Punjab & Sind Bank

To the Shareholders,

The Board of Directors of Punjab & Sind Bank are pleased to present the Directors' Report together with the Audited Financial Statements of the Bank for the Financial Year ended March 31, 2026.

The Financial Year 2025-26 was marked by a dynamic operating environment characterized by evolving global economic conditions, geopolitical developments, rapid technological advancements and changing customer expectations. Amid these developments, the Indian economy continued to demonstrate resilience, supported by strong domestic demand, sustained public investment, a robust financial sector and sound macroeconomic fundamentals.

Against this backdrop, Punjab & Sind Bank delivered another year of strong and balanced performance, reflecting the effectiveness of its strategic priorities and the commitment of its employees across the country. The Bank recorded healthy growth in business volumes, significant improvement in profitability, continued strengthening of asset quality and notable progress in digital transformation, operational excellence and customer-centric innovation.

The Bank remained focused on sustainable growth through calibrated expansion across Retail, Agriculture and MSME (RAM) segments, prudent risk management, enhanced recovery efforts and disciplined capital allocation. Simultaneously, the Bank accelerated its digital transformation journey through technology-led initiatives aimed at improving customer experience, enhancing operational efficiency and strengthening risk and compliance capabilities.

During the year under review, the Bank further deepened its commitment towards financial inclusion, social responsibility, sustainable banking and stakeholder value creation. Significant efforts were undertaken to expand outreach in rural and semi-urban markets, strengthen financial literacy initiatives, support priority sectors of the economy and contribute meaningfully to national development objectives.

The Board is pleased to report that the Bank achieved important milestones across key business and financial parameters during FY 2025-26, reflecting the growing strength and resilience of its franchise.

The glimpse of the Bank's performance and strategic initiatives during the year are presented in the subsequent sections of this Report.

GLIMPSE OF BANK\u2019S PERFORMANCE
Prestigious Awards
1 Conferred Best Emerging Bank in MSME and Best Bank for Promoting Social Schemes (Runner-Up) by the Union Minister of Commerce and Industry.
2 Won the Fastest Growth in Guarantee award from NCGTC
3 Second Prize (Region A) from the Ministry of Finance for Official Language implementation.
Business Success & Asset Quality
1 Total business crossed \u20b92.63 lakh crore (\u25b2 14.94%), driven by robust growth in deposits (\u25b2 12.37% to \u20b91,45,829 crore) and Gross Advances (\u25b2 18.29% to \u20b91,17,823 crore).
2 Net Profit jumped by 30.12% to \u20b91,322 crore, with Return on Assets (RoA) rising to 0.79%.
3 Gross NPAs dropped sharply to 2.40% (down from 3.38%) and Net NPAs fell to 0.79%. The Provision Coverage Ratio stood strong at 90.91 %
4 Maintained a robust Capital Adequacy Ratio (CRAR ) of 17.42% under Basel III
Game-Changing IT Initiatives
1 Real-Time Fraud Prevention: Partnered with RBIH to deploy MuleHunter A I, upgrading fraud detection to a near real-time, hourly processing model.
2 Advanced Cyber Safeguards: Implemented the FRI & MNRL systems to track real-time digital transaction risk tiers and disconnected mobile links .
3 Tech Modernization: Advanced private cloud infrastructure and established readiness for the Central Bank Digital Currency (CBDC).
GIFT City Expansion
Global Footprint: A significant milestone during the year was the receipt of No Objection Certificate (NOC) from the Reserve Bank of India for establishing an International Financial Services Centre (IFSC) Banking Unit at GIFT City, Gandhinagar. This will help the Bank in progressing towards opening an International Financial Services Centre (IFSC) Banking Unit at GIFT City, Gandhinagar, while centralizing global trade finance operations.
Customer Convenience & Social Inclusion
1 RAM Portfolio Surge: The Retail, Agriculture, and MSME ( RAM ) segment accounted for 58.80% of total advances, led by a 29.70% growth in MSME, and a 24.59% growth in Retail and 23.44% growth in Agriculture.
2 Grassroots Impact: Achieved 102% of its MUDRA target (disbursing \u20b93,062 crore) and surpassed annual benchmarks for flagship social schemes like PMJJBY, PMSBY, and APY .

1. ECONOMIC AND BANKING ENVIRONMENT

a. Global Economic Landscape

The global economy during 2025-26 continued to navigate a complex environment marked by geopolitical uncertainties, changing trade dynamics, inflationary pressures in certain regions and evolving monetary policy responses by central banks. Despite these challenges, economic activity remained resilient across several major economies, supported by technological innovation, investment in digital infrastructure and gradual normalization of supply chains.

The global financial sector witnessed increasing focus on operational resilience, cybersecurity, artificial intelligence, sustainability and climate-related financial risks. Financial institutions across the world continued to invest significantly in technology modernization and customer-centric digital ecosystems to remain competitive in a rapidly changing environment.

The International Monetary Fund (IMF), in its January 2026 World Economic Outlook update, revised global growth forecast for 2026 upward by 20 basis points to 3.3 per cent, while retaining the 2027 forecast at 3.2 per cent. The OECD, however, maintained a cautious outlook, projecting global growth at 2.9 per cent for 2026 and 3.0 per cent for 2027 in its March 2026 Economic Outlook. Rising energy prices and geopolitical developments continue to pose risks to global growth, inflation, and financial stability.

b. Indian Economic Environment

India continued to maintain its position among the fastest-growing major economies globally. Growth was supported by strong domestic consumption, sustained public infrastructure spending, expansion in manufacturing activity, increasing private sector investments and a resilient services sector.

