CATALYZING A SHARED SUSTAINABLE FUTURE - Yes Bank · mainstreaming sustainability. YES BANK has...

CATALYZINGA SHARED

SUSTAINABLEFUTURE

SUSTAINABILITY REPORT 2012-13

04 From the Managing Director & CEO’s Desk

06 About this Report

07 About YES BANK

13 YES BANK’s Sustainability Approach

20 Strengthening Corporate Governance

25 Impacting Environment & Society Through Innovative Solutions

28 Proactive Investments for Positive Environmental and Social Outcomes

29 Mainstreaming Sustainability Amongst Stakeholders

42 Leveraging Human Capital

51 YES FOUNDATION – Pursuing India’s Development Agenda

53 GRI G3.1 Content Index

YES BANK’s Sustainability Approach

Mainstreaming Sustainability Amongst Stakeholders

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13

CONTENTS

Banks, being crucial intermediaries, can play the role of catalysts for economic change. As one of India’s youngest and fastest growing banks, YES BANK has striven to be a part of India’s growth story and has adapted a strategic approach towards sustainability. By including wider economic, social and environmental objectives into its core business strategy, your Bank has endeavored to achieve significant traction in mainstreaming sustainability.

YES BANK has made sustainable finance a key pillar of its future growth. With business units active in the areas of financial inclusion, microfinance, affordable housing, agriculture, renewable energy, and development banking, YES BANK has created an impact among the most disadvantaged stakeholders in the society to catalyze a shared sustainable future.


2 CATALYZING A SHARED SUSTAINABLE FUTURE

India’s fourth largest private sector bank Over 21 lakh transactions through YES MONEY

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0.01% Best in class net non performing assets First Indian banking sector signatory to UN Global Compact

Over 12,500 Self Help Groups part of YES LEAP 7,024 Employees, up 24 %

Carbon Disclosure Project (CDP)CDP climate disclosures leader 2012

Sustainable Bank of the Year – Asia Pacific FT-IFC Sustainable Finance Awards 2012

HIGHLIGHTS

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Golden Peacock Award for Sustainability 2012 Profit After Tax ` 1,301 Crore, up 33.1%

Total Advances ` 47,000 Crore, up 23.7 % Organized the YES BANK IICA CSR Conclave

First Indian signatory in banking sector to UNEP Finance Initiative

430 branches in over 275 locations, up 20.8%

Hosting the 1st YES BANK Saevus Natural Capital Awards

First Indian Bank to receive the ISO 10002:2004 for complaints management system

HIGHLIGHTS



Dear Stakeholder,

I am pleased to share with you YES BANK’s sustainability report titled ‘Catalyzing a Shared Sustainable Future’. A broader stakeholder analysis and responses on key material issues has enabled robust disclosures that have strengthened this year’s report.

We welcome the UN Resolution adopted after the Rio+20 Summit which renews the world’s commitment to sustainable development and promoting an economically, socially and environmentally sustainable future for our planet. The resolution acknowledges the importance of sustainability reporting and the need to move towards integrating sustainability information into the reporting cycle.

As one of India’s youngest banks, YES BANK has since inception integrated Responsible Banking as one of its key differentiators. Our Responsible Banking ethos has seen considerable traction in the past few years, and YES BANK is aiming to take a leadership position in mainstreaming sustainability in India. The Bank has an active debt and advisory portfolio in India’s sunrise sectors such as food and agribusiness, infrastructure and logistics and healthcare. Through its ‘Frugal Innovation 4 Financial Inclusion’ (FI4FI) philosophy, the Bank has created award winning product innovations that target the Bottom of the Pyramid (BoP) in rural and urban India thus making a positive socio-economic impact.

Our people are our greatest assets. Our employee strength has increased steadily in keeping with the Bank’s steady growth. In our endeavor to be the ‘Professional’s Bank in India’, we have laid great stress on employee engagement and are providing enhanced training opportunities to all our employees.

Thought leadership on sustainability issues has been one of the key philosophies at our Bank, including sustainability research that culminates into policy advocacy and hosting and participating in global thought leadership platforms. During the year, the Bank released several research papers on pertinent sustainability issues in close partnership with its research partners at prestigious national fora. It continuously leveraged its partnership with UNEP FI, GIZ and TERI-BCSD to disseminate knowledge on CSR and sustainable development.

FROM THE MANAGING DIRECTOR & CEO’S DESK

Rana KapoorFounder, Managing Director & CEO

5FROM THE MANAGING DIRECTOR & CEO’S DESK

YES BANK’s unique community engagement initiative, YES COMMUNITY, has helped us build strong bridges with communities around our branches. Through this movement, we have been able to connect with the community on relevant social and environmental issues across India.

During the Year, YES BANK partnered with the Indian Institute of Corporate Affairs to host the YES BANK-IICA National CSR Conclave in Mumbai and helped in the formation of Responsible Investment Research Association (RIRA), a collaboration between the Indian financial industry and academia to mainstream environmental and social issues in investment decisions.

In order to mainstream sustainability within the broader financial community, YES BANK initiated the ‘Sustainability Series.’ This knowledge dissemination platform brings together the financial sector in India to review and build skills in environmental and social risk management.

I am pleased to announce the launch of the YES BANK Saevus Natural Capital Awards with an objective to showcase responsible practices on natural capital consumption, accounting mechanisms and conservation within industry and civil society. This platform brings together national and international organizations like WBCSD, UNGC, Trucost, WWF and KPMG to assess India’s receptiveness towards natural capital.

To formalize our commitment towards achieving internal resource consumption efficiencies, we launched the Environmental Management Policy in November 2012. The policy has listed broad level targets towards achieving resource efficiency, conservation of natural resources and reduction in carbon emissions. Since the Bank is in a state of steady and rapid growth, it impacts our overall resource consumption and emissions. Hence, we are in the process of targeting reduction in emission intensity as a measure of our progress.

I am pleased to report that YES BANK has been on the CDP’s Carbon Disclosure Leadership Index for India for two consecutive years, demonstrating our continued commitment towards emissions reduction and consumption rationalization.

I take professional pride in sharing some of the international and national accolades received by YES BANK during the year for sustainability leadership. The Bank won the prestigious ‘Sustainable Bank of the Year – Asia Pacific Region’ at the FT-IFC Sustainable Finance Awards 2012 for the third time in four years. The Bank has also been recognized for its sustainability leadership by OKOWORLD LUX, S.A, the Institute of Directors, CII-ITC Center for Excellence for Sustainable Development and India’s Council for Fair Business Practices.

In our quest to contribute towards overall social transformation in India, we have recently formed the YES FOUNDATION. The objective of the Foundation is to pursue the social development agenda of YES BANK in accordance with its Responsible Banking ethos. The Foundation would focus on stimulating Innovative Entrepreneurship

and Social Transformation to enable inclusive growth and development in India. Through our future reports, we would communicate the progress on the Foundation’s activities and achievements.

Through this report, I am happy to share our broad sustainability objectives as we move towards achieving our Version 2.0 – Vision & Strategy (2010-2015). Our vision of building the ‘Best Quality Bank of the World in India’ includes you, our valued stakeholder, at its core and we look forward to sharing our progress with you every year.

Sincerely,

Rana KapoorFounder, Managing Director & CEO

Our Responsible Banking ethos has seen considerable traction in the past few years, and YES BANK is aiming to take a leadership position in mainstreaming sustainability in India.



This report is for the period April 1, 2012 to March 31, 2013. YES BANK has adopted the financial year reporting cycle to prepare its sustainability reports. The Bank previously reported its sustainability performance for April 2011 to March 2012 as a part of its Annual Report 2011-12. This report does not contain any significant re-statement from the Bank’s Sustainability Disclosures 2011-12.

This report adheres to the Guidelines as per GRI G3.1, and addresses the three principles set by AccountAbility within the accountability standard AA1000APS – 2008.

The Foundation Principle of Inclusivity – The Bank has done a comprehensive stakeholder and materiality analysis by mapping the sustainability priorities and concerns of its internal and external stakeholders.

The Principle of Materiality – Through its Responsible Banking ethos, the Bank raises awareness within and outside on sustainability and related issues.

The Principle of Responsiveness – The Bank’s responsiveness to the expectations and concerns of its entire spectrum of stakeholders is highlighted in its Triple Bottom Line approach.

This report reflects the Triple Bottom Line ethos of the Bank which is guided at the highest level of the organization by its Founder, Managing Director and CEO, Mr. Rana Kapoor. The Bank’s key sustainability priorities as highlighted in this report are internal resource efficiency, financial inclusion,

sustainable finance, community development and human capital development.

All information in this report pertains to YES BANK Limited with its Corporate and Registered office at 9th Floor, Discovery of India, Dr. A.B Road, Worli Mumbai – 400018, Maharashtra, India. As on March 31, 2013, the Bank has two corporate offices in Mumbai, two National Operating Centers in Gurgaon and Mumbai each, and 430 branches in over 275 locations. The Bank does not have any branches outside India. YES BANK has one subsidiary which was incorporated in March 2013 and is excluded from the boundary of the Report.

This report has been prepared by the Bank internally and includes information and data provided by its various business units, and is validated by the Bank’s internal financial controls. This report is not assured by an external vendor. The Bank will seek to externally assure its future sustainability reports.

YES BANK is eager to continually improve its reporting and has made the best effort to include the most material issues for the broadest spectrum of its stakeholders. It welcomes feedback and suggestions on this report which may be communicated to Ms. Namita Vikas, President and Chief Sustainability Officer, YES BANK Ltd at [email protected]. This report may be accessed online at www.yesbank.in.

ABOUT THIS REPORT

7ABOUT THIS REPORT | ABOUT YES BANK

ABOUT YES BANK

YES BANK, India’s fourth largest private sector bank, is an outcome of the professional entrepreneurship of its founder, Mr. Rana Kapoor and the Bank’s highly competent management team, to establish a high quality, customer centric, service driven, private Indian bank catering to the ‘future businesses of India’.

As one of India’s youngest and fastest growing banks, YES BANK has striven to be part of India’s growth story and has adapted a strategic approach to sustainability. The Bank’s sustainability strategy is driven by its responsible banking philosophy which has produced credible and tangible results for the Bank and the wider stakeholder community.

YES BANK PLEDGE

As a proud YES BANKer, I will constantly strive to achieve our Version 2.0’s main objective of becoming ‘The Best Quality Bank of the World in India’ by 2015. I will walk the extra mile to accomplish this Vision, by discharging my duties as a YES BANKer through sincerity, integrity, responsibility and with utmost conformity to all regulatory guidelines.

I am aware of the fact that I represent YES BANK in my daily interactions. I am the Face of YES BANK, and I will ensure that I comply with YES PERSONALITY guidelines at all times, and deal with our Customers with utmost honesty, transparency and fairness.

I am proud to be an important part of the ‘Professionals’ Bank of India’ and will endeavor to keep the YES BANK flag flying high at all times, as I truly believe that - YES, it’s MY Bank!

RESPONSIBLE BANKING VISION

‘YES BANK - Be the Benchmark Financial Institution for Sustainability’

RESPONSIBLE BANKING MISSION

Link Sustainable Development with stakeholder value creation through innovative business solutions and services & Weave sustainability principles into YES BANK’s core business strategy and processes

RESPONSIBLE BANKING STRATEGY

Deliver positive internal and external socio-environmental impact

Enhance influence in sustainability space

YES BANK is a public limited company listed on the Bombay Stock Exchange and the National Stock Exchange of India.

The Bank’s total employee headcount as on March 31, 2013 stood at 7,024, up 24% from March 31, 2012.

The Bank’s total branches as on March 31, 2013 stood at 430, up 20.8% from March 31, 2012.

There has been no significant change in the shareholding pattern of the Bank since the previous reporting cycle. For the Bank’s complete financial profile and breakdown of the shareholding pattern, please visit the Bank’s Annual Report 2012-13 at www.yesbank.in.



YES BANK AT A GLANCE

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AWARDS AND RECOGNITION WON BY YES BANK

Name of Award / Rating Name of Awarding / Rating / Organization

Award Details

FT/IFC Sustainable Finance Awards 2012

Financial Times/IFC, London Sustainable Bank of the Year award – Asia/Pacific Region

Golden Peacock Award for Sustainability 2012

Institute of Directors, India Awarded for Sustainable Development

CII – ITC Sustainability Awards 2012

CII-ITC Center of Excellence for Sustainable Development

Commendation Certificate, Category A (Turnover > ` 500 Cr)

Connected World Forum Awards 2012

Connected World Forum, Dubai Best Overall Mobile Lifeline Launch – Yes Sahaj Micro-ATM

The OKOVISION Sustainability Leadership Award 2012

OKOWORLD LUX, S.A, Germany Awarded for commitment to sustainable Banking

CFBP Jamnalal Bajaj Uchit Vyavahar Pusarkar 2012

Council for Fair Business Practices, India

Category of Service Enterprises - Large

Golden Peacock Innovative Product/Service Award 2012

Institute of Directors, India Banking (Financial Services) Category – Awarded for YES MONEY remittance service

IMC Ramkrishna Bajaj National Quality Awards 2012

Indian Merchants’ Chamber Performance Excellence Trophy (Service Category)

The Financial Insights Innovation Awards 2012

UDC Financial Insights Innovation in Payments (Financial Supply Chain Integration)

CIO100 Award 2012 CIO Magazine, India Top Technology Excellence Organizations category

Finnoviti Awards 2012 Banking Frontiers Magazine, India

YES MONEY Remittance knowledge bridge

The 2012 Business Today – KPMG Best Banks Study

Business Today Magazine/ KPMG, India

Best Overall Performer Among Mid-size Banks

The BW Best Banks Survey 2012 Businessworld Magazine, India Best Bank in the Mid-size Category

YES BANK AT A GLANCE | AWARDS AND RECOGNITION



Name of Award / Rating Name of Awarding / Rating / Organization

Award Details

The Asian Banker Strongest Bank Awards 2012

Asian Banker Magazine, Singapore

The Strongest Bank in India

CLSA Corporate Governance (CG) Watch 2012

CLSA Asia-Pacific Markets, Singapore

Top 50 in CG Rankings in Asia with market cap less than USD 10bn

IPE Corporate Excellence Awards 2012

Institute of Public Enterprise, India

Banking and Finance category

ICAI awards for Excellence in financial reporting

The Institute of Chartered Accountants of India

Silver Shield for Excellence in Financial Reporting – Private Banks (including Corporate Banks)

