Your Result on : Directors Report
Yes Bank Ltd Industry :  Banks - Private Sector
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To the Members,

Your Directors are pleased to present the Thirteenth Annual Report on business and operations of your Bank together with the audited accounts for the year ended March 31, 2017.


Your Bank performed well in Financial Year (‘FY') 2016-17 with a net profit of Rs. 33,300.96 millions which is an increase of 31.1% from FY 2015-16. Your Bank showed continued acceleration and momentum in building a strong liability franchise with CASA ratio at 36.3% at the end of FY 2016-17. Your Bank has also completed its Retail Assets Product Suite and remains focused on increasing diversification in advances by growing the Retail and SME book. In terms of Human Capital strength, your Bank has achieved a significant milestone in FY 2016-17 by crossing the 20,000 mark.

Your Bank's branch network stood at 1,000 branches and 1,800+ ATMs (including Bunch Note Acceptors) as on March 31, 2017. Your Bank is also in the process of commissioning its single largest National Centralised Operations Management & Service Delivery facility in Ambattur, Chennai. Your Bank has adopted an ‘Alliances, Relationships & Technologies – ART' approach to Banking by building strong relationships with firms across multiple domains including Fintech, Responsible Banking, Human Capital and leveraging their innovations to provide a superior Banking experience.


FY 2016-17 was a significant year in your Bank's lifecycle. Your Bank continued on its consistent performance with Profit after Tax (‘PAT') growing to Rs. 33,300.96 millions from Rs. 25,394.47 millions showing a Y-o-Y growth of 31.1%.

On March 31, 2017, your Bank successfully issued 32,711,000 Equity shares by way of Qualified Institutions Placement at a price of Rs. 1,500.00 per equity share aggregating to Rs. 49,066.50 millions (approx. USD 750 millions) resulting in dilution of 7.2% on the expanded capital base. The Bank's Total Capital Adequacy has increased to 17.0 % & Tier I Capital to 13.3%, ensuring that the Bank is well positioned for growth. Further, during FY 2016-17, your Bank raised Rs. 30,000 millions of Basel III Compliant Additional Tier-1 (‘AT1') Bonds through private placement. The Bonds were listed on the BSE Limited and its proceeds qualify for Basel III Tier-I Capital. The Bonds have been rated as CARE AA (Stable Outlook) by Credit Analysis and Research Limited (‘CARE'), ICRA AA (Hyb), Stable by ICRA Limited (‘ICRA') and IND AA (Stable Outlook) by India Ratings & Research - A Fitch Group Company (‘India Ratings').

Your Bank continued its leadership in Green Infrastructure Bonds and raised Rs. 3,300 millions (approx. USD 50 millions equivalent) through an issue of a 7-year Green Infrastructure Bonds to FMO, the Dutch Development Bank, on a private placement basis. FMO invested in your Bank's bonds through FMO's own sustainable bonds. This was FMO's 1st investment in a Green Bonds in India. This was the third such green bond issuance by your Bank after the highly successful maiden issuance of Rs. 10,000 millions (USD 160 millions equivalent) in February 2015 followed by Rs. 3,150 millions (USD 50 millions equivalent) private placement to International Finance Corporation (‘IFC'), Washington in August 2015.

Your Bank also successfully raised Rs. 21,350 millions of Senior Long-term Infrastructure Bonds. The issue was rated ICRA AA+ by ICRA and CARE AA+ by CARE.

Your Bank signed an MoU for a USD 50 millions loan from IFC, Washington, to be used exclusively to lend to women-owned businesses. This project is part of the Women Entrepreneurs Opportunity Facility (‘WEOF'), the first-of-its-kind global facility dedicated to expanding access to capital for approximately 100,000 women entrepreneurs.

Your Bank was the first bank in India to commence the operations at International Financial Services Centre (‘IFSC') at GIFT City, Gujarat (‘IBU'). Setting up of an IFSC in India has been the vision of Hon'ble Prime Minister of India, as this would be a major game changer for the financial services sector in India. In FY 2016-17, your Bank's IFSC gained significant momentum as a specialized knowledge sectors focussed IBU of YES BANK and has reached the milestone of USD 1 billion balance sheet size as on March 31, 2017. A banking unit at GIFT IFSC (IBU) is equivalent to a foreign branch and is a significant development in overall augmentation of your Bank's business model whereby your Bank will be in a position to provide comprehensive solutions for its client's foreign currency banking requirements. The opening of an IBU has boosted YES BANK's Cross Border Trade offerings, External Commercial Borrowings, Foreign Currency loans/syndications and offshore M&A funding business among others. With the

Govt. of India announcing various incentives, to propel the growth of IFSC, this will provide further impetus to your Bank's operations in GIFT City.

Further information on the Business overview and outlook and State of the affairs of your Bank is discussed in detail in the Management Discussion & Analysis section.

There is no change in the nature of business of your Bank for the year under review.


Rs. in millions

Particulars April 1, 2016 to March 31, 2017 April 1, 2015 to March 31, 2016
Deposits 1,428,738.57 1,117,195.33
Borrowings 386,066.73 316,589.77
Advances 1,322,626.77 982,099.27
Total Assets/Liabilities 2,150,599.18 1,652,634.12
Net Interest Income 57,973.07 45,667.23
Non-Interest Income 41,567.57 27,121.47
Operating profit 58,375.23 43,024.98
Provisions and Contingencies 7,934.05 5,363.01
Profit before Tax 50,441.18 37,661.98
Provision for taxes 17,140.21 12,267.51
Net Profit 33,300.96 25,394.47
Add: Surplus/(Deficit) brought forward from last period 55,446.80 42,200.51
Amount available for appropriation 88,747.77 67,594.97
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949 8,325.24 6,348.62
Capital Reserve 1,083.00 734.83
Investment Reserve - -
Proposed Dividend and Tax thereon* - 5,061.52
Adjustment to earlier year dividend and tax thereon 5.61 3.21
Surplus carried to Balance Sheet 79,333.91 55,446.80
Net Interest Margin 3.4% 3.4%
Return on Annual Average Assets 1.8% 1.7%
Return on Equity 21.5% 19.9%
Cost to Income Ratio 41.4% 40.9%

* Bank has not accounted for proposed dividend as a liability as at March 31, 2017 as per revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance sheet date'. Proposed Dividend was however accounted for as a liability as at March 31, 2016 in line with the existing accounting standard applicable at that time.

Your Bank posted Net Revenues (Net Interest Income and other income) of Rs. 99,540.64 millions and Net Profit of Rs. 33,300.96 millions for FY 2016-17. The Net Revenues and Net Profit for FY 2015-16 was Rs. 72,788.70 millions and Rs. 25,394.47 millions respectively. Appropriations from the Net Profit have been made as per the table given above. Please refer to the section on Financial and Operating Performance in the Management Discussion and Analysis for a detailed analysis of financial data.


Your Bank is rewarding its shareholders by way of consecutive cash dividends considering the consistent financial performance of your Bank and promising future prospects while retaining capital to maintain a healthy Capital Adequacy Ratio and to support future growth. In view of the excellent financial performance of your Bank and in continuance of the earlier trends of cash dividends, the Board of Directors have recommended Dividend at a rate of Rs. 12 per equity share of Rs. 10 each for the year ended March 31, 2017 for approval by the Shareholders at the 13th Annual General Meeting as against Rs. 10 per equity share for the previous year ended March 31, 2016. This dividend shall be subject to tax on dividend to be paid by the Bank. This reflects our confidence in your Bank's ability to consistently grow earnings over time.


