Director Report

TO,

THE MEMBERS,

Your Directors are pleased to present the Nineteenth Annual Report on the business and operations of the

Bank together with the audited financial statements (standalone as well as consolidated) for the financial year ended March 31, 2023.

FY 2022-23 was the third year of the new journey of YES BANK under the new management, post the YES BANK Limited Reconstruction Scheme, 2020 (“Scheme”) which was implemented in March 2020. Whilst, in the first year, the focus was on rebuilding the Bank, in the second year, we swiftly shifted our focus on growing the

Bank, in the third year, we achieved critical milestones of equity capital raise from two global marquee Private

Equity investors, transfer of legacy stressed asset pool to ARC- which was by far the single largest transaction of sale of non-performing assets in the Indian Banking System, and continuedtobuildonastrongmomentum of The Carlyle Group) & Verventa Holdings on both our asset and liability of with Adventfocus International), granularity and in risk calibrated manner. The Directors are pleased to inform the shareholders that the Bank's Total Assets in FY 2022-23 crossed Rs 3.55 lakh crore, with deposits crossed Rs 2.18 lakh crore and CASA ratio at ~30.8%.

The Bank has further progressed on its transformation journey and has emerged as a re-energised, recapitalised and recalibrated organisation, by leveraging on a unique opportunity to learn from past challenges and become stronger, while continuing to fulfill its unwavering commitment towards its customers and stakeholders. The Bank is on track to achieve its longer-term Strategic

Objectives and none of this would have been possible without the confidencereposed of the Bank's customers, depositors and investors. The confidenceof stakeholders has not only been seen through the improving financial performance of the Bank during the last year, but also presence within the new-age payments through external validation in the form of Credit Rating upgrades, successful client win-backs and acquisition strategy, re-inclusion of the stock in marquee indices amongst others.

The Bank undertook multiple initiatives to grow the Bank's business and launched innovative and tailored sound, propositions for its customers. The Bank launched a first of its kind floating rate Fixed Deposit linked to RBI repo rate an Intelligent Fixed Deposit with Dynamic Returns. In addition, the Bank was a preferred partner of choice for the Government/RBI in multiple new breakthrough initiatives such as Unified Logistics Interface Platform

("ULIP"), Digital Banking Units and Digital Rupee (eRs) ? the Central Bank Digital Currency ("CBDC"). The Bank issued first e-BG in partnership with National E-Governance Services Limited. YES BANK also became the first bank in Asia Pacific to bring forth a debit card in Mastercard's premium Elite Platform. The Bank also launched industry first Build Your Own Card which allows customer to fully customise a credit card.

The Bank was certified as Great Place To Work? Certified which is a reflection of Bank's high-trust and high performance culture. Key highlights of the transformation Journey over the course of FY 2022-23 included:

Completed assignment of identifiedpool of stressed assets to the J.C. Flowers ARC amounting to nearly Rs 48,000 crore. This is single largest transaction of sale of non-performing assets in Indian Banking System. Capital raise of Rs 8,887 crore from two marquee private equity investors viz. CA Basque Investments (affiliates Limited (affiliates second largest private capital raise transaction to take place in the Indian Banking Sector over the last two decades.

The Bank also received multiple ESG certifications and scoring highest amongst the bank on S&P Global, CDP rating and Moody's ratings. The Bank continued its efforts towards building a stronger retail franchise with contribution of retail advances compared to total advances, increased to ~45% in FY 2022-23 compared to 36% in FY 2021-22. Digitisation remains the Bank's key pillar to grow the Retail, SME and the Transaction Banking businesses. The Bank has seen new sanctions/disbursements of ~Rs 1,00,000 crore in FY 2022-23 with Retail Assets disbursements of ~Rs 50,000 crore. The Bank has significant space with the highest market share of ~38% in UPI transactions (by volume) in FY 2022-23.

The Bank's fundamentals have strengthened and it has emerged from the crisis as a financially capitalised, well governed institution, with customer centricity and digital at the heart of its strategy. The Bank remains focused on its priorities and looks to continue this momentum onwards and upwards so that it can deliver on its strategic objectives while creating superior value for all its stakeholders.

The overall bank credit trajectory is expected to remain healthy on account of continued capex investments, expansion of public digital infrastructure, several path breaking growth impetus initiatives such as PM Gatishakti, National Logistics Policy and the Production Linked Incentives ("PLI") scheme announced for 13 key sectors by the government. Improved resilience of the banking system is likely to support stronger credit growth to SME's and retail segments. Home Loans will be a major driver of credit growth as demand for residential purchases is expected to continue growing. Unsecured Lending is also expected to see improvement as the segment will continue to be attractive on a risk-adjusted return basis.

Overall, the Indian Banking Sector is well positioned to fund faster credit growth, with healthy capital buffers, high profitability metrics, and waning asset quality pressures. These factors together with a strong deposits growth augur well for the Banking sector.

While, the above-mentioned are positive for the sector, there are also certain risks that could impact the sector, such as continued geopolitical tensions that could impact interest rates as well as many downstream sectors (some of which are already under pressure because of increased commodity prices); and higher-than-expected slowdown in private consumption. Credit growth may also be partially impacted by movement in real cost of credit in the international markets, overall inflation trajectory and consumption behaviour.

During the year under review, there has been no change in the nature of business of the Bank.

(Rs in million)

*For the purpose of determining ROE, the Bank has considered weighted average shareholder funds during the year. Basis simple average of shareholder funds the ROE is 1.9%.

Net Profit for FY 2022-23 is Rs 7,174.09 million as compared to profit ofRs 10,662.12 million for the FY 2021-22 lower by 32.7% largely on account of higher provision to step-up Provision Coverage Ratio ("PCR") on NPA as well as security receipts.

