criteria as laid down in RBI’s extant guidelines. BOARD STRUCTURE Committee. These include: Number of meetings attended is 99% in last The Bank has ensured that Board-level appointments ONE-TIER SYSTEM • Development of suitable strategies and business business/fiscal year. are more contemporarily professional by inducting plans at appropriate time and their effectiveness technical and specially qualified personnel. The current Number of Members Minimum of attendance for all members required, at composition of Board of Directors thus meets the • Implementation of robust policies and procedures Executive Independent least is 11.11% governance requirements as prescribed under the Directors - 1 Directors - 7 • Size, structure, and expertise of the Board; provisions of Banking Regulation Act 1949. BOARD MANDATES • Oversight of the financial reporting process, Other Non-Executive Total Board size - 9 Number of Non-Executive/Independent Directors with The Nomination and Remuneration Committee including internal controls Directors - 1 four or less other mandates: Mr. Shanker Annaswamy, determines the suitability of a person for the position • Willingness to spend time and effort to learn about Dr. T. T. Ram Mohan, Mr. Sanjeev Kumar Asthana, of ‘Director’, in compliance with RBI guidelines, the Bank and its business Mrs. Bhavna Doshi after perusing through several factors such as the The Independent Directors meet the criteria of candidate’s academic qualifications, experience, track Independence as laid down under SCHEDULE IV and • Awareness about the latest developments in areas Number of other mandates for record, integrity and reputation. The committee reviews Section 149 (6) of the Companies Act, 2013 such as Corporate Governance framework, financial Non-Executive/Independent Directors restricted to 9 annually the composition of Board. reporting, industry and market conditions, and more. The Independent Directors meet the criteria of The Board of Directors have carried out the annual BOARD PERFORMANCE REVIEW Post their recruitment, the Bank conducts induction Independence as laid down under Regulation 16 (1) (b) evaluation of the performance of the Board, Pursuant to the provisions of the Companies Act, programmes, invites external domain experts to and 17 (1) (a) of the Securities and Exchange Board of Individual Directors including Independent Directors, 2013 and the SEBI (Listing Obligations and Disclosure provide trainings, and encourages Directors to attend India (Listing Obligation and Disclosure Requirements) Non-Independent Directors, the Managing Director Requirements) Regulations, 2015, the Board has carried programmes conducted by reputed institutions, to help Regulations, 2015. & CEO, and the Chairman and the Committees of the out the annual evaluation of its own performance, them keep abreast of latest developments. Board. This has been reviewed by the Nomination & performance of Individual Directors, Chairman of the An independent director can be appointed for two Remuneration Committee, Committee of Independent Board and its Committees. The key areas of evaluation The Board has also constituted various committees consecutive terms of four years each. The tenure Directors and by the Board of Directors. of the Board Directors are knowledge of business, for efficient conduct of its business and ensuring of an independent director will be in line with the diligence and preparedness, effective interaction with compliance with the regulatory / statutory provisions of the Banking Regulations Act 1949. BOARD DIVERSITY others, constructive contribution to discussion and requirements of RBI, Companies Act, and SEBI (Listing Independent Directors are not liable to retire by The Bank maintains a board diversity policy available at strategy, concern for stakeholders, attentive to the obligations and Disclosure Requirements) Regulations, rotation. Re-appointment at the end of the term shall https://www.indusind.com/in/en/investors/ investor- internal controls mechanism and ethical conduct issues. 2015, among others. be based on the recommendations of the nomination landing/investor-resources.html IndusInd Bank exceeds While considering the extension of tenure of a Director, committee and subject to approval of the Board and the statutory requirement of having at least 1 woman the Nomination and Remuneration Committee of the The Committees of the Board include (i) Committee the shareholders. In considering re-appointment, the director on the Board. There are two Women Directors Board reviews the performance of the Director and of Directors; (ii) Audit Committee; (iii) Compensation Board would take into consideration the outcome of (Mrs. Bhavna Doshi and Mrs. Akila Krishnakumar), on makes a recommendation to the Board for considering Committee; (iv) Customer Service Committee; the performance evaluation process and the Director the Bank’s Board along with seven male directors, who his re-appointment. (v) Corporate Social Responsibility; (vi) Finance continuing to meet the independence criteria as bring varied expertise in areas such as information defined under the Companies Act, 2013. technology and payments systems, accountancy, banking, finance, agriculture & rural economy and