The country's macroeconomic fundamentals remained stable, supported by manageable inflation, healthy foreign exchange reserves, robust tax collections and continued policy reforms. Government initiatives aimed at infrastructure development, financial inclusion, digital transformation and ease of doing business further strengthened the economic growth trajectory.

The year-on-year Consumer Price Index (CPI)-based inflation stood at 3.48 per cent (provisional) in April 2026 as compared to April 2025. As per the recent Monetary Policy Committee (MPC) statement, CPI inflation for FY 2026-27 is projected at 4.6 per cent, with quarterly projections of 4.0 per cent in Q1, 4.4 per cent in Q2, 5.2 per cent in Q3 and 4.7 per cent in Q4.

The Reserve Bank of India (RBI) in its recent MPC Statement has maintained the real GDP growth projection for 2026-27 at 6.9 per cent, with quarterly estimates of 6.8 per cent in Q1, 6.7 per cent in Q2, 7.0 per cent in Q3, and 7.2 per cent in Q4. However, elevated energy prices, supply disruptions, and volatility in global financial markets may continue to pose near-term challenges to growth and exports.

c. Banking Sector Outlook

The Indian banking sector remained robust and resilient during FY 2025-26, supported by improved balance sheets, healthy capital positions, stronger profitability and continued improvement in asset quality.

Credit growth remained broad-based across retail, agriculture, MSME and infrastructure sectors, while

banks intensified efforts towards deposit mobilization amid increasing competition. Digital banking adoption continued to accelerate, driven by growing customer preference for convenient, secure and technology-enabled financial services.

The regulatory focus on governance, risk management, operational resilience, cyber security and customer protection continued to strengthen the overall stability and sustainability of the banking ecosystem.

Punjab & Sind Bank remains well-positioned to capitalize on emerging opportunities while continuing to support the nation's growth agenda through responsible and inclusive banking.

2. FINANCIAL PERFORMANCE

The Bank delivered a strong financial performance during FY 2025-26, driven by healthy growth in business volumes, improved operational efficiency, robust risk management practices and focused efforts towards improving asset quality.

a. Business Growth

Total Business increased by 14.94% (YoY) and reached ?2,63,652 crore as on March 31, 2026.

b. Deposit Growth

The Bank's deposit base increased by 12.37% (YoY) to ?1,45,829 crore as against ?1,29,774 crore in the previous year.

Retail deposits continued to remain a key focus area and witnessed healthy traction during the year. Retail term deposits increased by 19.58% (YoY) to ?65,047 crore, reflecting strong customer confidence in the Bank's franchise and product offerings.

CASA deposits increased by 10.02% (YoY) and stood at ?44,876 crore, providing a stable and cost-effective funding base for the Bank's growth initiatives.

c. Advance Growth

Gross Advances registered robust growth of 18.29% (YoY) and increased to ?1,17,823 crore from

? 99,605 crore in the previous year.

The Bank maintained a balanced credit portfolio with continued emphasis on Retail, Agriculture and MSME segments while selectively expanding its corporate credit portfolio. The share of RAM advances stood at 58.80% of Gross Advances compared to 55.15% as on 31.03.2025, underscoring the Bank's commitment towards inclusive and diversified growth.

d. Asset Quality

A high quality asset portfolio serves as the cornerstone of our long-term financial stability. We are pleased to report that the Bank maintained strong credit discipline and robust risk management practices, reflecting a significant improvement across key asset quality parameters during the Financial Year 2025-26.

The Gross NPAs of the Bank registered a substantial decline, standing at ? 2,830.77 crore (2.40%) as on March 31, 2026, compared to ? 3,370.06 crore (3.38%) as on March 31, 2025.

The Net NPAs of the Bank also witnessed a positive reduction, coming down to ? 919.19 crore (0.79%) as on March 31, 2026, against ? 937.07 crore (0.96%) in the previous financial year.

Demonstrating the Bank's strong resilient buffering capability, the Provision Coverage Ratio stood at a healthy 90.91% as on March 31, 2026, compared to 91.38% as on March 31, 2025.

Enhanced credit monitoring and proactive recovery mechanisms helped control fresh slippages effectively. The Slippage Ratio of the Bank improved significantly to 0.70% for the year ended March 31, 2026, down from 0.99% as on March 31, 2025.

e. Profitability

The Bank's profitability improved significantly during the year, reflecting sustained business growth, enhanced operating efficiencies and improved asset quality.

Operating Profit stood at ?2,182 crore. Net Profit increased by 30.12% and reached ?1,322 crore as compared to ?1,016 crore in the previous year.

Return on Assets improved to 0.79%, reflecting improved earnings quality and efficient utilization of assets.

The Bank's earnings profile continued to strengthen through a balanced combination of interest income, treasury operations, fee-based income and recovery from stressed assets.

f. Capital Adequacy

The Bank maintained a strong capital position throughout the year, significantly above the regulatory requirements prescribed by the Reserve Bank of India.

Capital Adequacy Ratio under Basel III stood at 17.42%, while CET-1 Ratio stood at 15.92% as on March 31, 2026.