As per requirement of RBI regulations, the Bank has transferred the following amounts to various reserves during Financial Year ended March 31, 2017:

Rs. in millions
Amount transferred to Amount
Statutory Reserve 8,325.24
Capital Reserve 1,083.00
Investment Reserve -


During the financial year ended March 31, 2017, your Bank has successfully completed capital raising by way of Qualified Institutions Placement (‘QIP') raising Rs. 49,066.50 millions by issuing 32,711,000 equity shares of Rs. 10 each at an issue price of Rs. 1,500 per equity share including premium of Rs. 1,490 per equity share. The Bank accreted Rs. 48,239.39 millions (net of share issue expenses of Rs. 500 millions) as premium, on account of QIP. The Bank also issued 3,243,172 shares pursuant to the exercise of stock option aggregating to Rs. 1,010.12 millions. Overall, 35,954,172 equity shares were issued by your Bank during financial year.

Post allotment of equity shares as aforesaid, the issued, subscribed and paid-up share capital of your Bank stands at Rs. 4,564,858,130 comprising of 456,485,813 equity shares of Rs. 10 each as on March 31, 2017.

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

During the year, your Bank raised Rs. 30,000 millions through private placement by issue of 9.50% Listed Rated Perpetual Subordinated Unsecured BASEL III compliant Additional Tier I Bonds in the Form of Debentures. Your Bank has also issued Rs. 24,650 millions through infrastructure bonds.

In line with the RBI circular on Capital Adequacy Framework, your Bank has computed capital charge for operational, market and credit risk and its Capital Adequacy Ratio as per Basel III accord as at March 31, 2017.

Your Bank is well capitalised with a Capital Adequacy Ratio of 17.0% as at March 31, 2017; of which Tier I Capital Ratio was 13.3% and Tier II Capital Ratio was 3.7%.


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, your Bank was recognized in various ways/by various institutions and some of the key awards presented to the Bank are listed below:

YES BANK has been recognized as the ‘Best Mid-Sized Bank' in the 21st edition of the Business Today - KPMG India's Best Banks study. This is the 8th year in a row, where YES BANK has been awarded by Business Today in its annual Banking survey for growing robustly, embracing technology, innovating and reaching out to people at the bottom of the pyramid.

YES BANK has been adjudged as Asia's Best Bank for Corporate Social Responsibility at the Euromoney Excellence Awards 2016 held in Hong Kong.

YES BANK has been adjudged the Best Bank in Asia Pacific for Payments and Collections by Global Finance, a leading international business magazine headquartered in New York.

YES BANK won the award for The Best Technology Bank of the Year in the medium banks category, at the Indian Banks' Association's (IBA) Banking Technology Awards 2017, in Mumbai.

YES BANK won 2 awards at The Asset Triple A Asia Infrastructure Awards 2016, Hong Kong:

Best Energy/Renewable Energy Deal – India for Porbandar Solar Power Rs. 1,260 millions non-convertible debentures, in which YES BANK acted as sole underwriter.

Best Green Bond Facility within commended category in India, for IFC's Rs. 3,150 millions green infrastructure bonds on the back of YES BANK's domestic green bond issuance.

YES BANK made its maiden entry into the Forbes Global 2,000 List of World's Top Companies 2016. YES BANK was the youngest Indian Company on the Forbes 2,000 List and also one of the youngest Banks in the World on this prestigious list.

YES BANK was recognized among India's Best BFSI Brands by Economic Times Best BFSI Brands 2016.

YES BANK received multiple awards at The Asian Banker Awards 2016:

Best Trade Finance Bank in India;

Best Corporate Payments Project in India for API Banking implementation for Snapdeal, one of India's leading e-commerce players.

YES BANK received the Best Bank (midsized) Award for Cyber Defence from RBI Governor Dr. Raghuram Rajan at the IDRBT Banking Technology Excellence Awards 2016.

YES BANK was adjudged Strongest Bank in India (by balance sheet) – 2015 by The Asian Banker, Hong Kong. This is the 4th time in the last 5 years that YES BANK has been recognized at these global awards.

YES BANK has been adjudged the Global winner in ‘Payments' Category by The Banker magazine, London (part of the Financial Times Group) at The Solar, Banker Transaction Banking Awards 2016.

YES BANK won the Porter Prize 2016 for Leveraging Unique Activities. The citation recognizes YES BANK's outstanding performance highly in the industry and to recognize its effective rendering of activities across the value chain that created competitive advantage.

YES BANK has won Ethical Corporation Responsible Business Award 2016, London in the ‘Most Effective Domestic Community Investment' category for its program on providing Access to Clean & Safe Drinking Water.

YES BANK was the sole Indian Bank to be recognized by Global Finance magazine as part of its Digital Banks of Distinction Awards 2016 in the Corporate/Institutional Banking Category.

YES School of Banking (the Learning & Development unit of YES BANK) has been awarded dual international certification in ISO 9001:2008 and ISO 29990:2010, making it the first Learning & Development function in the Indian banking sector to be recognized by this highest level of quality management system.

YES BANK has won the Reuters Most Accurate Forecaster Award for 2016 for the Indian economy for providing most accurate predictions of economic indicators in Reuters Poll in January 2016.

YES BANK received the Commendation Certificate for Significant Achievement in Environment Management at the CII ITC Sustainability Awards 2016 for innovative approaches, including policy and practice, to reduce the Bank's environmental impact in December, 2016.

YES BANK was conferred the SKOCH Resilient India Award (Gold) for Innovative Methods of Training in Bancasurrance at the 48th SKOCH Summit in December, 2016 in New Delhi.

YES BANK won the Good Corporate Citizen Award 2016 in the ‘Banking and Financial Companies' category by Bombay Chamber of Commerce and Industry for manifesting corporate social responsibility towards civic communities and operational excellence, and embedding social and economic dimensions of sustainability in programmes and practices in October, 2016.

YES BANK won the prestigious ‘Golden Peacock Award for Sustainability, 2016', for its nature, scope, and effectiveness of social and economic dimension of sustainability programs and practices, at the Institute of Director's 16th London Global Convention on Corporate Governance and Sustainability held in London in December, 2016.

YES BANK was awarded Certificate of Appreciation in Environment Excellence at the 10th Environment Partnership Summit and Environment Excellence Award 2016 in Service Industry category by Indian Chamber of Commerce, Kolkata in December, 2016.

YES BANK's Sustainability Report was Highly Commended as Asia's Best Integrated Report at the Asia Sustainability Reporting Awards 2016 by CSR Works International, Singapore in November, 2016.


Your Bank has instituted Stock Option Plans to enable its employees to participate in your Bank's growth and financial success. Your Bank provides its employees a platform for participating in important decision making and instilling long term commitment towards growth of the Bank by way of rewarding them through Stock Options. In terms of the Compensation and Benefit 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 Bank has Four Employee Stock Option Schemes in operation viz:

Joining Employee Stock Option Plan II (JESOP II); Joining Employee Stock Option Plan III (JESOP III); YBL ESOP (consisting of two sub schemes JESOP IV/PESOP I); and YBL JESOP V/PESOP II (consisting of three sub schemes JESOP V/PESOP II/ PESOP II -2010).

The Employee Stock Option Plans are administered by the Nomination & Remuneration Committee of the Board of the Bank.

The details of vesting of various schemes are as follows: ESOP Schemes Vesting Period

JESOP II 50% at the end of 3rd year and balance at the end of 5th year from the Grant date.
JESOP III 50% at the end of 3rd year and balance at the end of 5th year from the Grant Date.
JESOP IV 50% at the end of 3rd year and balance at the end of 5th year from the Grant date.
JESOP V 50% at the end of 3rd year and balance at the end of 5th year from the Grant Date.
PESOP I 25% at the end of each year from the Grant Date.
PESOP II 30%, 30% & 40% at the end of 1st year, 2nd year and 3rd year respectively from the Grant Date.
PESOP II - 2010 30%, 30% & 40% at the end of 3rd year, 4th year and 5th year respectively from the Grant Date.

