RESPONDING TO RISKS AND OPPORTUNITIES

Volatile economic environment driven by rising inflation, global monetary policy stance and geopolitical tensions.

Continuously monitored developments in the global and Indian economy, including country risk and sector-specific risks and responded accordingly.

Uncertainties pertaining to elevated geopolitical risks, continuing high interest rates for longer periods and weak global growth outlook across the world posed challenges for customers.

Ensured effective risk management across business segments, strengthened by ongoing reviews for early identification and stress testing; the Bank maintained strong capital and liquidity positions, which were significantly above regulatory requirements.

Challenges posed by tightening monetary policy, withdrawal of liquidity by the central bank and exchange rate movements.

Comprehensive policies and periodic reviews at the level of Board and committees; strategic priority towards asset liability management and strengthening the Bank’s liability franchise.

A disruption on account of information technology failures, internal/external frauds, execution/delivery process errors, model errors or third-party dependencies.

Effective risk management policies in the area of operational risk, information technology risk, third-party dependencies, model risk along with regular review and reporting/analysis of loss incidents. The Bank continues to focus on simplifying processes and platforms to minimise operational risk.

Growing threat of cyberattacks combined with increasing digitisation of banking products and services could expose the Bank to security risks. The Bank also leverages partnerships with third parties and these could also be a source for information security risks.

Investing on building resilience and effectively respond to cyberattacks; the Bank has laid significant focus on data privacy and data loss prevention mechanisms. There were no material incidents of security breaches or data loss during fiscal 2024.

The growing customer dependence on digital transactions and the rising volumes of such transactions requires banks to focus on the resilience, availability, scalability and security of our systems. Misalignment between business and IT strategies is a risk.

The Bank is proactively investing in technology and improving its response to changing technological dynamics. The cross-functional governance framework and Board-level oversight ensures that information technology strategy is aligned with the business strategy with appropriate policies and control frameworks. The Bank has also been reviewing the opportunities and risks arising out of Generative AI framework and solutions for possible integration with applications currently used. The Bank’s IT systems were stable and largely uninterrupted during fiscal 2024.

Retention of employees and ability to attract and motivate talented professionals is critical for the successful implementation of the Bank’s strategy and competing effectively.

Provide opportunity for job rotation and enhance career growth and development; employee well-being and upskilling are key priorities.

As a domestic systemically important bank (D-SIB), compliance with regulations and preparedness to evolving regulatory landscape is a key priority for the Bank.

The Bank has established well-articulated policies and controls to ensure compliance with laws and regulations. Continuous evaluation and updating the policies and processes is done to remain relevant and compliant. A strong compliance culture driven by the Bank’s leadership is enabling timely action.