The strong capital base provides adequate capacity to support future business growth while maintaining resilience against potential economic uncertainties.

3. BUSINESS GROWTH AND STRATEGIC INITIATIVES

The Bank's growth strategy during FY 2025-26 was anchored on strengthening its core banking franchise, enhancing customer engagement, accelerating digital adoption, improving operational efficiency and expanding its presence across high-growth business segments.

The Bank pursued a balanced growth model focused on sustainable expansion of the Retail, Agriculture, MSME and Corporate portfolios while maintaining prudent underwriting standards and strong risk governance. Strategic emphasis was placed on increasing granular deposits, deepening customer relationships, improving cross-selling opportunities and enhancing the overall customer experience.

During the year, the Bank continued to leverage technology as a key enabler of growth by simplifying customer journeys, digitizing processes and introducing innovative products and services across business segments. These initiatives enabled faster service delivery, improved operational efficiency and strengthened the Bank's competitiveness in an increasingly digital banking ecosystem.

The Bank's strategic initiatives were guided by five key priorities:

 Strengthening the Retail Banking Franchise

The Bank continued to expand its retail customer base through tailored products, improved digital channels and enhanced service delivery mechanisms. Focus remained on housing loans, vehicle

loans, personal loans and other retail lending products aimed at meeting the evolving needs of customers across demographics.

 Expanding MSME and Agriculture Financing

Recognizing the importance of MSMEs and agriculture in driving economic growth and employment generation, the Bank intensified its efforts to provide timely and accessible credit to entrepreneurs, farmers and rural enterprises. Digital credit assessment mechanisms and simplified loan origination processes were leveraged to improve accessibility and turnaround times.

 Digital-First Customer Experience

The Bank accelerated its digital transformation journey by strengthening internet banking, mobile banking, UPI-based services and digital lending capabilities. Significant investments were made in customer on-boarding, transaction processing, payment ecosystems and self-service channels to deliver seamless and secure banking experiences.

 Strengthening Liability Franchise

Deposit mobilization remained a key strategic focus area during the year. The Bank adopted targeted strategies to increase CASA deposits, deepen retail deposit penetration and strengthen relationships with existing customers through customized offerings and improved service quality.

 Enhancing Operational Excellence

The Bank continued its efforts towards process simplification, centralization of operations, automation and technology-enabled controls. These initiatives contributed to improved efficiency, better risk management and enhanced customer satisfaction.

Through these strategic initiatives, the Bank strengthened its market position while maintaining a strong focus on profitability, customer trust and long-term sustainability.

4. RETAIL, AGRICULTURE AND MSME (RAM) BUSINESS

Retail, Agriculture and MSME (RAM) Banking continued to remain the cornerstone of the Bank's growth strategy and constituted 58.80% of Gross Advances as on March 31, 2026.

The Bank maintained a customer-centric approach towards RAM lending by offering innovative products, simplified processes and technology-enabled solutions aimed at improving credit accessibility and enhancing customer convenience.

a. Retail Banking

Retail Banking registered robust growth during the year, driven by strong demand across housing, personal and vehicle loan segments.

Retail Advances increased by 24.59% (YoY) and reached ?27,498 crore as on March 31, 2026.

The Bank continued to focus on expanding its retail lending portfolio through a combination of branch-led acquisition, digital sourcing channels and strategic partnerships. Special emphasis was placed on improving turnaround times, simplifying documentation requirements and enhancing customer experience.

Several initiatives were undertaken during the year to strengthen the Bank's retail franchise, including digital loan origination capabilities, automated credit assessment processes and end-to-end digital customer journeys.

The Bank remains committed to expanding access to retail credit while maintaining prudent underwriting standards and portfolio quality.

The Bank has accelerated digitization of lending across Retail segments to improve turnaround time and customer experience. Following schemes have been digitised:

? Digital Education Loans up to ?7.5 lakh ensure quick, paperless access to higher education funding.

? Digital Personal Loans up to ?5 lakh provide instant, hassle-free credit through a fully digital process.

? Digital Pre-Owned Car Loans up to ?50 lakh offer seamless financing while boosting customer convenience and confidence in used vehicle purchases

? Digital Rooftop Solar Loans up to ?2 lakh promote clean and sustainable energy adoption.

b. Agriculture Banking

Agriculture remains a critical pillar of the Indian economy and a key focus area for the Bank. Agriculture Advances increased by 23.44% (YoY) and stood at ?16,610 crore as on March 31, 2026.

The Bank continued to support farmers, agri-businesses, dairy enterprises, horticulture activities and allied agricultural sectors through a comprehensive range of credit products.

Special focus was placed on financing farm mechanization, irrigation projects, renewable energy solutions and income-generating agricultural activities. The Bank also actively supported various Government-sponsored schemes aimed at promoting rural development and agricultural prosperity.

The Bank remains committed to advancing financial inclusion and supporting the agricultural ecosystem through responsible and sustainable financing.

c. MSME Banking

The MSME sector continues to play a vital role in employment generation, entrepreneurship and economic development.

MSME Advances increased by 29.70% (YoY) and reached ?25,169 crore during FY 2025- 26.

The Bank continued to strengthen its MSME franchise through customized financing solutions, digital credit assessment tools and simplified loan processing mechanisms. Special emphasis was placed on supporting micro and small enterprises, women entrepreneurs, start-ups and emerging businesses through technology-enabled lending platforms and relationship-based banking.