During the year, all new grants have been made in YBL JESOP V and YBL PESOP II – 2010 and grants under PESOP-II has been discontinued w.e.f. January 20, 2010. The Schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. Source of shares are primary in nature, since your Bank has been issuing new equity shares upon exercise of options.

Options under all the aforesaid plans are granted for a term of 10 years (inclusive of the vesting period) and are settled with equity shares being allotted to the beneficiary upon exercise.

No stock options were issued to the Directors of your Bank.

Various details including option movement during the year under Schemes i.e. JESOP II, JESOP III, YBL ESOP and YBL JESOP V/PESOP II respectively are as follows:



Date of Shareholders Approval July 24, 2006 July 24, 2006 August 29, 2007 August 29, 2007 September 18, 2008* September 18, 2008* September 18, 2008*
Total No. of Options approved 5,000,000 5,000,000 5,000,000 5,000,000 9,500,000 15,228,000 20,272,000
Total No. of options outstanding at the Beginning of the period - 13,000 119,768 214,465 4,456,232 1,138,135 13,384,420
Total No. of Options granted (during FY 2016-17) - - - - 821,500 - 872,050
The Pricing Formula Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note
1 1 1 1 1 1 1
Options Vested (during FY 2016-17) - - - - 850,700 - 2,766,750
Options Exercised (during FY 2016-17) - 13,000 46,308 81,500 957,727 132,000 2,012,637
Total No. of shares arising as a result of exercise of option - 13,000 46,308 81,500 957,727 132,000 2,012,637
Options lapsed/ Forfeited (during FY 2016-17) - - - - 270,475 - 422,500
Total No. of options exercisable at the end of the year - - 73,460 132,965 751,030 1,006,135 3,388,833
Total No. of options outstanding at the end of the year - - 73,460 132,965 4,049,530 1,006,135 11,821,333
Variation in terms of options Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note Refer Note
2 2 2 2 2 2 2
Money realized by exercise of Options (during FY 2016-17) (in Rs.) - 1,195,775 10,655,180 13,964,718 313,328,858 15,880,648 655,099,337
(i) Total No. of Options granted to Senior Nil Nil Nil Nil 50,000 Nil 170,500
Management Personnel (SMP) (as per Sub-table 1) (as per Sub-table 1)
(ii) Any other employee who received a grant in any one year of options, amounting to 5% or more of options granted during that year Nil Nil Nil Nil (as per Sub-table 2) Nil (as per Sub-table 2)
(iii) Identified employees who are granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Nil Nil Nil Nil Nil Nil Nil
Diluted Earnings Per Share (‘EPS') of the Bank after considering the effect of potential equity shares on account of exercise of Options 76.77
Impact of the difference between the Intrinsic Value of the Options and the Fair Value of the Options on Profits and on EPS The Bank has charged Nil amount, being the intrinsic value of the stock options granted for the year ended March 31, 2017 and March 31, 2016. Had the Bank adopted the Fair Value method (based on Black- Scholes pricing model), for pricing and accounting of options, net profit after tax would have been lower by Rs. 464.49 millions (Previous year: Rs. 414.23 millions), the basic earnings per share would have been Rs. 77.79 (Previous year: Rs. 59.63) per share instead of Rs. 78.89 (Previous year: Rs. 60.62) per share; and diluted earnings per share would have been Rs. 75.70 (Previous year: Rs. 58.34) per share instead of Rs. 76.77 (Previous year: Rs. 59.31) per share.
Weighted average Share/ Exercise Price of the shares exercised during the year (in Rs.) - 91.98 230.09 171.35 327.16 120.31 325.49
Weighted average fair values/price of the outstanding options (in Rs.) - - 179.62 164.59 655.93 125.24 522.41

* The options under the scheme were increased subsequently from 1 crore to 3 crores and finally to 4.5 crores by the shareholders' approval dated September 3, 2009 and June 28, 2011 respectively.

The Securities and Exchange Board of India (‘SEBI') has prescribed two methods to account for stock grants; namely (i) the intrinsic value method; (ii) the fair value method. The Bank adopts the intrinsic value method to account for the stock options it grants to the employees. The Bank also calculates the fair value of options at the time of grant, using Black-Scholes pricing model with the following assumptions:

March 31, 2017
Risk free interest rate 6.29%-9.23%
Expected life 1.5 yrs-7.5 yrs
Expected volatility** 25.01%-50.67%
Expected dividends 1.5%

**Expected Volatility is the last one year average volatility.

Note 1: Being the closing price on the stock exchange with the highest trading volumes on the last working day prior to the date of grant. Note 2: There is no variation in the terms of the options during the Financial Year ended March 31, 2017.

Sub-table 1: Following are the total number of stock options that have been granted to Senior Management Personnel (SMP) during the financial year ended March 31, 2017:

Scheme Name of Employee Designation Options Granted Grant Price (Rs.)
JESOP V Amit Sanan Group President 50,000 1,254.70
PESOP II - 2010 Amit Shah Senior President 15,000 1,254.70
PESOP II – 2010 Ashish Agarwal Senior Group President 50,000 1,254.70
PESOP II – 2010 Akash Suri President 15,000 1,254.70
PESOP II – 2010 Rajat Mehta Senior President 15,000 1,254.70
PESOP II – 2010 Aseem Gandhi Senior President 25,000 1,254.70
PESOP II – 2010 Neelesh Sarda Senior President 15,000 1,254.70
PESOP II – 2010 Punit Malik Group President 15,000 1,254.70
PESOP II – 2010 Shubhada Rao Group President 7,500 1,254.70
PESOP II – 2010 Niranjan Banodkar Senior President 13,000 1,254.70

Sub-table 2: Following are the details of the employee who have received a grant of options amounting to 5% or more of options granted during the financial year ended March 31, 2017.

Scheme Name of Employee Designation Options Granted Grant Price
JESOP 5 Bhadresh Pathak Senior President 50000 865.05
JESOP 5 Sai Giridhar Senior President 50000 1117.60
JESOP 5 Taranbir Singh Senior President 45000 1254.70
JESOP 5 Amit Sanan Group President 50000 1254.70
PESOP II - 2010 Ashish Agarwal Senior Group President 50000 1254.70
PESOP II - 2010 Lata Dave Senior President 50000 1254.70


As on March 31, 2017, your Bank has one Subsidiary, YES Securities (India) Limited (‘YSIL').


YSIL successfully completed its fourth full financial year of operations in March 31, 2017.

During FY 2016-17, YSIL earned a total revenue of Rs. 637.90 millions against Rs. 244.51 millions in the previous year. YSIL earned a profit of Rs. 97.89 millions in FY 2016-17.

YSIL has two business segments namely Retail Broking and Investment Banking & Merchant Banking, which are explained as under:


In keeping with the Bank's customer-centric approach to developing product and service solutions, YSIL's Retail Broking business offers the Bank's growing base of retail and wealth category customers a strong 3-in-1 account proposition, a comprehensive portfolio of investment products and a robust online, mobile and call-n-trade execution platform. YSIL customers benefit from the convenience of a streamlined banking and investment experience that links a Current/ Savings Account and a Demat account from your Bank, and a Trading account from YSIL.