Standard FINWIZ 2012 – Best Bankers Awards

The Sunday Standard, The New Indian Express paper, India

Rana Kapoor – Best Indian Banker/Best Private banker/Safest Banker/Best Banker in Growth & Expansion/Best Banker in Efficiency & Profitability (Mid Sized Banks)

TOP 100 CISO Awards, 2012 InfoSecurity Magazine, India Awarded to Hitesh Mulani, Chief Information Security Officer, YES BANK

NASSCOM IT User Award 2012 NASSCOM, India Awarded in Banking – Scheduled Commercial Banks vertical

Dun & Bradstreet – Polaris Financial Technology Banking Awards 2012

Dun & Bradstreet/Polaris Financial Technology

Priority Sector Lending – Private Sector

Top 1000 World Banks The Banker, UK Ranked 561 – OverallRanked 163 – Return on Assets

Dataquest Emerging Leader in Business Technology 2012

Dataquest Magazine, India Leadership in business technology

Zee Business Brand Excellence Awards 2012

World Brand Congress, India Sustainable Marketing Excellence AwardCause Related Marketing AwardCustomer Centric Brand

AWARDS AND RECOGNITION WON BY YES BANK

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THOUGHT LEADERSHIP PLATFORMS & MEMBERSHIPS

YES BANK plays an active role in promoting best practices in the banking, financial and sustainability domains at the following national and international platforms:

Organization About

International Forums

Carbon Disclosure Project (CDP)www.cdproject.net

CDP is a UK based organization representing over 650 institutional investors which invites global corporations to report on their carbon emissions

Clinton Global Initiative (CGI)www.clintonglobalinitiative.org

Established in 2005 by former US President Bill Clinton, the CGI convenes global leaders to create & implement innovative solutions to world’s challenges within 9 broad Tracks

Global Reporting Initiative (GRI)www.globalreporting.org

GRI is a global non-profit organization that works towards creating a common sustainability reporting framework that is applicable globally

Deutsche Gesellschaft für internationale Zisammenarbeit (GIZ)www.giz.de/en/

GIZ is an international enterprise for international cooperation owned by the German federal government

United Nations Environment Program – Finance Initiative (UNEP FI)www.unepfi.org

UNEP FI is a partnership between UNEP and global financial sector to link sustainability and financial performance

United Nations Global Compact (UNGC)www.unglobalcompact.org

Launched in 2000, the UNGC aligns global business with the objectives of the international community in human rights, labour, environment and anti-corruption

US India Business Council (USIBC)www.usibc.com

USIBC is an business advocacy organization representing the interests of American companies investing in India and Indian multinational corporations

World Economic Forum (WEF)www.weforum.org

WEF is an independent non-profit organization that brings the world’s business, political, academic and other leaders together to shape strategy

AWARDS AND RECOGNITION | THOUGHT LEADERSHIP



Organization About

National Forums

Associated Chambers of Commerce (ASSOCHAM)www.assocham.org

ASSOCHAM is an apex industry body that represents industry interests and interfaces with the government and counterpart international bodies

The Banking Codes and Standards Board of India (BCSBI)www.bcsbi.org.in

The BCSBI is an independent, autonomous body set up by the RBI as an independent watch dog for quality of service

Confederation of Indian Industry (CII)www.cii.in

CII is an industry body that partners with the government and industry through advisory and consulting processes

Federation of Indian Chambers of Commerce and Industry (FICCI)www.ficci.com

FICCI is one of India’s oldest apex business organization with a direct and indirect membership of over 250,000 companies, influencing policy and dialogue

Indian Banks’ Association (IBA)www.iba.org.in

The IBA promotes sound banking principles, practices and conventions in India and provides common services to the Indian banking industry

Indian Center for Corporate Social Responsibility (ICCSR)www.iccsr.org

The ICCSR is a not-for-profit advisory and training organization working towards setting India’s own agenda for CSR reporting standards.

Indian Institute of Corporate Affairs (IICA)www.iica.in

The IICA was established by the Ministry of Corporate Affairs, Government of India to act as a think tank, action research and capacity building support to the Ministry and Indian industry

PHD Chamber of Commerce and Industry (PHDCCI)www.phdcci.in

Established in 1905, PHDCCI is a multi-state organization that works as a facilitator for promotion of industry, trade and entrepreneurship

Responsible Investment Research Association (RIRA)www.ri-research.org

RIRA is a not-for-profit, member organization with a mission to act as a catalyst to mainstream environmental, social and governance (ESG) issues in investment and lending decisions

The Energy Research Institute – Business Council for Sustainable Development (TERI BCSD)http://bcsd.teri.res.in/

TERI BCSD is an industry led platform of TERI for corporate leaders to address issues related to sustainable development with over 100 corporate members across India

THOUGHT LEADERSHIP PLATFORMS & MEMBERSHIPS

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As a people centric organization, a meaningful and positive engagement with its entire spectrum of stakeholders is crucial for the Bank’s organizational success. Understanding its key stakeholders is important for the Bank as it gives it a broader perspective on business decisions.

To strengthen the Bank’s identification and prioritization of its key stakeholders, one to one meetings were conducted with key personnel at the Bank to arrive at a ranking of its key stakeholders. The meetings were conducted in the Bank’s Mumbai and New Delhi corporate offices.

YES BANK’S SUSTAINABILITY APPROACH

Map of Key Stakeholders

Customers/ Clients

NGOs

Media Investors

Core Ecosystem EngagementCommunity Engagement

Stakeholder Engagement

Vendors/ Suppliers

Community

Government

External AgenciesRegulators

Competition

Employees

THOUGHT LEADERSHIP | SUSTAINABILITY APPROACH



YES BANK’S SUSTAINABILITY APPROACH

The Bank engages with its stakeholders at multiple levels and at multiple platforms. The table below provides a brief view of its stakeholder engagement activities:

Organization About

Employees Employee induction – Quarterly for all new employees

Employee training – throughout the year based on training calendar

The Responsible Times - monthly newsletter

‘YES i CARE’ - Employee volunteering initiative

YES CONNECT – Internal campaigns on social and environmental causes and peer learning

Regulatory Authorities Compliance documents and requirements, notifications and directives

Training workshops participated in or jointly organized with government institutions and authorities

Advisory and participation in policy discussion and formulation

Customers YES COMMUNITY – pan-India branch level community engagement on pertinent social and environmental issues developed around an annual calendar of events

Customer feedback surveys – ongoing during the period

Monthly branch service committee meetings

Customer service day at branches, held once a month

Monthly telephonic surveys to receive customer feedback

Through the company website

Shareholders Annual General Meeting – Held after the declaration of the previous financial year’s results

Quarterly results announcements

Notifications of organizational changes through the Company Secretary – as and when required

The company website hosts information on financial performance and corporate governance

Dedicated Investor Relations team reachable through the company website

Meetings with shareholders and institutional investors on an ongoing basis

International road shows

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Organization About

Media The Bank’s Marketing & Corporate Communications team liaises with media publications and journalists on an ongoing basis

Interviews with top and senior management for articles and thought pieces

Partnerships with media houses to host knowledge forums and awards

Through PR agencies

Competition As members of industry bodies, chambers and associations

National and international platforms and forums

Vendors/Suppliers The Bank’s Strategic Sourcing Department focuses on forming long term relations with the Bank’s vendors on an ongoing basis

Vendor meetings by YES BANK management

The Bank has e-connected several of its vendors for placing orders, making payments in real time

Industry Associations YES BANK is a member of national and international industry associations with meetings and interactions conducted throughout the year

Partnerships with several associations to host platforms on specific sectors and on sustainability

Government The Bank’s Strategic Initiatives & Government Advisory (SIGA) team works closely with various government agencies, departments and ministries on an on-going basis on strategy and advisory, policy formulation and research

Business Partners The Bank believes in forming ongoing, strategic relationships with eminent national and global organizations

Rating Agencies Annual data submission and review

Release of the Annual Report and call with the Bank’s top management

Meetings with the Bank’s finance team on an ongoing basis

SUSTAINABILITY APPROACH



A commentary on the Bank’s top material issues is below:

Corporate Governance: As a listed company, corporate governance is a key issue for the Bank. The Bank has robust corporate governance policies in place, including policies on financial reporting, compliance with Ministry of Corporate Affairs (MCA), Code of Conduct for key personnel and employees, diversity in the Board and other Bank-wide policies. The Bank’s Board of Directors oversees its Corporate Governance response at the highest level of the organization.

Identification and prioritization of the Bank’s material issues was done through one on one meetings with its top management. Based on the rankings from the materiality survey, the key material issues for YES BANK are:

Risk Management: High standards of asset quality, risk mitigation, financial audit, management and control are inherent responsibilities as a financial institution. Managing legal risks also has a direct impact on the Bank’s reputation and operations.

The Bank has a strong risk management architecture in place overseen at the highest level of the organization by Board level Committees and the Management Committee, headed by the Managing Director and CEO. The Bank’s Risk Management department under the Chief Risk Officer is responsible for the day-to-day risk management, assessment, measurement, and control and reporting.

KEY MATERIALITY RISKS AND OPPORTUNITIES

Brand Management and Reputation

Priority Sector Lending

Product and process innovation

Talent Attraction and Retention

Financial Inclusion

Operational Costs

Product Portfolio

Thought leadership in Sustainable Finance

Corporate Governance

Risk Management

IT/Data Security

Customer Satisfaction

Regulatory Compliance

Top five material issues identified by the Bank’s key personnel

Competition

Global economy

Promoting non-discrimination, diversity and equal opportunities

Responsible investing

Community development

Climate change

Carbon footprint/GHG emissions

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Information Technology/ Data Security: As a public trust institution whose operations are highly technology dependent, maintaining the integrity of information is critical for the Bank. As a bank in the high growth phase, automation of processes and procedures will improve its data management, branch banking, and provide a platform for scaling up of business.

The Bank has implemented and has under implementation broad technology initiatives that improve the Bank’s competitiveness, customer service quality and operational efficiencies.

Customer Satisfaction: The Bank is a service organization in the business of providing financial services and products to individual and corporate clients. The Bank has in place processes and practices, voluntary or mandated, to increase customer satisfaction and has a robust grievance redressal process. High customer satisfaction fuels growth and adds to brand reputation.

The Bank is the first Indian Bank to receive the ISO 10002:2004 certification for its complaints management system.




Regulatory Compliance: The Bank operates in a highly regulated sector with strong compliance requirements from the Government and the RBI. Regulatory compliance is non-negotiable requirement for the Bank and has zero tolerance for non-compliance.

The Bank complies with all the regulations of the Banking Regulation Act, the Companies Act and Clause 49 requirements of the Stock exchanges, as well as, recommendations of various banking committees.

Financial Inclusion: Financial Inclusion is one of the priority areas for the Reserve Bank of India. Through its various products and services that serve the under-banked and unbanked population in rural and urban India, the Bank has made Financial Inclusion a priority. The Bank works on its financial inclusion plans and targets through its dedicated business units such as the Inclusive and Social Banking team.

Climate Change: The Bank believes climate change could have an impact on the way it does business and several of its business units. The Bank is active in the clean energy and clean technology space, which could witness a significant expansion in future. The Bank is active in the agriculture and allied sectors, and believes this sector could be significantly affected by climate change, thus affecting its business.

Community Development: As a public trust organization, the Bank considers community development to be a key material issue. The Bank goes beyond its regulatory mandates to engage with the community through financial inclusion plans, sustainability driven services and products and the Bank’s unique community engagement initiative, YES COMMUNITY.

Carbon Footprint/GHG Emissions: With the increased public awareness and acceptability on climate change, organizations are increasingly under scrutiny as a primary source of GHG emissions. As a Bank in a steady and rapid expansion phase, YES BANK is cognizant of its expanding carbon footprint and managing its footprint and resource consumption is a key material issue for it. The Bank is implementing several initiatives that rationalize its resource consumption and lower its specific carbon footprint.


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MARCH 2013

YES BANK signs up as the official Partner (Financial Services Category) of the Pepsi Indian Premier League.

JANUARY 2013

YES BANK and the International Finance Corporation sign MoU to create a fund focusing on the development of North East India.

DECEMBER 2012

YES BANK ties up with American Express to roll out American Express cards for its high value customer segments.

OCTOBER 2012

YES BANK and the Financial Times organize the 2nd FT-YES BANK International Banking Summit in Mumbai.

SEPTEMBER 2012

YES BANK receives the Reserve Bank of India’s approval to launch its securities broking business.

SEPTEMBER 2012

YES BANK introduces locker facilities at select branches across the country.

SEPTEMBER 2012

YES BANK wins bid to install and operate ATMs across 16 Kolkata Metro stations.

JULY 2012

YES BANK and Japan’s Shinsei Bank enter into a comprehensive business alliance.

JUNE 2012

YES BANK appoints Pralay Mondal to spearhead Retail and Business Banking.

JUNE 2012

YES BANK enters into a USD 100 million Master Facility Agreement to facilitate trade finance with EXIM Bank of Malaysia.

KEY MATERIALITY RISKS AND OPPORTUNITIES | SIGNIFICANT EVENTS

SIGNIFICANT EVENTS DURING THE YEAR



STRENGTHENING CORPORATE GOVERNANCE

YES BANK is a public trust organization operating in a highly regulated sector, and accords the highest priority to setting the highest standards of Corporate Governance and complying with all statutory and regulatory requirements. The Bank’s Corporate Governance agenda is set at the highest level by the Board of Directors through various codes and committees. The Bank’s Report on Corporate Governance is available as part of the Annual Report FY 2012-13.

The Board of Directors is constituted in compliance with the Banking Regulation Act, Companies Act, the Listing Agreement with the stock exchanges and in accordance with the best practices in Corporate Governance. The Board has set up 7 Board level Sub-committees to ensure the effective functioning of the Board. The Bank’s Chief Executive Officer, Mr. Rana Kapoor, is also the Managing Director.