The Bank also continued to support various Government initiatives aimed at strengthening the MSME ecosystem and promoting inclusive economic growth.

The TReDS portfolio of the Bank has also increased substantially from ? 1,787 Cr in FY 2025 to ? 3,100 Crore in FY 2026.

The Bank has accelerated digitization of lending across MSME segments to improve turnaround time

and customer experience. Following schemes have been digitised:

? Digital MSME Loans up to ?100 lakh have been launched to meet evolving business finance needs.

? Digital SHG Loans strengthen financial inclusion by providing quick and convenient credit to Self-Help Groups.

? Digital Vishwakarma and PM SVANidhi Loans provide seamless financial support to artisans, craftsmen, and street vendors.

? Digital Commercial Vehicle Loans offer a fully online financing solution for commercial vehicles up to ?50 lakh.

5. MUDRA

As part of its commitment to fostering entrepreneurship and self-employment opportunities, the Bank continued to actively participate in the Pradhan Mantri MUDRA Yojana (PMMY).

During FY 2025-26, the Bank achieved 102% of its annual MUDRA lending target and disbursed loans amounting to ?3,062 crore.

These initiatives have contributed significantly towards promoting financial inclusion, employment generation and economic empowerment at the grassroots level.

6. DIGITAL TRANSFORMATION AND TECHNOLOGY ENABLED BANKING

Digital transformation continued to be a strategic priority for the Bank during FY 2025-26. The Bank undertook several initiatives aimed at enhancing customer experience, improving operational efficiency, strengthening security and creating a future-ready banking ecosystem.

The Bank's digital strategy is centred around delivering seamless, secure and convenient banking services through technology-enabled platforms while maintaining the highest standards of governance and customer protection.

 Strengthening Digital Banking Ecosystem

During the year, the Bank significantly enhanced its digital banking capabilities through upgrades to internet banking, mobile banking and payment platforms.

Multiple customer-centric functionalities were introduced across retail and corporate banking channels, enabling customers to access a wider range of banking services through self-service digital platforms.

These enhancements included improvements in account servicing, deposit management, payment processing, customer on-boarding, beneficiary verification, tax payment facilities, and complaint management and transaction security mechanisms.

 Digital Lending Transformation

The Bank accelerated the digitization of lending processes across multiple business segments.

Digital lending solutions covering MSME loans, Self Help Group loans, PM Vishwakarma loans, PM SVANidhi loans, commercial vehicle loans, education loans, personal loans and housing loans were further strengthened during the year.

The digital lending framework has significantly reduced processing time, improved operational efficiency and enhanced customer convenience while maintaining robust credit underwriting standards.

 Payment Systems and UPI Innovation

The Bank continued to strengthen its digital payments ecosystem through enhancements in UPI services, merchant on-boarding capabilities, positive pay systems and fraud prevention measures.

Several customer protection measures were implemented in alignment with NPCI guidelines, including enhanced onboarding controls, beneficiary verification systems and transaction risk mitigation mechanisms.

These initiatives have strengthened customer trust while promoting secure adoption of digital payment channels.

 Technology Modernization

The Bank initiated significant technology modernization initiatives aimed at enhancing scalability, resilience and future readiness.

Key initiatives included:

 Strengthening private cloud infrastructure.

 Readiness for Central Bank Digital Currency (CBDC).

 API-enabled architecture for integration and innovation.

 Enhanced digital on-boarding capabilities.

 Automation of operational processes.

 Strengthening enterprise-wide technology governance.

These initiatives are expected to provide a robust foundation for the Bank's long-term digital transformation journey.

7. INTERNATIONAL BANKING

The Bank's International Banking operations continued to play a strategic role in supporting customers engaged in global trade and cross-border business activities. Through its growing trade finance capabilities, foreign exchange services and correspondent banking relationships, the Bank remains committed to facilitating international business opportunities for its customers.

During FY 2025-26, the Bank undertook several initiatives to strengthen its international banking framework, improve operational efficiency and enhance customer service delivery.

 Centralization of International Trade Finance Operations

As part of its operational transformation agenda, the Bank is in advanced stage of implementing the centralization of international trade finance operations. Key modules relating to Outward Remittance Management (ORM) and Inward Remittance Management (IRM) were operationalized across the Bank's network, enabling greater standardization, improved regulatory compliance and enhanced processing efficiency.

 Expansion into GIFT City

A significant milestone during the year was the receipt of No Objection Certificate (NOC) from the Reserve Bank of India for establishing an International Financial Services Centre (IFSC) Banking Unit at GIFT City, Gandhinagar. The Bank is in the process of obtaining other necessary approvals from the competent authority for establishment of the Gift City branch during the period FY 2026- 27.

The proposed presence at GIFT City will enable the Bank to expand its international banking footprint, access new business opportunities and participate more actively in global financial markets. This initiative aligns with the Government of India's vision of developing GIFT City as a world-class international financial hub.

8. CUSTOMER EXPERIENCE AND SERVICE EXCELLENCE

Customer centricity remains at the core of the Bank's business philosophy. During FY 2025-26, the Bank continued to invest in technology, process improvements and service delivery mechanisms aimed at enhancing customer satisfaction and building long-term relationships.

