Capital Small Finance Bank has issued a comprehensive postal ballot notice dated February 23, 2026, seeking shareholder approval for critical governance and remuneration matters through remote e-voting process. The notice addresses three significant resolutions requiring member consent under regulatory compliance frameworks.

Executive Director Remuneration Revision

The bank proposes to revise the remuneration structure of Executive Director Munish Jain (DIN: 10132430) effective April 01, 2025, following Reserve Bank of India guidelines. The revision aligns with RBI's compensation framework for Whole Time Directors and Chief Executive Officers.

The revised structure reduces fixed compensation while increasing performance-linked variable components. RBI has approved the fixed remuneration of ₹1.54 crore per annum through letter No. DoR.GOV.No.S5481/29.44.004/2024-2025 dated October 10, 2025.

Re-appointment of Executive Director

The second resolution seeks approval for Munish Jain's re-appointment as Whole Time Director designated as Executive Director for three years effective August 28, 2026. Jain, who joined the bank in 2000 during its inception as Capital Local Area Bank, brings over 25 years of banking experience across strategic formation, treasury operations, and business planning.

The Nomination and Remuneration Committee recommended the re-appointment based on Jain's contribution to the bank's conversion to Small Finance Bank status and successful equity listing on February 14, 2024.

Related Party Remuneration Approval

The third resolution addresses remuneration for Shahbaz Singh Samra, son of Managing Director & CEO Sarvjit Singh Samra, who currently serves as Senior Vice President – Alternate Distribution Unit. The proposal seeks approval for enhanced remuneration ceiling to accommodate performance-linked revisions.

Samra holds qualifications from Loughborough University (B.Sc. Management Science) and University of St. Andrews (M.Litt. Marketing), with prior experience at KPMG-India's Strategy – Financial Services practice.

E-voting Process and Timeline

The bank has engaged MUFG Intime India Private Limited (formerly Link Intime India Private Limited) to facilitate remote e-voting. Mr. Bunny Sehgal of B. Sehgal and Associates (Membership No. F11407, COP No. 15161) has been appointed as Scrutinizer for the postal ballot process.

Eligible shareholders as of the cut-off date can participate through multiple platforms including NSDL, CDSL, and InstaVote portals. The notice is being distributed electronically to registered email addresses in compliance with MCA circulars.

Regulatory Compliance Framework

All proposed resolutions require compliance with multiple regulatory frameworks including the Companies Act 2013, SEBI Listing Obligations and Disclosure Requirements Regulations 2015, and Banking Regulation Act 1949. The remuneration revisions specifically align with RBI's Guidelines on Compensation of Whole Time Directors dated November 04, 2019.

The bank's board of directors unanimously recommends approval of all three ordinary resolutions, emphasizing their alignment with corporate governance standards and long-term organizational objectives.

Capital Small Finance Bank delivered a strong performance in Q3FY26, demonstrating consistent growth across key business metrics while maintaining stable margins and improving asset quality. The bank's results reflect disciplined execution of its strategy focused on secured lending and retail deposit mobilization.

Financial Performance Highlights

The bank's financial metrics for Q3FY26 showed robust growth across multiple parameters:

The bank achieved quarterly disbursements of ₹919 crores, marking a significant 25% year-on-year increase, supported by festive season demand and strong rural cash flows. For the nine months ending December 2025, total disbursements reached ₹2,590 crores, reflecting 24% growth.

Asset Quality and Risk Management

Asset quality metrics showed marginal improvement during the quarter:

The slippage ratio improved significantly to 1.21% from 1.73% in Q2FY26, while write-offs remained minimal during the quarter. The bank maintained its provision coverage ratio above 50%, reaching 50.46% compared to 49.5% in the previous quarter.

Deposit Growth and Liability Management

The bank's deposit franchise demonstrated strong momentum with total deposits crossing ₹9,931 crores, registering 18.5% year-on-year and 7% quarter-on-quarter growth. The CASA ratio improved to 35.9% from 33.9% in Q2FY26, underlining the strength of the retail deposit base.

The cost of deposits began trending downward, declining to 5.86% from 5.92% in Q2FY26, reflecting initial benefits from term deposit repricing. Management expects more meaningful repricing benefits over the next six months, with 63% of existing term deposits scheduled for repricing across the next three quarters.

Business Segment Performance

The bank's diversified portfolio showed balanced growth across key segments:

• MSME/Business Segment: Grew 42% year-on-year and 10% quarter-on-quarter, increasing its portfolio share to 25% from 23% in Q2FY26
• Agriculture Segment: Moderated to 28% from 30% in Q2FY26, maintaining stable asset quality
• Mortgage Portfolio: Remained stable at 26%, with LAP accounting for 15% and housing loans 11%
• Corporate Segment: Maintained 14% share

Geographically, advances outside Punjab continued outpacing overall bank growth, with the out-of-Punjab portfolio constituting 24% as of December 31, 2025, compared to 21% in Q3FY25.

Profitability and Operational Efficiency

Profitability metrics remained stable despite temporary margin pressures:

*Excluding exceptional item of INR5.13 crores related to New Labour Code implementation

The bank maintained strong capital adequacy at 21.6% with average LCR of 215.8%, providing substantial headroom for future growth. The branch network expanded to 203 branches across 5 states and 2 union territories, with SURU branches accounting for 76% of the network and contributing 75% to deposits.

Strategic Outlook and Guidance

Management provided comprehensive guidance for future growth:

• FY26 Targets: 20%+ advance growth, maintaining current trajectory
• FY29 Vision: Advance book exceeding INR16,000 crores, 300+ branches
• Profitability Goals: ROA expansion to 1.6%+ and ROE of 15%+ by FY29
• NIM Expectations: 3-5 basis points improvement in Q4FY26, with 10-15 basis points enhancement in subsequent quarters

The bank expects NIM expansion supported by deposit cost moderation from repricing, with 23% of high-cost deposits maturing in Q4FY26, 46% in Q1FY27, and 27% in Q2FY27. This repricing schedule positions the bank favorably for margin improvement in the coming quarters.