DIRECTORS' REPORT

Your Board of Directors (the "Board”) is pleased to present its
88th Integrated Annual Report on the performance of the Bank,
together with the audited Balance Sheet, Profit and Loss Account
and the report on business and operations for the year ended
March 31, 2026.

Performance at a Glance

During the financial year ended March 31, 2026, the
Bank continued to deliver strong operational and financial
performance, supported by sustained business growth, healthy
asset quality, improved profitability and a robust capital position.

•    The aggregate business of the Bank stood at
J2,90,334.72 crore as on March 31, 2026.

•    Total deposits increased by J16,784.54 crore,
from J1,48,569.46 crore as on March 31, 2025 to
J1,65,354.00 crore as on March 31, 2026, registering a
growth of 11.30%.

•    CASA deposits stood at J75,478.32 crore, constituting
45.65% of the Bank's total deposits.

•    The average cost of deposits for FY 2025-26 was 4.70%.

•    Gross advances stood at J1,24,980.72 crore as on
March 31, 2026.

•    Net advances stood at J1,22,641.01 crore as on March
31, 2026.

•    Yield on advances for FY 2025-26 was 8.98%.

•    Average Priority Sector Advances stood at J43,602.91 crore.

•    During the year, the Bank achieved cumulative cash
recoveries, upgradation of NPAs and recoveries from
technical write-offs aggregating J1,177.28 crore.

•    The Bank’s net investment portfolio stood at
J40,821.86 crore as on March 31, 2026.

Insurance Business

The Bank earned a commission income of H102.31 crore from
Insurance Business by mobilising a business of H780.51 crore in
life insurance (including fresh retail life business of H183.99 crore,
Credit life business of H102.18 crore and renewal business of
H494.35 crore) and H210.72 crore in non-life insurance during
financial year 2025-26.

Income Analysis

The Bank maintained strong earnings momentum during
FY 2025-26.

•    Interest income amounted to J13,145.19 crore, while interest
expenditure stood at J7,269.42 crore, resulting in a Net
Interest Income (NII) of J5,875.77 crore.

•    Net income from operations, comprising net interest income
and non-interest income, amounted to J6,815.62 crore.

•    Operating expenses declined by J165.26 crore to
J3,829.13 crore, compared with J3,994.39 crore in the

previous financial year.

•    Consequently, the Cost-to-Income Ratio improved to
56.18% during FY 2025-26.

Operating Profit

The Bank reported an Operating Profit of J2,986.49 crore

for FY 2025-26, reflecting continued improvement in its core
operating performance.

Provisions

Total provisions towards loan losses, standard assets, taxation
and other contingencies amounted to J623.02 crore during
the financial year.

Net Profit

The Bank recorded a Net Profit of J2,363.47 crore for

FY 2025-26, reflecting sustained growth in earnings supported
by improved operating efficiency and prudent risk management.

Dividend

In terms of Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Bank has
formulated and adopted a Dividend Distribution Policy with the
objective of appropriately rewarding Shareholders through
dividends while retaining the capital required for meeting
regulatory capital requirements, maintaining adequate buffers
and supporting its future growth. The said Policy is available on
the official website of the Bank at:

https://ikb.bank.in/sites/default/files/2025-05/24.%20

Dividend%20Distribution%20Policy.pdf

The Board of Directors of the Bank did not recommend any
dividend for the Financial Year 2025-26.

Branch Network and Delivery Channels

The Bank continued to strengthen its physical and digital
distribution network during the year.

During FY 2025-26, the Bank established five new branches
and four Zonal Impaired Asset Recovery Centres (ZIARCs),
taking its total network to 1,017 branches (including IARCs and
ZIARCs) as on March 31, 2026, spread across 18 States and
4 Union Territories.

The distribution of branches (excluding Extension Counters,
Mobile Branches and Service Branches), based on Census 2011
classification, is as follows:

The Bank further expanded its alternate delivery infrastructure
by establishing two Easy Banking Units (EBUs)/Ultra Small
Branches (USBs) during the year, taking the total number of
EBUs/USBs to 99.

