ESAF Small Finance Bank (ESAF SFB) has received a significant boost in its Environmental, Social, and Governance (ESG) credentials, as CareEdge ESG Ratings upgraded the bank's ESG rating from CareEdge-ESG2 to CareEdge-ESG1. This upgrade represents a substantial improvement in the bank's overall ESG score, rising from 68.10 to 75.40.

Key Highlights of the Upgrade

The upgrade reflects ESAF SFB's strong commitment to sustainability and responsible banking practices. Here are the main factors contributing to the improved rating:

1. Leadership in Workforce Diversity: The bank has shown exemplary performance in maintaining a diverse workforce.

2. Focus on Financial Inclusion: ESAF SFB continues to demonstrate a sharp focus on promoting financial inclusion.

3. Robust Governance Practices: The bank's governance framework has been recognized as a key strength.

4. Enhanced CSR Allocation: ESAF SFB has allocated more than the regulatory required Corporate Social Responsibility (CSR) funds, showcasing its commitment to social upliftment.

5. Strong Cybersecurity Framework: The bank boasts an ISO/IEC 27000-certified cybersecurity framework, enhancing its digital security posture.

6. Comprehensive Regulatory Compliance: ESAF SFB demonstrates full compliance with SEBI and Companies Act requirements.

Areas for Improvement

While the upgrade is significant, CareEdge ESG Ratings also highlighted some areas where ESAF SFB could further enhance its ESG performance:

• Absence of third-party verified climate-related data
• Limited coverage of emission accounting
• Lack of specified targets on emissions and energy consumption
• Small green loan portfolio
• Absence of external evaluation of existing policies
• Insufficient diversity at senior management levels

ESG Rating Details

The following table summarizes the key details of ESAF SFB's ESG rating upgrade:

This upgrade in ESG rating is a testament to ESAF Small Finance Bank's ongoing efforts to integrate sustainable practices into its core business operations. It also reflects the bank's commitment to transparency and responsible banking, which are increasingly important factors for investors and stakeholders in the financial sector.

As the banking industry continues to evolve with a greater emphasis on sustainable and responsible practices, ESAF SFB's improved ESG rating may position it favorably in the market. However, the areas identified for improvement suggest that there is still room for the bank to further enhance its ESG performance, particularly in environmental metrics and senior management diversity.

ESAF Small Finance Bank has successfully concluded its postal ballot process with all four proposed resolutions receiving overwhelming shareholder approval. The bank announced the results on December 12, 2025, following the completion of remote e-voting.

Postal Ballot Results Overview

The voting process concluded with strong shareholder participation, as detailed in the scrutinizer's report:

Resolution-wise Voting Results

All four resolutions were passed with requisite majority:

Approved Resolutions

Capital Structure Enhancement: Shareholders approved the increase in authorized share capital from ₹600.00 crore to ₹1,000.00 crore by creating an additional 40 crore equity shares of ₹10.00 each. This move strengthens the bank's capital adequacy position and supports future growth objectives.

Board Appointments: Three key board-level appointments received approval:

1. Karthikeyan Manickam as Non-Executive Independent Director and Part-Time Chairman, effective December 21, 2025, for a three-year term with fixed remuneration of ₹20.00 lakh per annum
2. Ms. Kolasseril Chandramohanan Ranjani re-appointed as Non-Executive Independent Director for another three-year term from December 13, 2025
3. Ajay Sharma appointed as Non-Executive Independent Director for a three-year term starting December 21, 2025

Regulatory Compliance

The postal ballot process was conducted in compliance with Sections 108 and 110 of the Companies Act, 2013, and SEBI Listing Regulations. Pursuant to Section 12(2) of the Banking Regulation Act, 1949, and RBI guidelines, promoter voting rights were restricted to 26% of total voting rights.

The results have been displayed at the bank's registered office, website ( www.esaf.bank.in ), and filed with BSE and NSE. These approved changes position ESAF Small Finance Bank for enhanced governance structure and future growth initiatives.