Net Interest Income ("NII") of the Bank increased by 21.8% to Rs 79,175.72 million during FY 2022-23 as compared to Rs 64,978.54 million during FY 2021-22. The Net Interest Margin ("NIM") was 2.6% in FY 2022-23. Non-interest income consists of fee, trade income and gain on sale of securities. Non-interest income increased by 20.4% from Rs 32,624.69 million in FY 2021-22 to Rs 39,266.50 million in FY 2022-23. Higher non-interest income and NII was largely offset by higher operating expenditure.

Operating expenses increased by 26.5% from Rs 68,443.94 million in FY 2021-22 to Rs 86,614.58 million in FY 2022-23. The employee cost increased from Rs 28,556.91 million in FY 2021-22 to Rs 33,627.00 in FY 2022-23. Other operating cost increased by 32.8% from Rs 39,887.03 million in FY 2021-22 to Rs 52,988 million in FY 2022-23.

Provisions and contingencies (excluding provision for taxes) increased by 50.0% from Rs 14,800.81 million in FY 2021-22 to Rs 22,198.46 million in FY 2022-23.

During FY 2022-23, the Bank has not declared any dividend on equity shares.

As per requirement of RBI regulations, the Bank has transferred the following amounts to various reserves during Financial Year ended March 31, 2023:

In accordance with the provisions of Section 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), dividend which remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by the company to the Investor Education and Protection Fund (“IEPF”). Further, the provisions of section 124(6) of the Companies Act 2013, read with the IEPF Rules mandates companies to transfer all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more to the designated demat account of the IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/ dividend from the IEPF Authority following the procedure prescribed in the Rules.

In accordance with the said IEPF Rules, the Bank had sent notices to all the concerned shareholders whose shares were due for transfer to the IEPF Authority advising them to claim their unclaimed dividend and simultaneously, published newspaper advertisement in this regard.

During the Financial Year 2022-23, the Bank transferred 31,736 Equity Shares to IEPF Authority corresponding to unclaimed dividend for the year 2014-15. The IEPF

Authority holds 2,23,395 Equity Shares in the Bank as at 31^st March, 2023.

Members who have not yet claimed their dividends for the Financial years 2015-16 and/or subsequent years till Financial year 2018-19 are requested to submit their claims to KFin Technologies Limited without any delay. The details of Nodal Officer appointed under the provisions of IEPF are available on the website of the Bank.

On December 13, 2022, the Bank issued 3,696,155,702 equity shares of face value Rs 2 each fully paid up for cash on a preferential basis. During the year ended March 31, 2023, the Bank has issued 3,666,651 equity shares (Previous year: 47,000 equity shares) of face value of Rs 2 each pursuant to the exercise of stock options by employees under the approved stock option schemes.

The Bank has not issued any equity shares with differential voting rights during the year.

Post allotment of aforesaid equity shares, the issued, subscribed and paid up share capital of the Bank stands at Rs 57,509,550,668 comprising of 28,754,775,334 equity shares of Rs 2 each as at March 31, 2023.

Rs in million

CET-I ratio is at 13.3% and CRAR is at 17.9%. NNPA ratio significantly improved at 0.8% pursuant to sale of stressed assets to Asset Reconstruction Company ("ARC").

The Management Discussion and Analysis Report for the year under review as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is presented in a separate section forming part of the Annual Report.

The Bank's Enterprise Risk Management framework encompasses the following:

Risk Governance Framework:

The Bank has implemented an Enterprise Risk Governance framework to ensure non-silo based management and oversight of Risk. The Bank's Risk Management philosophy is guided by the Three Lines of Defence: deficiencies (if

First Line of Defence -

Business Management: Each business segment of the Bank has risk ownership and is responsible for assessment and management of risks and has the overall responsibility of the management and mitigation of the Risk. The segments are required to implement appropriate procedures to fulfil their risk governance responsibilities.

Second Line of Defence -

Independent functions: The Bank's independent oversight functions, such as, Risk Management, Credit Underwriting, Compliance, Legal, Fraud Containment Unit, etc. set standards for management and oversight of risks, including compliance with applicable laws, regulatory requirements and policies.

- Risk Management: Risk Management team reporting into the Chief Risk Officerestablishes policies and guidelines for risk assessment and management and contributes to controls and tools to manage, measure and mitigate risks faced by the Bank. Risk Management comprises units such as Enterprise Risk,

Market Risk, Operational Risk, Legal Risk,

Information Security, Portfolio Analytics, Retail, SME & Rural Policy, Risk Secretarial Unit, etc which are responsible for independent review, monitoring and reporting of all risk control parameters and taking appropriate corrective actions where necessary. These units also ensure compliance to internal policies and regulatory guidelines.

- Credit Underwriting: The Credit Risk team reporting into the Chief Credit Risk Officer ensures an independent assessment of credit proposals and is responsible for monitoring the credit quality of the Bank's portfolio and undertaking portfolio reviews. The Credit Risk team is a specialised function that is well staffed with individuals having the necessary experience as well as skillsets to provide a balanced view of credit proposals to the sanctioning authorities.

- Compliance: The Compliance unit is responsible for tracking implementation of all regulatory circulars/communication, review of new products & processes from regulatory perspective, conducting compliance reviews to ensure adherence to regulatory guidelines and monitoring progress in rectification of significant any) pointed out by regulators in inspection reports as well as implementation of recommendations made therein. This ensures that the overall Compliance Risk of the Bank is managed and mitigated.