The Bank's customer service strategy is focused on providing seamless, secure and convenient banking experiences across physical and digital channels while maintaining the highest standards of transparency and responsiveness.

 Customer Engagement

The Bank significantly enhanced its customer engagement framework through the modernization of its 24x7 Contact Centre ecosystem.

The upgraded platform integrates voice, digital and self-service channels to provide customers with seamless access to banking services and support. Advanced customer relationship management capabilities have enabled more efficient handling of customer queries, complaints, feedback and service requests.

The introduction of multilingual support and self-service functionalities has further improved accessibility and convenience for customers across diverse geographies.

 Leveraging Artificial Intelligence and Analytics

The Bank continued to leverage Artificial Intelligence (AI), analytics and automation to improve customer experience and operational effectiveness.

AI-enabled tools, knowledge management platforms, virtual assistants and advanced analytics solutions have been deployed to support customer interactions, service quality monitoring and decision-making processes.

These initiatives have enabled faster resolution of customer queries, enhanced service consistency and improved customer engagement.

 Strengthening Customer Protection

Customer protection and trust remain central to the Bank's service philosophy.

Several initiatives were undertaken during the year to strengthen transaction security, improve fraud prevention mechanisms and enhance customer awareness regarding digital banking risks.

The Bank remains committed to delivering a secure, reliable and customer-friendly banking environment.

9. ENVIRONMENTAL, SOCIAL AND SUSTAINABILITY INITIATIVES

The Bank recognizes that sustainable development is integral to long-term value creation and responsible banking. During FY 2025-26, the Bank continued to integrate environmental and social considerations into its business strategy, lending practices and operational framework.

The Bank remains committed to supporting India's sustainability objectives while promoting environmentally responsible and socially inclusive growth.

 Sustainable Financing

The Bank continued to support environmentally sustainable projects through dedicated financing initiatives aimed at promoting renewable energy and resource efficiency.

Under the PSB Sour Urja initiative, financing support was extended for installation of rooftop and ground-mounted solar energy systems. These initiatives contribute towards reducing carbon emissions, promoting clean energy adoption and supporting sustainable economic development.

 Social Responsibility and Inclusive Growth

The Bank continued to prioritize financial inclusion, rural development, women empowerment and support for underserved communities through its lending, outreach and social initiatives.

The Bank's commitment to responsible banking extends beyond financial performance and reflects its broader role in contributing to sustainable and inclusive national development.

10. BRAND BUILDING AND CORPORATE COMMUNICATION

During FY 2025-26, the Bank undertook several additional initiatives to strengthen brand visibility, enhance stakeholder engagement and reinforce its positioning as a trusted and progressive public sector bank.

The Bank adopted a multi-channel communication strategy leveraging both traditional and digital media platforms to improve outreach and customer engagement.

Brand visibility initiatives included strategic advertising campaigns, transit media, airport displays, metro station branding, railway advertising and participation in major industry events and conferences.

These initiatives have contributed towards enhancing brand recognition, improving customer awareness and supporting business development efforts across markets.

11. CORPORATE SOCIAL RESPONSIBILITY

The Bank remains committed to fulfilling its responsibilities towards society through meaningful Corporate Social Responsibility (CSR) initiatives aimed at improving the quality of life in communities and supporting sustainable development.

CSR initiatives during FY 2025-26 focused on healthcare, education, community development, environmental sustainability and support for vulnerable sections of society.

The Bank provided support for healthcare infrastructure through the distribution of ambulance, water coolers, wheelchairs, medical equipment and other essential resources to hospitals and healthcare institutions.

In the area of education and child development, the Bank supported various initiatives including the development of Model Anganwadis in collaboration with local administration and community stakeholders.

Financial assistance was also extended towards rural development projects, community welfare programs and initiatives promoting alternative energy solutions.

Through its CSR interventions, the Bank seeks to create lasting social impact and contribute meaningfully to inclusive and sustainable development.

12. FINANCIAL INCLUSION AND GOVERNMENT BUSINESS

Financial inclusion remains a core pillar of the Bank's mission and a key component of its contribution towards national development.

The Bank continued to expand access to affordable banking services and financial products, particularly among underserved and unbanked segments of society.

 Strengthening Business Correspondent Network

The Bank significantly expanded its Business Correspondent (BC) network during the year.

The number of Business Correspondents increased to 3,027 as on March 31, 2026 from 2,083 in the previous year, substantially improving outreach and accessibility in rural and remote areas.

The expanded network has enabled the Bank to deliver banking services closer to customers while supporting financial inclusion objectives.

 Financial Literacy and Capacity Building

The Bank continued to promote financial literacy through Financial Literacy Centres (FLCs), Centre for Financial Literacy (CFL) initiatives and awareness programs conducted across villages and rural communities.

These initiatives focused on enhancing awareness regarding banking services, digital payments, savings, insurance, pensions and responsible financial management.

Thousands of individuals benefited from these programmes during the year, contributing to greater financial awareness and inclusion.

During the financial year 2025-26, the Bank actively organized a total of 795 awareness camps, which witnessed the enthusiastic participation of 12,457 individuals.

Furthermore, the Reserve Bank of India (RBI) has designated our Bank as a sponsor Bank for the implementation of Phase 1 and Phase 3 of the scaled-up Centre for Financial Literacy (CFL) project. This initiative entails setting up 17 CFLs across 17 blocks in the State of Punjab, effectively serving a total of 51 blocks. Under this project, 9,469 camps were successfully organized, imparting financial literacy and training to 229,106 individuals.