4 of the 7 Directors on the Board (57.1% of the Board) are independent, underscoring the Corporate Governance practices at the Bank. The Bank has one female member on the Board, Ms. Radha Singh. The names of the members of the Board for FY 2012-13 are as follows:

Name of Director Type of Directorship Committees

Mr. Rana Kapoor Managing Director Chairman - Nominations & Governance CommitteeChairman - Fraud Monitoring CommitteeChairman – Capital Raising Committee

Ms. Radha Singh Independent Director Chairperson – Service Excellence Committee

Mr. Ajay Vohra Independent Director Chairman – Audit & Compliance Committee

Lt Gen. (Retd.) Mukesh Sabharwal Independent Director Chairman – Investor Relations Committee

Mr. Ravish Chopra Promoter Nominee Non Independent Director

Mr. Diwan Arun Nanda Independent Director Chairman - Board Remuneration Committee

Mr. M R Srinivasan Promoter Nominee Non Independent Director

Chairman – Risk Monitoring Committee

The seven Committees of the Board are:

i) Audit & Compliance Committee

ii) Risk Monitoring Committee

iii) Board Remuneration Committee

iv) Nominations & Governance Committee

v) Investor Relations Committee

vi) Fraud Monitoring Committee

vii) Service Excellence Committee

In addition, the Board has also constituted a special purpose committee called the Capital Raising Committee to look at various options for capital infusion. The Terms of Reference of each committee can be accessed in the Annual Report 2012-13.

The Board comprises of eminent personalities who are stalwarts in their area of expertise. All the members of the Board also have exposure to finance/economics/public administration as the case may be, and are constantly conscious of their responsibilities as the highest Governing Body of the Bank and have been instrumental in putting

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in place some of the best governance practices in the Bank, evidenced by the various awards the Bank has been receiving over the years. The Board has played a key role in the launch of some key environmental and socio-economic initiatives such as Responsible Banking, YES FOUNDATION among others. The Bank has also been playing an important role in the economic growth of the nation with a presence in over 275 cities.

Further, the Nominations & Governance Committee of the Board conducts an annual due diligence of the Board members in accordance with the RBI “fit & proper” Guidelines. The declarations of the members of the Nominations & Governance Committee are reviewed by the Board members.

The Bank’s shareholders can provide their feedback or recommendations to the Board during the Annual General Meeting, last held on July 14, 2012 in Mumbai. Shareholders may reach the Board through the website, www.yesbank.in.

The Managing Director & CEO is paid remuneration as recommended by the Board Remuneration Committee and approved by the Board, shareholders and the Reserve Bank of India. The Remuneration of the Board is included in the Report on Corporate Governance in Annual Report 2012-13.

The Board has approved and implemented a Code of Conduct for the Board of Directors and senior management and instituted a comprehensive Code of Conduct for prevention of insider trading.

To ensure zero non-compliance:

a) The Bank has in place policies approved by the Board which include the Compliance Policy, Know Your Customer Policy and Anti-Money Laundering Policy. These lay down the guiding principles for the effective management of the Bank.

b) New product notes outline critical information of the Bank’s products including the product dynamics, operational aspects, and regulatory requirements. These are approved by the Product and Process Approval Committee.

c) The Bank undertakes periodic reviews of its products and services which are also reviewed by the Bank’s internal audit and concurrent audit teams.

d) The Compliance Unit at the Bank reports periodically on compliance aspects to the Board’s Audit & Compliance Committee, senior management and the MD & CEO.

e) Submission of all regulatory returns, regulatory letters, notices and circulars are centrally tracked and reported by the Compliance Unit.

f) Employees are trained regularly on compliance, product responsibility, and regulations.

YES BANK’s Corporate Whistleblower Policy has been approved by the Audit & Compliance Committee of the Board and intends to cover major concerns that may fall outside the scope of the other procedures of the Board.

The Bank is a part of the Corporate Whistleblower Initiative which is an independent reporting and communication initiative that provides a simple and effective portal for whistleblowers to log their concern and for organizations to effectively manage, process and respond to them.

The Board of Directors and top management (together referred to as key personnel) are mandated to adhere to an expanded Code of Conduct that outlines their responsibility to set the standards of ethical conduct.

Some of the pertinent clauses of the Code of Conduct for ‘key personnel’ that address the Bank’s human rights and ethical standards are:

a) Fair Practices – The Bank regards fair practice as a conduct that is practiced with utmost care and without malafide intention. The section clearly directs the key personnel to not indulge in making any payment directly or indirectly to or for anyone for the purpose of obtaining business or any other favourable action.

b) Conflicts of Interest – The Code clearly outlines what constitutes as conflicts of interest for key personnel, and specifically prohibits them from taking any personal advantages arising out of their association with the Bank, using the Bank’s properties for personal gain, and competing against the Bank.

c) Disclosures – The Code directs all key personnel to comply with all disclosures and directs them to refrain from favouring individuals or single entities in providing information pertaining to the Bank.

d) Confidentiality – The Code clearly defines what constitutes confidential information and clearly deems illegal the use or distribution of proprietary information, an obligation they must adhere to even if they move on from their employment or contract with the Bank.




e) Insider Information – The Bank has a comprehensive Code of Conduct for Prevention of Insider Trading that guides the actions of its executives on gaining undue financial advantage in the securities markets.

Guidelines for Operating Staff Accounts – The Bank released the Version 3.0 of its Guidelines for Operating Staff Accounts to ensure that executives use their staff accounts for bona fide transactions and to prevent unauthorized access to their accounts for unlawful activities. The document guides the executives’ actions on handling cash deposits, employee to employee transfers and transactions with other internal and external parties.

In addition, the Bank has separate policies that guide the classification and control of its information systems to ensure that the integrity and sanctity of its information systems infrastructure is maintained and accounted for.

Risk Control and ManagementIn areas of process controls and risk management, the Bank goes beyond its statutory or regulatory obligations, and has put into place systems that are aimed to lower the Bank’s operational risks. The Board has the overall responsibility for risk management at the Bank.

The Bank has structured a pro-active risk management department which reports to the Bank’s Chief Risk Officer for effective day-to-day risk management including risk assessment, measurement, control and reporting. The department is structured with separate risk units for each business vertical.

In addition, there are several senior management committees that are a part of the risk framework.

The Bank’s risk management systems and management analysis are also a part of the Annual Report FY 2012-13. The Annual Report adequately covers the Bank’s response to its external and internal risks.

Internal ControlsYES BANK’s internal audit is an independent and objective assurance and advisory that adds value and improves its control environment. It brings a systematic and disciplined approach to evaluate and improve the effectiveness of the Bank’s risk management, control and governance processes. The function has adopted a Risk Based Approach of Internal


Audit (RBIA) which has been structured taking into account RBI guidelines and international best practices.

Skills

Audit Evidence Confi dentiality Doc

umen

tatti

on

Inte

grity

Objectivity Independence Competence Audit

The Internal Audit function reports to the Managing Director and CEO for day-to-day activities and to the Audit and Compliance Committee for Audit Planning and Reporting. The Bank also subjects its operations to Concurrent Audits by independent audit firms.

The Bank has a dedicated Compliance Department for ensuring regulatory compliance across its entire spectrum of activities.

The Bank’s dedicated Fraud Investigation Unit is a separate function within the team to focus wholly on investigating and preventing fraud. The unit reviews each case including a Root Cause Analysis and identification of non adherence to laid down processes.

The Bank has also constituted a Fraud and Suspicious Transaction Monitoring Committee (FASCOM) chaired by the Managing Director and CEO to review frauds and suspicious cases on an ongoing basis.

The Bank’s Internal Audit department is ISO 9001:2008 certified (Quality Management System).

The Bank conducts risk awareness and management training sessions for its employees. During the year, the Bank conducted risk awareness sessions on information security, business continuity, records management and vendor management framework.

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ORGANIZATION STRUCTURE

Board of Directors

Board Committees

Executive Committees

Audit & Compliance Committee

Risk Monitoring Committee

Fraud Monitoring Committee

Board RemunerationCommittee

Nominations & GovernanceCommittee

Investor RelationsCommittee

Service ExcellenceCommittee

Capital RaisingCommittee

Fraud Control & Suspicious Transactions Monitoring Committees

Asset & Liability Committee

Operational RiskCommittee

ManagementCreditCommittee

Wholesale Banking Groups Branch / Retail / Business Banking Product Groups Support Units

Outsourcing ManagementCommittee

Security CouncilCommittee

Product and Process Approval Committee

Standing Committee of Customer Services

ECONOMIC PERFORMANCE

Direct Value Added

Direct Economic Value Generated FY 2012-13 ` in Thousands

Remarks

Revenues 95,514,317 P&L Account, Annual Report 2012-13

Economic Value Distributed

Operating costs 6,789,932 Schedule 16 – Operating Expenses, P&L Account, Annual Report 2012-13

Employee wages and benefits 6,555,435 Schedule 16 – Operating Expenses, P&L Account, Annual Report 2012-13

Payments to providers of capital 62,903,826 Annexure A

Payments to Government 6,599,575 Annexure B

Community Investments 67,968 Annual Business Responsibility Report

Economic Value Retained 12,597,581

ANNEXURE A


Remarks

Interest on deposits 45,636,130 Schedule 15 – Interest Expended, P&L Account, Annual Report 2012-13

Interest on RBI/Inter-bank borrowings/Tier I & Tier II debt instruments

14,935,490 Schedule 15 – Interest Expended, P&L Account, Annual Report 2012-13

Others 180,472 Schedule 15 – Interest Expended, P&L Account, Annual Report 2012-13

Proposed Dividend 2,151,734 P&L Account, Annual Report 2012-13




ANNEXURE B


Remarks

Provisions made for Income Tax during the year

6,250,510 Schedules forming part of the Accounts, 18.6.1 – Income Taxes

Tax (including surcharge and education cess) on Dividend

349,065 P&L Account, Annual Report 2012-13

Disclosure on Management Approach – Economic PerformanceThe Bank’s economic approach is driven by Version 2.0, its vision to be ‘The Best Quality Bank of the World in India’. The Bank is committed to build a highly differentiated, service oriented financial institution with a focus on earning, retaining and growing Institutional faith and trust.

The Bank’s Annual Report for 2012-13 includes the Management Discussion and Analysis which lays the Bank’s current and future strategies towards achieving its economic goals.

The Bank’s three primary product and services categories are retail banking, corporate banking and treasury. The Bank’s total advances grew by 23.7% to ` 46,999.7 Crore as on March 31, 2013 from March 31, 2012. The Bank’s CASA deposits grew by a healthy 71.6% year on year to ` 12,687.5 Crore, taking the CASA ratio to 18.9% as on March 31, 2013.

Retail Banking Liabilities (CASA + Retail Banking term deposits) improved from 32.7% of Total Deposits as of March 31, 2012 to 35.5% as of March 31, 2013. Corporate & Institutional Banking (Large Corporates) accounted for 64.7% of the Customer Assets portfolio, Commercial Banking (Mid-sized Corporates) accounted for 17.1% and Retail Banking, which includes the MSME portfolio accounted for 18.2%.

The Bank’s total CSR expenditure during the reporting period was approximately ` 6.8 Crore, which was spent on

the promotion of sports, arts and culture, contribution to the YES FOUNDATION, hosting YES COMMUNITY events, hosting industry platforms on CSR, the Bank’s contribution to employee payroll giving and support given to NGOs, non-profit organizations and institutions.

Indirect Value AddedYES BANK acts as a catalyst to accelerate positive social and environmental change in the wider stakeholder community. The Bank’s Responsible Banking philosophy and practice supports the Bank’s ESG priorities through Thought and Action.

The Bank’s thought leadership initiatives seek to engage and influence the society through knowledge platforms and knowledge papers. The sustainability platforms supported by the Bank, such as the YES BANK IICA CSR Conclave and the YES BANK Saevus Natural Capital Awards bring strong recognition to organizations in the social or environmental sectors, thus bringing with it more credibility and opportunities for growth.

Through its successful products and services at the Base of the Pyramid, the Bank has enabled numerous unbanked and under-banked Indians to improve their economic well being, on which rides the economic well being of their dependents. The Self-Help Groups supported by the Bank, for example, have enabled and inspired more community members to turn into entrepreneurs.


The Bank’s CASA deposits grew by a healthy 71.6% year on year to ` 12,687.5 Crore, taking the CASA ratio to 18.9% as on March 31, 2013.

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YES MONEY

YES MONEY is a unique new social innovation designed to meet the remittance need of India’s vast migrant, unbanked and under-banked population in India.

This remittance service has leveraged existing cash remittance technologies, India’s vast spread of local, family owned retail stores (kirana) and the pan-India commercial banks branch network using a custom built, multi-channel platform - Remittance Knowledge Bridge.

The Bank has been able to create a sustainable business model with YES MONEY. The convenience and reliability of YES MONEY has created new market segments for it. Several organizations such as Pepsi and Scholastic now use YES MONEY to manage their cash payments to their distributors and retailers across India. The service was presented as a

IMPACTING ENVIRONMENT & SOCIETY THROUGH INNOVATIVE SOLUTIONS

YES BANK’s Inclusive and Social Banking (ISB) unit works with the unbanked and under-banked population in urban and rural India by leveraging the Bank’s branch network, technology edge and relationship capital. Today, it has created an eco-system that alleviates poverty and improves livelihood through fairly priced, transparent and suitable financial products and services accompanied with appropriate financial education for the financially excluded low income communities across urban and rural India.

With YES SAMPANN, a direct micro-finance initiative since 2006, ISB has launched several viable business models in rural, semi-urban and urban settings, guided by the Bank’s ‘Frugal Innovations For Financial Inclusion (FI4FI) principle.

The Bank’s products and services that target the base of the pyramid hire members of the local communities where the product is offered, thus acting as a source of local employment. The local business correspondents are trained in basic banking and operating banking equipment.

best practice at the African Development Bank conference on Cross Border payments in 2012.

YES MONEY’s Socio-Economic Impact

a) At an average of 5 hours per user transaction, approximately, 9 million man-hours of productive – wage earning time have been saved in aggregate.

b) 48% of the transactions happen between 6 am to 10 am and between 4 pm to 12 midnight. These are non banking hours, clearly highlighting the acceptability and usability of the service in the Indian market.

c) Usage pattern reveals close to 8% of the transactions originate and terminate within specific areas in the same city, indicating this remittance service is also finding

A YES MONEY customer sending money through a Business Correspondent

STRENGTHENING CORPORATE GOVERNANCE | INNOVATIVE SOLUTIONS



usage in conducting business transactions within the same city.

d) The Bank shares a major portion of the income generated with the BC Agents, holding onto only 20% of the user fees, thus generating extra income for agents.

e) The footfalls that the BC agents attract to their stores have created a new customer base for the retail shop owner, with YES MONEY clients purchasing additional products from those stores.