- FCU & AML: The Fraud Containment Unit ("FCU") is responsible for prevention and detection of internal and external frauds in the areas of Liabilities, Product and Support functions. The unit conducts transaction monitoring, forensic scrutiny, employee awareness trainings and vulnerability assessments to help achieve the said objective. The Anti Money Laundering Unit ("AML") is responsible for identifying and reporting of suspicious transactions and other regulatory reports such as Cash Transaction Report, Cross Border Wire Transfer Report, Not for Profit Organisation Transaction report etc. as prescribed under PMLA Act/Regulators, across all Business segments of the Bank. The AML unit is equipped with qualified,trained and experienced staff, which monitors various transactions undertaken by customers with a view to combat financial crimes and prevents misuse of the accounts for money laundering.

Third Line of Defence

The Bank's Internal Audit Department independently reviews activities of the first two lines of defence based on a risk-based audit plan and methodology approved by the Audit Committee of the Board. Internal Audit Department provides independent assurance to the Audit Committee of the Board, top management and regulators regarding the effectiveness of the Bank's governance and controls framework designed for risk mitigation.

The Board of Directors of the Bank has overall responsibility for Risk Management. The Board oversees the Bank's Risk and related control environment, reviews and approves the policies designed as part of overseeing the Risk Management practices. The Board ensures that comprehensive policies, systems and controls are in place to identify, monitor and manage material risks at a Bank-wide level, with clearly defined risk limits. The Board has laid down Risk Appetite Statement which articulates the quantum of risk the Bank is willing and able to assume in its exposures and business activities in pursuit of its strategic objectives and desired returns. The Board has also established policies governing risk management, such as, Credit Policy, Asset Liability Management Policy, Operational Risk Management Policy, Information Security Policy, Enterprise Risk Management Policy, Group Risk Management Policy, Model Risk & Governance Policy, Risk Based Pricing Policy, Stress Testing Policy, etc. which establish the Risk Appetite Framework within the overall Risk Appetite Statement.

The Board has put in place four Board level Committees which inter-alia pertain to Risk Management, viz. Risk Management Committee ("RMC"), Audit Committee ("AC"), Fraud, Willful Defaulters and Non Co-operative Borrowers Monitoring Committee (FWD & NCBMC) and Board Credit Committee ("BCC") to deal with risk management practices, policies, procedures and to have adequate oversight on the risks faced by the Bank.

The Board Committees have set up various Executive level committees for oversight over specific risks.

1. Apex Management Committee

2. Enterprise Risk, Reputation Risk and Model Assessment Committee

3. Management Credit Committee

4. Executive Credit Committee

5. Asset & Liability Management Committee

6. Operational Risk Management Committee

7. Standing Committee on Customer Service

8. Fraud & Suspicious Transaction Monitoring Committee

9. Committee for Classification of Wilful Defaulters & Non-Cooperative Borrowers

10. Accountability Review Committee

11. Whistle Blower Committee

12. Disciplinary Committee

13. Internal Committee under POSH - The Bank's Internal Committee is constituted in lines with “The Sexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013” to investigate and redress the complaints of sexual harassment

14. Steering Committee for IFRS (IndAS)

15. Product Process Approval Committee

16. IT Steering Committee

17. Security Council

18. Stressed Asset Monitoring Committee

19. Sustainability Council

20. Fraud Identification Committee

21. Governing Body for IBU (IFSC Banking Unit)

These Committees review various aspects / key risks and ensure that the best-in-class frameworks are in place to oversee day-to-day management of underlying business activities, transactions and associated risks while dealing with internal and external stakeholders. Further, Risk events, potential threats, performance of the Bank vis-a-vis Risk Limits and Risk Appetite, Risk Profile dashboard covering key risk indicators, etc. are presented to these Committees, with periodic trends highlighted along with level and direction of risk. The Bank also conducts a detailed Internal Capital Adequacy Assessment Policy ("ICAAP") review exercise at least on an annual basis to identify its Risk universe, review its Risk appetite in line with its business strategy as well as assess its internal controls and mitigation measures in place for the risks and capital requirements. The ICAAP document is approved by the RMC and the Board.

Additionally, in line with best Risk Governance practices, the Bank has segregated credit underwriting and risk management verticals. The underwriting vertical consisting of Credit Units is headed by the Chief Credit Risk Officer ("CCRO") and the risk controls and policy vertical consisting of various independent control units is headed by the Chief Risk Officer ("CRO"). The CRO reports to the Risk Management Committee while the CCRO reports to the Managing Director & Chief Executive Officer, also accountable to Board Credit

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.

During the year under review, the Bank was recognised in various ways/by various institutes.

Some of the key awards won by the Bank are listed below:

1. Best Payments Initiative award at the Economic Times BFSI Excellence Awards

2. Best AI & ML Bank and Best Technology Bank at IBA's 18th Annual Banking Technology Conference and Awards: 2021-22

3. Excellence in HR Business Partnership Function at the Economic Times Human Capital Awards

4. Best Technology Implementation at the Digital Banker Digital CX Awards

5. Great Place To Work certification by the Great Place to Work R (GPTW) Institute, India

6. India In-House Team of the Year at the Asian Legal Business India Law Awards 2023

Based on the condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI's supervisory process for the year ended March 31, 2022.

As at March 31, 2023, the Bank had one wholly-owned subsidiary, i.e. YES Securities (India) Limited ("YSIL").

The Bank does not have any material subsidiary, associate and joint venture company. There were no entities which became or ceased to be the Bank's Subsidiaries, associates or joint ventures during the year.

Performance and Financial Position of YSIL is given in Management Discussion & Analysis which forms part of this Annual Report.