During the FY 2016-17, YSIL's Retail Broking business further sharpened its long term strategy of building a formidable wealth-focused franchise in line with the broader wealth management strategy of the Bank. To enhance client stickiness and deepen relationships, YSIL made enhancements to its product and service proposition such as launch of Equity SIP, online subscription to IPOs, deployment of a dedicated HNI dealing desk and introduction of value-linked brokerage plans. YSIL's average monthly retail trading volume grew by 130% to Rs. 4,440 millions in FY 2016-17. Retail Broking revenue increased to Rs. 45.65 millions translating to a year-on-year growth of 118%.

Additionally, YSIL proactively assisted its clients to invest in new products like Government of India's Sovereign Gold Bonds and the CPSE ETF. During the year, YSIL's Retail Research desk was acknowledged by Zee Business with India's Best Market Analyst Award in the Initial Public Offerings (‘IPO') category.


The Investment Banking team provides M&A and Capital Advisory services to large and mid-market corporate and financial sponsor clients through key products such as Mergers & Acquisition advisory and Private Equity fund-raising.

The Merchant Banking team provides Capital Market products such as Initial Public Offerings (IPO), Qualified Institutions Placements (QIP), Public Debt Offerings, Rights Issues and other structured offerings to leading Indian companies at each stage of the capital life-cycle.

YSIL's highly-experienced teams offer expertise across a variety of sectors including Food & Agri business, Media & Entertainment, Internet & E-Commerce, Consumer Markets, Infrastructure & EPC, BFSI, Industrials and Logistics to corporate clients. YSIL's Investment and Merchant Banking businesses closed 22 transactions in FY 2016-17. Some of the representative transactions consummated by the team during the year under review include:

• Exclusive strategic and financial advisor to Food Services Private Limited for divesting 49% stake to SSP Group plc;

• Exclusive strategic and financial advisor Fonroche Energie for sale of its 22.3 MW solar plant to Hinduja Group;

• Book Running Lead Manager to the Rs. 11.0 billions IPO of Varun Beverages Limited;

• Book Running Lead Manager to the Rs. 7.5 billions QIP of Bharat Financial Inclusion (erstwhile SKS Microfinance Limited);

• Lead Manager to the Rs. 70 billions public issue of NCDs of Indiabulls Housing Finance Limited;

• Lead Manager Rs. 30 to billions public issue of NCDs of Reliance Home Finance Limited;

• Lead ManagerRs. to 140 billions public issue of NCDs of Dewan Housing Finance Corporation Limited.


During the year under review, your Bank issued Rs. 54,650 millions rated listed unsecured Bonds in the nature of Debentures. These Bonds were rated by various rating agencies namely, Credit Analysis and Research Limited (‘CARE'), by ICRA Limited (‘ICRA') and India Ratings & Research Pvt. Ltd. (‘India Ratings') - A Fitch Group Company etc. and Bond details as well as the ratings were as under:

i. Your Bank issued 21,350 Senior Unsecured

Listed Rated Redeemable Long-Term Bonds in the nature of Debentures of a Face Value of Rs. 10,00,000/- each aggregating to Rs. 21,350 millions on September 30, 2016 and the issue was rated by CARE and by ICRA. CARE assigned a rating of ‘CARE AA+; Stable' and ICRA assigned a rating of ‘ICRA AA+; Stable'.

Travelii. Your Bank issued 30,000 Rated listed unsecured perpetual subordinated Basel III compliant Additional Tier I (AT-1) bonds in the nature of Debentures of a Face Value of Rs. 10,00,000/- each to aggregating to Rs. 30,000 millions on December 23, 2016 and the issue was rated by CARE, ICRA and India Ratings. CARE assigned a rating of ‘CARE AA; Stable', ICRA assigned a rating of ‘ICRA AA (hyb); Stable' and India Ratings assigned a rating of ‘IND AA; Stable'.

iii. Your Bank issued 3,300 Rated Listed Redeemable Long-Term Bonds in the nature of Debentures "Green Infrastructure Bonds" of a Face Value of Rs. 10,00,000/- each aggregating to Rs. 3,300 millions on December 29, 2016 rated by CARE, ICRA and by India Ratings. CARE assigned a rating of ‘CARE AA+; Stable', ICRA assigned a rating of ‘ICRA AA+; Stable' and India Ratings assigned a rating of ‘IND AA+; Stable'.



Mr. Ashok Chawla was appointed as Additional Director on the Board on March 5, 2016 and subsequently was appointed by the Shareholders as an Independent Director on June 7, 2016 for a period of five years. Further, RBI vide it's letter dated August 12, 2016 had approved the appointment including terms of appointment of Mr. Ashok Chawla as Non-Executive Part-time Chairman of the Bank for three (3) years from the date of his taking charge. Accordingly, Mr. Ashok Chawla took charge as Non-Executive Part-time Chairman of the Bank effective from October 30, 2016 for a period of 3 years.

The relevant details including profile of Mr. Ashok Chawla is included separately in the Notice calling the 13th Annual General Meeting of the Shareholders.



Mr. Ajay Vohra, Independent Director of the Bank, completed his tenure of eight years as Director of the Bank and hence, in terms of the provisions of Regulation 10A (2-A) of the Banking Regulation Act 1949, has vacated his office with effect from April 28, 2016. Accordingly, Mr. Ajay Vohra ceased to be Director of the Bank with effect from April 28, 2016.


Ms. Radha Singh was appointed as Director on the Board of the Bank on April 29, 2008. Further, she was appointed as Non-Executive Part-time Chairperson of the Bank on October 30, 2014 for a period of two years and has completed her tenure as Non-Executive Part-time Chairperson of the Bank in terms of RBI approval dated August 01, 2014 as on October 29, 2016 and accordingly ceased to be Director on the Board of the Bank at the close of business on October 29, 2016.


Mr. M. R. Srinivasan, Non-Executive Non-Independent Director and Mr. Diwan Arun Nanda, Independent Director of the Bank, on October 22, 2016 completed their tenure as Directors on the Board of the Bank in terms of RBI approval dated March 04, 2015. Accordingly, Mr. M. R. Srinivasan and Mr. Diwan Arun Nanda ceased to be Directors on the Board of the Bank at the close of business hours on October 22, 2016.

The Board places on record its appreciation for the valuable services rendered by Mr. Ajay Vohra, Ms. Radha Singh, Mr. M. R. Srinivasan and Mr. Diwan Arun Nanda during their tenure as Directors of the Bank.

Considering the above changes, your Bank has Seven (7) Directors consisting of Five (5) Independent Directors, One (1) Non-Executive Director and Managing Director & Chief Executive Officer (‘MD & CEO').


In terms of Section 152 of the Companies Act, 2013, Mr. Ajai Kumar, Non-Executive Non-Independent Director being liable to retire by rotation, shall retire at the ensuing AGM and being eligible for re-appointment, offers himself for re-appointment.


Mr. Rana Kapoor, MD & CEO, Mr. Rajat Monga, Chief Financial Officer and Mr. Shivanand R. Shettigar,

Company Secretary of the Bank are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and rules made thereunder.

None of the Key Managerial Personnel has resigned or appointed during the year under review.


The Bank has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), that they meet the criteria of independence laid down in the Companies Act, 2013 and Listing Regulations.


The various programs undertaken for familiarizing Independent Directors with the functions and procedures of the Bank are disclosed in the Corporate Governance Report, which forms part of this Annual Report.


Regular meetings of the Board are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/Committee meetings to be held in the forthcoming financial year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, the Board has also been approving several proposals by circulation from time to time.

The Board met five (5) times during the Financial Year 2016-17 viz. on April 26 & 27, 2016, June 7, 2016, July 27, 2016, October 20, 2016 and January 19, 2017. Additionally, several Committee meetings were held during the year including Audit Committee meeting, which met six (6) times during the year.

Detailed information on the meetings of the Board and its committees are included in the report on Corporate Governance, which forms part of this Annual Report.