The ATM network expanded by 20 ATMs, increasing the total
number of ATMs to 1,437 as on March 31, 2026.

Additionally, the Bank commissioned 18 Cash Recycler
Machines (CRMs) during the year, taking the total number of
CRMs to 173.

Capital

The capital management framework of the Bank includes a
comprehensive internal capital adequacy assessment process
conducted periodically, which determines the adequate level of
capitalisation needed to meet the regulatory norms and current
and future business needs.

The capital management framework of the Bank is complemented
by the risk management framework, which covers the business
and capital plans and stress testing results integrated with the
internal capital adequacy assessment process while assessing
its impact on the capital ratios and adequacy of capital buffers
for current and future periods.

As at March 31, 2026, the Subscribed and Paid-up Capital of
the Bank stood at H110,11,82,463.00 comprising of 110,11,82,463
equity shares, which is same as at March 31, 2025.

Net Worth and Capital Adequacy Ratio (CRAR)

The Bank maintained a strong capital position well above the
regulatory minimum prescribed under Basel III.

•    Net Worth stood at J15,045.86 crore as on March 31, 2026.

•    The Capital Adequacy Ratio (CRAR) under Basel III was
16.55% as on March 31, 2026.

•    The Common Equity Tier 1 (CET1) ratio stood at 13.54%,
while the Tier 1 Capital Ratio stood at 14.44% as on
March 31, 2026.

•    The Adjusted Book Value per share stood at J129.51 as on
March 31, 2026.

The Bank continues to maintain a comfortable capital buffer,
providing adequate capacity to support future business growth
while complying with regulatory capital requirements.

Integrated Annual Report

For Financial Year 2025-26, the Bank is publishing its
first Integrated Annual Report based on the International
Integrated Reporting Framework ("IIRC”) and SEBI's guidelines
on integrated reporting. This report covers aspects such as
Bank’s strategy, governance framework, performance, risk
management and prospects of value creation based on the
six forms of capitals viz., financial capital, intellectual capital,
manufactured capital, human capital, social & relationship
capital, and natural capital.

Board of Directors

As on March 31, 2026, your Bank had Eleven (11) Directors
consisting of Managing Director & Chief Executive Officer,
Executive Director and 09 Non-Executive Directors.

Independent and Non-Independent•    Non-Independent Executive Directors

Mr. Amitava Chatterjee (DIN: 07082989), Non-Independent
Executive Director has been serving as the MD & CEO of
the Bank since December 30, 2024. Mr. Sudhir Gupta
(DIN: 09614492), Non-Independent Executive Director has
been serving as the Executive Director of the Bank since
December 14, 2022.

•    Non-Independent Non-Executive Directors

Mr. Shailendra Kumar, IAS (07352828), Dr. Mandeep
K Bhandari, IAS (DIN: 07310347), Mr. Sanjiv Dayal
(DIN: 10926091) {RBI appointed Additional Director} and
Mr. Rajesh Kumar Chhibber (DIN: 08190084) are the
Non-Independent Non-Executive Directors of the Bank.

•    Independent Non-Executive Directors

In terms of the definition of 'Independent Director’ as
prescribed under Regulation 16(1)(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 and Section 149(6) of the Companies Act, 2013 and
based on the declarations/disclosures received from the
Directors, the following Non-Executive Directors are
Independent Directors of the Bank.:

1.    Mr. Sankarasubramanian Krishnan (DIN: 07261965)
(Part Time Chairman)

2.    Mr. Anand Kumar (DIN: 03041018)

3.    Ms. Shahla Ayoub (DIN: 09834993)

4.    Mr. Arun Gandotra (DIN: 08907929)

5.    Mr. Prafulla Premsukh Chhajed (DIN: 03544734)

Statement on declaration by Independent
Directors

All Independent Directors of the Bank have given their respective
declarations stating that they meet the criteria of independence
as laid down under the applicable laws and in the opinion of the
Board, the Independent Directors meet the said criteria.