The brief details about business of the subsidiary company is as under:

YES Securities (India) Limited ("YSIL') is a Wholly Owned Subsidiary of the Bank that completed tenth year of its operation in the FY 2022-23. YSIL is a full scale capital market intermediary that offers retail, HNI, corporate and institutional customers a comprehensive range of products and services encompassing Broking, Investment Banking, Merchant Banking, Research and Institutional Equities sales and trading.

YSIL is registered with the Securities and Exchange Board of India ("SEBI") as a stock broker holding membership of the National Stock Exchange of India Limited ("NSE"), BSE Limited ("BSE"), Multi Commodity Exchange of India ("MCX") & National Commodity & Derivatives Exchange Limited ("NCDEX").

YSIL is also registered with SEBI as Category I Merchant Banker, Investment Adviser, Research Analyst as well as registered as Depository Participant with Central Depository Services Limited (“CDSL”) and National Securities Depository Limited (“NSDL”). YSIL is Sponsor & Investment manager of YSL Alternates Alpha plus Fund which is a SEBI registered Category III Alternative Investment Fund. YSIL is also registered with Association of Mutual Funds of India ("AMFI").

The Consolidated Financial Statements of the Bank and its Subsidiary company for the Financial Year ended March 31, 2023 prepared in accordance with the requirement of Section 129(3) of the Companies Act, 2013 shall be laid before the ensuing AGM and it forms part of this Annual Report.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of Financial Statements of subsidiary company of the Bank in Form AOC-1 forms part of the Annual Report. The Financial Statements of the subsidiary company of the Bank are made available on the website of the Bank at weblink https://www.yesbank. in/about-us/investors-relation/financial-information/ annual-reports; Financials of Bank and its subsidiary shall also be available for inspection by members or trustees of the holders of any Debentures/Bonds of the Bank at its Registered office.

The Bank has transactions with implemented the related parties including adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. The Bank also ensures that internal controls are operating effectively. There is utmost attention accorded to Internal Financial Controls at both, the highest levels at Management as well as the Audit Committee of the Board. There is no material weakness in the Bank's framework with respect to Internal Financial Controls over Financial Reporting and the Bank shall continue to review its overall control framework on an ongoing basis to ensure robustness and effectiveness of its controls.

There are no material changes and commitments, affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e. March 31, 2023 and the date of the Directors'Report i.e. May 12, 2023.

While India is emerging from COVID-19 pandemic, the extent to which any new wave of COVID-19 will impact the Bank's results will depend on ongoing as well as future developments, inter-alia including, the impacts of actions of governments and other authorities to contain its spread or mitigate its impact.

The Credit Rating and change/revision in the Credit Ratings for various debt instruments issued by the Bank from time to time are provided in the Corporate Governance Report forming part of the Annual Report.

Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given or securities provided or acquisition of securities by a Banking company in the ordinary course of its business are exempted from disclosure requirements under Section 134(3) (g) of the Companies Act, 2013.

During the year, the Bank has entered into transactions with the related parties in the ordinary course of business. The Bank has not entered into any materially significant Directors, Key Managerial Personnel, Subsidiaries or Relatives of the Directors, which could lead to a potential conflict of interest between the Bank and these parties. The details of the transactions with related parties, were placed before the Audit Committee from time to time. There were no material individual transactions with related parties, which were not in the ordinary course of business of the Bank, nor were there any transactions with related parties, which were not on arm's length basis. Hence, there are no Related Party Transactions to be reported under Section 188(1) of the Companies Act, 2013, in form AOC-2. Suitable disclosure as required by the Accounting Standards (AS-18) has been made in the notes to the Financial Statements. The Bank has submitted with the Stock Exchanges and also published on the Bank's website, disclosure on Related Party Transactions, drawn in accordance with applicable accounting standards as per the requirements of Regulation 23(9) of Listing Regulations for the half year ended September 30, 2022 and March 31, 2023 respectively. Further, Omnibus approval for transactions is obtained from the Audit Committee for the related party transactions which are repetitive in nature as well as for the normal banking transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee for their approval.

The Board of Directors have formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions pursuant to the provisions of the Companies Act, 2013 and Listing Regulations. The same is displayed on the website of the Bank at https://www.yesbank.in/ pdf?name=policies_pdf6.pdf.

During the Financial Year 2022-23, the following changes took place in the composition of the Board of Directors:

Mr Ravindra Pandey, Nominee Director (Non-Executive) of State Bank of India on the Board of the Bank (“SBI”), appointed pursuant to YES BANK Limited Reconstruction Scheme March 2020 (“Reconstruction Scheme”) resigned from the directorship of the Bank, effective from July 2022 consequent to his superannuation from SBI.

The following Directors appointed pursuant to the YES BANK Limited Reconstruction Scheme, 2020 (“Reconstruction Scheme”) demitted their office from the Board of the Bank, on formation of alternate Board, w.e.f. July 15, 2022: a. Mr. Sunil Mehta, Chairman & Non-Executive Director b. Mr. Mahesh Krishnamurti, Non-Executive Director c. Mr. Atul Bheda, Non-Executive Director d. Mr. Vadalur Subramanian Radhakrishnan, Nominee Director (Non-Executive) of State Bank of India (“SBI”) e. Mr. Atul Malik, Non-Executive Director (Re-appointed as part of the alternate Board with effect from July 15, 2022) f. Ms. Rekha Murthy, Non-Executive Director (Re-appointed as part of the alternate Board with effect from July 15, 2022) g. Mr. Sharad Sharma, Non-Executive Director (Re-appointed as part of the alternate Board with effect from July 15, 2022) h. Mr. Prashant Kumar, Managing Director & Chief Executive Director (Re-appointed as part of the alternate Board with effect from July 15, 2022)

Mr. Ananth Narayan Gopalakrishnan and Mr. Rama Subramaniam Gandhi, additional directors appointed by Reserve Bank of India (“RBI”), continued on the Board till they ceased to be on the Board of the Bank, w.e.f. July 20, 2022, pursuant to the RBI order dated July 20, 2022.