YES MONEY’s success can be gauged from its growing usage across all user segments.

FY 2012-13 FY 2011-12

YES MONEYNumber of Business Correspondents

11 4

Number of transactions done (Lakhs)

21.34 4.7

Total value of transactions (` in Crores)

822.54 256.39

Number of Unique senders (Lakhs)

3.85 1.63

* A BC is a regional distributor with multiple BC Agents under it

YES SAHAJThe innovative micro-ATM model is a cost effective and scalable Mobile Transaction solution bringing the mobile teller machine to the under-banked customers in rural India.

Environmental and Social ImpactYES SAHAJ has defeated the need of the user to travel to the bank by bringing banking closer to the population through its vast Business Correspondent Agent network.

YES SAHAJ has strengthened partnerships with Business Correspondent Agents (BCA), SHGs, non-profit institutions and local communities.

By bringing basic financial services to a rural household, it has greatly enhanced the economic status of rural women, by allowing them more control over the finances of their families.

Due to the low capital requirement for its development and its low operational expenditure costs, the model is highly cost effective and scalable.

FY 2012-13 FY 2011-12

YES SAHAJTotal Service Officers/CSPs 270 46Total Value of Transactions (` in Crores)

21. 24 5.92

IMPACTING ENVIRONMENT & SOCIETY THROUGH INNOVATIVE SOLUTIONS

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YES Livelihood Enhancement Action Program (YES LEAP) provides credit, saving and insurance facilities to Self Help Groups through various NGOs acting as Business Correspondents of the Bank. By the end of FY 2012-13, YES LEAP has extended Financial Inclusion (FI) services to around 500 villages, spread across 12 states, working through 32 Business Correspondents linked to 40 Branches. The Bank has extended FI services to over 72,000 households through this program.

A self help group under YES LEAP

Particulars FY 2012-13 FY 2011-12

YES LEAP**

Number of Business Correspondents (BC)*

26 8

Number of savings linked SHG’s

4617 250

Total outstanding value in saving linked SHGs (` in Crores)

9.79 0.797

Number of credit linked SHGs 7900 192

Total loan outstanding in credit linked SHGs (` in Crores)

155.24 1.81

* A BC is a regional distributor with multiple BC Agents under it** Figures for end of period

Microfinance Institutions and Affordable Housing Group (MIAG)

In line with the objective of ‘Creating equal financial opportunities, Enabling Financial Inclusion’, MIAG plays a key role in making credit available to the bottom of the pyramid.

The unit expanded its scope to include affordable housing and works closely with developers and Housing Finance Companies (HFC). Since inception in 2006, it has impacted nearly 3 million low income borrowers. During the year, the Group extended funding to two developers and five HFCs in the affordable housing sector.

During the year, the Group accomplished a major multi-originator securitization deal amounting to ` 1720 million involving two MFIs with close to 300,000 clients.

INNOVATIVE SOLUTIONS

The Bank has extended FI services to over 72,000 households through this program.

Since inception in 2006, it has impacted nearly 3 million low income borrowers.



Mr. Jin-Yong Cai, EVP & CEO, IFC and Mr. Rana Kapoor, Managing Director & CEO, YES BANK at signing of the MoU

PROACTIVE INVESTMENTS FOR POSITIVE ENVIRONMENTAL AND SOCIAL OUTCOMESDisclosure on Management Approach - Sustainable InvestingYES BANK views climate change as an opportunity and believes it could spur the development and adaption of cleaner and newer technologies into mainstream market. Through sustainable finance, the Bank addresses the challenge of long term sustainability goals and shorter term financial horizons.

YES BANK’s Corporate Finance unit has an active investment and advisory portfolio covering clean energy, transportation, water, transportation and waste management space. The unit has within it a specialized investment advisory team, Sustainable Investment Banking (SIB) that has worked on several key advisory deals during the reporting period. Some of the notable deals were:

Exclusive advisor to Global Wind Power Limited (GWPL), a Reliance ADA Group company, for sale of significant stake to China Ming Yang Wind Power Group Limited.

Underwriter of Senior Debt of ` 400 crore for Lalpur Wind Energy Limited (a Special Purpose Vehicle of IL&FS Group) for setting up a 174.4 MW wind farm in the states of Gujarat, Karnataka and Maharashtra.

Sole Underwriter and Mandated Lead Arranger for Senior Debt requirement of ` 457.9 crores for Renew Wind Energy (Jath) Private Limited for setting up of 84.65 MW wind farm project at Maharashtra.

Underwriter and Mandated Lead Arranger for Senior Debt requirement of ` 200.0 crores for Welspun Solar Madhya Pradesh Private Limited for development and implementation of 130 MW Solar PV Project at Madhya Pradesh.

YES BANK – IFC Private Equity Fund for the Development of North–East India

YES BANK and the International Finance Corporation, a part of the World Bank Group, signed a Memorandum of Understanding to jointly create a Private Equity fund that will make significant investments across sectors in the North Eastern states of India.

The fund is an outcome of a common vision for the North Eastern Region of India which has significant economic potential and needs immediate private intervention to realize it. The fund corpus will focus on investments spread mainly across sectors of Tourism & Hospitality, Food & Agribusiness, Infrastructure, Healthcare, Education & Livelihood Creation and Affordable Housing.

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MAINSTREAMING SUSTAINABILITY AMONGST STAKEHOLDERS

By approaching sustainability with a 360 degree view, YES BANK aims to be at the forefront of mainstreaming sustainability within the global financial sector and the broader stakeholder spectrum.

The Bank plays an active role in promoting sustainability within stakeholders through its flagship stakeholder engagement program, YES COMMUNITY, research and thought leadership and knowledge banking.

YES COMMUNITY

YES COMMUNITY is YES BANK’s unique community engagement initiative that aims to connect the Bank with the local communities residing within 5 km of its branches on pertinent social and environmental issues. The Bank believes that its branches can be effectively utilized as knowledge sharing centers to build strong community relations and help shape meaningful conversations on real life issues, thus moving the relationship beyond transactional value.

PROACTIVE INVESTMENTS | MAINSTREAMING SUSTAINABILITY

The Bank believes that its bank branches can be effectively utilized as knowledge sharing centers to build strong community relations and help shape meaningful conversations on real life issues.

The Howrah branch conducted a knowledge session and energy quiz for school children during the National Energy Conservation Week, 2012

YES COMMUNITY incorporates community development initiatives such as clean and green drives, energy efficiency practices, workplace health and safety, disaster management plans, waste management and recycling and rain water harvesting among others.

The YES COMMUNITY program has grown over the last one year through its calendar of social events based on national and international days of importance for the Bank and the community. It has created a feedback mechanism for community which enables the Bank to enhance the YES COMMUNITY platform.



YES BANK participates in the Joy of Giving Week every year at its branches across India through tie ups with NGOs and engages stakeholders to contribute towards the NGOs’ causes. This year, the Bank tied up with the NGO ‘Goonj’ to collect clothing, toys, stationary and other items for the community.

December 14th is commemorated as the National Energy Conservation Day in India to highlight and propagate energy conservation in the country. To commemorate the event, the Bank organized special energy conservation themed YES COMMUNITY events across its pan-India branches.

Various YES BANK branches took a lead in commemorating the event by tying up with local schools, NGOs and other institutions to organize painting competitions, science exhibitions, science quizzes and other activities.


An employee of the Gurukul Branch, Ahmadabad spreading the message of water conservation on World Water Day

Launch of the paper ‘Electric Vehicles in India: Challenges & Opportunities’ at the World CEO Sustainability Summit, New Delhi

The World Water Day was commemorated at a 100 branches across India through events, signature campaigns, theme based art competitions and awareness programs. Employees at the participating branches reached out to the communities around their branches to raise awareness towards this precious resource. The Bank created an information brochure on water conservation that was distributed to community members.

Sustainability Research InitiativesTo conduct research around new progressive areas on sustainability that culminates into policy advocacy, YES BANK is partnering with national and international organizations such as the TERI – BCSD and the GIZ to release knowledge papers on contemporary social and environmental issues.

‘Electric Vehicles in India: Challenges & Opportunities’Rapid urbanization and rising aspirations have led to increasing vehicular traffic and resulting emissions. Electric vehicles can offer an effective solution to reduce emissions but face several challenges in India. YES BANK, in partnership with TERI BCSD, released a knowledge paper titled ‘Electric Vehicles in India: Challenges & Opportunities’ that focused on the path ahead for electric vehicles in India. The paper was launched by Dr. Farooq Abdullah, Union Minister of New & Renewable Energy, at the World CEO Sustainability Summit, held in Delhi on the 30th of January 2013 in the presence of

‘Responsible Banking: Special Focus on Micro, Small and Medium Enterprises’Micro, small and medium businesses are the engine of economic growth in nations across the world, including India, where they generate gainful employment for a sizeable section of the population. YES BANK has been a part of the partnership between the Foundation for Micro, Small and Medium Enterprise Clusters (FMC) and the ‘IICA-GIZ CSR Initiative’ to release the knowledge report which assesses the relationship between promoting the economic growth of MSMEs and ensuring they become competitive responsibly.

31

Dr R.K. Pachauri, Director-General, TERI, and leading Indian and International Industry Representatives. The paper was widely circulated within key YES BANK clients in the auto ancillary, OEM, clean energy and utility sectors.

Some of the pertinent papers released during the year were:

‘Corporate Social Responsibility: A Private Sector Perspective’, released during the YES BANK IICA National CSR Conference.

‘2nd Green Revolution – From Agriculture to Agri-business’, released at the YES BANK ASSOCHAM 4th Global Summit & Exhibition on Second Green Revolution.

‘Indian Organic Foods Market’, released at Jaivik India 2012.

‘Vision 2025: India as an Economic Super Power’, released at the PHDCCI Global Summit on Role of Industry Chambers.

‘Towards Accelerated Growth: Policy & Economic Snapshot of North and Central India’ released at the PHD Chambers Annual Session – Chief Ministers Conclave.

‘Improving Access to Quality Education in India’ released at the 2nd India Education Summit.

Thought Leadership InitiativesYES BANK IICA National CSR Conclave

Launch of the knowledge paper ‘Responsible Banking: Special Focus on Micro, Small and Medium Enterprises‘ at the YES BANK IICA National CSR Conclave

To focus on the role of India’s private sector in incorporating the triple bottom line approach for contributing effectively towards India’s development sustainably, YES BANK partnered with the Indian Institute of Corporate Affairs, an autonomous body under the Union Ministry of Corporate Affairs to organize the National CSR Conclave: Private Sector Perspective. The Conclave focused on the triple bottom line approach as guided by the National Voluntary Guidelines by the Ministry of Corporate Affairs.

The Conclave was inaugurated by Dr. M. Veerappa Moily, Union Minister for Corporate Affairs. Leading practitioners from Government and industry such as Mr. Arun Maira (Member – Planning Commission), Dr. Bhaskar Chatterjee (Director General, IICA), Mr. Manoj Kumar (Joint Secretary, Union Ministry of Corporate Affairs), Mr. Rajeev Kumar Agarwal (Wholetime Member, SEBI), Mr. Kishor Chaukar (Managing Director, Tata Industries Limited) and Mr. Rana Kapoor (Founder, Managing Director and CEO, YES BANK) spoke at the Conclave. Over 200 business leaders from across the industry participated in the Conclave.

MAINSTREAMING SUSTAINABILITY



Responsible Investment Research Association

In an effort to mainstream ESG parameters into lending and investment decisions, YES BANK actively helped in the formation of the Responsible Investment Research Association (RIRA), an India based not-for-profit initiative. The Association’s main objectives are:

Initiate and partner in ESG research relevant in the Indian context

Facilitating multi-stakeholder dialogues on mainstreaming responsible investment in India

Training investment professionals in India

Building a common platform to bring together organizations, investors and domain experts

1st YES BANK Saevus Natural Capital Awards

Natural capital puts a value on the resources obtained from the environment such as fresh water, healthy soil, stable climate, forest cover among other resources. YES BANK has taken a proactive approach to highlighting natural capital as a topic in India, with an objective of bringing together an ecosystem to help develop appropriate regulatory framework, disclosure mechanisms and reporting mechanisms to account for natural capital within the financial context.

The Bank has launched the YES BANK Saevus Natural Capital Awards in partnership with Saevus, India’s premium wildlife and natural history web portal and magazine to showcase responsible practices on natural capital consumption, accounting mechanisms within organizations and conservation within the industry and civil society. The Awards will be hosted in September 2013 and the Bank looks forward to reporting on the Awards in the next report.

Sustainability SeriesThe Sustainability Series is the first initiative in India to create a knowledge platform that trains today’s finance professionals on expanding their risk management skills to incorporate environmental and social risks.

YES BANK has partnered with the United Nations Environment Programme – Finance initiative (UNEP FI) and Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) GmbH to launch a series of workshops covering risks in debt, equity and insurance sectors.