 Performance under Government Schemes:

The Bank demonstrated exemplary performance in driving financial inclusion and executing various flagship Government Schemes:

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): The Bank surpassed its targets by achieving a

commendable 100.42% of its objective for the policy year ended May 31, 2026.

Pradhan Mantri Suraksha Bima Yojana (PMSBY): The Bank achieved 100.24% of its assigned target for the policy year ended May 31, 2026.

Atal Pension Yojana (APY): In terms of Active Enrolments, the Bank exceeded its annual goals by securing a 101.90% target achievement for the financial year ended 2025-26.

 Rural Self Employment Training Institutes (RSETIs)

The Bank's RSETIs continued to play an important role in skill development, entrepreneurship promotion and livelihood generation.

Training programmes conducted during the year focused on empowering youth, women and economically weaker sections through skill enhancement and self-employment opportunities.

The Bank remains committed to supporting inclusive growth through financial inclusion, entrepreneurship development and community empowerment initiatives.

Demonstrating our steadfast focus on grassroots capacity building, the Bank's RSETIs organized 80 skill-enhancement programs during FY 2025-26, training a total of 2,502 candidates. The initiative maintained a social impact, with beneficiaries including 1,754 individuals from the SC/ ST communities, 2,211 from BPL families, and 1,915 women, reinforcing our corporate mandate toward equitable socio-economic development.

13. HUMAN RESOURCES AND ORGANIZATIONAL DEVELOPMENT

The Bank firmly believes that its employees are its most valuable asset and the cornerstone of its sustained growth and success. During FY 2025-26, the Bank continued to invest in strengthening human capital through leadership development, capability building, employee engagement, succession planning and technology-enabled human resource management.

The Bank's people strategy is aligned with its long-term business objectives and focuses on developing a future-ready workforce capable of navigating an increasingly dynamic and technology-driven banking environment.

 Performance Management System (Navjyoti)

During the year, the Bank introduced an integrated Performance Management System, PSB Navjyoti, encompassing role clarity, performance appraisal, real-time performance dashboards, scorecards, career development and succession planning to enhance transparency, accountability, and merit-based growth. The Bank has also initiated scientific manpower planning to optimize workforce deployment in alignment with business needs and future capabilities.

 Talent Development and Learning

Continuous learning and professional development remained a key focus area during the year. The Bank conducted a wide range of training programmes covering credit, risk management, treasury, digital banking, cyber security, leadership, compliance, customer service and emerging technologies.

Special emphasis was placed on developing future leaders through structured leadership development programmes, mentoring initiatives and specialized learning interventions.

The Bank also leveraged digital learning platforms to provide employees with flexible and continuous access to knowledge resources and professional development opportunities.

 Employee Engagement and Well-being

The Bank continued to promote a culture of collaboration, inclusiveness and employee well-being.

Various initiatives aimed at enhancing employee engagement, promoting work-life balance and supporting physical and mental wellness were undertaken during the year. Employee welfare measures, recognition programmes and communication platforms were further strengthened to foster a positive and productive work environment.

 Diversity, Equity and Inclusion

The Bank remains committed to fostering an inclusive workplace that values diversity and equal opportunity.

Focused initiatives wereundertaken tosupporttheprofessional growth and leadership development of women employees while ensuring a safe, respectful and equitable work environment for all employees.

The Bank continues to strengthen policies and practices that promote diversity, inclusiveness and merit-based growth across all levels of the organization.

 Women Centric Initiatives:

To champion the health, well-being, and professional continuity of our female employees, the Bank introduced targeted maternal welfare programs during the financial year. Key highlights include the organization of specialized webinars on 'Post-Maternity Counseling and Support' to assist employees transitioning back to work. Additionally, the Bank launched the 'Reimbursement of Antenatal Check-up Expenses Scheme', providing vital financial assistance for routine prenatal medical evaluations to ensure safe motherhood and timely healthcare supervision.

14. BRANCH NETWORK AND DISTRIBUTION EXPANSION

The Bank continued to strengthen its distribution network and customer outreach during FY 2025-26 through a balanced combination of physical and digital channels.

As on March 31, 2026, the Bank operated through an extensive network of branches, ATMs, Business Correspondents and digital service channels across the country, enabling it to serve customers across urban, semi-urban and rural geographies.

The Bank's distribution strategy focuses on improving accessibility, enhancing customer convenience and deepening market penetration in strategically important regions.

 Expanding Rural and Semi-Urban Reach

Particular emphasis was placed on strengthening the Bank's presence in rural and semi-urban areas to support financial inclusion and economic development.

The significant expansion of the Business Correspondent network during the year has enabled the Bank to extend banking services to underserved and remote locations, thereby enhancing accessibility and customer outreach.

 Digital Distribution Channels

The Bank continued to complement its physical network through investments in digital channels, enabling customers to access banking services anytime and anywhere.

The growing adoption of digital banking platforms has strengthened customer engagement while enhancing operational efficiency and service delivery.

The Bank remains committed to developing an integrated omni-channel banking ecosystem that combines the trust of branch banking with the convenience of digital services.

 Regional Offices: Abiding by the Bank's strategy to enhance accessibility and deepen market penetration, the Bank opened 4 new Regional offices in Raipur, Bengaluru, Bhubaneswar and Shimla. The opening of Regional Offices aimed at having better control mechanism.