92 Integrated Report 2019-20 IndusInd Bank 93 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

BOARD ELECTION PROCESS Name of Holder Number of Shares The longest performance period covered by our There were 8 vigilance complaints/references Board members are elected and re-elected on an executive compensation plan is 1 year. The Bank has a Paul Abraham 2,19,000 received directly (including two cases from annual basis. Board members are elected individually. clawback provision in place as per the RBI guidelines. previous fiscal years) of which 3 were closed Average tenure of board members is 8 years. Kalpathi Sridhar 5,18,065 The ratio between the total annual compensation of after investigation, 2 cases resulted in Suhail Chander 1,93,000 8 independent and non-executive members have the Chief Executive Officer and the median employee punitive action and 1 was under disciplinary relevant industry experience including Arun Khurana 2,14,500 compensation is 107.69. proceedings; two were under investigation (as • Information Technology – Mr. Shanker Annaswamy S. V. Parthasarathy 30,000 Mr. Romesh Sobti had been Managing Director & CEO on March 31, 2020) and Mrs. Akila Krishna Kumar Ramesh Ganesan 1,10,000 of the Bank with effect from February 1, 2008. The RBI • Banking and Finance – Mr. Arun Tiwari, Dr. T. T. had approved the appointment of Mr. Romesh Sobti S. V. Zaregaonkar 50,650 Ram Mohan, Mr. Sanjay Asher, Mrs. Bhavna Doshi as Managing Director and CEO of the Bank up to Of the Vigilance and whistle-blower cases received in Sanjeev Anand 140 March 23, 2020. Details of Remuneration paid to FY 2019-20, 10 complaints were received / dealt with • Small Scale Industry – Mr. Rajiv Agarwal Mr. Romesh Sobti during the FY 2019-20 are as follows: in the category of corruption and bribery. Of these, 6 Zubin Mody 5,600 • Agriculture & Rural Economy – Mr. Sanjeev Kumar were found to be not true and remaining 4 were under Asthana Sanjay Mallik 16,500 Salary `209.92 lakhs, Other Allowances `236.30 investigation as on March 31, 2020. lakhs, facility of company-leased and furnished Ramaswamy Meyyappan 15,500 DISTRIBUTION OF SHAREHOLDING accommodation, Provident Fund at 12% of Salary, WHISTLE-BLOWER PROTECTION (as on March 31, 2020) Bijayananda Pattanayak 1,45,500 Gratuity at one months’ Salary, Pension at two months’ The Bank has in place a strong whistle-blower Salary, Medical Expenses - reimbursement up to protection mechanism, clearly elucidated in the Sr. Number of % of M. R. Rao 1,65,606 Name of the Shareholder `2.09 lakhs, Leave Fare Concession of Rs.2.09 lakhs, Whistle-blower Policy. Under this, the identity of No. Shares Held Shareholding Mediclaim for self and family members, Personal the whistle-blower is protected and is known only The bank has no specific stock ownership requirements i. IndusInd International 6,65,75,939 9.6 Accident Insurance, Membership of two Clubs and to designated authorities. Any form of reprisal or for the CEO and other members of the executive Holdings Ltd. official car with driver. retaliation against the whistle-blower is thus avoided. ii. IndusInd Ltd. 2,38,00,000 3.43 committee. No governmental institutions own more than 5% of the total voting rights. The Bank does A. Total Promoters 9,03,75,939 13.03 Mr. Sumant Kathpalia has been appointed as The Directors, both, executive and non-executive, neither have differential voting rights nor does it have Shareholding (i.