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YES BANK’s Thought Leadership InitiativesYES BANK, through its various partnerships, has played an important role in knowledge platforms, awards and conferences to bring together Indian and international industry leaders, policy makers and academia to discuss current pertinent issues. Details:

Event Partnership Event Details

YES BANK Led Initiatives

2nd FT-YES BANK International Banking Summit, Mumbai

Joint Organizer with Financial Times

Theme: ‘Stress or Stability? Re-aligning the Global Banking System’

1st Annual YES BANK – PHD CHAMBER Emerging Corporate Summit 2012

Joint Organizer with PHD Chamber of Commerce

Theme: ‘Empowering Emerging Corporate – Into the Next Growth Orbit’

YES BANK National CFO Forum, New Delhi Organizer and Host Establishment of the North India ChapterYES BANK Presents 3rd Business Today SME Awards 2011

Joint Organizer with Business Today

Awards highlighting innovation and success in Indian SMEs

YES BANK – IICA 3rd National CSR Conclave, Mumbai

Joint Organizer with IICA Theme: ‘Corporate Social Responsibility: A Private Sector Perspective’

4th Global Summit & Exhibition on Second Green Revolution, New Delhi

Joint Organizer with ASSOCHAM

Theme: ‘Agriculture to Agri-Business’

2nd Food and Agribusiness conclave, New Delhi

Joint Organizer with The Hindu

Theme: ‘Ushering India’s Second Agri Revolution’

Indo-African Knowledge Exchange Workshop 2012

Joint Partner with African Development Bank

International Mobile Banking Summit- A view from the Top

1st India Luxury Summit 2012, New Delhi Joint Organizer with ASSOCHAM

Inaugural summit on India’s luxury market and HNI segment

YES BANK Partnered Initiatives

2nd India Education Summit Knowledge Partner A platform for industry to discuss the future of the sector

Indian Pension Fund Congress 2012, Mumbai

Knowledge Banking Partner

Only conference in India providing investment strategies for pension funds and asset managers

5th ASSOCHAM International Conference on Indian Civil Aviation, New Delhi

Knowledge Banking Partner

India as aviation hub/Aerospace & MRO

FICCI The Great Domestic Tourism Bazaar 2012, New Delhi

Knowledge Partner Conclave on domestic tourism

PHD Chamber Chief Ministers’ Conclave 2012, New Delhi

Knowledge Partner Attended by the President of India and CM’s of eight states to discuss growth and economy

ASSOCHAM International Conference on RAIL@2020

Knowledge Partner Public private partnerships in Indian railways

8th ASSOCHAM Annual Banking Summit 2012, New Delhi

Knowledge Partner Theme: ‘Poised for Explosive Growth’

Jaivik India 2012 Knowledge Partner Conference on organic and natural productsPHD Chamber - Global Summit: Role of Industry Chambers

Knowledge Partner The role of industry chambers in global economic paradigm

Young Presidents Organization (YPO) Congress, Kolkata

Knowledge Partner The YPO is a global organization that connects leaders in over 120 countries

Knowledge Banking – A Key DifferentiatorStrategic Initiatives, Government & Advisory

To attract private sector investments through public private partnerships, YES BANK has institutionalized a dedicated Strategic Initiatives, Government & Advisory (SIGA) division to work with Union & State Governments, their agencies

and other stakeholders through policy advocacy and advisory engagements. This approach of YES BANK has been instrumental in advocating a ‘projectisation’ approach, institutional reforms and streamlining of policy across several identified ‘sunrise sectors’.




Below are SIGA’s activities during the reporting period: As a Board member of the UNEP FI Banking Commission,

YES BANK was part of a UNEP FI paper submitted at the Rio+20 talks on developing a model sustainable finance framework.

The Gujarat Government mandated YES BANK to prepare the Vision Document on tourism for the state and set out a roadmap for positioning and strengthening Gujarat as the most favored tourist destination in the world by identifying the key themes for tourism development.

YES BANK, in association with the Ministry of Tourism, Government of India, has launched the ‘Incredible India Travel Card’ to complement the policy measures taken by the government to promote the ‘Incredible India’ brand with robust product offerings.

Cooperative Tourism Development Project YES BANK supports tourism as a tool for achieving

inclusiveness through employment generation in rural and urban India. In this pursuit, SIGA has been roped in as Country Manager India for a Cooperative Tourism Development Project funded by the South Asia Development Fund (under International Development Fund) of the Scottish Government.

The project involves establishing unique tourism co-operatives in rural India bringing together Scottish & Indian expertise to deliver inclusive development through tourism to socially and economically disadvantaged communities.

YES BANK has partnered with Queen Margaret University, Edinburgh as the project manager and Dunira Strategy, a Scottish tourism consultancy, for the project.

The project has chosen three districts in Uttarakhand - Almora, Bageshwar, Pithoragarh, and Purulia district in West Bengal in the first stage.

The Project has achieved the following milestones during the year:

Capacity building workshops are being conducted regularly at all districts.

Cooperative Destination Management Organizations (cDMOs) have been established in each district.

A portal, under the collective brand ‘Edge of India’, has been launched. ‘Edge of India’ was

internationally launched at the World Travel Market in 2012 in London.

Edge of India was recognized as one of the Top-50 Financial Inclusion Projects in India at the Skoch Financial Inclusion Awards in January, 2013, under the ‘Livelihoods’ category.

Food & Agribusiness Strategic Advisory and Research (FASAR)FASAR is a specialized group within the Development Banking space at YES BANK and has emerged as a premier and specialized food and agri-business consultancy and research group in India with prestigious domestic and international mandates.

The specialized team has worked on mandates in agri-inputs, agro food parks, modern terminal markets, commodities plantations, large scale farming, dairy, value chain analysis, trade policy, bio-technology and rural retail among others. The team has worked closely with the Ministry of Agriculture, Ministry of Commerce and the Ministry of Food Processing Industries of the Government of India and state governments on the development of the food and agri-business sectors.

FASAR’s achievements include: Appointed national consultants by Union Ministry of

Agriculture to develop a framework for implementation of Modern Terminal Markets (MTMs) across India.

Project Management Consultant for Ministry of Food Processing Industries for development of Mega Food Parks in various states.

Involved in the ‘Rationalization and Streamlining Study and Restructuring’ of Agricultural and Processed Food Products Export Development Authority (APEDA).

FASAR has several strategic tie-ups with international organizations of repute.

United States Agency for International Development –Michigan State University (USAID-MSU) for value chain of fresh commodities.

Israel Export & International Cooperation Institute (IEICI) for implementation of GROWIN program in India to transfer agri and water technologies from Israel to India.

FASAR took on 15 corporate mandates during the reporting period in the dairy farming sector, establishing food and agri-parks, land acquisition in Africa and financial evaluation.


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ADAPTING SUSTAINABLE BEST PRACTICES WITHIN

Disclosure on Management Approach – Product ResponsibilityAs a public trust institution, the quality of YES BANK’s products and services, and transparency in its operations, is directly linked to its reputation and brand value. To ensure the highest standards of information security and product responsibility at the Bank, employees go through a robust training and induction process that trains them to recognize and act on financial fraud, money laundering, adherence to regulatory requirements and due diligence.

YES BANK has in place a Product Appropriateness and Suitability Policy that clearly underscores keeping in mind the needs and means of a customer before recommending a product or service to them.

The Bank’s marketing and branding initiatives are led by the Bank’s Marketing & Corporate Communications (MCC) team, which adheres to the Bank’s branding guidelines and international best practices.

The Bank adheres to the Banking Codes and Standards Board of India, Goiporia Committee recommendations and Committee on Procedures and Performance Audit of Public Services (CPPAPS) guidelines. As a principle, the Bank does not indulge in any activity that is deemed to be anti-competitive.

The Bank has taken several initiatives to mitigate the environmental impact of its products and services. The Bank offered internet banking services to its customers right since its inception, and has been encouraging them to replace paper statements with electronic statements.

The launch of the mobile phone based merchant acquiring services (MPOS) will facilitate transaction level convenience to the customer’s doorstep in the retail and corporate segments. Innovative services such as mobile money services and advanced voice enabled IVR (interactive voice response) reduces the environmental footprint of the client by reducing travel and paper consumption. The Bank’s

micro-ATM service, YES SAHAJ, reduces the need for the rural customer to travel to a bank branch by bringing basic banking services to their doorstep. Through periodical communications via email and text messages, the Bank shares information and tips on various banking products and services.

The Bank is the first Indian bank, and the third bank globally to have received the ISO 10002:2004 certification for its Complaints Management System from BSI. The Bank has also received the ISO 9001:2008 certification across 100 branches in the country by Bureau Veritas.

At YES BANK, customer support and information dissemination is conducted through a three pronged approach –

Direct Enablers – Including Contact Center, mailers and bank statements, periodic meetings, regulatory updates.

Self Enablers – IVR, net banking, placing phones in ATMs connected to Contact Center, information and resources on the website.

Indirect Enablers – Relationship managers, contact center agents and other key customer touch points.

The Bank has designated a Chief Experience Officer (CXO) who drives the initiatives to provide seamless service to customers and is responsible for building and maintaining customer levels. The Bank conducts ‘mystery shopping’ at branches to gauge the level of customer focus, and service quality audits. Every new customer receives an on-boarding call to gauge their feedback on their experience and ensure that all the required details of charges and costs have been shared with them. The Bank conducts monthly customer satisfaction surveys. Taking an average of the monthly surveys conducted during the reporting period, 92% of the survey takers reported a Wow Experience, 6% reported a good experience with the rest reporting a satisfactory experience.

Customer service practices at the Bank include: Insights2Engage – a tool providing 360 degree view of

customer information to aid in providing appropriate customer support.

Customer listening – ensuring the pulse of the customer is understood on an ongoing basis.

Customer Service Day – Observed on the 7th every month, when customers can meet the branch representatives directly to discuss any issue or provide feedback.


TheBank is the first Indian bank, and thethird bank globally to have received the ISO 10002:2004certificationforitsComplaintsManagement System from BSI.



For information on customer complaints received and redressed during the year, please refer to the ‘Other Disclosures’ section of the Annual Report FY 2012-13.

Building Sustainable Value ChainsYES BANK builds and maintains long term associations with its suppliers and has a Strategic Sourcing Department, since its inception, to bring more focus and acquire economies of scale on its purchasing practices. Senior officers continuously communicate with vendors through participation in vendor meets and site visits. Most of the Bank’s goods and services are procured from India-based suppliers and vendors.

The Bank seeks to advance its sustainability agenda to its partners in the value chain and helps them build social and environmental considerations into their own business operations, including adapting best labour practices and adapting greener technology. The Bank’s procurement procedures and policies ensure that goods and services are selected through a comprehensive vendor selection

process, which encompass global best practices. Several vendors are e-connected and they participate actively in regular interactions to build a positive socio-environmental approach. The Bank’s comprehensive vendor agreement includes clauses for adherence to all labour regulations and brings service providers, under the purview of the Bank’s Whistleblower Policy, allowing them to report wrong doings/concerns in their dealings with the Bank.

Employee Grievance Redressal - My VoiceMy Voice is an internal portal available to all executives within the Bank and accessible from the internal Human Capital Portal. My Voice is a secure channel for any employee to raise queries, report grievances, make suggestions or seek clarifications on any issue. Every employee within the organization is assigned a single point of contact in the Human Capital Management team who the employee can reach out to for any query.


My Voice Query Analysis, FY 2012-13, By Category (%)

9.9Employee Benefits

8.9HCM

Policies

38.2Payroll Related6.1

YES for You

36.5Others

0.3ESOPs

100%

2009-10 2010-11 2011-12 2012-13

59

2

20

18

66

6

14

14

5

45

22

29

56

4

11

28

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

My Voice Query Analysis, By Type (%)

Clarification Feedback

Grievances Suggestion

There has been a decline in the share of payroll related queries in FY 2012-13 as compared to the previous reporting period which can be attributed towards actions taken to improve communication and engagement with employees, including HCM Connect, a periodic employee awareness program to highlight key policies and practices.

My Voice is aimed at providing the middle, junior and general management direct access to the Bank’s Human Capital Management (HCM) team. The chart below highlights the extensive usage of the tool by these target employees.

37

NCR MMR South

North West East

100%

2009-10 2010-11 2011-12 2012-13

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

My Voice Distribution by Region

16

16

11

4

20

3333

11

6

20

8

22

4

12

37

13

14

1920

4

18

39

15

3

My Voice also serves as an effective tool for employees in branches all across the country to reach the HCM teams. The chart below represents the regional distribution of queries raised through My Voice in the past three financial years.

5

36

38

21

5

41

34

19

61

32

23

38

11

20

35

43

100%

2009-10 2010-11 2011-12 2012-13

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

My Voice Distribution by Management Level (%)

Top Management Senior Management

Middle Management Junior Management

General Management

Environment Management Initiatives at YES BANKDisclosure on Management Approach - EnvironmentYES BANK has adopted sustainable internal practices right since inception. Adopting best practices in resource consumption and waste management not only lower the Bank’s operational costs but also lower its carbon footprint. YES BANK is in a phase of rapid expansion and is cognizant of its growing consumption and waste footprint. Hence, reducing its specific emissions will be a key target area for the Bank. As a service organization, calculating the environmental footprint of its employees is an important environmental objective for the Bank, and it is in the process of establishing the processes to calculate it.

In line with its sustainable development practices, the Bank takes a precautionary approach to environmental and social impacts of its lending activities.

The Bank focuses on improving its operational efficiency and optimizing resource consumption through initiatives that target the entire operational spectrum of banking operations.

Driven by the Bank’s Infrastructure and Management (INM) and Operations and Service Delivery (OSD) teams, the Bank has several initiatives underway that focus on rationalizing

its resource consumption and improving service delivery. These are part of a broader spectrum of quality assurance projects underway at the Bank.

Environmental & Social PolicyYES BANK is the first commercial bank in India to voluntarily incorporate environmental and social risks into its overall risk assessment framework based on Equator Principles and IFC guidelines.

The Bank’s Environment and Social Policy (ESP) is a part of its credit risk analysis and ensures the Bank does not lend, invest or enter into business agreements with organizations that engage in socially and environmentally unethical, illegal, or unsustainable activities.

The Policy incorporates social aspects of projects including social exclusion, livelihoods, indigenous peoples, child labour, rehabilitation, resettlement, and community development,


YES BANK is the first commercialbank in India to voluntarily incorporate environmental and social risks into its overall risk assessment framework.



and environmental considerations like pollution, natural resource depletion, water management and energy efficiency.


Environmental Management PolicyYES BANK released the Environmental Management Policy in November 2012 which formalized its commitment towards sustainable development. The Policy entails achieving internal natural resource consumption efficiencies through broad level actions. The Policy was instituted by the Bank’s Environment and Cost Management Committee (ECMC) and is implemented by the Responsible Banking team.

War on WasteThe War on Waste is YES BANK’s organization wide initiative to eliminate waste resulting from over-processing, overproduction, inventory and rework.

The War on Waste helps the Bank bring down branch premises expenses, human capital expenses and other expenses.

The Policy stipulates environmental and/or social audits of the clients or the projects to determine compliance with environmental and social standards, liabilities, and their environment, health and safety (EHS) management systems.

A site visit to a wind power project in Gujarat

Centralized expense analysis Top defaulters identified Actions initiated and controlled Best practices replicated

War on Waste

Waste Reduction Utilization Improvement Consumption Controls Process Step Elimination Cost Negotiation

39

Sustainable PrintingPaper is a major resource consumed at the Bank. The Bank is in the process of implementing an online system that will streamline and consolidate the ordering of printing paper at the Bank across all its branches. This will allow it to monitor its consumption closely and identify locations with high consumption.