The Bank has 12 Committees of the Board which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Bank has following Committees of the Board:

Audit Committee

Risk Monitoring Committee

Board Credit Committee

IT Strategy Committee

Corporate Social Responsibility Committee

Nomination and Remuneration Committee

Stakeholders Relationship Committee

Fraud Monitoring Committee

Service Excellence, Branding and Marketing Committee

Board Committee on Willful Defaulters & Non-Cooperative Borrowers

Capital Raising Committee

Committee of Independent Directors

The details with respect to the compositions, powers, roles, terms of reference, etc. of these committees are given in the report on Corporate Governance which forms part of this 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 established Corporate Social Responsibility (‘CSR') Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure 1. The CSR Policy as recommended by the CSR Committee and as approved by Board is available on the website of the Bank. social_responsibility_policy


In terms of the provisions of the Companies Act, 2013 and Listing Regulations, your Bank has laid down criteria for performance evaluation of Directors, Chairperson, MD & CEO, Board Level Committees and Board as a whole and also the evaluation process for the same. The Bank has further aligned its Board Evaluation Framework in line with the Guidance Note on the Board Evaluation issued by SEBI vide circular dated January 05, 2017.

The performance of the members of the Board, the Board level committees and Board as a whole were evaluated at the meeting of the Committee of the Independent Directors, the Board of Directors and respective Committees held on April 18 & 19, 2017. Additional information on the performance evaluation of the Board forms part of the Report on Corporate Governance.


Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders' expectations. Your Board functions as trustees of the shareholders and seeks to ensure that the long-term economic value for its shareholders is achieved while balancing the interest of all the stakeholders. Your Bank is committed to achieve thehigheststandardsofCorporateGovernanceandalso adheres to the Corporate Governance requirements set by the Regulators/applicable laws. Accordingly, your Bank has adopted a Code of Corporate Governance which will act 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 your 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 from M/s. BNP & Associates, Practicing Company Secretaries, conforming compliance 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.


The Management Discussion and Analysis Report for the year under review as stipulated in Listing Regulations is presented in a separate section forming 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 Reserve Bank of India. 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.


The Risk Architecture of the Bank is based on Three Lines of Defence principle as given below:

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

Risk Management: Risk Management establishes policies and guidelines for risk assessment and risk management and contributes to controls and tools to manage, measure and mitigate risks faced by the Bank.

Compliance: The Compliance manages adherence to applicable laws and regulatory guidelines.

Legal: The Legal Risk Management (LRM) division of the Bank undertakes various activities including advising business and operational management, acting as an independent control function while facilitating business, ensuring legal compliance, assisting the Board and Committees of the Board regarding analysis of laws and regulations, regulatory matters, disclosure matters, and potential risks and exposures on key litigation and transactional matters.

Finance: The Finance vertical key data and consultation to facilitate sound decisions in support of the objectives of the Bank and the business verticals. Finance serves as an independent control function advising business management and establishing policies or processes to manage risk. It has overall responsibility for managing the Bank's balance sheet and the Bank's liquidity and interest rate risk.

FCU: The Fraud Containment Unit is an integral part of the bank's Audit & Management Governance function and is primarily responsible for prevention of frauds in the areas of Retail Liabilities, Support functions and all other businesses. The unit is responsible for transaction monitoring, alert generation, forensic scrutiny of newly opened accounts, mystery shopping, creating employee awareness, instituting a formal reward and recognition platform for fraud identification, training, and conducting periodic Fraud Vulnerability Assessments of various products and processes. Fraud Risk Management for the assets business is carried out by a separate Risk Containment Unit under the Chief Risk Officer.

Third Line of Defence – Internal Audit: The Bank's Internal Audit function 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 provides independent assurance to the Board, the Audit Committee of the Board, senior management and regulators regarding the effectiveness of the Bank's governance and controls designed for risk mitigation and to enhance the Bank's compliance and control.

provides T he 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 a Risk Appetite framework 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, Enterprise Risk Management Policy, Reputation Risk Policy, Credit Policy, ALM Policy, etc. In order to maintain oversight on risk management, the Board approves the annual Internal Capital Adequacy Assessment Process (ICAAP) and reviews the Bank's Stress Testing framework and the periodic stress testing results.

The Board has put in place five Board committees which inter alia pertain to Risk Management, viz. Risk Monitoring Committee (RMC), Audit Committee (AC), Fraud Monitoring Committee (FMC), Board Committee on willful Defaulters & Non-Cooperative Borrowers (BCWD & NCB) 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 management committees for oversight over specific risks.

Enterprise Risk Management & Management Committee

Management Credit Committee

Executive Credit Committee

Asset & Liability Management Committee

Investment & Financial Market Management Committee

Operational Risk Management

Outsourcing Management Committee

Security Council

Product Process Approval Committee

Fraud & Suspicious Transaction Monitoring Committee

Reputation Risk Management Committee

Standing Committee on Customer Service

IT Steering Committee

Steering Committee for IFRS (Ind AS)

Whistle Blower Committee

Model Assessment Committee

Risk events, potential threats, performance of the Bank vis--vis Risk Limits and Risk Appetite, Risk Profile dashboard covering key risk indicators, etc. are presented to these Committees, with QoQ/YoY trends highlighted, with level and direction of risk. The Chief Risk Officer (‘CRO') is responsible for the overall Risk Governance and Supervision, on a day to day basis. CRO ensures an effective implementation of an enterprise wide risk management framework and risk culture through various risk policies, processes, thresholds, controls and continuous training and Capital awareness programmes that enable prompt risk identification, accurate risk measurement and effective risk mitigation. CRO also ensures risk compliance and monitoring as well as reviewing and presenting information to the RMC and the Board.

T he Risk Management Department under the CRO is delegated with responsibilities of managing the risk - including risk assessment, measurement, control and reporting - by the Risk Monitoring Committee of the Board. The Risk Management Department consists of various teams such as Credit Risk Unit, General Legal Counsel and Risk Control Units. Credit Risk Unit is responsible for evaluating, rating and underwriting credit under respective Credit Risk Heads. Risk Control Units such as Market Risk, Operational Risk, Enterprise Risk, Information Security, Portfolio Analytics Unit,

Credit Risk Control Unit, Credit Mid Office, Credit Intelligence & Analytics and Risk Containment Unit are responsible for independent review, monitoring and reporting of all risk control parameters and take appropriate corrective actions where necessary. These units under the supervision of Chief Risk Control Officer are also responsible for ensuring compliance to internal policies and regulatory guidelines.


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.


All related party transactions that were entered during the financial year were in the ordinary course of the business of the Bank and were on arm's length basis. There were no materially significant related party transactions entered by the Bank with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Bank.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval for normal banking transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the normal banking transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee.

The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Bank and the link for the same is

Since all related party transactions entered into by the Bank were in the ordinary course of business and were on an arm's length basis, form AOC-2 is not applicable to the Bank.


Pursuant to sub-section (3) of Section 129 of the Companies Act, 2013, the Bank has prepared a consolidated financial statement of the Bank and also of its Subsidiary, YES Securities (India) Limited, in the same form and manner as that of the Bank which shall be laid before the ensuing 13th Annual General Meeting of the Bank along with the Bank's Financial Statement under sub-section (2) of Section 129 i.e. Standalone Financial Statement of the Bank.

Further, pursuant to the provisions of Accounting Standard (‘AS') 21, Consolidated Financial Statements notified under Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs, the Consolidated Financial Statements of the Bank along with its subsidiary for the year ended March 31, 2017 forms part of the Annual Report.


Your Bank has implemented 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.