Appointments/Resignations from the Board of
Directors

During the FY 2025-26, there were following changes in the

composition of the Board:

•    Mr. Sankarasubramanian Krishnan (DIN: 07261965) was
appointed as Independent Director on the Board of the Bank
for a period of three years effective from March 27, 2025 and
subsequently appointed as a Part-time Chairman of the Bank
w.e.f. November 13, 2025 till March 26, 2028.

•    Dr. Pawan Kotwal, IAS (DIN: 02455728) and Dr. Mandeep
K Bhandari, IAS (DIN: 07310347) were re-appointed as
Rotational Directors on the Board of the Bank effective from
August 26, 2025.

•    Mr. Arun Gandotra (DIN: 08907929) was appointed as
Independent Director on the Board of the Bank for a period
of three years effective from August 26, 2025.

•    Mr. Sudhir Gupta (DIN: 09614492) was re-appointed as
Executive Director on the Board of the Bank effective from
December 13, 2025 till November 30, 2027.

•    Ms. Shahla Ayoub (DIN: 09834993) was re-appointed as
Independent Director for a further period of three years on
the Board of the Bank w.e.f. December 26, 2025 to December
25, 2028.

•    Dr. Pawan Kotwal, IAS (DIN: 02455728) Non-Executive
Non-Independent Director of the Bank, upon attaining the
age of superannuation on December 31, 2025, resigned on
January 01, 2026 from the position of Non-Executive Non¬
Independent Director of the Bank.

•    Mr. Umesh Chandra Pandey (DIN: 01185085) and Mr. Anil
Kumar Goel (DIN: 00672755) ceased to be Independent
Directors on the Board of the Bank effective from January
20, 2026 after completion of their second term.

•    Mr. Prafulla Premsukh Chhajed (DIN: 03544734) was
appointed as an Independent Director on the Board of the
Bank for a period of three (3) years effective from February 18,
2026 to February 17, 2029.

•    Mr. Shailendra Kumar, IAS (DIN: 07352828) was appointed
as Government Nominee Director in place of Mr. Santosh
Dattatraya Vaidya, IAS (DIN: 05340193) effective from March
02, 2026.

Changes in the Board of Directors after the
Closure of Financial Year

•    Mr. Ashish Kundra, IAS (DIN: 06966214) was appointed as
a Rotational Director on the Board of Directors of the Bank
w.e.f. April 23, 2026.

•    Mr. Pravin Raghavendra (DIN: 09686944) was appointed
as an Independent Director on the Board of the Bank for a
period of three years, w.e.f. April 23, 2026 to April 22, 2029.

•    Mr. Ashish Kundra, IAS (DIN: 06966214) has resigned from
the position of Rotational Director of the Bank with effect
from August 20, 2026 due to his official engagements.

Directors retiring by rotation at AGM

Mr. R K Chhibber (DIN: 08190084) is liable to retire by rotation
at the ensuing Annual General Meeting. Mr. R K Chhibber has
not offered himself for re-appointment on the Board of the Bank.

Appointments/Resignations of the Key
Managerial Personnel

During the Financial Year 2025-26, Mr. Amitava Chatterjee,
(DIN: 07082989), Managing Director & Chief Executive Officer,
Mr. Sudhir Gupta (DIN: 09614492), Executive Director, Mr. Fayaz
Ahmad Ganai, Chief Financial Officer (upto July 16, 2025),
Mr. Ketan Kumar Joshi, Chief Financial Officer (from July 17,
2025) and Mr. Mohammad Shafi Mir, Company Secretary were
the Key Managerial Personnel of the Bank.

Mr. Ketan Kumar Joshi was appointed as Chief Financial Officer
of the Bank on July 17, 2025 in place of Mr. Fayaz Ahmad Ganai,
who ceased to be the CFO w.e.f. July 16, 2025.

