Corporate Social Responsibility Policy

1. Preamble

The origin of ESAF in 1992 has been in response to the convictions on social responsibility, as articulated in its vision for creating a just and fair society. By now for quarter of a century, we have journeyed with the underprivileged and the marginalised to bring them forward to the main stream. With that heritage, at ESAF SMALL FINANCE BANK, we are committed to the triple bottom line approach pursuing our vision- to be India’s leading SOCIAL bank, carving out an exemplary reputation as a bank that synergises economic, social and environmental responsibility

In the GOI norms, the concept of Corporate Social Responsibility (CSR) is governed by clause 135 of the Companies Act, 2013, which was enacted in August 2013. The CSR provisions within the Act is applicable to companies with an (a) Annual turnover of INR 1,000 crore and more, or (b) A net worth of INR 500 crore and more, or (c) A net profit of INR 5 crore and more.

The companies (Corporate social Responsibility Policy) Rules, 2014 require companies to setup a CSR Committee consisting of at least 3 board members, including at least one independent director. The Act encourages companies to spend at least 2% of their average net profit in the previous three years on CSR activities. The Act lists out a set of activities eligible under CSR. The indicative activities which can be undertaken by a company under CSR have been specified under Schedule VII of the Act.

2. Purpose & Scope

Through the CSR projects and programmes, ESAF SFB will pursue inclusive and sustainable development of the community in and through its domain of operations. Beyond charity donations, aligned with its vision statement, the bank will pursue transformation of lives and communities and would choose projects accordingly.

This policy shall apply to all projects, programs, donations and activities undertaken by the Bank in fulfilment of its corporate social responsibility and shall be reviewed and updated from time to time with changes in the CSR rules and applicable laws regulations as and when required.

3. CSR Policy Statement

ESAF SMALL FINANCE BANK is committed the transformation of lives and communities by:

• 3.1. Addressing social, environmental and economic needs of the poor and the marginalized sections of the society
• 3.2. An approach that integrate the solutions to the critical problems of the society into the strategies of the bank to benefit the communities at large with a Triple Bottom Line impact
• 3.3. Employee and customer participation in the projects and networking with founding society, group companies and likeminded entities.
• 3.4. aligning the corporate social responsibility strategies with the ESAF group’s vision for a just and fair society, fighting the partiality of prosperity

4. Key Focus Areas and Activities

The Key focus areas for CSR activities of ESAF SMALL FINANCE BANK are chosen in such a way that the broad vision of the bank and ESAF Group are fulfilled. ESAF Group envisions a just and fair society through holistic transformation of the poor and the marginalized. This implies addressing critical issues of the poor and the marginalized like Education, Health, Sanitation, Environment and Livelihood Development

4. Key Focus Areas and Activities

The Key focus areas for CSR activities of ESAF SMALL FINANCE BANK are chosen in such a way that the broad vision of the bank and ESAF Group are fulfilled. ESAF Group envisions a just and fair society through holistic transformation of the poor and the marginalized. This implies addressing critical issues of the poor and the marginalized like Education, Health, Sanitation, Environment and Livelihood Development

4.1. Education
4.1.1 Construction and renovation of school buildings.
4.1.2 Education of the underprivileged
4.1.3 Education of girls
4.1.4 Digital literacy through computer education.
4.1.5 Merit scholarships to financially backward students.
4.1.6 Supply of note books and text books.
4.1.7 Adult Literacy Programmes4.2. Healthcare
4.2.1 Medical camps (general and multi-specialty with specialist doctors).
4.2.2 Mobile clinics with doctors and paramedical staff
4.2.3 Ambulance services.
4.2.4 Awareness programmes for women and adolescent girls.
4.2.5 Blood donation and eye donation camps.
4.2.6 Palliative care
4.2.7 Geriatric care
4.2.8 Home based Health Care
4.2.9 Training Health Volunteers

4.3. Sanitation
4.3.1 Construction of household toilets.
4.3.2 Construction of toilets for children in the schools.
4.3.3 Facilitating sanitation for rural areas / urban slums
4.3.4 Community Sanitary Awareness campaigns.

4.4. Environment
4.4.1 Environment Education and Awareness Raising
4.4.2 Biodiversity conservation
4.4.3 Waste management systems
4.4.4 Circular Economy Development Models
4.4.5 Global Warming Risks Mitigation

4.5. Livelihood Development
4.5.1 Skill development for rural youth to improve employability and entrepreneurship
4.5.2 Skill development for rural women to promote entrepreneurship
4.5.4 Basic infrastructure to enhance rural livelihoods
4.5.4 Rural Economy Eco System Development

4.6 Any other activity as permitted under Companies Act, 2013

5. Governance & Monitoring Structure

A robust and transparent governance structure is constituted to oversee the implementation of our CSR Policy, in compliance with the requirements of Section 135 of the Companies Act, 2013.

Board will constitute a Board level CSR Committee, which will be assisted by a CSR Management Committee. Sustainable banking Department will be responsible for the CSR function of the bank.

5.1 Board‐Level CSR Committee
The CSR governance structure will be headed by the Board Level CSR committee that will be ultimately responsible for the CSR projects undertaken.

5.2 CSR Management Committee:
The Board Level CSR Committee will be assisted by a CSR Management committee led by MD & CEO as the Chair, Head (Sustainable Banking) as Convenor, and three department heads (as nominated by MANCO) as co-opted members

5.3 The Responsibilities of CSR Management Committee shall be
5.3.1. Stewardship of CSR policy, putting monitoring mechanisms in place to track the outcomes through the Sustainable Banking Department.
5.3.2 Periodic reports to the board with suggestions for Board interventions to the Board through the Board Level CSR Committee
5.3.3 Recommend the CSR expenditure to the Board who will approve it
5.3.4 Identify agencies and approve projects that are in line with the CSR policy
5.3.5 Proposing Revisions to CSR Policy, and obtaining approval from the Board
5.3.6 Appointment of an independent agency to evaluate the implementation and impact assessment as and when needed,

The Committee can also decide to undertake the CSR Activities through registered Society or Trust having enough track record in the field.

5.4 Project Monitoring
The Sustainable Banking Department will be the process owner for the stewardship of the CSR Projects to monitor time-bound actions and outcome plans and measurements and reporting.

Depending on the nature, the size and the complexity of the project, the CSR Management Committee may implement projects in any of the following manner

5.4.1 Execute the entire project itself, or through eligible NGOs within the ESAF Group
5.4.2 Engage with such agencies as NGOs, Trusts, Societies, etc., as deemed fit
5.4.3 Execute the initiatives in collaboration with other banks or corporates or government agencies
5.4.4 Design a participatory plan involving employees and customers of the bank

6. CSR Budget

6.1 Budget: The total budget for the CSR projects will be decided by the CSR Committee in line with the Govt of India regulations and other Board directives. The Board Level CSR Committee will propose the budget to the Board for approval

7. Conclusion

The terms CSR, and TRIPLE BOTTOM LINE now appear everywhere, from business news to mainstream news to super market store. But this has been the life style and legacy of ESAF over a credible period -for a quarter of a century.