+ii.) ‘Managing Director & CEO’ of the Bank with effect top management, middle level management and all dual class shares. It has a single class of shares for B. Non-Promoters 60,31,59,799 86.97 from March 24, 2020. Details of Remuneration paid associates follow and adhere to strong corporate codes general public as well as the senior management. Shareholding to Mr. Sumant Kathpalia during the Financial Year of conduct laid out by the organisation in its culture C. Grand Total (A+B) 69,35,35,738 100 2019-20 are as follows: Salary `3.59 lakhs, Other and also in policies accessible to all. These policies Allowances `11.69 lakhs, Provident Fund at 12% of emphasise on activities being carried out in honest, fair, STOCK OWNERSHIP OF EXECUTIVE CEO’s Compensation Salary, Gratuity at half months’ Salary, Mediclaim for diligent and ethical manner, within the scope of the COMMITTEE MEMBERS The Bank has pre-defined financial returns and relative self and family members, Personal Accident Insurance, authority conferred upon associates and in accordance financial metrics relevant for Chief Executive Officer’s Membership of One Club. with the laws, rules, regulations, agreements, guidelines Position and Name of Holder Number of Shares variable compensation. The variable component of the and standards. Directors and associates have a duty Chief Executive Officer Mr. Romesh Sobti 9,06,000 remuneration for Managing Director & CEO is based on VIGILANCE to make decisions and implement policies in the (Demitted Office as MD & CEO on the following parameters: We have strong vigilance mechanism in place and best interests of the company and its stakeholders. March 23, 2020) various policies as below: The Board of Directors is entrusted with the fiduciary Mr. Sumant Kathpalia 5,28,818 (1) Annual performance on the Bank’s business responsibility of overseeing the assets and affairs (Appointed as MD& CEO on objectives approved at the beginning of the financial Anti-corruption Policy of the company. March 24, 2020) year by the Board of Directors The Bank follows a strict anti-corruption policy. It prohibits corruption in any form, including: We have a robust whistle-blower process wherein (2) The Bank’s financial performance and profitability employees can raise whistle blows/ complaints through • Bribes in any form (including kickbacks) on any the forum to the Corporate Ombudsman. This is an portion of contract payments or soft dollar practices (3) The variable component of the remuneration based open communication channel to identify and report on the Bank’s compensation policy designed as per • Undisclosed direct or indirect political contributions potential risks that are reviewed by the investigation the RBI guidelines on Compensation of Whole Time team and the Redressal Committee members and • Undisclosed charitable contributions Directors, Chief Executive Officers, Risk Takers and mitigation strategies are looked upon.This is in addition and sponsorship Control function staff. The Bank has guidelines on to the existing Risk Management framework, wherein deferred bonus, time vesting, and performance period The Bank also conducts regular training sessions for potential risks are identified and reported. for the CEO’s variable compensation. the employees to sensitise them in vigilance practices. In FY 2019-20, 221 such sessions were conducted across all major zones, with a total participation of 5,019 employees.