With the Bank moving towards green procurement and e-procurement, it is expected to reduce paper consumption in the form of contracts, bills and invoices as the Bank brings more vendors into the e-payment fold.

The Bank has tied up with Canon as its primary third party vendor for printing. The Bank closely monitors its printing usage and works towards rationalizing it through initiatives such as default two sided printing, environment friendly disposal of printer cartridges and recycling waste paper.

In a major initiative towards reducing the Bank’s paper consumption, the Bank has reduced the thickness of its printing paper from 75 gsm to 70 gsm.

Recycling InitiativesAs paper is a major waste output, recycling paper waste is an important environmental priority for the Bank. The Bank continues its partnership with Green-O-Bin to manage its paper waste in its offices in National Capital Region (NCR).

The Bank has tie-ups with Government approved waste paper vendors at its offices which collect paper on a fortnightly basis. To ensure confidentiality of all documents, the Bank shreds all paper waste before recycling.

A snapshot of waste collected at NCR region

7.3%Newsprint

2.8%Magazines0.8%

Shredded Paper

7.4%Flat Boards/ paper cups

3.2%Brochures

43.6%Card Board

35.0%White Office Paper

Total Paper Waste Collected for FY 2012-13: 5418

E-Waste ManagementAs a technology driven organization, electronic waste is one of the major components of the Bank’s total waste. E-waste is classified as hazardous waste by the Union Ministry of Environment & Forests and the Bank takes utmost precaution in managing its e-waste. The Bank has tied up with a Government approved third party recycling partner, Justdispose to manage its e-waste.

The Bank has conducted an end-point scrapping at 100 branches of the Bank and 257 assets were collected for recycling after salvaging their hard disk drives.

Compared to e-waste disposal of 315.2 kg in FY 2011-12, the Bank disposed off 3,389 kg of e-waste from across branches.

Infrastructure ManagementThe Bank is moving towards automating its entire real estate management process to reduce the amount of paper consumed, through moving towards digitization of records and centralized payments of utility bills.

The Bank has undertaken intelligent branch design to reduce its electricity and utility consumption. Usage of efficient lighting has reduced the electricity consumed for signage. Rationalization of the timings for keeping the signage lit at select branches by installing timers that shut off the signage units at late night hours has also reduced the overall energy consumption.

The Bank has tie ups with several hospitality providers across India for guest houses with stringent selection criteria that includes thorough physical survey of the property, and as importantly, the location of the property from its flagship branch in the city. By selecting properties close to the branches, the Bank reduces the commute time for executives thus reducing its potential emissions.

The Bank has initiated e-procurement of capital goods which reduces its costs and emissions associated with paper consumption and courier.

Air Conditioning: Air conditioning is a major consumption point of electricity at the Bank. To optimize electricity consumption, air conditioners in large cabins and meeting rooms are installed with VAV (Variable Air Volume) controllers that responds to change in temperature by adjusting air flow without having to lower the temperature.

Power Factor Rectification at Branches: The Bank has an ongoing project on power factor rectification at certain branches which were identified by the respective utility providers. There were 13 branches identified in 8 different




regions where the project was undertaken. As on March 31, 2013, 12 of the locations had rectified their power factor.

Technology InitiativesYES BANK is cognizant of the significant operational efficiencies it can achieve by improving its own infrastructure and network and contribute to reducing its overall ecological footprint. Technology and innovation, thus, are major organizational drivers at the Bank. Driven by the Technology Solutions Group (TSG) unit, YES BANK has implemented several technology initiatives during the reporting period.

Server Optimization and VirtualizationTechnology costs form a significant portion of the Bank’s capital and operational costs. Within an enterprise environment, the overall availability and performance of servers is a critical component of operations. The Technology Solutions Group at YES BANK undertook server optimization and virtualization to bring down the Bank’s operational and capital costs, and improve their availability and performance.

Desktop RationalizationYES BANK is currently in the Version 2.0 of the Bank’s life cycle, aiming to reach 900 branches by the end of 2015 from 430 branches on March 31, 2013. The Technology Solutions Group, which is responsible for hardware installations, undertakes operational stock rationalization at branches and adheres to an optimal ratio of hardware for new branches. In addition, the Bank aims to reuse as many desktops as possible in the new branches, thus cutting down its e-waste output and reducing its hardware acquisition costs. During the year, 124 desktop systems were reused, thus resulting in a saving of over ` 0.35 Crores.

During the year, the Bank donated 15 computers saved through the desktop rationalization initiative to the Kolhapur, Maharashtra based NGO, ‘Helpers of the Handicapped.’

Other Initiatives: The Bank entered into a new AMC contract with Dell with 24x7 support. The new AMC results in a cost saving of approximately ` 10,50,000. TSG has also undertaken an offline defragmentation drive to reclaim space from the Bank’s servers.

Performance on Key Environmental ParametersSince the past two years, we have undertaken a comprehensive review of our carbon footprint as per the GHG Protocol developed by WBCSD/WRI to enable us to chart a more focused carbon strategy which aims to reduce

our carbon emission intensity by 5% in 2013-14. We also continue to report our emissions based on these protocols.

a. Scope 1: All direct GHG emissions from consumption of diesel

b. Scope 2: Indirect emissions from consumption of grid electricity

We have also used IPCC Guidelines for National Greenhouse Gas Inventories released in 2006 and India’s National GHG Inventory.

The Bank consumes water in the form of drinking water and through utilities. As the Bank enters into leases with developers and private parties for their branches, the water utility bills are a part of the lease contract for most locations. The Bank keeps track of its drinking water consumption.

Unit FY 2012–13

WATER CONSUMPTIONDrinking water KL 697

Erratic electricity supply is an issue that many YES BANK branches have to deal with regularly. To ensure electricity supply during banking hours, the Bank uses diesel generators. The Bank has made a conscious move to procure environment friendly, noise free, low emission diesel generator sets at its branches.

Unit FY 2012–13

FUEL CONSUMPTION

Diesel Litres 348,616

GJ 12,442.6

Grid electricity is the primary source of indirect emissions at the Bank. The Bank keeps track of its electricity consumption and has several initiatives to optimize its electricity consumption. As highlighted in the report, these include rationalization of signage timings at branches, adaption of LED lighting, and motion sensors to switch off lighting in unoccupied cabins.

Unit FY 2012–13

ELECTRICITY CONSUMPTION

Grid Electricity MWh 26,198

GJ 94,312.8

This year, the Bank adapted a more robust process to report on its GHG emissions. As the Bank is in the rapid growth


41

phase, its overall electricity and resource consumption is estimated to grow considerably. Thus, the Bank has adapted its specific GHG emissions as a more accurate measure of its GHG performance. The primary source of Scope 1 emissions at the Bank is diesel consumption for generator sets at branches. The primary source of Scope 2 emissions is consumption of grid electricity.

Unit FY 2012–13

GHG EMISSIONSScope 1 tCO2e 922

Scope 2 tCO2e 24,537

Total 25,459

Reporting on Sustainability PerformanceUN Global Compact

YES BANK is one of the first signatories in India to the UN Global Compact. As a signatory, the Bank is committed to issuing an annual Communication on Progress (COP), a public disclosure to stakeholders on the Bank’s progress in implementing the ten principles of the UN Global Compact and supporting broad UN development goals.

The Bank’s COP 2013 highlighted its policies, systems and products that demonstrate its action on UNGC principles. With its latest COP response, the Bank moved from the Learner’s platform to the GC Active level, demonstrating a higher level of maturity in the organization in responding to the UNGC principles.

Carbon Disclosure Project (CDP)YES BANK is one of the first signatories to the Carbon Disclosure Project from India. As a signatory, the Bank has been reporting on its GHG emissions and commitments to the CDP.

The Bank was on the Carbon Disclosure Leadership Index for India in 2011 and the latest index for 2012. With an overall score of 73, the Bank maintains its ‘Band A’ position and stood a joint 5th among the 57 Indian organizations who responded to the CDP questionnaire.

A Step towards Being Carbon NeutralYES BANK endeavors to mainstream environmental awareness within the Bank and among its external stakeholders. As a small step towards offsetting its own environmental impact and building a stronger relationship with its external stakeholders, the Bank gifts to them trees that are planted at ecological hotspots at locations across India. The Bank has partnered with Grow Trees, a tree planting partner of the UNEP’s Billion Tree campaign and an official partner of the WWF’s Cities for Forests campaigns, for this endeavor.

The Bank planted 7,724 trees in the reporting period through Grow Trees and gifted over 2,000 e-certificates to its customers during the period. For every e-certificate, Grow Trees plants a tree at selected locations around India.

During the 2nd FT YES BANK International Banking Summit, the Bank made a commitment of planting 45 trees and of another 28 trees during the India Pakistan Debate.

Grow Trees is currently active in 9 locations across India. YES BANK’s trees are part of their projects at the Sariska Tiger Reserve, Alwar, Rajasthan, Kanha National Park, Mandla, Madhya Pradesh, and Kumbhalgarh Sanctuary, Udaipur, Rajasthan.

Grow Trees estimates that on an average, one tree offsets approximately 20 kg of carbon annually. Thus, the 7,724 trees planted by YES BANK during the year offset approximately 154.48 tons of carbon. The Bank’s green gifting campaign has been widely welcomed and appreciated by clients.


YESBANKisoneofthefirstsignatoriesinIndia to the UN Global Compact.

The Bank has been recognized as a CDP Climate Disclosures Leader 2012 by the CDP for its high disclosure scores.



LEVERAGING HUMAN CAPITAL

Disclosure on Management Approach – Labour Practices and Decent WorkYES BANK’s human capital philosophy is to build a strong employer brand within the Indian banking industry and ensure that it is able to attract, engage and retain high quality human capital for its long term success. As an organization, the Bank’s focus has been on building world class teams and creating and implementing learning solutions that continually enhance employee value.

Disclosure on Management Approach – Human RightsYES BANK is an equal opportunity employer with no discrimination in terms of gender, religious or political affiliation, physical disability, region and caste. Every executive at the Bank adheres to the Employees’ Code of Conduct policy to reinforce the institutional trust and faith of the Bank internally and externally. The Bank does not support or engage in child labour or forced labour of any kind. Through its various policies, risk and audit systems which include various aspects of human rights, the Bank’s entire set of operations are scanned for human rights concerns.

The Bank’s Policy on prevention of sexual harassment to maintain and protect the dignity of all executives is enforced through two separate committees based in New Delhi and Mumbai. These committees at any point in time comprise of three members, two of which shall be women executives.

The Bank’s employee welfare schemes and policies provide comprehensive benefits to its executives and their families. As the Bank only hires full time employees, all employees of the Bank are eligible for its welfare and benefit schemes and policies. These schemes include:

a) Group Mediclaim Policy for self and family

b) Group Term Life Insurance policy

c) Mediclaim Policy for parents of YES BANK employees

d) Employee deposit linked scheme

e) Re-imbursement policies and other benefits based on the executives’ management level

The Bank provides 90 days of maternity leave to eligible employees. The Bank has a notice period of 90 days for all employees for separation and termination. The Bank does not have any collective bargaining agreements with employees. The Bank’s working hours are compliant with industry standards and the applicable laws of the land.

The Bank’s employees are entitled to carry forward a part of their unutilized/unavailed leaves subject to a maximum limit. The Bank provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the law, all employees of the Bank are entitled to receive benefits under the provident fund, a defined contribution plan in which both the employee and the Bank contribute monthly at a pre determined rate.

EMPLOYEE ENGAGEMENT

In line with the Bank’s Responsible Banking philosophy, the Bank’s Responsible Banking and the HCM teams have initiated a unique employee engagement program to sensitize employees on sustainability.

The Bank has created an annual calendar of socially and environmentally relevant national and international days at which employees participate. These monthly activities have helped the Bank involve its employees on commemorating events such as the National Energy Conservation Week and the World Water Day.

During Diwali, the initiative brought together NGOs such as the Salaam Baalak Trust, Habitat for Humanity, Aseema, Akanksha, Save the Children and Earthy Goods to exhibit and sell products made by the socially underprivileged, generating an income of over ` 100,000 for the NGOs with over 150 employees signing up as volunteers.

At the Joy of Giving Week, the Bank’s partner NGO ‘Goonj’ participated in a collection drive which collected close to 3000 pieces of clothing, 60 notebooks, 300 toys and 200 miscellaneous items for the underprivileged.

YES CONNECT is a platform initiated by the Bank’s HCM unit for employees to come together, share ideas and best practices and celebrate with each other.

43

YES-i-CARE

‘YES i CARE’ is an Employee Volunteering Program which enables employees to contribute their time towards social causes such as education, youth empowerment and affordable housing.

Social Deposit AccountBusinesses do not operate in a vacuum and YES BANK is cognizant of the need to integrate social and environmental aspects into its core business strategies for long term growth. To be successful, the Bank must align the environmental and social goals of its employees with those of the organization.

The Social Deposit Account is India’s first philanthropy banking product that allows a Fixed Deposit holder to allocate a portion of the interest earned with the partnering NGO Care India who ploughs the funds into their projects across India. YES BANK acts as a conduit for secure and transparent employee contributions to Care India.

Through YES BANK’s partnership with Care India, the Bank’s employees can create an impact in healthcare and nutrition, education, financial inclusion, disaster mitigation and integrated development.

To market the SDA within its employees, the Bank created a team of SDA Ambassadors who directly engaged with

employees at its corporate offices in Mumbai and Delhi and successfully generated over 100 leads and 33 conversions within the first day of their campaign.

Employee Payroll GivingYES BANK has partnered with GiveIndia, an NGO that connects NGOs with Indian organizations through an online web portal that allows employees to contribute a part of their salary to the cause of their choice. GiveIndia partners with over 200 NGOs.

GiveIndia’s Payroll Giving Program has over 60 participating corporations with over 30,000 individuals contributing to it.

YES BANK has been a part of the Payroll Giving Program since FY 2007-2008, with over ` 4,200,000 contributed by over 900 employees.

Employee Payroll Contributions (` Mn)

1.22

1.24

2010-11 2011-12 2012-13

1.20

1.18

1.16

1.14

1.12

1.10

1.08

1.06

1.04

1.02

Donations by Cause

29%Children

27%Education

1%Environment

1%Employment

7%Health

18%Disabled

5%Women

1%Youth

11%Elderly


‘YES i CARE’ is an Employee Volunteering Program which enables employees to contribute their time towards social causes such as education, youth empowerment and affordable housing.



