As I sit down to write this message for the Annual Report, the last credit of the funds of our well-received QIP exercise has come into our Escrow account. This marks the end of a very demanding process but establishes the beginning of a new and exciting phase in our engagement with you. Let me begin by extending my sincerest gratitude to all our existing shareholders, whose unwavering belief in the ‘Federal Journey’ has been the bedrock of our progress. I am delighted to also welcome our new investors, whose trust in us has added momentum to our journey. We recognise that the faith presented to us always demands us to exceed expectations.

Esteemed Shareholders, it is with great pride that I present to you yet another Annual Report, my 13th as the MD & CEO of Federal Bank. While the general notion is to fear associating anything with the number 13, I am happy to differ on this count, as this was one of the best years for our Bank. We achieved the highest annual profits, the highest quarterly profits, the highest-ever net operating profit and much more.

While it was an overall positive year for us, the global markets have been tumultuous, experiencing a series of challenging events such as wars, the failure of some global banks, sovereign defaults, high inflation, and acute tightening of monetary policy. As a result, the world economy did witness a slowdown, and at times it seemed like an incomprehensible environment was emerging around us. Though many countries continue to battle the aftermath of the pandemic and face additional challenges as an outcome of stringent economic policies and rate hikes, India has demonstrated remarkable resilience.

The Indian economy is perceived as a bright spot in the global economy by supranational organisations such as IMF – clearly expected to grow faster than many large economies. By the end of the calendar year 2022, India had grown to become the 5th largest economy in the world by GDP. Aided by a strong domestic demand, focussed long-term investments by the Government and encouragingly upbeat services export, the provisional GDP growth for the Financial Year reached 7.2%, one of the highest among large economies. Also mentioned by the RBI governor,

Shri Shaktikanta Das, in his address as chief guest of the Federal Bank Hormis Memorial Lecture 2023, ‘International confidence on India’s capacity to contribute constructively to reshape the global economic order is rising’ - India is slowly but steadily progressing towards a distinct position in the global stage.

From the above narrative, I have come to believe that the Building of A New India (BANI) is steadily taking place in this Brittle, Anxious, Non-Linear and Incomprehensible world – B A N I in a B.A.N.I. WORLD. While India was not insulated from events around the world, however from the point of intersection, as a nation, we are showing the world –The India Way. Be it geopolitical relations, financial sector stability, currency exchange rates, the Government, regulators, and even citizens of the nation have kept the ball in play through purposeful resilience.

As India gears up for take-off, it is imperative that organisations have the force and direction vectors aligned with that of the country’s growth path. This new India in the making is a synthesis of many concepts – a digital India, an inclusive India, a sustainable India, and more. To participate in this growth story requires organisations such as ourselves to sharpen our digital prowess, take great strides in harnessing our human potential and refine all our operational processes using new-age technology. Also, as we strive to resonate with the ideals projected by the new India, prioritising ESG becomes equally important. We take immense pride in Federal Bank’s ESG strides, evident not only in the improvement of our Refinitiv score (Globally our Bank ranks 74th out of 934 Banks and 25th out 723 Indian Companies in India, under Refinitv Rankings), but also in our association with an esteemed institution like IFC, a world bank entity. IFC’s stake in our Bank serves as a significant recognition of our commitment to ESG and our significant role in shaping India’s story.

#Rishta with Digital Prowess

In this exciting juncture, technology takes the centre stage in almost all aspects of our lives, ushering in a wave of possibilities with AI, blockchain, and other innovations. Embracing the generative AI era, our Bank has forged strong partnerships with tech companies to revolutionise the banking experience for our customers.

Our model, partnering with many new-age tech firms, has magnified our reach, establishing Federal Bank as the first choice for any technology innovators in the country to collaborate with. Currently, we proudly offer over 13 API bundles and 400+ APIs, ensuring seamless integration with multiple systems. An impressive 90% of our transactions are now conducted through digital means, while our AI Digital Assistant, Feddy, handles 70% of customer queries. Our Bank has taken proactive strides to promote digital initiatives, such as Soft Pos, transforming mobile devices into POS machines for easy payment settlements. Furthermore, our Digital Banking Unit offers more than 20 services available through kiosks, while BAAP - Bus as a Branch Platform - brings banking to mobile branches on buses. We have also launched groundbreaking projects like the Instant Kisan Credit Card, providing record TAT loan sanctions in collaboration with RBiH. Our state-of-the-art digital micro-lending platform, Fedmi, delivers exceptional TAT, enhancing the banking experience for our valuable customers. Remarkably, our 1,355 branches, combined with these digital enablers and partnerships, extend our reach to almost 18,000 of the 19,000+ pin codes in India – enabling us to serve customers across the nation. Our blue and yellow colours paint a vibrant and innovative banking landscape, spanning from the serene valleys of Munnar to the majestic palaces of Jaisalmer, and from the bustling streets of Assam to the vibrant plains of Indore.

#Rishta with Human Progress

Our Bank’s strong commitment to both people and society lies at the core of our approach to play a prominent part in the incredible India growth story. We actively empower communities and contribute to social well-being through extensive CSR programmes spread across the country. Additionally, our skill academies bridge gaps in formal education, empowering individuals with valuable knowledge and skills. The country-wide debating platform, Speak for India, serves as a catalyst for discovering bright talent from all corners of the nation.

Notably, we have been honoured with the Great Place to Work award three times in a row, a significant achievement that reflects our dedication to creating a positive and engaging work culture. Our Bank actively fosters a deep and vibrant employee talent pool through multiple programmes, with Coursera, E-academies, Certification Support, Upskilling Scholarships, Daksha Webinars, and more. In the fiscal year, I am pleased that 3.9 Lakh person-hours of training were imparted, with 99% of our officers participating in self-learning programmes. We further enhanced employee engagement through our in-house built app, ‘Pulse of Federals’, which facilitates building connections and ensures employee well-being through its various features. A direct result of the focus on people, we ensure our committed workforce continues to enjoy being Federals for Life. Our relatively low attrition rates, testify this. As we march forward, we firmly believe that the success of our Bank is intricately linked to the growth and well-being of society. By nurturing a talented workforce and actively contributing to social upliftment, we endeavour to co-create a brighter future where everyone can partake in India’s Growth story and thrive!

#Rishta with Operational Processes

In our unwavering quest to become the Most Admired Bank, we have embraced industry-leading standards and processes to deliver great customer experiences. Our pursuit of excellence is seen through strategic measures that we are taking to help deliver our ambition of being a bank with an NPS that sets industry benchmarks.

Automation with AI: The implementation of an AI-based remote monitoring process not only ensures the safety and security of our Bank’s premises but also enables simultaneous monitoring of a large number of locations.

Centralised Crisis Management: The adoption of centralised monitoring for crisis management prepares our Bank for potential eventualities that may impact business continuity, facilitating quick and effective remedial actions.