[GRI:102-16, 205-3]

94 Integrated Report 2019-20 IndusInd Bank 95 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

During FY 2019-20, 690 cases of staff • Politically Exposed Persons (PEPs): Formal policy The Bank does not support political campaigns, political while availing the products and services vide online accountability were reported, of which 671 and procedures in place covering the identification, organisations, lobbyists or lobbying organisations and applications. The Bank recognises its responsibility periodical review and monitoring of PEPs other tax-exempt groups to influence policy. to maintain the confidentiality of the information it were resolved and 19 were under process secures, at all times. This Privacy Policy is applicable as on March 31, 2020. During FY 2019-20, • Senior management to sign off PEP TRADE ASSOCIATIONS to personal information and sensitive personal 82 Whistle-Blower cases were reported of customers or other customers from countries, IndusInd Bank supports the following trade data or information collected by the Bank through which 72 were resolved and 10 were under businesses and products with greatest risk of associations through the respective contributions: its online portals, mobile apps and electronic money-laundering/terrorism financing communications, apart from any information process as on March 31, 2020. collected by the Bank’s server from the customer’s • Record keeping for five years for all `21,24,000 `11,80,000 browser. The Privacy Policy can be found online at anti-money-laundering/terrorism https://www.indusind.com/in/en/personal/ Indian Banks Microfinance 82 cases were reported through the Whistle-Blower financing-related documents privacy-policy.html Association Institutions Network mechanism of which 64 were investigated resulting in 12 cases of punitive action. The aspects of • Annual independent assessment of monitoring DATA PRIVACY anti-corruption are covered in vigilance sessions taken procedures via an external agency ` All Information collected shall be used for the relevant during the HR training programmes. 2,95,000 lawful purposes connected with various functions Impact There is no legal case pending against the Bank with or activities of the Bank related to services in which Investors Council The Bank did not incur any fines or settlements respect to anti-competitive behaviour and violations of the concerned person is interested, and/or to help related to Anti-Competitive Business Practices in the anti-trust and monopoly legislation for FY 2019-20. determine the eligibility of the concerned persons past four years OTHER INSTITUTIONS for the product/services requested/ applied/ shown HONESTY AND INTEGRITY • Institute For Development And Research In interest in and/or to enable the Bank to verify The policy can be found online at The Bank conducts business with honesty and Banking Technology Persons verification and/or process applications, https://www.indusind.com/in/en/sustainability.html integrity, and in compliance with all regulatory and requests, transactions and/or maintain records as per • Confederation of Indian Industry legal obligations. The principles of anti-corruption and internal/legal/regulatory requirements and shall be ANTI-COMPETITIVE AND MONOPOLISTIC PRACTICES bribery are captured in the three codes of conduct the • Institutional Investor Advisory Services India Limited used to provide the Concerned Person with the best The Bank strictly adheres to the prevention of Bank follows : Code of Conduct for Directors and Senior possible services/products as also to protect interests • Bombay Chamber of Commerce & Industry anti-competitive and monopolistic practices during Management, Code of Conduct for Prevention of Insider of IndusInd Bank. its operations. As a result, there is no legal case Trading, and Code of Practices and Procedures for • Indian Institute of Banking & Finance pending / completed against the Bank with respect to Fair Disclosure. The Customer Account Information shall not be anti-competitive behaviour and violations of anti-trust CLAWBACK POLICY shared with any external organisation unless the and monopoly legislation for FY 2019-20. IndusInd Bank does not encourage associates or any The Bank has guidelines on deferred bonus, time same is necessary to enable IndusInd Bank to connected stakeholders to follow unethical means vesting, and performance period for the CEO’s variable provide services or to enable the