Project Udaan


YES BANK has entered into a 5 year partnership with the Ministry of Home Affairs, Government of India and the National Skill Development Corporation of India to be a part of Project Udaan, a unique initiative of the Government of India to engage organizations to train and employ youth from Jammu & Kashmir. As a partner, YES BANK has selected 50 graduates from a pool of nearly 500 applicants from the top universities in J&K to train them in the Banking sector with an aim to absorb them into the Bank or any other financial institution.

This initiative comprises of six months of structured learning and development training and will cover general awareness, banking knowledge, role specific skill development and personality development aspects through classroom training, on-the-job training, and periodic evaluation. In addition to the training, the candidates also meet and interact with the Bank’s top management.

Gauging Employee SatisfactionYES BANK has partnered with Great Place to Work® Institute, India to undertake an independent Executive Engagement Survey and assessment of its Workplace cultural practices. By participating in this Study, the Bank would be able to benchmark executives’ perceptions of its workplace environment with selected benchmarks from within its industry and elsewhere. This would enable the Bank to better appreciate its strengths and identify focus areas for improvement.

The results of the employee survey will be a part of the Institute’s ‘India’s Best Companies to Work For’ Study – 2013, thus benchmarking the Bank against its peers in the Indian industry.

This is the Bank’s first comprehensive effort towards gauging and benchmarking its employees’ perception of their work environment, and it looks forward to reporting the results in its next report.

During the year, the Bank also participated in a McKinsey & Company survey on Leadership Effectiveness and Human Capital, FICCI-IBA Survey of Banks 2012 and an Executive Engagement Survey, in partnership with HR Alexi, an advisory firm.

Employee Performance ManagementYES BANK manages the performance of its executives through the Y-TOP – YES Talent Optimization Program to ensure a timely, unbiased, transparent and result oriented appraisal process for all executives.

Executives are appraised on an annual goal sheet that is aligned with the Bank’s overall strategy that trickles down into the goals of the top management and the goals and objectives of individuals and teams.

The Bank follows an annual review cycle with a mid-year review to bring more dynamism into the appraisal process and allow for course correction. Every executive at the organization undergoes performance valuation. The ratio of basic salary for men and women at the Bank is 1:1.

The first batch of graduates under Project Udaan

45

Employee RecognitionYES – GOLDEN PIN: The CEO’s Award is the highest employee recognition program at YES BANK. The program recognizes and honours the executives who have demonstrated exceptional performance consistently.

The CEO’s League of Excellence recognizes the outstanding contribution of executives in the following four areas:

Customer relationship management and origination

Superior service delivery

Innovation and productivity management

Business management support

The Award is divided into two categories – YES Champion, for executives with tenure of more than 2 years, and YES Rising Star, with executives of tenure of more than 1 year and less than 2 years.

2010-11 2011-12

Yes GoldenPIN

Yes Champion

Yes Rising Star

CEO League of Excellence Awards

98 27 89862033

Employee TrainingYES BANK mandates all new employees to undergo comprehensive training programs on policies and products. Employee induction is an important platform for sensitizing and training the Bank’s new employees on policies pertinent to human rights, anti-corruption and employee standards.

The YES School of Banking was institutionalized in 2007 as a Center of Excellence for employee learning and development initiatives at YES BANK. Apart from the learning and

development initiatives within the Bank, the School has two flagship programs that play a key role in highlighting the Bank’s focus on emerging as the ‘Professional’s Bank of India’.

The University and School Relationship Management (USRM) builds knowledge partnership across higher education institutions and includes interactions with subject matter experts, workshops and case studies.

Y-PEP hires participating in a team building exercise during induction

The YES Professional Entrepreneurship Program (Y-PEP) aims at hiring the best available talent from the best management institutions in India and abroad. The employees hired within the program undergo rigorous class room and on the job training before working with the Bank.

The YES Professional Series are a series of learning and skill development workshops launched with a strong focus on augmenting the knowledge levels and professional skills of employees. The workshops focus on key relevant topics that add long term value to employees. Approximately 8% of the total executives who received formal training during the reporting period were women.

Specific employees in the sales and marketing roles are trained in the Bank’s policies and practices in product responsibility, due diligence, anti-money laundering, anti-corruption, and data security among others. Approximately 8% of all executives trained were women. The average training man days per employee was approximately 3.8.




Employee training programs conducted

FY 2012-13 FY 2011-12

Total training programs conducted 1008 1054Total Executives trained in programs above 5846 4548

Employees trained by Management category:


Senior Management 87 103

Middle Management 1450 856

Junior Management 1650 1339

General Management 2659 2250

TOTAL 5846 4548

Training programs by category:


Behavioral (soft skills) 70 47

Employee induction 124 98

Mandatory policies and compliance 101 147

Process training 188 180

Product training 525 582

TOTAL 1008 1054

FY 2012-13 FY 2011-12

Training Man days 25,400 24,402


47

EmployeeProfile

a) Employee Strength

Particulars Under 30 30-50 Above 50

Male Female Male Female Male Female

FY 2012 - 13

Top Management 0 0 50 3 4 1

Senior Management 0 0 210 31 0 0

Middle Management 229 50 1184 128 1 1

Junior Management 712 207 880 146 0 1

General Management 1631 451 668 80 0 0

TOTAL 2572 708 2992 388 5 3

FY 2011 – 12






TOTAL 2273 668 2121 302 7 4

FY 2010 - 11






TOTAL 1737 517 1339 200 7 3




b) Total Attrition During the Year

Particulars Under 30 30-50 Above 50 Attrition RatesMale Female Male Female Male Female

FY 2012 - 13

Top Management 0 0 5 1 2 1 15.5%

Senior Management 0 0 21 1 1 1 10%

Middle Management 22 10 177 38 0 0 15.5%

Junior Management 192 86 205 41 0 0 26.9%

General Management 714 184 250 39 0 0 41.9%

TOTAL 928 280 658 120 3 2 29.86%

Attrition Rates 36.1% 39.6% 22% 30.9% 60% 66.7%

FY 2011 – 12


Senior Management 0 0 22 1 1 0 12.3%




TOTAL 717 219 461 77 2 0 27.5%

Attrition Rates 31.5% 32.8% 21.7% 25.5% 28.6% 0.0%

FY 2010 - 11






TOTAL 738 222 386 62 0 0 37%

Attrition Rates 42.5% 42.9% 28.8% 31% 0.0% 0.0%

The entire sales and operations force is on the payroll of the Bank. Some industry participants have seperate entities that employ the direct sales force.


49

c) Total Hires During the Year

Particulars Under 30 30-50 Above 50Hire

Male Female Male Female Male Female

FY 2012 - 13






TOTAL 1286 330 852 97 0 0 38.5%

Attrition Rates 50% 46.6% 28.5% 25% 0.0% 0.0%

FY 2011 – 12






TOTAL 1337 335 771 95 2 0 47.3%

Attrition Rates 58.8% 50.1% 36.4% 31.5% 28.6% 0.0%

FY 2010 - 11






TOTAL 1000 270 456 64 1 0 47.1%

Attrition Rates 57.6% 52.2% 34.1% 32.0% 14.3% 0.0%

The Employee profile analysis is based on the database maintained by the Bank’s HCM unit. This database may be different from the total headcount of the Bank on a particular date as an employee may have joined the Bank but their employee profile was still in the process of being created and added to the database by the HCM team. The total employee headcount as on March 31, 2013 is 7,024.





d) Return to Work after Parental Leave All female employees at the Bank are eligible for a parental leave of 90 days. A majority of the employees that take parental

leave return to work at the end of the leave period. A percentage of employees extend their leave, while some resign from the organization during or at the end of the leave period.

Particulars FY 2012-13 FY 2011-12 FY 2010-11

Employees eligible for parental leave 1099 974 720

Employees taking parental leave 48 37 32

% of total employees eligible 16.5% 18.1% 18.9%

EMPLOYEE HEALTH & SAFETY

Disclosure on Management Approach – Health and SafetyAs an employee centric organization, YES BANK accords the highest priority to the safety and well being of its employees and continues to take initiatives to make all its locations safe and healthy workplaces for employees.

With rising crime against women in India, YES BANK has enhanced its systems and processes to ensure the safety of its women employees. During the year, the Bank launched several initiatives that enhanced the Bank’s response to issues of employee safety.

The Bank has set up a 24x7 Helpline for all YES BANK employees which provides users several response options in an unsafe or emergency scenario. The Helpline is offered through the Bank’s Contact Center.

An employee in distress can either send an SMS or make a call to a secure toll free number that will alert call center officers within the Bank and the emergency contacts provided by the employee.

In addition, the Bank has undertaken the installation of safety mobile applications on executives’ phones that provide a host of mobile/GPRS based safety features and alarms.

The Bank organizes medical camps for employees and ties up with health service providers to provide medical facilities at special rates.

YES BANK has a Physical Security Policy that provides guidelines on the security measures that the Bank needs to take, in order to protect its assets and staff. Physical security refers to the protection of human capital, building sites and equipment. The Bank has a unit, Infrastructure and Network Management, which is responsible for formulating and implementing the guidelines.

The Bank has taken steps to reduce the threat of a fire at its locations by disseminating a fire manual to all employees, designating fire wardens in every team at the Bank with clearly defined responsibilities and conducting fire drills at all locations.

51

Since inception, YES BANK has had a significant focus on sustainability and through its Responsible Banking platform, been working towards CSR and Sustainable Development focusing on the Triple Bottomline ethos. YES FOUNDATION was established in December 2012 with an intention to further expand YES BANK’s sustainability footprint by supporting and empowering various stakeholders around a framework of innovation. It will focus on stimulating entrepreneurship, and innovatively use media initiatives for social transformation, to enable India’s inclusive growth and development. The vision of the Foundation is to build ‘an Empowered and Equitable India.’

YES FOUNDATION would be guided by an eminent Governing Council, led by its Chief Mentor, Mr. Rana Kapoor, Founder, Managing Director & CEO, YES BANK. Ms. Prerana

Langa would serve as the CEO. The Governing Council includes Mr. S.L. Kapur (Former Non-Executive Chairman, YES BANK; Former Secretary, Ministry of Food Processing & Small Scale Industry, GOI) as its Chairman, and industry stalwarts including Mr. Y.M Deosthalee (CMD, L&T Finance Holdings), Dr. Shabnam Sinha (Sr. Education Specialist, World Bank), Dr. Isher Judge Ahluwalia (Chairperson, Indian Council for Research on International Economic Relations), Dr. Amrita Patel (Chairperson, National Dairy Development Board), Mr. Bharat Patel (Former Director, YES BANK and Former Chairman, P&G India), Mr. Wouter Kolff (Director Cosmos Bank, Taiwan), Mr. Arun Kumar Sharma (Chief Investment Officer, Global Financial Markets, International Finance Corporation, Washington), and Ms. Namita Vikas (President and Chief Sustainability Officer, YES BANK).

LEVERAGING HUMAN CAPITAL | YES FOUNDATION

YES FOUNDATION - PURSUING INDIA’S DEVELOPMENT AGENDA



ARB Agri-business and Rural Banking

BC Business Correspondent

BMIS Business Management, Innovation and Strategy

CASA Current Account/Saving Account

CSR Corporate Social Responsibility

ECB Emerging Corporates Banking

ECMC Environment and Cost Management Committee

EMP Environmental Management Policy

ESG Environment, Social & Governance

ESP Environment & Social Policy

FI4FI Frugal Innovations For Financial Inclusion

FASAR Food & Agribusiness Strategic Advisory and Research

GJ Giga Joules

HCM Human Capital Management

IFI Indian Financial Institutions

INM Infrastructure and Network Management

ISB Inclusive and Social Banking

KL Kilo Litre

LEAP Livelihood Enhancement Action Program

MCC Marketing & Corporate Communications

MFI Micro-Finance Institution

MIG Microfinance Institutions Group

MMR Mumbai Metropolitan Region

MSME Micro, Small and Medium Enterprises

MWh Megawatt Hour

OSD Operations and Services Delivery

SIGA Strategic Initiatives, Government & Advisory

SHG Self Help Group

tCO2e Tons of Carbon Dioxide Equivalent

TSG Technology and Solutions Group

GLOSSARY

53

StandardDisclosuresPartI:ProfileDisclosures

Profile Disclosure

Disclosure Level of Reporting

Location of Disclosure

For partially reported disclosures, indicate the part not reported

Reason for omission

Explanation for the reason for omission

1. Strategy & Analysis1.1 Statement from the most senior

decision-maker of the organization.Fully 4-5

1.2 Description of key impacts, risks, and opportunities.

Fully 16-18

2. OrganizationalProfile2.1 Name of the organization. Fully 62.2 Primary brands, products, and/or

services.Fully 24

2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

Fully 23

2.4 Location of organization's headquarters. Fully 62.5 Number of countries where the

organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

Fully 7

2.6 Nature of ownership and legal form. Fully 62.7 Markets served (including geographic

breakdown, sectors served, and types of customers/beneficiaries).

Fully 6

2.8 Scale of the reporting organization. Fully 6, 7, 24 Total Equity: ` 58,077 Mn Total Debt:

` 932,965 Mn

2.9 Significant changes during the reporting period regarding size, structure, or ownership.

Fully 6, 19

2.10 Awards received in the reporting period. Fully 9-103. Report Parameters3.1 Reporting period (e.g., fiscal/calendar

year) for information provided.Fully 6

3.2 Date of most recent previous report (if any).

Fully 6

3.3 Reporting cycle (annual, biennial, etc.) Fully 6

GLOSSARY | GRI G3.1 CONTENT INDEX

GRI G3.1 CONTENT INDEX



Profile Disclosure




Reason for omission


3.4 Contact point for questions regarding the report or its contents.

Fully 6

3.5 Process for defining report content. Fully 6, 13, 163.6 Boundary of the report (e.g., countries,

divisions, subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary Protocol for further guidance.

Fully 6

3.7 State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope).

Fully 6

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

Fully 6

3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols.

Fully 6, 40

3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g.,mergers/acquisitions, change of base years/periods, nature of business, measurement methods).