Changes in the Key Managerial Personnel
after the Closure of Financial Year

NIL

Number of Meetings of the Board

During the year, seventeen (17) Board Meetings were held in due
compliance with statutory provisions, on the following dates:

25- 04 & 01-05-2025, 05-05-2025, 28-05-2025, 27-06-2025, 25¬
07-2025, 25&26-08-2025, 24-09-2025, 18-10-2025, 31-10-2025,

26- 11-2025, 03&04-12-2025, 23&26-12-2025, 20-01-2026, 09&11-
02-2026, 17-02-2026, 05-03-2026 and 25-03-2026.

Committees of the Board

The Bank has following Committees of the Board:

1)    Management Committee (MCB)

2)    Audit Committee (ACB)

3)    Integrated Risk Management Committee (IRMC)

4)    Nomination and Remuneration Committee (N&RC)

5)    Corporate Social Responsibility & Environmental, Social
and Governance Committee (CSR&ESGC)

6)    Stakeholders Relationship Committee (SHRC)

7)    Special Committee of the Board for Monitoring and Follow
up of Cases of Frauds (SCBMF)

8)    Customer Service Committee (CSC)

9)    Information Technology Strategy Committee (ITSC)

10)    Legal & Impaired Assets Resolution Committee (L&IARC)

The compositions, powers, roles, terms of reference, etc. of
aforesaid Committees are given in detail in the statement on
Corporate Governance annexed to this report.

Selection and Appointment of Directors

The selection and appointment of Directors of the Bank is
carried out in accordance with the applicable provisions of
the Companies Act, 2013 and the rules made thereunder, the
Banking Regulation Act, 1949, the guidelines issued by the
Reserve Bank of India (RBI), the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, and the Articles of
Association of the Bank.

In alignment with the above statutory and regulatory
framework, the Bank has adopted a structured and
comprehensive approach towards Board composition. The
following policies and plans have been formulated to ensure
an effective, diverse, and future-ready Board:

•    Succession Plan for the Board of Directors

•    Policy on Appointment and Remuneration of Directors

•    Board Diversity Policy

•    Policy for Training of Directors

These frameworks aim to ensure that the Board comprises
individuals with appropriate balance of skills, experience, and
diversity, and that there is a seamless transition and continuity
in the leadership of the Board.

Policy on Appointment and Remuneration of
Directors

The Bank has in place a policy on Appointment and Remuneration
of Directors. This Policy has been framed in compliance to the
applicable provisions of the Companies Act, 2013, the Banking
Regulation Act, 1949, the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations,
2015 and other guidelines issued by the RBI as amended from
time to time and in accordance with the Articles of Association
of the Bank.

The objective of this Policy is to set out criteria and other standards
for appointment or re-appointment of Directors on the Board
of the Bank and for evaluating the 'fit and proper' criteria for
Directors. The policy also deals with reappointment of Directors,
familarisation programmes and remuneration to the Directors. The
policy is available on the official website of the Bank at:https://jkb.
bank.in/Investor/corporate-governance-policies.

Performance Evaluation of the Board

The Nomination and Remuneration Committee (N&RC) has
laid down a framework/policy for evaluation of the Board,
Committees of the Board and the individual Members of the
Board (including the Chairperson). In conformity with the said
policy requirements, following is the process of evaluation:

•    The performance evaluation of all the Independent Directors
is conducted by the entire Board excluding the Director
being evaluated.

•    Independent Directors evaluate the performance of Non¬
Independent Directors, Chairperson of the Board, Whole
Time Directors and Board as a whole and submit the report
to the Non-Executive Chairman who in turn places it before
the Board along with necessary comments and suggestive
course of action arising out of the evaluation.

•    The performance evaluation of the Committees of the Board
is conducted by the entire Board.

A questionnaire for the evaluation of the Board, its Committees
and the individual Members of the Board (including the
Chairperson) designed in accordance with the said framework
and covering various aspects of the performance relating to
the following is forwarded to individual Directors:

The responses received to the questionnaires on evaluation
of the Board, its Committees, individual Directors including
Chairperson are consolidated and discussed by the Board.