The Members of the Bank at the 12th Annual General Meeting held on June 07, 2016, have approved the appointment of M/s. B S R & Co. LLP, Chartered Accountants as Statutory Auditors of the Bank for a period of 4 years, subject to the approval of the Reserve Bank of India, to hold office from the conclusion of the 12th AGM till the conclusion of 16th AGM of the Bank to be held in 2020, subject to ratification of the appointment by the Members at every AGM. Accordingly, appointment of M/s. B S R & Co. LLP, Chartered Accountants, as a Statutory Auditors of the Bank is required to be ratified by the Members at 13th AGM, subject to the approval of the Reserve Bank of India. The Bank has received the consent from the Auditors and confirmation to the effect that they are not disqualified to be appointed as the Auditors of the Bank in terms of the provisions of the Companies Act, 2013 and rules made thereunder. Accordingly, the Board of Directors has recommended the ratification of appointment of M/s. B S R & Co. LLP, Chartered Accountants, as the Statutory Auditors of the Bank, to hold office from the conclusion of the ensuing AGM till the conclusion of the 14th AGM on remuneration to be decided by the Board or Committee thereof, to the Members for approval.


Pursuant to Section 204 of the Companies 2013, your Bank had appointed M/s. Mehta & Mehta, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Bank for the FY 2016-17. The Bank provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the FY 2016-17 is annexed to this report as

Annexure 2.


1. In respect of appointment of woman as required under Rule 3 of the Companies (Appointment and Qualification of Directors) Rule, 2014 and Regulation 17(1)(a) of Listing Regulations. (Similar observation has been made in the Certificate on Compliance with Conditions of Corporate Governance issued by M/s. BNP & Associates, Company Secretaries).

Ms. Radha Singh, who was on the Board of the Bank for last 8 years, retired from the Board of the Bank at the close of business on October 29, 2016. In fact, she had been the Chairperson of the Bank from October 30, 2014 till October 29, 2016. The Bank has always recognized the importance of appointing directors with diverse educational background, functional expertise, experiences and skill set, to ensure optimum Board Diversity, including gender diversity, in fullest conformity with the stipulated regulations. The Bank is in the process of identifying a suitable woman candidate in her place. Being a banking company, the proposed director is required to satisfy the prescriptions contained in the Banking Regulation Act, 1949; the "fit and proper" criteria prescribed by Reserve Bank of India and the internal policies of Bank on ‘Board Diversity, Fit & Proper Criteria and Succession Planning'. In view of the above, the process has taken slightly more time than expected. Nevertheless, the Board and the Nomination and Remuneration Committee of the Board is in the process of appointing a woman director at the earliest.

Act,2. In respect of compliance with the requirements of Regulation 29(1) (d) of Listing Regulations in respect of the Board Meeting held on April 27, 2016.

The Board approval for capital raising upto USD 1 billion, inter alia, by way of QIP was first obtained at the Board meeting held on April 22, 2015 in line with the extant Regulations (subject to final approval of the Shareholders), subsequently approved by the shareholders' at the AGM held on June 06, 2015 which was in the public domain, when the Board of the Bank met on April 27, 2016. Hence, there was no intention on the part of the Bank to deviate from the Director Listing Regulations since the resolution passed by the Board of Directors at their meeting held on April 27, 2016 was essentially a continuation/reiteration of the existing Board and Shareholders' approvals obtained in 2015 for raising of capital for the Bank, inter alia, by way of QIP. However, the Bank has made required intimation to Stock Exchanges in October 2016 before the Board considered the proposal for reiteration and re-endorsement of the resolution passed by the Board of Directors at its meeting held on April 27, 2016 and as approved by the Shareholders at the 12th Annual

General Meeting held on June 07, 2016 for capital raising by way of QIP and other permitted mode.


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


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, 2017 and the date of the Directors' report i.e. April 19, 2017.


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


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, which is forming part of the Annual Report.


The Board of Directors of the Bank had formulated and adopted policies for Remuneration of Employees of the Bank, Remuneration of Directors including the Chairperson of the Bank. The details of the same have been included in the Report on Corporate Governance, which is forming part of the Annual Report.


(a) The statement containing particulars of as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) 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 is open for inspection during working hours at the Registered Office of your Bank. A copy of this statement may be obtained by the members by writing to the Company Secretary of your Bank.

(b) The ratio of the remuneration of each Director to the median remuneration of the employees of the Bank and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure 3.


Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extracts of the Annual Return as at March 31, 2017, forms part of this report as Annexure 4.


Green infrastructure bonds have emerged as a mainstream financing mechanism for providing structured finances to vital clean energy, and are playing a pivotal role in realization of India's renewable energy potential and achieving the globally committed target of 175 GW of additional capacity installation by 2022. Green bond issuances in India have steadily increased over the past two years since the first issuance by your Bank in February 2015, making India among the top ten largest green bond markets globally, with extensive participation from many corporate and financial institutions.

Post the successful first Green Bond of YES Bank which raised Rs. 10,000 millions (equivalent to USD 160 millions) in February 2015 and witnessed a strong demand from leading investors, your Bank further strengthened the green bond market by subsequently raising two other green bonds. In August 2015, the Bank raised Rs. 3,150 millions (equivalent to USD 49.4 millions) 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 dominated bond or "Green Masala Bond."

Moving ahead with its conviction towards Climate Finance, YES Bank has raised Rs. 3,300 millions (equivalent to USD 50 millions) in September 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 issuance is unique owing to its innovative financing structure. FMO, the Dutch Development Bank has used the proceeds of sustainability bonds raised by them to invest in this third green bond issued by your Bank.

The amount raised through all of these issues, are used to finance Green Infrastructure Projects as per ‘Eligible Projects' outlined in the Bank's internal guidelines for adherence to Green Bond Principles. KPMG, India has provided assurance on the use of proceeds for the first two green bonds for FY 2015-16. A third-party assurance provider would be providing the Assurance Services this year, on the use of proceeds in accordance with the Green Bond principles.


The Green Bond Principles (‘GBP') are voluntary process guidelines intended for broad use by the market that recommend transparency and disclosure, and promote integrity in the development of the Green Bond market. The Principles provide issuers guidance on the key components involved in launching a credible Green Bond; they aid investors by promoting availability of information necessary to evaluate the environmental impact of their Green Bond investments; and they assist underwriters by moving the market towards standard disclosures which will facilitate transactions. The GBP emphasize transparency and accuracy which may be increasingly used for strategic decision making by investors. The GBP has the following four key components that YES BANK has adopted:

• Use of proceeds;

• Process to identify, evaluate and select eligible projects;

• Management of proceeds; and

• Reporting.


The proceeds raised through the issue of these bonds/ debentures are used in eligible project categories to enhance the long-term resources for funding infrastructure projects and include all projects funded in whole, or in part, in the fields of renewable and clean energy projects including generation from sources such as Wind, Solar, Biomass, Hydropower and other such projects. Wind, Solar, Hydro and Biomass projects sanctioned post the closure of debenture subscription only (February 24, 2015 for Rs. 10,000 millions issue, August 05, 2015 for Rs. 3,150 millions issue, and September 26, 2016 for Rs. 3,300 millions issue) are considered for the allocation of the proceeds from Green Bonds.


Along with the Bank's credit policy that provides guidance for the identification, formulation and appraisal of projects, the Bank has formally adopted an Environment and Social Policy which governs its lending decisions. The Project evaluation process follows from the interactions with potential borrower to understand the overall aspects of the project and a comparison against the eligibility criteria. Post preliminary consideration, based on the merits of the project, the evaluation moves to the risk team which assesses it and conveys opinion on detailed due-diligence, if required. The eligibility of the project is thus confirmed and further documentation is sought as per the Bank's policies and Green Bond Principles.