Fully 6

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

Fully 6

3.12 Table identifying the location of the Standard Disclosures in the report.

Fully 53-70

3.13 Policy and current practice with regard to seeking external assurance for the report.

Fully 6


55

Profile Disclosure




Reason for omission


4. Governance, Commitments, and Engagement4.1 Governance structure of the organization,

including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

Fully 20, 23

4.2 Indicate whether the Chair of the highest governance body is also an executive officer.

Fully 20

4.3 For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members.

Fully 20

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

Fully 21

4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization's performance (including social and environmental performance).

Fully 21

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Fully 21

4.7 Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity.

Fully 20

4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.

Fully 7, 21




Profile Disclosure




Reason for omission


4.9 Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.

Fully 20-22

4.10 Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance.

Fully 20

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization.

Fully 37

4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

Fully 37, 41

4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization: * Has positions in governance bodies; * Participates in projects or committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic.

Fully 11-12

4.14 List of stakeholder groups engaged by the organization.

Fully 13

4.15 Basis for identification and selection of stakeholders with whom to engage.

Fully 13

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

Fully 14-15

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

Fully 16-18


57

Standard Disclosures Part II: Disclosures on Management Approach (DMAs)

G3.1 FSSS DMAs




Reason for omission


To be reported in

DMA PS Disclosure on Management Approach PSAspects Product Portfolio Fully 24FS1 Policies with specific

environmental and social components applied to business lines.

Fully 37

FS2 Procedures for assessing and screening environmental and social risks in business lines.

Fully 37

FS3 Processes for monitoring clients' implementation of and compliance with environmental and social requirements included in agreements or transactions.

Fully 37-38

FS4 Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines.

Fully 45

FS5 Interactions with clients/investees/business partners regarding environmental and social risks and opportunities.

Fully The Bank interacts with its

wider stakeholder spectrum on E&S

issues through knowledge platforms,

research reports, and industry associations.

Audits Fully 22Active Ownership Fully 7

DMA EC Disclosure on Management Approach ECAspects Economic performance Fully 24

Market presence Fully 24Indirect economic impacts Fully 24

DMA EN Disclosure on Management Approach ENAspects Materials Fully 37

Energy Fully 37Water Fully 37Biodiversity Fully 38Emissions, effluents and waste Fully 38Products and services Fully 35Compliance Fully 22




G3.1 FSSS DMAs




Reason for omission


To be reported in

Transport Fully 37Overall Fully 37

DMA LA Disclosure on Management Approach LAAspects Employment Fully 42

Labor/management relations Fully 42Occupational health and safety Fully 50Training and education Fully 45Diversity and equal opportunity Fully 42Equal remuneration for women and men

Fully 42

DMA HR Disclosure on Management Approach HRAspects Investment and procurement

practicesFully 36-37

Non-discrimination Fully 42Freedom of association and collective bargaining

Fully 42

Child labor Fully 42Prevention of forced and compulsory labor

Fully 42

Security practices Fully 50Indigenous rights Fully 37Assessment Fully 38Remediation Fully 38

DMA SO Disclosure on Management Approach SOAspects Local communities Fully 29

Corruption Fully 35Public policy Fully 33Anti-competitive behavior Fully The Bank, as

a principle, does not

indulge in any activity that is deemed

as anti-competitive

Compliance Fully 22


59GRI G3.1 CONTENT INDEX

G3.1 FSSS DMAs




Reason for omission


To be reported in

DMA PR Disclosure on Management Approach PRAspects Customer health and safety Fully 35

Product and service labeling Fully 35FS15 Policies for the fair design and

sale of financial products and services.

Fully 35

Marketing communications Fully 35Customer privacy Fully 35Compliance Fully 35



Standard Disclosures Part III: Performance Indicators

PRODUCT AND SERVICE IMPACT

Indicator Disclosure Level of Reporting



Reason for omission


To be reported in

Product PortfolioFS6 Percentage of the portfolio

for business lines by specific region, size (e.g. micro/SME/large) and by sector.

Fully 24

FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose.

Fully 26-28

FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose.

Fully 26-28

AuditFS9 Coverage and frequency

of audits to assess implementation of environmental and social policies and risk assessment procedures.

Fully ESP is integrated

into the Bank’s credit

appraisal systems and stipulates an annual review

of portfolioActive OwnershipFS10 Percentage and number

of companies held in the institution's portfolio with which the reporting organization has interacted on environmental or social issues.

Fully Interactions with wide

stakeholder spectrum including clients in portfolio

include E&S issues.

FS11 Percentage of assets subject to positive and negative environmental or social screening.

Fully All assets are subject

to E&S screening as part of ESP



Standard Disclosures Part III: Performance Indicators




Reason for omission


To be reported in

FS12 Voting polic(ies) applied to environmental or social issues for shares over which the reporting organization holds the right to vote shares or advises on voting.

Fully The Bank is not in any

such position

ECONOMICEconomic PerformanceEC1 Direct economic value

generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

Fully 23

EC2 Financial implications and other risks and opportunities for the organization's activities due to climate change.

Fully 18

EC3 Coverage of the organization's defined benefit plan obligations.

Fully 42

EC4 Significant financial assistance received from government.

Fully None

Market PresenceEC5 Range of ratios of standard

entry level wage by gender compared to local minimum wage at significant locations of operation.

Fully On par or above the local

minimum wage

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.

Fully 36






Reason for omission


To be reported in

EC7 Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation.

Fully Senior appointments

are made on basis of

Bank’s need, with equal weightage given to all

Indirect economic impactsEC8 Development and impact of

infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

Fully 28

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.

Fully 27

ENVIRONMENTALMaterialsEN1 Materials used by weight or

volume.Not Not

availableMeasurement systems being

put in

2015

EN2 Percentage of materials used that are recycled input materials.

Not Not available

Measurement systems being

put in

2015

EnergyEN3 Direct energy consumption by

primary energy source.Fully 40

EN4 Indirect energy consumption by primary source.

Fully 40

EN5 Energy saved due to conservation and efficiency improvements.

Not Not available


put in

2015

EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.

Partially 35, 39-40 Results of initiatives

not measured

EN7 Initiatives to reduce indirect energy consumption and reductions achieved.

Partially 39-40 Reductions achieved not

measured






Reason for omission


To be reported in

WaterEN8 Total water withdrawal by

source.Fully 40

EN9 Water sources significantly affected by withdrawal of water.

Fully None

EN10 Percentage and total volume of water recycled and reused.

Fully None

BiodiversityEN11 Location and size of land

owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

Fully None

EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

Fully None

EN13 Habitats protected or restored. Fully NoneEN14 Strategies, current actions,

and future plans for managing impacts on biodiversity.

Fully 37

EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

Fully None

Emissions, effluents and wasteEN16 Total direct and indirect

greenhouse gas emissions by weight.

Fully 41

EN17 Other relevant indirect greenhouse gas emissions by weight.

Fully Nil

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved.

Partially 39, 41 Reductions achieved are not

measured






Reason for omission


To be reported in

EN19 Emissions of ozone-depleting substances by weight.

Not Not material

Currently not part of data collection

as the impact is very less

organisation wide

EN20 NOx, SOx, and other significant air emissions by type and weight.

Not Not material

Currently not part of data collection

as the impact is very less

organisation wide

EN21 Total water discharge by quality and destination.

Not Not material

Since the Bank is a service

organization, waste water discharged is

minimal. Water is mainly consumed

for domestic purposes

EN22 Total weight of waste by type and disposal method.

Fully 39

EN23 Total number and volume of significant spills.

Fully None

EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.

Fully None

EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization's discharges of water and runoff.

Fully None

Products and servicesEN26 Initiatives to mitigate

environmental impacts of products and services, and extent of impact mitigation.

Fully 35

EN27 Percentage of products sold and their packaging materials that are reclaimed by category.

Fully None






Reason for omission


To be reported in

ComplianceEN28 Monetary value of significant

fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

Fully None

TransportEN29 Significant environmental

impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the workforce.

Not Not available


put in

2015

OverallEN30 Total environmental protection

expenditures and investments by type.

Not Not available


put in

2015

SOCIAL: LABOUR PRACTICES AND DECENT WORKEmploymentLA1 Total workforce by employment

type, employment contract, and region, broken down by gender.

Fully 47

LA2 Total number and rate of new employee hires and employee turnover by age group, gender, and region.

Fully 48-49

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.

Fully 42

LA15 Return to work and retention rates after parental leave, by gender.

Fully 50






Reason for omission


To be reported in

Labour/management relationsLA4 Percentage of employees

covered by collective bargaining agreements.

Fully As there are no unions, no

collective bargaining agreements exist

LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.

Fully 90 days

Occupational health and safetyLA6 Percentage of total workforce

represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

Not Not available

The Bank does not have a formal safety

committee

2015

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender.

Not Not available

The Bank being spread across 400 locations

does not capture safety statistics at all locations. Steps are being

implemented to capture the

same

2015

LA8 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

Fully 45-46

LA9 Health and safety topics covered in formal agreements with trade unions.

Fully No trade unions exist






Reason for omission


To be reported in

Training and educationLA10 Average hours of training per

year per employee by gender, and by employee category.

Fully 45

LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Fully 45-46

LA12 Percentage of employees receiving regular performance and career development reviews, by gender.

Fully All employees receive annual

performance reviews.

Diversity and equal opportunityLA13 Composition of governance

bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.

Fully 47

Equal remuneration for women and menLA14 Ratio of basic salary and

remuneration of women to men by employee category, by significant locations of operation.

Fully 44

SOCIAL: HUMAN RIGHTSInvestment and procurement practicesHR1 Percentage and total number

of significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening.

Fully As ESP is integrated into the Bank’s core

credit appraisal mechanisms,

the Bank’s entire portfolio is screened

for clauses that cover pertinent HR

issues






Reason for omission


To be reported in

HR2 Percentage of significant suppliers, contractors and other business partners that have undergone human rights screening, and actions taken.

Fully 100% screened, no action taken

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

Fully 45

Non-discriminationHR4 Total number of incidents of

discrimination and actions taken.Fully 1 case of sexual

harassment reported. The

Committee found the accused guility and recommended termination from

employment.

Freedom of association and collective bargainingHR5 Operations and significant

suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.

Fully None

Child laborHR6 Operations and significant

suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor.

Fully None

Prevention of forced and compulsory laborHR7 Operations and significant

suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor.

Fully None






Reason for omission


To be reported in

Security practicesHR8 Percentage of security

personnel trained in the organization's policies or procedures concerning aspects of human rights that are relevant to operations.

Fully Training is as per Bank guidelines

and policies which include human rights

aspects

Indigenous rightsHR9 Total number of incidents of

violations involving rights of indigenous people and actions taken.

Fully None

AssessmentHR10 Percentage and total number

of operations that have been subject to human rights reviews and/or impact assessments.

Fully Through policies, including vendor

code, and risk assessment

systems, all of the Bank’s operations

have been reviewed for HR violations.

RemediationHR11 Number of grievances

related to human rights filed, addressed and resolved through formal grievance mechanisms.

Fully None

SOCIAL: SOCIETYLocal communitiesSO1 (FSSS)

Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.

Fully 25-28, 39

SO1 (G3.1)

Percentage of operations with implemented local community engagement, impact assessments, and development programs.

Fully 25-27, 51

FS13 Access points in low-populated or economically disadvantaged areas by type.

Fully 8, 27






Reason for omission


To be reported in

FS14 Initiatives to improve access to financial services for disadvantaged people.

Fully 25-27

SO9 Operations with significant potential or actual negative impacts on local communities.

Fully None

SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities.

Fully 37

CorruptionSO2 Percentage and total number

of business units analyzed for risks related to corruption.

Fully The Bank operates a highly regulated sector with strong

policies and oversight, with all

operations analyzed.

SO3 Percentage of employees trained in organization's anti-corruption policies and procedures.

Fully All employees are trained during

induction. Client facing employees

are given additional training.

SO4 Actions taken in response to incidents of corruption.

Fully No incident reported

Public policySO5 Public policy positions and

participation in public policy development and lobbying.

Fully 11-12, 33

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.

Fully None

Anti-competitive behaviorSO7 Total number of legal actions

for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.

Fully None

ComplianceSO8 Monetary value of significant fines

and total number of non-monetary sanctions for non-compliance with laws and regulations.

Fully None






Reason for omission


To be reported in

SOCIAL: PRODUCT RESPONSIBILITYCustomer health and safetyPR1 Life cycle stages in which health

and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

Fully 35

PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.


Product and service labelingPR3 Type of product and service

information required by procedures, and percentage of significant products and services subject to such information requirements.

Fully 35

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.


PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

Fully 35

FS16 Initiatives to enhance financial literacy by type of beneficiary.

Fully 27







Reason for omission


To be reported in

Marketing communicationsPR6 Programs for adherence to

laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.

Fully 35

PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.


Customer privacyPR8 Total number of substantiated

complaints regarding breaches of customer privacy and losses of customer data.

Fully None

CompliancePR9 Monetary value of significant

fines for non-compliance with laws and regulations concerning the provision and use of products and services.

Fully None

Standard Disclosures

Output

C

Rep

ort A

pplic

atio

n Le

vel

C+

B

A+

Report Externally Assured


Profile Disclosures

Report on:1.12.1 – 2.103.1 -3.8, 3.10 -3.124.1 – 4.4, 4.14 – 4.15

Not required

Disclosures on Management Approach

Performance Indicators & Sector Supplement Performance Indicators

Report fully on a minimum of any 10 Performance Indicators, including at least one from each of: social, economic and environment. **

Report on all criteria listed for Level C plus:1.23.9, 3.134.5 – 4.13, 4.16 – 4.17

Management Approach Disclosures for each Indicator Category

Report fully on a minimum of any 20 Performance Indicators, at least one from each of: economic, environment, human rights, labor, society, product responsibility. ***

* Sector supplement in final version** Performance Indicators may be selected from any finalized Sector Supplement, but 7 of the 10 must

be from the original GRI Guidelines*** Performance Indicators may be selected from any finalized Sector Supplement, but 14 of the 20

must be from the original GRI Guidelines

B+

A


Same as requirement for Level B

Management Approach Disclosures for each Indicator Category

Respond on each core and Sector Supplement* Indicator with due regard to the materiality Principle by either: a) reporting on the indicator or b) explaining the reason for its omission.

Corporate and Registered Office:

Nehru Centre, 9th Floor, Discovery of India, Dr. A.B. Road, Worli, Mumbai-400018. India. www.yesbank.in

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