The following Directors were appointed as a part of the alternate Board of the Bank, w.e.f. July 15, 2022, by the Shareholders at the 18^th Annual General Meeting:

a. Mr. Atul Malik, Independent Director

b. Ms. Rekha Murthy, Independent Director

c. Mr. Sharad Sharma, Independent Director

d. Ms. Nandita Gurjar, Independent Director

e. Mr. Sanjay Kumar Khemani, Independent Director

f. Mr. Sadashiv Srinivas Rao, Independent Director

g. Mr. Thekepat Keshav Kumar, Non-Executive Non- Independent Director

h. Mr. Sandeep Tewari, Non-Executive Non- Independent Director

i. Mr. Prashant Kumar, Director Mr. Ananth Narayan Gopalakrishnan and Mr. Rama Subramaniam Gandhi, additional directors appointed by RBI, continued to be Directors on the alternate Board of the Bank, as on the date of 18^th Annual General Meeting of the Bank, i.e. July 15, 2022. They ceased to be on the Board of the Bank, w.e.f. July 20, 2022, pursuant to the RBI order dated July 20, 2022.

The Independent Directors i.e. Mr. Atul Malik, Ms. Rekha Murthy, Mr. Sharad Sharma, Ms. Nandita Gurjar, Mr. Sanjay Kumar Khemani and Mr. Sadashiv Srinivas Rao were appointed for the period of five years w.e.f. July 15, 2022 till July 14, 2027.

Pursuant to letter dated May 18, 2022 received from State Bank of India, Mr. Thekepat Keshav Kumar and Mr. Sandeep Tewari were recategorised as Nominee Director of State Bank of India w.e.f. August 25, 2022.

Pursuant to the recommendation of the Nomination & Remuneration Committee of the Bank (“N&RC”), the Board at its meeting held on July 15, 2022, approved and recommended to RBI, appointment of Mr. Prashant Kumar as the Managing Director and Chief Executive Officer (“MD & CEO”) of the Bank, for a period of three (3) years.

In order to have management continuity pending review and approval by RBI of the above recommendation, the Board at the said meeting basis the recommendation of the N&RC, also approved and recommended to the RBI, appointment of Mr. Prashant Kumar as Interim MD & CEO of the Bank. The RBI vide its letter dated July 15, 2022, approved the appointment of Mr. Prashant Kumar as the Interim MD & CEO of the Bank, for the period of three (3) months, w.e.f. July 15, 2022 or till the appointment of a regular MD&CEO of the Bank, wherever is earlier, which was subsequently approved by the Shareholders of the Bank at the Extra Ordinary General Meeting held on August 24, 2022.

The RBI vide its letter dated October 6, 2022, approved the appointment of Mr. Prashant Kumar as the MD & CEO of the Bank, for a period of three (3) years w.e.f. October 6, 2022, which was subsequently approved by the Shareholders of the Bank through Postal Ballot on March 9, 2023.

Pursuant to the recommendation of the N&RC, the Board at its meeting held on July 23, 2022, appointed Mr. Rama Subramaniam Gandhi as an Additional Independent Director on the Board of the Bank for the period of five (5) years effective from July 23, 2022, subject to approval of shareholders.

The Shareholders of the Bank, at the Extra Ordinary General Meeting held on August 24, 2022, approved the appointment of Mr. Rama Subramaniam Gandhi as an Independent Director of the Bank for a period of five consecutive years from July 23, 2022 to July 22, 2027.

Based on the recommendation of the Board of the Bank, the RBI vide its letter dated September 20, 2022, approved the appointment of Mr. Rama Subramaniam Gandhi as the Non-Executive (Part-time) Chairman of the Bank, for a period of three (3) years w.e.f. September 20, 2022.

Pursuant to the recommendation of the N&RC, the Board at its meeting held on December 13, 2022, appointed Mr. Sunil Kaul (Nominee of CA Basque Investments) and Ms. Shweta Jalan (Nominee of Verventa Holdings Limited) as Additional Directors on the Board of the Bank, effective from December 13, 2022, which was subsequently approved by the Shareholders of the Bank through Postal Ballot on March 9, 2023.

Pursuant to the recommendation of the N&RC, the Board at its meeting held on September 20, 2022, approved the appointment of Mr. Rajan Pental as an Additional Director on the Board of the Bank with effect from the date of receipt of RBI approval for appointment as an Executive Director.

Further, the Board of Directors at its said meeting of September 20, 2022 also approved and recommended to the RBI, the appointment and remuneration of Mr. Rajan Pental as Executive Director of the Bank for a period of three (3) years effective from the date of receipt of RBI approval.

The RBI vide its letter dated February 2, 2023, approved the appointment of Mr. Rajan Pental as an Executive Director of the Bank for a period of three (3) years w.e.f. February 2, 2023.

The Shareholders through Postal Ballot, on March 9, 2023, approved the appointment of Mr. Rajan Pental as a Director of the Bank and also as an Executive Director for a period of three (3) years w.e.f. February 2, 2023.

During the FY 2022-23, following changes took place in the Key Managerial Personnel;

1. Mr. Prashant Kumar the MD & CEO of the Bank, appointed as per the Scheme notified by the Ministry of Finance, Government of India under Notification No. G.S.R. 174(E) dated March 13, 2020, ceased to be the Director and Key Managerial (5) Personnel of the Bank w.e.f. July 15, 2022. The Shareholders at its 18^th Annual General Meeting, appointed, Mr. Prashant Kumar as the Director of the Bank, w.e.f. July 15, 2022.