compilation of a ANTI-MONEY LAUNDERING such as bribery or kickbacks. It has a zero tolerance compensation. The longest performance period transaction, credit reporting, or the same is necessary The Bank has established procedures to ensure the approach to bribery and corruption, with commitment covered by your executive compensation plan is 1 year. or required pursuant to applicable banking norms effective establishment and implementation of a to acting professionally, fairly and with integrity in all its The Bank has a clawback provision in place as per the or pursuant to the terms and conditions applicable company culture opposing money-laundering and business dealings and relationships. Strong guidelines Reserve Bank of India guidelines. to such Information as agreed to with IndusInd Bank terrorism financing. These include: have been laid down to avoid malpractices and or pursuant to any requirement of law/regulations GLOBAL SYSTEMICALLY IMPORTANT consequences of such actions are also well defined. or any Government/court/other relevant authority’s BANK (G-SIB) • Customer Due Diligence (CDD): Formal policies Strong and stringent control measures are in place directions/orders. Banks play a vital role in the flow of money and and procedures include customer verification to stop such activities and associates are encouraged credit between savers and borrowers. For a working based on reliable, independent source documents, to bring to notice any such malpractice which might RESTRICTED ACCESS AND ETHICS economy and society, the stability and sustainability data or information, identification of beneficial have been missed out. The Bank has made no direct Keeping financial information secure is one of the of the entire financial system is of utmost importance. owner, or conducting ongoing due diligence on or indirect political contributions. The Bank’s charitable Bank’s most important responsibilities. It maintains Learnings from past financial crisis have driven national business relationships contributions and sponsorships are part of the CSR physical, electronic and procedural safeguards to and international regulatory initiatives that press funding. Any donations made are legal and ethical protect the customer information. Employees are for the adoption of stronger capital requirements • Non face-to-face CDD: Formal policies and under local laws and practices, such as mandates laid authorised to access customer information for business and loss absorbency, among other measures. procedures are in place for non face-to-face down by Section (135) of the Companies Act 2013. purposes only. Global Systemically Important Banks, as defined and customers including, amongst other measures, monitored by the Financial Stability Board (FSB), are certification of documents presented and TAX STRATEGY The Bank’s employees are bound by a code of ethics particularly subject to these regulatory initiatives, as independent contact with the customer by the Bank The business operations of the Bank are largely that requires confidential treatment of customer the Basel Committee on Banking Supervision seeks concentrated in India. Activities outside India are information and are subject to disciplinary action if to improve the resilience of banks and banking • Terrorist financing: CDD procedures include formal restricted to resource mobilisation in the international they fail to follow this code. IndusInd Bank may also systems that are active in business areas with high-risk searches against lists of known or suspected markets. Since the Bank does not have material share Information to provide customers with better exposure. As per the latest list released by the FSB, terrorists issued by competent authorities having earnings emanating from foreign operations, the Bank services and a range of offers and services available IndusInd Bank does not fall under the ambit of Global jurisdiction over the relevant financial institution is considered to operate only in domestic segment. to them. If customers desire the Bank to limit such Systemically Important Banks (G-SIB). The Bank is not present in any tax haven countries sharing whereby customer would not like to be and does not do business in any tax evasive modes. PRIVACY POLICY informed of offers available he/she may contact Bank at IndusInd Bank is committed to protecting customers’ [email protected]. privacy during their visits online and offsite visits, and [GRI:102-16, 102-17, 205-3]