The process for management of proceeds has been updated this year, to an MIS based asset tagging which tracks green bonds investments on a quarterly basis. The unallocated proceeds, if any, are placed in temporary instruments on a quarterly basis.


Communication to investors through an annual update would include information on allocation of proceeds:

• List of projects to which Green Bond have been allocated;

• Brief description of these projects including installed capacity and annual generation of renewable energy (wherever applicable);

• Summary of environmental and social impacts associated with these projects, if any;

• Types of temporary investment instruments for the balance of unallocated proceeds.

The proceeds from Green Bonds have been allocated to the following eligible projects:

Renewable Energy Category Project Location Brief Project Details* Estimated** positive E&S impacts - CO2 Emission Reduction / yr) (tCO2 Known significant negative E&S Impacts
Wind Maharashtra 31.5 MW capacity wind energy project 67,129 None
Wind MP & Gujarat 24 MW capacity wind energy project 49,297 None
Wind Andhra Pradesh 100 MW capacity wind energy project 229,368 None
Wind Karnataka 51 MW capacity wind energy project 126,581 None
Wind MP & Gujarat 12 MW capacity wind energy project 21,670 None
Solar Andhra Pradesh 50 MW capacity solar energy project 115,497 None
Solar Telangana 15 MW capacity solar energy project 27,280 None
Solar Telangana 15 MW capacity solar energy project 27,280 None
Solar Punjab 150 MW capacity solar energy project 224,661 None
Solar Andhra Pradesh 10 MW capacity solar energy project 17,451 None
Solar Madhya Pradesh 20 MW capacity solar energy project 32,180 None
Solar Tamil Nadu 216 MW capacity solar energy project 347,544 None
Solar MP & Gujarat 30 MW capacity solar energy project 57,770 None
Solar Telangana 48 MW capacity solar energy project 78,916 None
Solar Karnataka 50 MW capacity solar energy project 95,214 None
Solar Telangana 143 MW capacity solar energy project 252,484 None
Solar Andhra Pradesh 50 MW capacity solar energy project 115,497 None
Solar Maharashtra 40 MW capacity solar energy project 73,603 None
Solar Andhra Pradesh 50 MW capacity solar energy project 115,497 None
Solar Telangana 30 MW capacity solar energy project 56,409 None
Solar Telangana 5 MW capacity solar energy project 7,703 None
Solar Telangana 50 MW capacity solar energy project 87,468 None
Solar Rajasthan 50 MW capacity solar energy project 100,092 None

* The total annual generation of units is based on total installed capacity of the project and project PLF/CUF data provided by the borrower. emission reductions have been estimated based on potential total annual generation of units and grid emission

** The total CO2 factors and calculated through the use of CDM Methodological tool: Tool to calculate the emission factor for an electricity system' Version 05.0.


The disclosures required to be made under sub-section (3)(m) of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 by your Bank are given as under:


Environmental stewardship in the financial sector

– ISO 14001:2015 Environmental Management System certification for the Bank embarked on the 4th year

Benchmarking continual improvement and exponential growth in the Indian Banking space, your Bank has achieved significantly in internal natural resource consumption efficiencies and minimizing its carbon footprint. In the FY 2016-17 YES BANK became the FIRST BANK GLOBALLY to migrate to the latest ISO 14001:2015 Environment Management System (‘EMS') standard within one year of its release.

The re-certification to the new standard is on the Bank's new Environmental Management Policy released in 2016 which entails achieving internal natural resource consumption efficiencies and firmly outlines the Bank's commitment to achieve a minimum of 10% reduction in its carbon emissions intensity through broad-level actions. Your Bank has enhanced the scope of its EMS to 444 metro urban branch locations and included Retail Asset operation into the certification program. The Bank's Environment Management Policy highlights greater commitments to environment protection and commitment to source renewable energy for the greening the Bank's operation.

Your Bank aims to enhance the scope certification to the subsidiary unit YES Securities (India) Limited as per the revised ISO 14001:2015 compliance in the coming financial year. Environmental Mitigation Initiatives such as aggressive awareness creation around electricity, paper, water, diesel conservation in day-to-day activities through wide circulation of resource conservation mailers, signage and posters, Periodical trainings on Environmental Management System through comprehensive e-learning module, workshops, involvement of employees in ideas generation and their implementation.


Your Bank's energy management initiatives over a period of 2 years will aim at reducing 18 - 20% energy consumption from sustainable facility management

Installations of IoT based energy monitoring system which helps in dynamic monitoring of consumption across facilities and result in 5 to 7% savings. The pilot study conducted over 10 branches was successful. We would target metro urban branches for implementationinFY2017-18.Inasecond level pilot, we have achieved between 8-12% drop in energy consumption in FY 2016-17.

Similarly Power factors at branches are being monitored above 0.9 with the help of capacitor bank and power factor monitoring panels are installed to reduce financial risk of penalty levied by DISCOMs.

The air conditioning replacement model has been developed with a criteria for replacing old models with an energy consumption of 1.6 -1.8 times of peak of load and temperature control with dedicated AHU units for centralised AC systems are being carried out.

Retrofit solutions for HVAC systems which has a potential saving of 10 to 15%. we will be incorporating some of the solutions in a phased manner over a period of 2 years. Maintaining AC temperature above 250 Celsius all the time has helped the bank to achieve 3% saving of hourly kWh consumptions.

Incorporation of LED lighting in our facilities, has a huge potential and will be taken up for implementation in all of our facilities in phased manner. So far 3128 nos. of LED lights in 136 new branches have been installed with a potential saving of 2,26,780 kWh of energy consumption and approx Rs. 2.26 millions of saving.

92% of YES Bank branches are Petro cards for procurement of diesel, which has resulted into enhanced transparency, reduce wastages and cost saving of 15-20% over last financial year.

(II) THE STEPS TAKEN BY THE BANK FOR UTILIZING ALTERNATE SOURCES OF ENERGY: Your Bank has explored the potential of using alternate sources of energy through open access and your Bank would continue to explore alternative sources of energy in future.

(III) THE CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENTS: Rs. 5.02 millions upto present Financial Year (IoT based Energy monitoring pilot project, LED Tube lights project at IFC, Mumbai).



Technology is a key enabler and core facilitator to the key goals of your Bank and is identified as one of the strategic pillars of the Bank. Since inception your Bank has been at the forefront of leveraging technology to provide better products and services to its customers. Your Bank is a truly differentiated Financial Institution with world-class, state-of-the-art technology. All departments within the Bank use Information Technology (IT) to deliver superior products and services to the customers.

Your Bank has adopted innovative modern of technology and best in class international banking practices in respect of governance frameworks to ensure that it renders the highest standards of service quality and operational excellence to its customers. As a new generation Bank, your Bank has deployed "Technology" as a Strategic Business enabler to build a distinct competitive advantage and to achieve Superior standards of Customer Service. The technology architecture and the innovative IT Outsourcing structure has enabled your Bank to achieve high standards of Customer Service at comparatively lower cost structures.

Your Bank has moved towards service oriented architecture by implementing Enterprise Service Bus (‘ESB'). An ESB is a Web-services-capable infrastructure that supports intelligently directed communication and mediated relationships among loosely coupled and decoupled business components. The service oriented architecture assists your Bank's large customers and e-commerce firms, who are technology-driven or require time sensitive processing to consume your Bank's ESB services for their payment and receivables.