Your Bank has in place a process, wherein, declarations are
obtained from the Directors regarding fulfilment of the 'fit
and proper' criteria in accordance with the RBI guidelines/
Companies Act, 2013. The declarations from the Directors other
than Members of the N&RC are placed before the N&RC and the
declarations of the Members of the N&RC are placed before
the Board. Assessment on whether the Directors fulfil the said
criteria is made by the N&RC/Board on an annual basis.

Fiscal Year

The Fiscal Year for the Bank is reckoned as starting from
April 01, to March 31, every year.

Lead Bank Responsibility

J&K Bank continues to hold the unique distinction of being
the only private sector bank in India entrusted with the
responsibility of convening the State/Union Territory Level
Bankers' Committee (SLBC/UTLBC).

During FY 2025-26, the Bank continued to discharge its Lead
Bank responsibilities effectively across its allocated 12 districts
of the Union Territory of Jammu & Kashmir, namely Srinagar,
Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag,
Kulgam, Pulwama, Shopian, Poonch and Rajouri. The Lead Bank
responsibility for the remaining eight districts of the Union
Territory continues to be discharged by the State Bank of India.

In its capacity as the Convenor of the J&K UTLBC, the Bank
played a pivotal role in coordinating with the Government,
the Reserve Bank of India, NABARD and member banks for
the effective implementation of financial inclusion initiatives,
priority sector lending, government-sponsored programmes
and banking sector development across the Union Territory.

Annual Credit Plan - FY 2025-26

The Annual Credit Plan (ACP) for the Union Territory of Jammu
& Kashmir, launched on April 01, 2025, envisaged total credit
disbursement of J77,974.29 crore benefiting 19.90 lakh
beneficiaries.

During FY 2025-26, banks operating in the Union Territory
collectively disbursed J84,384.12 crore to 19.37 lakh
beneficiaries, achieving 108% of the financial target and 97%
of the physical target.

The overall credit disbursement comprised:

•    Priority Sector: H44,228.30 crore disbursed to 12.07 lakh
beneficiaries against the target of H43,812.17 crore for 12.54
lakh beneficiaries, representing an achievement of 101%.

•    Non-Priority Sector: H40,155.82 crore disbursed to 7.31 lakh
beneficiaries against the target of H34,162.12 crore for 7.37
lakh beneficiaries, representing an achievement of 118%.

J&K Bank was assigned an annual credit target of
J39,679.43 crore for 10.76 lakh beneficiaries under the
Priority and Non-Priority Sectors. Against this, the Bank
disbursed J47,235.53 crore to 13.40 lakh beneficiaries,

achieving 119% of the financial target and 124% of the physical
target.

With total disbursements of J47,235.53 crore, J&K Bank
accounted for 56% of the total credit disbursed by the banking
sector in the Union Territory during FY 2025-26.

J&K UTLBC Meetings

During FY 2025-26, the Bank convened two meetings of the
J&K UTLBC and five meetings of various UTLBC Sub¬
Committees to review the progress of banking and financial
inclusion initiatives across the Union Territory.

The meetings focused on:

•    implementation of the Annual Credit Plan;

•    strengthening Priority Sector Lending;

•    promoting employment generation through government-
sponsored schemes;

•    expanding the digital payments ecosystem and digital
account opening;

•    extending banking services to unbanked and under-banked
areas through branches, Business Correspondents and
Digital Banking Units;

•    enhancing financial literacy and customer awareness;

•    strengthening Farmer Producer Organisations (FPOs)
through institutional credit;

•    increasing coverage under the Kisan Credit Card Scheme; and

•    improving enrolment under Government-sponsored social
security schemes.

These meetings also served as an effective platform for
coordinated policy implementation among banks, Government
departments, regulatory authorities and other stakeholders.

District-Level Implementation

As Convenor of the Lead Bank Scheme, the Bank ensured
that District Consultative Committee (DCC), District Level
Review Committee (DLRC), Block Level Bankers' Committee
(BLBC) and other meetings under the Lead Bank Scheme were
conducted in accordance with the prescribed calendar across
all 20 districts of the Union Territory.