Pursuant to the recommendation of the N&RC, the Board at its meeting held on July 15, 2022, appointed Mr. Prashant Kumar as the MD & CEO, subject to approval of the RBI.

However, in order to have management continuity pending review and approval by RBI of the above recommendation, the Board at the same meeting on recommendation of the N&RC, appointed Mr. Prashant Kumar as the Interim MD & CEO as well, which was approved by the RBI vide its letter dated July 15, 2022. Subsequently, the RBI vide its letter dated, October 6, 2022, approved the appointment of Mr. Prashant Kumar as the MD & CEO of the Bank, for a period of three (3) years w.e.f. October 6, 2022.

2. Mr. Rajan Pental was appointed as the Executive Director and Key Managerial Personnel w.e.f. February 2, 2023.

As on the date of this report, in terms of Section 203(1) of the Companies Act, 2013, Mr. Prashant Kumar, Managing Director & Chief Executive Officer, Mr. Rajan Pental, Executive Director, Mr. Niranjan Banodkar, Chief Financial Officer and Mr. Shivanand Shettigar, required under Company Secretary are the Key Managerial Personnel of the Bank.

As per the Reconstruction Scheme through which the erstwhile Board was constituted, none of the Directors were designated as Independent Directors. Hence, the Bank was not required to obtain declarations under Section 149(6) and 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) and Regulation 25(8) of the Listing Regulations, from the erstwhile Board. However, as a matter good governance the Bank had obtained declarations from six Non-Executive Directors who were appointed/co-opted pursuant to the Scheme, confirming that they meet the criteria of independence as required under the relevant provisions of Companies Act, 2013 and Listing Regulations.

The alternate Board of the Bank was constituted w.e.f. July 15, 2022 which operates under the applicable laws & regulations as against the erstwhile Board which was constituted and functioned under the ambit of the Scheme. The Bank has already complied with all the conditions of the Scheme and made an application to RBI for confirmation that the Bank is out of the Scheme. However, the said confirmation from RBI is awaited and till such time, the Bank is still deemed to be under the Scheme.

The Bank has received necessary declarations from each Independent Director under Section 149(6) and 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) and Regulation 25(8) of the Listing Regulations, that they meet the criteria of independence laid down thereunder. The Board has assessed the veracity of the confirmations submitted by the Independent Directors, as required under Regulation 25(9) of the SEBI Listing Regulations.

During the year, there has been no change in the circumstances affecting their status as Independent Directors of the Bank and that they are not debarred from holding the office of director under any SEBI order or any other such authority.

In the opinion of the Board, the Independent Directors are persons of integrity and possess the requisite all experience, expertise and proficiency applicable laws and the policies of the Bank.

The details of Meetings of Board and Committees held during the year, attendance of Directors at the meetings and constitution of various Committees of the Board are included separately in the Corporate Governance Report, which forms part of the Annual Report.

In line with the provisions of the Companies Act, 2013, Listing Regulations and SEBI Guidance Note on the Board Evaluation dated January 05, 2017 and as per the performance evaluation framework approved by the Nomination & Remuneration Committee and endorsed by the Board, the Board has carried out the performance evaluation of the Directors including Chairman, Managing Director & CEO, Executive Directors, Board Level Committees and Board as a whole for the FY 2022-23.

The Bank had formulated separate questionnaires for the aforesaid evaluation and was circulated to the members of the Board electronically. The said questionnaires covered various aspects of evaluation, including the following:

Attendance and Participation, Contribution in Strategic Planning, Responsibilities towards Stakeholders, Compliance & Governance and Updation of Knowledge.

Experience and Knowledge, Performance of the Bank, Awards and recognition, Leadership, Attendance and Participation, Contribution in Strategic Planning and Responsibilities towards Stakeholders.

Conduct of Meeting, Impartiality, Attendance and Participation, Experience and Knowledge, Leadership, Contribution in Strategic Planning, Responsibilities towards Stakeholders and effective use of resources.

Composition and Diversity, Committees of the Board, Discussions at the Meetings, Teamwork and Cohesiveness of Board decisions, Understanding of roles and responsibilities and Grievance redressal of Stakeholders.

Composition and balance of skill sets, adherence to pre-approved meeting schedule, frequency and overall contribution, understanding of regulatory environment and developments, Interaction with Board , Independence of Committee from Board and justice to the role of the Committees.

The Independent Directors at their meeting held on April 22, 2023, reviewed the performance of Non-Independent Directors, Chairman, Managing Director & CEO, Executive Directors and Board as a whole and submitted the summary report of evaluation to the Board for their consideration. Further, the Board at its meeting held on April 22, 2023, based on the summary report of the Independent Directors and the responses received to the questionnaire, assessed the performance of the Directors including Chairman, Managing Director & CEO, Executive Directors, Board Level Committees and Board as a whole and submitted the summary report of evaluation to N&RC for reviewing the implementation of performance evaluation as per the approved framework. The N&RC at its meeting held on May 10, 2023, reviewed the implementation and compliance of the performance evaluation framework basis the report submitted by the Board.

The Chairman of the Board and the Chairperson of Nomination & Remuneration Committee and an Independent Director who chaired the meeting of the Independent Director took the lead in the process of evaluation and sharing the feedback with the Individual Directors and discussion on actionable. The feedback on Board and Board Level Committees were also shared for further action. The Board of Directors also identified specific actionable with due emphasize and focus on sustainable improvement in governance practices and business growth.