 Zonal Offices: For having better operational efficiency & control, effective utilization of resources and exploring opportunities for tapping fresh business from Regions under their jurisdiction three new Zonal Offices at Delhi, Lucknow and Kolkata were established in the Bank.

 Branch Expansion: During FY 2025-26, Bank continued to focus on branch expansion and opened 59 branches (including TReDS) and total branches of the Bank stood at 1654 as on 31.03.2026.

15. RISK MANAGEMENT FRAMEWORK

Effective risk management remains fundamental to the Bank's strategy and long-term sustainability.

The Bank has established a comprehensive risk management framework designed to identify, measure, monitor and mitigate risks across all areas of operations while supporting business growth and value creation.

The framework is guided by the Board-approved Risk Management Policy and is aligned with regulatory expectations, industry best practices and the Bank's risk appetite.

 Credit Risk Management

The Bank continues to maintain a prudent approach towards credit risk management through robust underwriting standards, independent risk assessment mechanisms and continuous portfolio monitoring.

Advanced monitoring systems and early warning frameworks have been strengthened to facilitate timely identification and management of emerging credit risks.

The Bank's continued improvement in asset quality indicators reflects the effectiveness of its risk management practices and recovery strategies.

 Market Risk Management

The Bank actively manages market risk arising from interest rate movements, foreign exchange exposures and investment portfolio fluctuations through well-defined policies, risk limits and monitoring mechanisms.

The Treasury function continuously monitors market developments and implements appropriate strategies to safeguard the Bank's financial position while optimizing returns.

 Liquidity Risk Management

Maintaining adequate liquidity remains a key priority for the Bank.

The Bank maintains strong liquidity buffers and regularly conducts stress testing and scenario analysis to ensure resilience under varying market conditions.

The Liquidity Coverage Ratio and other regulatory liquidity parameters remained above prescribed requirements throughout the year.

 Operational Risk Management

The Bank continues to strengthen operational risk management through process improvements, technology-enabled controls, business continuity planning and employee awareness programmes.

A proactive approach towards operational resilience helps ensure uninterrupted service delivery while minimizing operational disruptions and losses.

16. COMPLIANCE, GOVERNANCE AND INTERNAL CONTROL FRAMEWORK

The Bank is committed to maintaining the highest standards of corporate governance, regulatory compliance and ethical conduct.

Strong governance practices form the foundation of the Bank's decision-making processes and contribute to sustainable value creation for stakeholders.

 Corporate Governance

The Board of Directors provides strategic guidance and oversight while ensuring that the Bank operates in a transparent, accountable and responsible manner.

The Board is supported by various committees that oversee critical areas including risk management, audit, customer service, compliance and stakeholder interests.

The governance framework ensures effective supervision, prudent decision-making and alignment with regulatory expectations.

 Compliance Culture

The Bank continues to strengthen its compliance culture through policy frameworks, technology-enabled monitoring systems, and employee training and continuous oversight mechanisms.

Compliance management is integrated into business processes to ensure adherence to applicable laws, regulations, supervisory expectations and internal policies.

The Bank remains committed to fostering a culture of integrity, accountability and ethical conduct across all levels of the organization.

 Development of General- Purpose Ticket solution: A General- Purpose Ticketing (GPT) System has been developed within ITSOM platform, wherein, branch raises incidence ticket to apply for an approval to conduct a specific task while Regional office shall accord the permission based on the document submitted through the GPT solution. At initial stage 15 use cases/ item have been rolled out from six sub- categories, going forward the same shall be increased to include more domains. GPT system shall enable the Bank to have the audit trail, documentation, governance and oversight on conducting transaction/ other administrative tasks.

 Empowering Compliance & Governance (ECG): Launched in January 2025, the ECG platform was enhanced in FY 2025-26 with a workflow-based Gap Assessment module to automate and streamline compliance with RBI Master Directions. The Bank is currently expanding its operational Compliance Testing module from the Head Office to Regional Offices, CenMARG, and Branches, while concurrently implementing an Issue Management module for IRAR/RMP compliance to fortify its governance structure.

 Data Quality Index (DQI) Portal: Established in December 2025 to bolster data integrity, the DQI Portal utilizes 25 deployed rules to scan core customer, loan, and account data for exceptions, which are monitored via dashboard and rectified by branches within prescribed TATs. Looking ahead to FY 2026-27, the rollout of RRDM will integrate additional rules and introduce branch/RO model-based scores to further elevate data governance

17. INTERNAL AUDIT AND ASSURANCE

Internal Audit serves as an important pillar of the Bank's governance and risk management framework.

The Bank follows a risk-based internal audit approach that focuses on areas of higher risk and materiality while ensuring comprehensive coverage of business operations.

The Internal Audit function provides independent assurance regarding the adequacy and effectiveness of governance processes, risk management practices and internal controls.

The Bank has transitioned the conduct & compliance of internal audits from in-house audit portal to specialized integrated audit & compliance automation platform eTHIC.

Technology-enabled audit tools, data analytics and thematic reviews are increasingly being leveraged to enhance audit effectiveness and coverage.

Audit observations are regularly monitored and corrective actions are reviewed to ensure timely closure and continuous improvement.