These forums regularly reviewed:

•    implementation of Annual District Credit Plans;

•    banking infrastructure;

•    financial inclusion;

•    priority sector lending;

•    Government-sponsored programmes;

•    credit flow to productive sectors; and

•    district-specific banking issues.

The consultative mechanism continued to facilitate close
coordination among banks, Government departments and
development agencies.

Financial Inclusion

The banking ecosystem in the Union Territory of Jammu &
Kashmir has witnessed significant expansion over the past
two decades, resulting in improved access to formal banking
services across urban as well as rural areas.

The Bank, in coordination with member banks under the UTLBC
framework, continued to implement the Financial Inclusion
Plans (FIPs) and the National Strategy for Financial Inclusion
(NSFI) 2025-30.

As on March 31, 2026:

•    one banking outlet was available for every 1,074 persons; and

•    one banking outlet served an average geographical area of
3.70 square kilometres, reflecting sustained improvement
in banking accessibility.

All phases of the Financial Inclusion Plans launched by the
Government of India and the Reserve Bank of India have been
successfully implemented in the Union Territory.

To strengthen banking penetration, 1,843 previously unbanked
Gram Panchayats were identified and allocated among banks
for coverage through banking outlets. Of these, 1,546 Gram
Panchayats had been covered as on March 31, 2026.

Further, under the National Strategy for Financial Inclusion
(NSFI) 2025-30, 2,988 unbanked Revenue Centres were
identified for coverage through branches, Fixed Business
Correspondents and Digital Banking Units. Of these, 1,468
Revenue Centres were allocated to J&K Bank for phased
coverage.

Social Security Schemes

A nationwide intensive saturation campaign covering Financial
Inclusion schemes was conducted from July 01, 2025 to
October 31, 2025 across all Gram Panchayats and Urban Local
Bodies.

The campaign focused on:

•    enrolment under social security schemes;

•    digital fraud awareness;

•    nomination registration;

•    Re-KYC compliance;

•    access to unclaimed deposits; and

•    promotion of digital banking.

As a result of the coordinated efforts of all stakeholders,
cumulative enrolments under Government-sponsored social
security schemes in the Union Territory reached:

Rural Self Employment Training Institutes
(RSETIs)

In accordance with the guidelines issued by the Ministry of
Rural Development, Government of India, the responsibility for
establishing Rural Self Employment Training Institutes (RSETIs)
in the Union Territory has been shared between J&K Bank and
the State Bank of India based on their respective Lead Bank
jurisdictions.

J&K Bank has established 12 RSETIs across its allocated Lead
Districts, namely Anantnag, Bandipora, Baramulla, Budgam,
Ganderbal, Kulgam, Kupwara, Poonch, Pulwama, Rajouri,
Shopian and Srinagar.

The performance of RSETIs, including training programmes
conducted, candidates trained and credit linkages established,
continued to be reviewed periodically by the UTLBC.

Financial Literacy Centres (FLCs)

In accordance with the Reserve Bank of India’s Financial Literacy
Centre guidelines, J&K Bank has operationalised 12 Financial
Literacy Centres (FLCs) across its allocated Lead Districts.

In addition, the State Bank of India operates eight FLCs, while
Punjab National Bank, Jammu & Kashmir Grameen Bank and
Jammu & Kashmir State Cooperative Bank operate six, four
and one FLC, respectively.

Accordingly, 31 Financial Literacy Centres were operational
across the Union Territory as on March 31, 2026.

These centres continued to conduct financial literacy
programmes covering savings, responsible borrowing, digital
banking, cyber security awareness, customer rights, grievance
redressal and Government-sponsored financial inclusion
initiatives. Their performance is reviewed regularly at UTLBC
meetings and other monitoring forums.