With a view to support new initiatives, innovations and ensure customer delight, your Bank has successfully executed a major upgrade of the Core Banking System perhaps the only Bank in India, that has executed a Core Banking Upgrade project of this size and complexity including both Retail and Corporate parts of the business, with a Big Bang Cutover approach. Your Bank has also upgraded various systems and platforms as also implemented new systems and platforms. Your Bank has implemented virtualization in its data centers, to ensure its IT Infrastructure is highly resilient and usage is optimized. As a result, your Bank has reduced its carbon footprint.

The Bank has embarked upon implementing Virtual Desktop Infrastructure (‘VDI'). VDI refers to the process of running a user desktop inside a virtual machine that resides on a server in the data centre It's a powerful form of desktop virtualization because it enables fully personalized desktops for each user with all the security and simplicity of centralized management. VDI will help us in streamlining management and costs by consolidating and centralizing the desktops while delivering end-users mobility. This will enable access to virtual desktops anytime, from anywhere, on any device. This means a more centralized, efficient client environment that is easier to maintain and able to respond more quickly to the changing needs of the user and business.

Your Bank is at the forefront on the next-generation payments system like Unified Payments Interface (‘UPI'), a simplified and robust payments system being operated by National Payments Corporation of India (NPCI). Leveraging capabilities of the UPI platform like Phone-linked payments, any-bank account debit and 1-click 2 factor authentication – to deliver a superior user experience to customers. We aim to have the widest range of offerings in the digital payments space by covering multiple use cases either directly via our own branded offering or via strategic partnerships with industry leaders, start-up forums, start-ups etc., to emerge as a thought and business leader in the Indian payments space leveraging the capabilities provided by UPI and move toward the era of a ‘less-cash' India.

Your Bank has launched the SIMsePAY, a unique innovation that allows any account holder to do money transfers, pay utility bills and other mobile banking services, without the need for smart phones or internet. SIMsePAY is a wafer-thin sticker which can be stuck on any type of SIM card of any Telco service provider – Standard, Micro and Nano. This sticker installs a SIM Tool Kit (STK) based app which can be accessed by the consumer on ANY mobile phone without the need for internet connectivity. The SIMsePAY is linked to a Prepaid Wallet which can be loaded by the consumer to perform various types of transactions. The transactions are performed using a patented encrypted SMS technology to communicate with the servers of the Bank.

Your Bank has also upgraded its Mobile Banking App for seamless customer experience. YES Mobile comes packed with a host of exciting features that enable you to truly bank On-The-Go. From simplified login through your fingerprint to transfer funds to pay all your bills in one go or experience the all new augmented reality to locate a YES Branch nearby. YES Mobile Banking App comes with over 85 services offering to YES Bank customers Anytime, Anywhere Banking.

Your Bank has launched Corporate mobile banking App which will provide an OMNI Channel online banking experience to our corporate clients. It will enable them to view and authorize transaction requests initiated on ‘Corporate Net Banking' on their mobile devices even when they are travelling or are out of office. The App would allow decisions to be made on the move, eliminating process bottlenecks due to unavailability of the decision makers and facilitating faster turnaround times.

Your Bank has implemented a multi-nodal Blockchain transaction to fully digitize vendor financing for Bajaj Electricals. Your Bank will leverage IBM Watson Conversation, a cloud-based cognitive service, to enhance the digital experience of partners, corporate clients and developers collaborating with them on the integrated Blockchain – API Banking platform. Capitalizing on the efficiency and security features of Blockchain, your Bank has used the Hyper ledger Fabric supported by IBM to design a vendor financing solution which allows Bajaj Electricals (anchor client) to digitize the process for discounting and disbursal of funds to its vendors by integrating seamlessly with YES BANK's systems. The solution will also facilitate an automated debit from Bajaj Electricals' account by YES BANK. The business logic and rules are captured in a smart contract (Chain Code) developed by Cateina Technologies. The key business advantages and highlights of this blockchain implementation for vendor financing include:

• The entire process cycle for bill discounting reduces from four days (owing to manual intervention and transit) to almost real-time;

• Transparency to all parties through blockchain's shared public ledger;

• End-to-end digital process paper trail & manual intervention;

• The entire transaction history of particular vendor is recorded and is immutable through blockchain;

• The transaction status along with details are seamlessly transmitted to Bajaj Electricals' Enterprise Resource Planning;

• Seamless integration with existing API Banking implementation by YES BANK using IBM's Enterprise Service Bus (IIB), API management and Datapower solution. This integration offers automated processing of transactions with almost zero manual intervention. YES BANK was the 1st Bank in India to launch API Banking services, which was also in collaboration with IBM in 2015;

• Use of a permissioned blockchain with flexibility to add other participants later;

• Use of superior Cryptokey to offer state-of-the-art security for both documents and transactions on the blockchain.


Technology has responded by being true strategic partner with business. Many first mover implementations have provided business, long lasting advantages, as also won many accolades and awards for the Bank. One of the finest direct banking platforms, first bank in India to offer two factor authentication, single PIN access to all electronic channels, Wi-Fi branches are some of the examples.

Innovations like API Banking, ‘Bank in a BOX' , Money Monitor (aggregation of customer accounts of all types across 11,000 institutions globally), Mobile Money Services, dual factor authentication, one view of customer relationship and most advanced voice enabled IVR helps the products and sales teams to offer superior products and services.

Your Bank has evaluated and implemented cutting edge technologies like virtualization, cloud computing and social media to invest in the best in class IT systems and practices, and in order to ensure that its technology platform becomes a strategic business tool for building a competitive advantage.

Apart from product development, product improvement & effective cost management, technology has also played a major role in customer acquisition & ensuring high level of service delivery & customer excellence. Your Bank has also been able to cater to Financial Inclusion needs through its award winning and globally recognized technology solution platform which offers doorstep banking services.


Details of Technology Imported Year of Import Whether the Technology been fully absorbed If not fully absorbed, areas where absorption has not taken place, and the reasons thereof
Port wise Authentication Platform (Por twise Authentication Server + Access Manager - 10,000 concurrent users) Mar-14 Yes NA
Software Tokens for Net Banking, Implementation fees and delivery of Branded Software Tokens Aug-14 Yes NA
Enabling Radius licenses for 10,000 concurrent users (SMS/Email, OATH, software tokens) on existing setup Sep-15 Yes NA
Master Data Management licenses Nov-15 Yes NA
Cisco WanStack for Branch WAN Architecture Revamp Dec-16 No Delivery is still expected



The Foreign Exchange earned in terms of inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.

During the year ended March 31, 2017 the Bank earned Rs. 4,566.02 millions and spent Rs. 5,102.38 millions in foreign currency. This does not include foreign currency cash flows in derivatives and foreign currency exchange transactions.


As a responsible organization, the Bank strives to foster a safe and respectful work environment. The Bank has Zero tolerance towards any action 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 endeavour 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.

Particulars Numbers
Number of complaints pending as on the beginning of the financial year One*
Number of complaints filed during the financial year Ten
Number of complaints pending as on the end of the financial year Three

* The open complaint as on the end of the FY 2015-16 has been resolved


Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

(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 judgments 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 taken proper and sufficient 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 customers of the Bank 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 in its continued robust performance on all fronts. The Bank has followed the A.R.T. – Alliances, Relationships and Technology led approach to Banking, and in line with this philosophy, the Directors would also like to thank all our valued partners, vendors and stakeholders who have played a significant role in the continued Business Excellence achieved by the Bank. Your Directors would also like to thank the employees for their continued support as the Bank evolves as the "Professionals' Bank of India" with a vision of "Building the Finest Quality Bank of the World in India by 2025 ."

For and on behalf of the Board of Directors

Rana Kapoor Ashok Chawla
Managing Director & CEO Non-Executive
(DIN No. 00320702) (Independent) Part-time
Place: Mumbai Chairman
Date: April 19, 2017 (DIN No. 00056133)


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