The Board of Directors of the Bank had formulated and adopted policy on “Board Diversity and Fit & Proper Criteria and Succession Planning” for appointment of Directors on the Board of the Bank and succession planning. The details of the same have been included in the Report on Corporate Governance forming part of this Annual Report.

The Board of Directors of the Bank had formulated and adopted policies for Remuneration of Directors including the Chairman of the Bank. The details of the same are made available on the Bank's website and can be accessed at https://www.yesbank.in/pdf/board_kmp_sr_ mgmtfiremuneration_policy_pdf.

Further, the Bank has a separate Total Rewards Policy articulated in line with relevant RBI guidelines which inter alia deals with the Compensation & Benefits of the Managing Director & CEO and the Whole-time Directors.

a) The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of Section 136 of the Companies Act, 2013, the same would be available for inspection during working hours at the Registered Office of the Bank till the date of Annual General Meeting. A copy of this statement may be obtained by the Members by writing to the Company Secretary of the Bank.

b) The ratio of the remuneration of each Director and employees of the Bank as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 1 to the Report.

YES BANK has instituted Stock Option Plans to enable its employees to participate in Bank's future growth and financial success. The Bank provides its employees a platform for participating in important decision making and instilling long term commitment towards future growth of the Bank by way of rewarding them through Stock Options. In terms of Total Rewards Policy of the Bank, employees are granted options as part of Annual Performance Review process based on their performance as well as to ensure their retention, and to hire the best talent for its senior management and key positions. The detailed disclosures as stipulated under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is hosted on the website of the Bank at https://www.yesbank.in/pdf?name=esos_ disclosure_pursuantfitofiregulation_14_of_sebi_sbeb_n_ sefiregulations_2021_pdf.pdf.

The Bank is committed to follow best Corporate Governance practices and adheres to the Corporate Governance requirements set by the Regulators under the applicable Laws/Regulations. In line with the foregoing, the Bank has adopted a Code of Corporate Governance which acts as a guide to the Bank and the Board on the best practices in the Corporate Governance.

A separate section on Corporate Governance standards followed by the Bank and the relevant disclosures, as stipulated under Listing Regulations, Companies Act, 2013 and rules made thereunder forms part of the Annual Report.

A Certificate Company Secretaries, conforming compliance by the Bank to the conditions of Corporate Governance as stipulated under Listing Regulations, is annexed to the Report on Corporate Governance, which forms part of the Annual Report.

In line with the provisions of Listing Regulations, the Companies Act, 2013 and the principles of good governance, the Bank has devised and implemented a vigil mechanism, in the form of ‘Whistle-Blower Policy'. The policy devised is also aligned to the recommendations of Protected Disclosure Scheme for Private Sector and Foreign Banks, instituted by RBI. Detailed information on the Vigil Mechanism of the Bank is provided in the Report on the Corporate Governance which forms part of the Annual Report.

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Bank has constituted Corporate Social Responsibility and Environmental, Social & Governance ("CSR&ESG") Committee and statutory disclosures with respect to the CSR&ESG Committee and Annual Report on CSR Activities forms part of this Report as Annexure 2. The CSR Policy is available on the website of the Bank and can be accessed at https://www.yesbank.in/pdf/ ybl_corporate_socialfiresponsibility_policy.

In terms of the Guidelines issued by the Reserve Bank of India ("RBI") vide Circular No. DoS.CO.ARG/ SEC.01/08.91.001/2021-22 dated April 27, 2021, the Members of the Bank at the 17^th Annual General Meeting held on August 27, 2021 had approved the amendment in the tenure and terms of appointment of M/s. M. P. Chitale & Co., Chartered Accountants (ICAI Firm Registration No. 101851W) to hold office from the conclusion of the Sixteenth Annual General Meeting until the conclusion of the Nineteenth Annual General Meeting of the Bank to be held in the year 2023 who shall act as Joint Auditors of the Bank for the remainder of the revised term, and also approved the appointment of M/s. Chokshi & Chokshi LLP, Chartered Accountants, (ICAI Firm Registration No. 101872W/W100045), as Joint Statutory Auditors of the Bank to hold office from the conclusion of the Seventeenth Annual General Meeting until the conclusion of the Twentieth Annual General Meeting of the Bank to be held in the year 2024 subject to approval by RBI on an annual basis.

There were no qualifications, reservation or adverse remarks made by the Statutory Auditors in the Auditor's Report for Financial Year 2022-23.

Pursuant to Section 204 of the Companies Act, 2013, M/s. BNP & Associates, Practicing Company Secretaries, were appointed as Secretarial Auditors of the Bank to conduct the secretarial audit for the FY 2022-23. The Bank provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the FY 2022-23 is annexed to this report as Annexure 3. There are no qualifications,reservations or adverse remarks in the Secretarial Audit Report for FY 2022-23.

In terms of SEBI Circular no CIR/CFD/CMD1/27/2019 dated 8 February, 2019, relating to Annual Secretarial Compliance Report, the Bank had appointed M/s. BNP & Associates, Practicing Company Secretaries, for issuing the aforesaid report for FY 2022-23. The Bank has submitted the Annual Secretarial Compliance Report to the Stock Exchanges within the prescribed time limit.

Being a Banking Company, the Bank is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

During the Financial Year 2022-23, pursuant to Section 143(12) of the Companies Act, 2013, neither the Statutory Auditors nor the Secretarial Auditors of the Bank have reported any instances of frauds committed in the Bank by its officers or its employees.

As stipulated in Listing Regulations, the Business Responsibility and Sustainability Report describing the initiatives undertaken by the Bank from environmental, social and governance perspective is separately attached as part of the Annual Report.

During the year under review, no significant orders were passed by the regulators or courts or tribunals impacting the going concern status and Bank's operation in future.

