IDFC FIRST Bank Limited has released its Business Responsibility and Sustainability Report (BRSR) for FY 2025-26, providing comprehensive disclosures on environmental, social, and governance (ESG) performance in accordance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report is prepared on a standalone basis and has been independently assured by SGS India Private Limited.

Entity Overview and Financial Parameters

The bank, incorporated in 2014 with CIN L65110TN2014PLC097792, operates as a financial services entity engaged in monetary intermediation of commercial banks. Its paid-up capital stood at ₹86,01,69,92,480 as on March 31, 2026. Key CSR-related financial parameters for FY 2025-26 are presented below:

The bank serves a diverse customer base including retail customers (urban and rural), professionals, large corporates, private companies, MSMEs, and NBFCs across 25 states and 5 Union Territories.

Operations and Workforce

As at the end of FY 2025-26, the bank operated 1,199 national locations (1,146 plants/branches and 53 offices) and one international office. The total permanent workforce stood at 43,059 employees, comprising 35,128 males (81.58%) and 7,931 females (18.42%). The bank also reported 11 differently abled permanent employees — 10 male and 1 female.

Approximately 60% of the bank's workforce is engaged in frontline roles including sales, customer service, call centres, and collections, while nearly 27% of employees are based in rural locations. The overall permanent employee turnover rate for FY 2025-26 was 31.5%, compared to 32.0% in FY 2024-25 and 32.2% in FY 2023-24.

Governance, Ethics, and Compliance

The bank's Board-approved policies cover all nine principles of the National Guidelines on Responsible Business Conduct (NGRBC). The CSR & ESG Committee of the Board holds oversight responsibility for ESG-related implementation and disclosures. Policy reviews are conducted annually or whenever regulatory changes necessitate amendments.

During FY 2025-26, the Reserve Bank of India imposed two monetary penalties on the bank. A penalty of ₹10,000/- was levied on December 11, 2025, relating to a branch visit at Noida Sector 16 on November 13, 2025, where the branch did not provide the facility for exchanging mutilated notes. A separate penalty of ₹5,000/- was imposed on October 15, 2025, for non-compliance with the requirement to prominently display security features at the Panipat (Haryana) Branch. No appeals were preferred in either case, and corrective actions including staff sensitisation and disciplinary measures were initiated.

The bank's anti-corruption and anti-bribery framework is embedded in its Code of Conduct for Board of Directors & Senior Management Personnel, Code of Conduct for Employees, and Whistle Blower Policy. No complaints related to conflict of interest involving Directors or KMPs were received in FY 2025-26 or FY 2024-25.

Stakeholder Grievances and Consumer Complaints

The bank received and processed grievances from multiple stakeholder groups during FY 2025-26. Customer complaints related to delivery of essential services totalled 17,170, with 760 pending resolution at year-end, compared to 21,573 filed and 321 pending in FY 2024-25.

On human rights, 4 sexual harassment complaints were filed in FY 2025-26, with 2 pending resolution at year-end, compared to 1 filed and 1 pending in FY 2024-25. No complaints related to discrimination, child labour, forced labour, wages, or other human rights issues were recorded in either year.

Environmental Performance

The bank reported a reduction in total Scope 1 and Scope 2 greenhouse gas emissions from 61,701.28 tCO2e in FY 2024-25 to 49,393.40 tCO2e in FY 2025-26. Scope 1 emissions declined from 19,417.16 tCO2e to 9,107.77 tCO2e, while Scope 2 emissions decreased from 42,284.12 tCO2e to 40,285.63 tCO2e.

Total Scope 3 emissions for FY 2025-26 were 41,004.59 tCO2e (down from 42,680.95 tCO2e in FY 2024-25), covering purchased goods and services (Cat. 1: 368.47 tCO2e), business travel (Cat. 6: 39,300.49 tCO2e), and employee commuting (Cat. 7: 1,335.63 tCO2e). Non-hazardous waste generated included metal waste (0.98 metric tonnes), dry waste (333.11 metric tonnes), and wet waste (191.99 metric tonnes) in FY 2025-26.

In FY 2025-26, the bank added 3 offices and 50 branches under green certification, taking its overall green footprint to 1.4 million sq. ft., representing 36% of the bank's carpet area. The bank has also voluntarily initiated connecting its large offices to the green power grid to reduce Scope 2 emissions, and implements Zero Liquid Discharge principles at select large offices through Sewage Treatment Plants.

Subsidiary and Associate Companies

The bank holds the following subsidiaries and associate companies participating in its business responsibility framework:

None of the entities listed above participate in the bank's Business Responsibility initiatives. The bank is affiliated with four national trade and industry chambers, including the Indian Banks' Association, Confederation of Indian Industry, Fixed Income Money Market and Derivatives Association of India, and Foreign Exchange Dealers Association of India.

