Profitability & Capital Adequacy Presentation

b. Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality Benefit Bank has utilized the new Indian digital Ecosystem for better controls in lending Stage of Loan Processing KYC Risk Scorecards Earlier New Ecosystem • Physical copies of Passport, Ration Card, etc. Identity is Biometric • Regression and Judgement based models AI / ML Now Low seasoning of Bureau • Low awareness of credit bureau Bureau • Lesser records (300m) • Static Photo test Fraud Control •Traditional eyeballing method for Frauds Cash Flow and Financial Analysis Repayment Mandate Collections Monitoring No Fraud database, Scorecard Physical copies of financials, bank statements, salary slips, Income Tax Returns No alternative data sources Manual calculation of financial ratios basis photocopied document PDCS/SI/ NACH for repayment • Tele-calling, field collections Batch Mode, once a month Biometric KYC - eKYC, CKYC, Aadhaar OTP based KYC Advanced Scorecards based on Logistic Regression and Machine Learning algorithms • High seasoning, better data quality Bureau is evolved • More records (600m) Advanced real time fraud check mechanism Bank statements, GST records are electronic NACH is electronic UPI, BOT . • High awareness and sensitivity among customers Live Facial recognition technology, latitude-longitude marker • Automated identification of fraudulent transactions Availability of Fraud Database and Scorecards Digitized .pdf bank statement, salary slips, tax returns Digitized alternate data sources like GST, Telecom, etc. Automated calculation of financial ratios and cash flow analysis Electronic mandate through- NACH High Quality Identity check Better Risk management Reduced credit risk Better fraud management More accurate cash flow analysis Better collections • Collection through sending UPI link, calling using bots to Frictionless, lesser use customer of tele-calling Better quality of portfolio Analytics is • Real time monitoring of portfolio by various cuts real time 38 IDFC FIRST Bank

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