96 Integrated Report 2019-20 IndusInd Bank 97 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Annexure I

GRI Content Index In accordance with the GRI Standards (Core) option

PAGE NUMBER / PAGE NUMBER / GRI STANDARD DISCLOSURE DESCRIPTION GRI STANDARD DISCLOSURE DESCRIPTION REFERENCE LINK REFERENCE LINK

GRI 102: GENERAL DISCLOSURES 2016 GRI 203: 103-1 Explanation of the material topic and its Boundary 60 indirect Economic 103-2 The management approach and its components 60 Organisational 102-1 Name of the organisation 8 impacts 103-3 Evaluation of the management approach 60 profile 102-2 Activities, brands, products, and services 12-13 203-1 Infrastructure investments and services supported 60-83 102-3 Location of headquarters Back Cover GRI 205: 103-1 Explanation of the material topic and its Boundary 95 102-4 Location of operations 14-15 Anti-Corruption 103-2 The management approach and its components 95 102-5 Ownership and legal form 8, 12 103-3 Evaluation of the management approach 95 102-6 Markets served 14-15, 49 205-3 Confirmed incidents of corruption and actions taken 95 102-7 Scale of the organisation 10, 11, 14, 15, 32 102-8 Information on employees and other workers 32, 84-85 GRI 300: ENVIRONMENT 102-9 Supply chain 73 GRI 302: 103-1 Explanation of the material topic and its Boundary 55 102-10 Significant changes to the organisation and its supply chain 2 Energy 103-2 The management approach and its components 55 102-11 Precautionary Principle or approach 53 103-3 Evaluation of the management approach 55 102-12 External initiatives 52 302-1 Energy consumption within the organisation 56-57 102-13 Membership of associations 49 GRI 305: 103-1 Explanation of the material topic and its Boundary 56 Strategy 102-14 Statement from senior decision-maker 4-5 Emissions 103-2 The management approach and its components 56 102-15 Key impacts, risks, and opportunities 42-45 103-3 Evaluation of the management approach 56 Ethics and 102-16 Values, principles, standards, and norms of behaviour 11, 95, 96 305-1 Direct (Scope 1) GHG emissions 57 integrity 102-17 Mechanisms for advice and concerns about ethics 95 305-2 Energy indirect (Scope 2) GHG emissions 57 Governance 102-18 Governance structure 16-17 305-3 Other indirect (Scope 3) GHG emissions 57 102-19 Delegating authority 16-17 305-4 GHG emissions intensity 56 102-20 Executive-level responsibility for economic, environmental, 16-17 GRI 306: 103-1 Explanation of the material topic and its Boundary 59 and social topics Effluents and waste 103-2 The management approach and its components 59 102-21 Consulting stakeholders on economic, environmental, 36-37 103-3 Evaluation of the management approach 59 and social topics 306-2 Waste by type and disposal method 59 102-22 Composition of the highest governance body and 16-17 GRI 307: 103-1 Explanation of the material topic and its Boundary 53 its committees Environmental 103-2 The management approach and its components 53 102-23 Chair of the highest governance body 16-17 compliance 103-3 Evaluation of the management approach 53 102-24 Nominating and selecting the highest governance body 16-17 307-1 Non-compliance with environmental laws and regulations 53 Stakeholder 102-40 List of stakeholder groups 36-37 GRI 400: SOCIAL engagement 102-41 Collective bargaining agreements 91 GRI 401: 103-1 Explanation of the material topic and its Boundary 87 102-42 Identifying and selecting stakeholders 36-37 Employment 103-2 The management approach and its components 87 102-43 Approach to stakeholder engagement 36-37 103-3 Evaluation of the management approach 84-91 102-44 Key topics and concerns raised 36-37 401-1* New employee hires and employee turnover 88 Reporting 102-45 Entities included in the consolidated financial statements 2 401-3 Parental leave 88 practice 102-46 Defining report content and topic Boundaries 2 GRI 403: 103-1 Explanation of the material topic and its Boundary 89-90 102-47 List of material topics 38-39 Occupational health 103-2 The management approach and its components 89-90 102-48 Restatements of information 2 and Safety 103-3 Evaluation of the management approach 89-90 102-49 Changes in reporting 2, 39 403-1 Occupational health and safety management system 89-90 102-50 Reporting period 2 403-2 Hazard identification, risk assessment, and incident investigation 89-90 102-51 Date of most recent report 2 403-3 Occupational health services 89 102-52 Reporting cycle 2 403-4 Worker participation, consultation, and communication on 90 102-53 Contact point for questions regarding the report Inside Back Cover occupational health and safety 102-54 Claims of reporting in accordance with the GRI Standards - Core 2, 98 403-5 Worker training on occupational health and safety 89-90 102-55 GRI content index 98-99 403-9 Work-related injuries 89-90 102-56 External assurance 103-105 403-10 Work-related ill health 89-90 GRI 200: ECONOMIC GRI 404: 103-1 Explanation of the material topic and its Boundary 85 GRI 201: 103-1 Explanation of the material topic and its Boundary 36-37 Training and 103-2 The management approach and its components 85 Economic 103-2 The management approach and its components 36-37 Education 103-3 Evaluation of the management approach 85 103-3 Evaluation of the management approach 36-37 404-1 Average hours of training per year per employee 85 201-1 Direct economic value generated and distributed 18-19, 32-33 404-3 Percentage of employees receiving regular performance and 86 career development reviews *The breakup of employee turnover by age group and gender is not available to report in the current year. This will form part of the disclosure in the subsequent year. [GRI:102-54, 102-55] [GRI:102-55]