IDFC First Bank has convened its 12th Annual General Meeting (AGM) on Monday, August 31, 2026, at 2:00 p.m. IST, to be held through Video Conferencing (VC) / Other Audio-Visual Means (OAVM). The meeting will take up adoption of audited financial statements for FY 2025-26, declaration of dividend, re-appointment of a director, and special resolutions for capital raising and amendment of the Articles of Association.

Key Financial Highlights — FY 2025-26

The Bank delivered steady growth across core operating metrics in FY 2025-26, even as a fraud incident at its Chandigarh branch weighed on reported profitability.

The moderation in NIM from 6.09% in FY 2024-25 to 5.75% in FY 2025-26 was attributable to the run-down of the high-yielding microfinance portfolio and the transmission of repo rate reductions of 125 basis points since February 2025. The Bank's credit cost was 2.13% of average loan book in FY 2025-26, reflecting the impact of the microfinance (MFI) industry crisis.

Chandigarh Fraud Incident

In February 2026, the Bank identified an incident of unauthorised and fraudulent activity at its Sector 32 Branch, Chandigarh, involving collusion between certain employees/ex-employees of the branch, certain employees of customers (departments of the State Government of Haryana), and certain third parties. The Bank paid claims aggregating ₹645.59 crore and recognised the full financial impact — amounting to ₹646 crore (₹483 crore post-tax) — in Q4 FY 2025-26. An independent forensic review by KPMG confirmed the incident was isolated to a single branch. The Bank subsequently implemented additional preventive and technology-led controls, including enhanced centralised oversight and strengthened customer communication processes.

Asset Quality

Asset quality improved during FY 2025-26 across key metrics.

Collection efficiency in the microfinance portfolio recovered to pre-crisis levels, reaching 99.7% in Q4 FY26. For Q1 FY 2026-27, the credit cost as a percentage of average loan book stood at 1.53%.

Capital Adequacy and Net Worth

As of March 31, 2026, the Bank's net worth stood at ₹47,352 crore, up from ₹38,078 crore a year earlier. During the year, the Bank raised ₹7,500 crore through a preferential issue of Compulsorily Convertible Cumulative Preference Shares (CCPS), subsequently converted into equity shares.

Q1 FY 2026-27 Update

The Bank reported its highest-ever quarterly Profit After Tax of ₹1,075 crore in Q1 FY 2026-27, crossing the ₹1,000 crore mark for the first time. Return on Assets crossed 1% during the quarter.

In Q4 FY26, operating income grew 17.1% while operating expenses grew 12.3%. In Q1 FY27, operating income grew 21.5% while operating expenses grew 16.4%, reflecting a positive profitability jaw of approximately 500 basis points.

Banking Network and Franchise

As of March 31, 2026, the Bank operated 1,147 branches (777 urban, 370 rural), 289 asset outlets, 1,050 ATMs, and 6,627 Micro-ATMs. The Bank's FASTag business maintained over 18 million active FASTags, processing 40% of all NETC issuer transactions by value. The Easy Buy EMI Card franchise grew to 26 million customers.

ESG Highlights

Key ESG metrics for FY 2025-26 included:

• Green Deposits: ₹1,284+ crore raised; 221 lakh+ kg CO2e emissions avoided
• Electric Vehicles Financed (via Green Deposits): 1.02 lakh+
• Rural Finance Portfolio (March 31, 2026): ₹24,146 crore
• Women Borrowers Served: 37 lakh+ in FY 2025-26
• Green Power Area (June 30, 2026): 5.6 lakh+ sq. ft.
• MSCI ESG Rating: Upgraded from A to AA
• S&P Global ESG Score: Improved from 48 to 56
• Green-Certified Premises: 36% of total premises (14,09,998 sq. ft.)

AGM Agenda and Proposed Resolutions

The 12th AGM will consider the following businesses:

Ordinary Business:

• Adoption of audited standalone and consolidated financial statements for FY 2025-26
• Re-appointment of Mr. Pradeep Natarajan (DIN: 10499651) as Director, retiring by rotation
• Declaration of dividend of ₹0.25 per equity share (face value ₹10 each) for FY 2025-26

Special Business:

• Enabling approval to raise funds up to ₹7,500 crore through issuance of equity securities (including via QIP, preferential allotment, or private placement) within one year from the AGM date
• Enabling approval to issue debt securities on a private placement basis up to ₹12,500 crore within one year from the AGM date
• Amendment to the Articles of Association: modification of Article 101A and insertion of new Article 101B to provide clarity on appointment of nominee director(s) by eligible investors, subject to RBI and shareholder approval

The record date for dividend eligibility is Friday, August 7, 2026. The Board had recommended the dividend at its meeting held on April 25, 2026, subject to shareholder approval at the AGM. The remote e-voting period runs from August 26, 2026 (9:00 a.m. IST) to August 30, 2026 (5:00 p.m. IST).