Utkarsh Small Finance Bank 's Board of Directors has approved significant leadership appointments following its meeting held on December 13, 2025. The Board's decisions, made based on recommendations from the Nomination and Remuneration Committee (NRC), include the permanent appointment of Ms. Suchita Chatterjee as Head-Internal Audit and the re-appointment of Mr. Ajay Kumar Kapur as Independent Director for a second term.

Key Board Appointments

The Board meeting, which commenced at 10:00 a.m. (IST) and concluded at 07:15 p.m. (IST), approved two crucial appointments pursuant to Regulation 30 of SEBI Listing Regulations:

Leadership Profile: Ms. Suchita Chatterjee

Ms. Suchita Chatterjee brings substantial expertise to her permanent role as Head-Internal Audit, forming part of the bank's Senior Management team. Her appointment was approved on the recommendation of the Audit Committee. Her educational qualifications include:

• Master's in Business Administration from Calcutta University
• LLB from Utkal University

She possesses over 20 years of prior work experience in the audit function across various financial institutions, including:

• Ujjivan Small Finance Bank Limited
• IndusInd Bank
• Various microfinance institutions including Bharat Financials

Director Re-appointment Details

Mr. Ajay Kumar Kapur (DIN: 00108420) received Board approval for re-appointment as Independent Director for a second term spanning three consecutive years from March 02, 2026 to March 01, 2029 (both days inclusive). This re-appointment remains subject to shareholder approval.

Professional Background

Mr. Kapur holds a bachelor's degree in engineering (industrial engineering) from the University of Roorkee, now known as Indian Institute of Technology, Roorkee. His extensive professional experience includes associations with:

• Punjab Tractors Limited
• Industrial Development Bank of India
• India SME Technology Services Limited
• SIDBI

Currently, he serves as an advisor to the United Nations Industrial Development Organization, bringing valuable international perspective to the bank's board.

Regulatory Compliance

The Board confirmed that Mr. Ajay Kumar Kapur is not debarred from holding the office of director by any order of SEBI or other authorities. Additionally, he is not disqualified from holding the office of director pursuant to provisions of Section 164 of the Companies Act, 2013. The disclosure has been made available on the bank's website at www.utkarsh.bank.in .

Strategic Implications

The permanent appointment of Ms. Chatterjee as Head-Internal Audit strengthens the bank's risk management and compliance framework, while Mr. Kapur's re-appointment ensures continuity in independent oversight and strategic guidance. These leadership decisions position Utkarsh Small Finance Bank to maintain robust governance standards while pursuing its growth objectives in the competitive small finance banking sector.

Utkarsh Small Finance Bank , a prominent player in the microfinance sector, reported a net loss of Rs 348 crore for the second quarter of fiscal year 2026. The bank's performance was significantly impacted by regulatory changes and lingering stress in its microfinance portfolio.

Key Highlights

Regulatory Impact and Portfolio Stress

The implementation of MFIN Guardrail 2.0, effective from April 1, 2025, has introduced significant changes in the microfinance lending landscape. This regulatory shift, which limits borrower-level leverage to a maximum of 3 lenders, has led to slower-than-expected recovery in collection sentiment and elevated overdue accounts.

Govind Singh, Managing Director and CEO of Utkarsh Small Finance Bank, stated, "The quarter was marked by a deliberate shift in strategy – balancing caution with forward momentum. Our focus has remained on strengthening the fundamentals, even as we navigate through transitional headwinds that have impacted certain segments of our portfolio."

Portfolio Diversification and Risk Management

Despite challenges in the Joint Liability Group (JLG) segment, the bank has made significant strides in diversifying its portfolio:

• The micro-banking business loan (MBBL) portfolio grew by 39.00% year-on-year, now constituting 13.00% of the micro-banking loan book.
• Non-JLG lending businesses maintained healthy momentum, growing by 30.00% year-on-year and 4.00% quarter-on-quarter.
• The MSME loan book expanded by 33.00% year-on-year to Rs 4,164.00 crores.
• Housing loans grew by 21.00% year-on-year to Rs 947.00 crore.

Capital Raising and Future Outlook

To strengthen its capital base, Utkarsh Small Finance Bank successfully raised Rs 950.00 crore through a rights issue in November 2025. This capital infusion is expected to support the bank's growth plans for the next 24 months.

Looking ahead, the bank aims to achieve a loan book growth of around 25.00% over the next 2-3 years, with a focus on maintaining a well-diversified portfolio. The management expects the secured lending share to exceed 50.00% of the total loan book.

Recovery Trajectory

While Q3 FY26 may still face some challenges, the bank anticipates a gradual recovery starting from Q4 FY26. Govind Singh emphasized, "We expect asset quality to improve meaningfully from quarter 3 onwards. Pre-qualified loans to existing customers with no delinquencies are streamlining field operations, and exploring innovations across products will enable us to gain a higher wallet share of our existing customers with strong repayment track records."

The bank targets a net interest margin (NIM) of around 8.50% and aims to deliver a return on equity of about 15.00% by FY28, supported by efficient operations and moderated growth.

As Utkarsh Small Finance Bank navigates through this transitional phase, investors and stakeholders will be closely watching its performance in the coming quarters for signs of sustained recovery and growth.