98 Integrated Report 2019-20 IndusInd Bank 99 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Annexure I Annexure II

DJSI Mapping

DJSI PAGE NUMBER / IR REF GRI STANDARD DISCLOSURE DESCRIPTION SECTION DJSI QUESTION IR REF SECTION NAME REFERENCE LINK PAGE. NO. NO. GRI 413: 103-1 Explanation of the material topic and its Boundary 60-75 1.1.1 Board Structure Governance 16-17 Local 103-2 The management approach and its components 60-75 1.1.2 Non-executive Chairman/Lead Director Governance 17 Communities 103-3 Evaluation of the management approach 60-75 1.1.3 Diversity Policy Governance 16, 84, 85 413-1 Operations with local community engagement, impact 60-75 1.1.4 Gender Diversity Governance 84,85 assessments, and development programmes 1.1.5 Board Effectiveness Governance 16, 93, 94 GRI 417: Marketing 103-1 Explanation of the material topic and its Boundary 26-27 1.1.6 Average Tenure Governance 92, 94 and Labeling 103-2 The management approach and its components 26-27 1.1.7 Board Industry Experience Governance 16 103-3 Evaluation of the management approach 26-27 1.1.8 Executive Compensation - Success Metrics CEO’s compensation 92 417-1 Requirements for product and service information and labeling 26-27 1.1.9 Executive Compensation - Alignment with Long-Term CEO’s compensation 92 417-2 Incidents of non-compliance concerning product and service 26-27 Performance information and labeling 1.1.10 Management Ownership Governance 92 417-3 Incidents of non-compliance concerning marketing 27 1.1.11 Management Ownership Requirements Governance 92 communications 1.1.12 Government Ownership Governance 92 GRI 418: 103-1 Explanation of the material topic and its Boundary 74 1.1.13 Family Ownership Governance 92 Customer Privacy 103-2 The management approach and its components 74 1.1.14 Dual Class Shares Governance 92 103-3 Evaluation of the management approach 74 1.1.15 Disclosure of Median or Mean Compensation of all CEO’s compensation 92 418-1 Substantiated complaints concerning breaches of customer 74 Employees & CEO Compensation privacy and losses of customer data 1.2.1 Material Issues Materiality Assessment 38-39 GRI 419: 103-1 Explanation of the material topic and its Boundary 60 1.2.2 Materiality Disclosure Materiality Assessment 38-39 Socio-Economic 103-2 The management approach and its components 60 1.3.2 Emerging Risks Risk Management 42-43 Compliance 103-3 Evaluation of the management approach 60 1.4.1 Codes of Conduct Governance 95-97 419-1 Non-compliance with laws and regulations in the social and 60 1.4.3 Corruption & Bribery Governance Community Relations 95-96 economic area 1.4.7 Reporting on breaches Governance 96 1.5.1 Satisfaction Measurement Client Engagement 74 1.6.1 Contributions and Other Spending Governance 97 1.6.2 Largest Contributions and Expenditures Governance 97 1.7.1 Tax Strategy Governance 96 1.7.2 Tax Reporting Governance 19, 96 1.7.3 Effective Tax Rate Key Financial Performance Indicators 19 1.8.1 Information Security/Cybersecurity Governance Information Security Practices 25 1.8.4 Information Security/Cybersecurity Breaches Information Security Practices 33, 25 1.9.2 Integration of ESG Criteria in Wholesale/Corporate/ Sustainability Framework and Performance 50, 54, 55 Investment Banking 1.9.3 Integration of ESG Criteria in Project Finance Sustainability Framework and Performance 50, 54, 55, 77-82 1.9.7 ESG Products & Services for Wholesale/Corporate/ Sustainability Framework and Performance 50, 54, 55, Investment Banking Creating Environmental Impact through 77-82 Investing 1.10.1 Crime Prevention: Business Policy/Procedures Governance 96-97 1.11.1 Global Systemically Important Banks Governance 97 1.12.1 Privacy policy: Systems/Procedures Governance 97 1.12.2 Customers' Information Client Engagement 74 1.12.3 Breaches of Customer Privacy: Complaints Client Engagement 74 2.1.1 Environmental Reporting - Coverage Environment 53-54 2.1.2 Environmental Reporting - Assurance Assurance Statement in Annexure III 102-103 2.2.1 EP - Direct Greenhouse Gas Emissions (Scope 1) Environment 56 2.2.2 EP - Direct Greenhouse Gas Emissions (Scope 2) Environment 56 2.2.3 EP - Energy Environment 56 2.2.4 EP - Water Environment 59 2.2.5 EP - Waste Environment 59 2.2.6 EP - Emissions from Business Travel Environment 56 3.1.1 Social Reporting - Coverage Social 60-61 3.1.2 Social Reporting - Assurance Assurance Statement in Annexure III 102-103

100 Integrated Report 2019-20 IndusInd Bank 101 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Annexure II Annexure III

Independent assurance statement

DJSI IR REF SECTION DJSI QUESTION IR REF SECTION NAME PAGE. NO. NO. 3.2.1 Diversity Employee Diversity 84 3.2.2 Equal Remuneration Equal Remuneration 87 3.2.3 Freedom of Association People 91 3.3.1 Human Rights - Commitment People 90 3.3.2 Human Rights - Due Diligence Process People 90 3.3.4 Human Rights - Disclosure People 90 3.5.1 Type of Individual Performance Appraisal People 86-87 3.5.2 Long-term Incentives Long-term incentive programs 88 3.5.4 Trend of Employee Engagement People 91 3.6.1 Group-wide Strategy Social 75 3.6.3 Input Social 75 3.7.2 Absentee Rate People 84 3.8.1 Financial Inclusion Financial Inclusion 77-83 3.8.2 Measurement and Impact Financial Inclusion 77-83

[GRI:102-56]

102 Integrated Report 2019-20 IndusInd Bank 103 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Annexure III

[GRI:102-56] [GRI:102-56]

104 Integrated Report 2019-20 IndusInd Bank 105 Annexure III Notes

106 Integrated Report 2019-20 CORPORATE INTEGRATED APPROACH TO APPROACH TO ANNEXURES OVERVIEW VALUE-CREATION SUSTAINABILITY

Notes

Feedback: Any queries on this Report or about the sustainability agenda of the Bank may be addressed to Mr. Prashant Ghodake [Head - Sustainability] at [email protected] [GRI:102-53]

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