Performance of Subsidiary/Associate CompaniesSubsidiary:JKB Financial Services Limited (JKBFSL)

As on March 31, 2026, the Bank had one wholly owned unlisted
subsidiary, JKB Financial Services Limited (JKBFSL),
incorporated on August 27, 2008.

JKBFSL was established to provide a comprehensive range of
capital market and investment related financial services to the
customers of the Bank and the public at large, particularly across
the Union Territories of Jammu & Kashmir and Ladakh. The
Company continues to complement the Bank’s financial services
portfolio by offering equity broking, depository participant
services, margin trading facilities, mutual fund distribution and
other investment products through a collaborative business
model with the Bank.

JKBFSL is a registered member of the National Stock
Exchange of India Limited (NSE) and the BSE Limited (BSE)
and is affiliated with both the National Securities Depository
Limited (NSDL) and the Central Depository Services (India)
Limited (CDSL) for providing broking and depository services.

During the year, JKBFSL continued to strengthen its digital
capabilities through its JKB mTRADE platform, offering
customers an integrated digital investment experience, including
online trading, IPO applications, Demat account opening and
access to mutual fund investment services.

The collaborative business model between the Bank and
JKBFSL continued to facilitate cross-selling of investment
products through the Bank’s branch network, thereby enhancing
customer convenience while supporting the Bank’s fee-based
income initiatives.

Financial Performance

JKBFSL maintained its growth trajectory during FY 2025-26
and reported improved operational and financial performance.

Income

•    Total income increased from J1,918.36 lakh in FY 2024-25
to J1,992.91 lakh during FY 2025-26, registering a growth
of approximately 4%.

•    Income from Margin Trading Facility (MTF) increased to
J493.30 lakh from J487.64 lakh in the previous year.

•    Assets Under Management (AUM) under mutual fund
distribution recorded a year-on-year growth of approximately
47%, while income from mutual fund distribution increased
from J201.13 lakh to J287.22 lakh, representing a growth
of 43%.

•    Income from equity broking stood at J860.18 lakh.

•    Trading turnover increased to J4,608.02 crore, compared
with J4,424.61 crore in the previous year.

•    Depository income increased to J104.18 lakh, from
J91.13 lakh during FY 2024-25.

Expenditure

Total expenditure during FY 2025-26 amounted to
J1,423.63 lakh, as against 71,421.48 lakh in the previous
financial year. The marginal increase reflects prudent cost
management, with operating expenses remaining broadly within
the approved budget.

Profitability

JKBFSL reported:

•    Profit Before Tax (PBT): J569.28 lakh

•    Profit After Tax (PAT): J410.07 lakh

Compared with the previous financial year, PBT and PAT
increased by 15% and 8%, respectively, reflecting continued
business growth, improved operational efficiency and effective
cost management.

During the year, JKBFSL continued to expand its digital
distribution capabilities, strengthen customer acquisition
through the Collaborative Business Model (CBM) with the Bank,
and enhance the adoption of investment products across the
Bank’s branch network. The Company also continued to improve
its technology platform and operational resilience, supporting
sustainable growth in its broking, depository, margin funding
and mutual fund distribution businesses.

Associate:Regional Rural Bank (Sponsored by
J&K Bank)Jammu and Kashmir Grameen Bank

Jammu and Kashmir Grameen Bank (JKGB), sponsored by J&K
Bank, was constituted with effect from May 01, 2025 pursuant
to the amalgamation of the erstwhile J&K Grameen Bank and
Ellaquai Dehati Bank, in accordance with the Government of
India Notification dated April 07, 2025 issued under Section
23A(1) of the Regional Rural Banks Act, 1976.

The Bank is jointly owned by the Government of India, the
Government of the Union Territory of Jammu & Kashmir and
J&K Bank in the shareholding ratio of 50:15:35, respectively.
Headquartered at Jammu, JKGB continues to play a pivotal role
in promoting financial inclusion and fostering inclusive rural
development by providing timely and affordable credit to small
and marginal farmers, agricultural labourers, artisans, micro
and small enterprises, self-help groups and other economically
weaker sections of society. Through its extensive rural network,
the Bank actively supports agricultural development, rural
entrepreneurship, livelihood generation and socio-economic
progress across its area of operation.