The Audit Committee of the Board continues to provide strategic oversight to the Internal Audit function and reviews significant audit findings and remedial measures.

18. CYBER SECURITY AND OPERATIONAL RESILIENCE

As digital adoption accelerates across the banking industry, cyber security and operational resilience have become strategic priorities for the Bank.

The Bank continues to strengthen its cyber security posture through investments in technology, governance frameworks, monitoring capabilities and customer protection mechanisms.

 Cyber Security Framework

The Bank has implemented a multi-layered cyber security architecture designed to protect information assets, customer data and critical infrastructure from evolving cyber threats.

Continuous monitoring, threat intelligence, vulnerability assessments, security testing and employee awareness programmes form integral components of the Bank's cyber defence strategy.

 Fraud Risk Management

The Bank continues to strengthen its fraud prevention and detection capabilities through advanced monitoring systems, analytics-based surveillance and regulatory integrations.

The implementation of Fraud Risk indicator (FRI), Mobile Number Revocation List (MNRL), Indian Cyber Crime Coordination Centre (I4C) integration and AI-based mule account detection mechanisms has significantly enhanced fraud risk management capabilities.

These initiatives enable faster identification, prevention and response to fraudulent activities while strengthening customer protection.

 RBiH Mule Hunter

In September 2025, the Bank adopted MuleHunter.AI, an innovative AI/ML solution designed by the Reserve Bank Innovation Hub (RBiH) to identify suspected mule accounts with significantly higher accuracy and speed than legacy rule-based setups.

 Operational Resilience

The Bank has established comprehensive Business Continuity Management and Disaster Recovery frameworks to ensure uninterrupted delivery of critical services.

Periodic testing, simulation exercises and resilience assessments are conducted to strengthen preparedness and response capabilities.

The Bank remains committed to maintaining resilient operations and safeguarding customer interests under all circumstances.

19. Official Language

 The Bank was awarded 'Second Prize' under 'Region A' by the Department of Financial Services, MOF at the Official Language Seminar-cum-Review Meeting on June 12-13, 2025 for excellent performance in implementing the Official Language Policy during the FY 2024-25

 Punjab & Sind Bank, received three awards across various categories from the Town Official Language Implementation Committee, Delhi (Bank). Specifically, the Bank was conferred the Second Prize in the 'Rajbhasha Shield Competition 2024-25' for the implementation of the Official Language; the First Prize for its quarterly Hindi magazine 'Rajbhasha Ankur'; and the Third Prize in the E-magazine category for its e-magazine, 'Rajdeep'.

 The Official Language Portal was launched to receive quarterly reports on the progressive use of Hindi from the various departments of the Head Office and from the Zonal Offices.

20. Other Awards & Accolades

 Conferred Best Emerging Bank in MSME for 2025 by Union Minister of Commerce and Industry of India.

 Conferred Best Bank for Promoting Social Schemes- Runner- up by Union Minister of Commerce and Industry of India.

 Conferred Fastest Growth in Guarantee by National Credit Guarantee Trustee Company Ltd.

21. Directors' Responsibility Statement:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2026:

 The applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

 The accounting policies were framed in accordance with the guidelines of the Reserve Bank of India and were consistently applied. Reasonable and prudent judgments and estimates were made to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of its profit and loss for the year ended March 31, 2026.

 Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities.

 Annual accounts have been prepared on a going concern basis.

 The Internal financial controls system, to be followed by the Bank was laid down and such internal financial controls are adequate and are operating effectively.

 Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

22. OUTLOOK AND WAY FORWARD

Looking ahead, the Bank remains optimistic about the opportunities presented by India's strong economic fundamentals and evolving financial landscape. The Bank's strategic priorities for FY 2026-27 will focus on:

 Accelerating sustainable business growth

 Strengthening the liability franchise and CASA base.

 Deepening Retail, Agriculture and MSME penetration.

 Enhancing digital banking and technology capabilities.

 Maintaining superior asset quality and recovery performance.

 Strengthening operational resilience and cyber security.

 Advancing financial inclusion and sustainable banking initiatives.

 Enhancing customer experience and service excellence.

 Developing future-ready talent and leadership capabilities.

 Supported by a strong capital position, improving profitability, robust governance framework and committed workforce, the Bank is well-positioned to create sustainable long-term value for all stakeholders.

23. ACKNOWLEDGEMENT

The Board of Directors extend their gratitude to Ms. M.G. Jaysree, GoI Nominee Director, Sh. S.L. Agarwal, Non Official Director, and all the members of the Board, both past and present for their valuable insight, support, guidance, and contributions to the management in all endeavours.

The Board of Directors places on record its sincere appreciation for the continued guidance and support received from the Government of India, the Reserve Bank of India, the Department of Financial Services, Securities and Exchange Board of India, stock exchanges and other regulatory and supervisory authorities.

The Board also expresses its gratitude to the Bank's valued customers, shareholders, investors, business partners and other stakeholders for their continued trust and confidence in the Bank.

The Directors acknowledge with appreciation the dedication, professionalism and commitment demonstrated by employees at all levels, whose efforts have contributed significantly to the Bank's achievements during the year.

The Directors remain confident that with the continued support of all stakeholders, Punjab & Sind Bank will further strengthen its position as a trusted, responsible and progressive banking institution dedicated to nation building and sustainable value creation.

For and on behalf of the Board of Directors

Punjab & Sind Bank