Green bond issuances in India have steadily increased over the past few years since the first issuance by YES BANK in February 2015, making India among the top ten largest green bond markets globally, with extensive participation from many corporates and financial institutions. Post the successful first Green Bond of YES BANK which raised Rs 1,000 crore (equivalent to USD 160 million) in February 2015 and witnessed a strong demand from leading investors, YES BANK subsequently raised two other green bonds. In August 2015, the Bank raised Rs 315 crore (equivalent to USD 50 million) through the issue of Green Bonds to International Finance Corporation (IFC) on a private placement basis, the first investment by IFC in an Emerging Markets Green Bond issue in the world through the first offshore rupee denominated bond or “Green Masala Bond”. Moving ahead with its conviction towards Climate Finance, YES BANK has raised Rs 330 crore (equivalent to USD 50 million) in December 2016, through an issue of a 7-year Green Infrastructure Bonds to FMO, the Dutch Development Bank, on a private placement basis. This is FMO's 1st investment in a Green Bond issued by a bank in India.

The amount raised through all these issuances, are used to finance Green Infrastructure Projects, in whole, or in part, as per ‘Eligible Projects' outlined in the Bank's internal guidelines for adherence to Green Bond Principles. The proceeds are managed through MIS-based asset tagging which tracks green bonds investments. The unutilised proceeds are invested in G-Secs. KPMG, India has provided limited assurance on conformity of the use of proceeds, process for evaluation and selection of projects, management of proceeds and reporting of these green bonds to Green Bond Principles (GBP) 2021.

The GBP are voluntary guidelines, developed by the International Capital Markets Association, for broad use by the market that recommend transparency and disclosure, and promote integrity in the development of the Green Bond market. They have the following four key components and the bank showcases its adoption below:

Use of Proceeds:

The proceeds raised by the bank are used in eligible project categories and include all projects funded in whole, or in part, in the fields of renewable and clean energy projects including Wind, Solar, Biomass, Hydropower and other such projects

Process for Evaluation and Selection of Eligible Projects:

The bank's process starts with interactions with potential borrowers to understand the overall aspects of the project and a preliminary confirmation against the eligibility criteria. The evaluation moves to risk assessment for confirmation of the eligibility, post which further documentation is sought as per the Bank's policies and GBP

Management of Proceeds:

Green Bond allocations to eligible projects are tracked by the bank through an MIS based asset tagging system. The unallocated proceeds, if any, are placed in liquid instruments

The bank's communication to investors through an annual update includes:

- List of projects to which proceeds have been allocated to, with brief description including amounts disbursed, installed capacity

- Summary of Environment and Social ("E&S") impacts associated with projects, if any

- Information on investment of unallocated proceeds in liquid instruments

Through financing solar and wind power plants, these bonds strengthen India's energy security while reducing fossil fuel dependency. These bonds have been crucial in financing climate change mitigation with avoidance of emissions of CO2, SO2, NOx and other air pollutants associated with fossil fuel based energy generation. Estimated CO2 emission reductions are shared along with project details.

List of projects against which green bonds proceeds have been allocated as at March 31, 2023 is provided below.

* The total CO2 emission reduction for individual projects have been calculated based on the methodology outlined in the document ‘CO2 Baseline Database for the Indian Power Sector User Guide Version 18.0 dated December 2022' (published by the Central Electricity Authority of India) along with other relevant factors such as project PLF/CUF estimates, installed project capacity, resultant annual unit generation etc.

The temporary unallocated proceeds (Rs 315 crore of Rs 315 crore bond issued in August 2015) are allocated in Government Securities and will be allocated back to eligible projects, when available.

The assurance statement issued by KPMG India is attached herewith as Annexure 4.

The disclosures required to be made under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 on the conservation of energy, technology absorption and Foreign exchange earnings and outgo are given as Annexure 5.

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Bank has placed a copy of the Annual Return in the prescribed Form MGT-7 as at March 31, 2023 on its website at https://www.yesbank. in/about-us/investors-relation/financial-information/ annual-reports.

The Board of Directors affirm that the Bank has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India SS-1 and SS-2 respectively relating to Meetings of the Board, its Committees and the General Meetings.

The Bank has Zero tolerance towards any act on the part of any executive which may fall under the ambit of ‘Sexual Harassment' at workplace and is fully committed to uphold and maintain the dignity of every women executive working in the Bank. The Policy regarding Prevention & Prohibition of Sexual Harassment at Workplace provides for protection against sexual harassment of women at workplace and for prevention and redressal of complaints. Also, in its endeavor to spread awareness on the aforementioned policy and ensure compliance by all the executives, the Bank has implemented a plan of action to disseminate the information and train the executives on the policy under the ambit of ‘Gender Respect and Commitment to Equality' ("GRACE") program.

The Bank has complied with provisions relating to the constitution of Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH).

Number of cases filed and their disposal under Section 22 of the POSH is as follows:

*Investigation in the matter of pending cases has been completed and further action is in progress which will be completed within the statutory timelines.

Pursuant to the requirement under Section 134(5) of the that: CompaniesAct,2013,itisherebyconfirmed

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for that period;

(c) the directors had sufficient taken proper and care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; (e) the directors, had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Your Directors take this opportunity to express their deep and sincere gratitude to the customersoftheBank role in continuing for their confidence and patronage, as well as to the Reserve Bank of India, Securities and Exchange Board of India, Government of India, and other Regulatory Authorities for their cooperation, support and guidance. Your Directors would like to express a deep sense of appreciation for the commitment shown by the employees in supporting the Bank. We would also like to thank all our valued partners, vendors and stakeholders to who have played a significant support the Bank.

For and on behalf of the Board of Directors

YES BANK Limited