Capital Structure

The authorised share capital of JKGB stands at J2,000 crore,
comprising 200 crore equity shares of J10 each. As
on March 31, 2026, the paid-up share capital stood at
J988.35 crore, fully subscribed by its shareholders in the
prescribed ratio, as detailed below:

Investment towards CBS Implementation

J&K Bank, in its capacity as Sponsor Bank, has contributed
towards the implementation of Core Banking Solution (CBS)
in JKGB through investment in Tier II Bonds. Out of the total
project cost of J23.34 crore incurred for CBS implementation
by the erstwhile J&K Grameen Bank, J&K Bank contributed
J11.67 crore, representing its 50% share. Following the
amalgamation, the Bank further invested J4.11 crore, being the
Sponsor Bank’s share in the Tier II Bonds earlier subscribed by
the State Bank of India on behalf of the erstwhile Ellaquai Dehati
Bank. Accordingly, the aggregate investment of J&K Bank
towards CBS implementation in JKGB stands at J15.78 crore.

Area of Operation

JKGB operates across all 20 districts of the Union Territory
of Jammu & Kashmir and the two districts of the Union
Territory of Ladakh (Leh and Kargil) through an extensive
network of 328 branches and 2 Extension Counters. As on
March 31, 2026, the Bank had a workforce of 1,424 employees,
including 10 officers on deputation from J&K Bank.

Business Performance

FY 2025-26 marks the first year of operations of the
amalgamated JKGB. Accordingly, the comparative figures
presented below are with reference to the opening position of
the amalgamated Bank as on April 30, 2025.

During the period under review, the aggregate business of the
Bank increased from J12,606.59 crore to J13,799.51 crore,

registering an absolute growth of J1,192.92 crore.

Total deposits grew from J7,686.16 crore to J8,341.71 crore,

reflecting a growth of 8.53%, while advances increased from
J4,920.43 crore to J5,457.80 crore, registering a growth of
10.92%. Consequently, the Credit-Deposit Ratio improved from
64.02% to 65.43% during the period.

Priority Sector Advances stood at J4,174.54 crore, accounting
for 76.49% of the Bank's total advances, reaffirming its
continued focus on rural credit and priority sector lending.

The JKGB maintained satisfactory asset quality during
the year. Gross Non-Performing Assets (GNPA) stood at
J263.45 crore, representing 4.83% of gross advances, while
Net Non-Performing Assets (NNPA) stood at J100.97 crore,
representing 1.91% of net advances as on March 31, 2026.

Business per employee stood at J9.69 crore, while business
per branch stood at J42.07 crore as on March 31, 2026,

reflecting improved operational productivity.

For the period from May 01, 2025 to March 31, 2026, JKGB
reported a net loss of J28.35 crore, primarily representing
the first year of operations following amalgamation and the
associated integration of systems, operations and financials.

Sponsor Bank Support

As Sponsor Bank, J&K Bank continued to provide strategic
guidance and operational support to JKGB across key areas
including governance, technology, digital banking, risk
management, compliance, human resource development,
business planning and capacity building. The Bank remains
committed to supporting the long-term growth, operational
resilience and financial sustainability of JKGB while
strengthening financial inclusion across the Union Territories
of Jammu & Kashmir and Ladakh.

Advertising and Publicity

During FY 2025-26, the Bank further strengthened its integrated
communication strategy by effectively leveraging print,
electronic, digital and outdoor media to engage with customers

and other stakeholders across its operational geographies. The
Bank undertook focused communication campaigns to promote
its products, services, digital banking solutions and customer¬
centric initiatives in alignment with its business priorities,
regulatory requirements and strategic growth objectives.

Throughout the year, sustained multimedia campaigns were
carried out to support product launches, business development
initiatives, institutional milestones and customer acquisition
programmes. These initiatives were complemented by regular
engagement through press releases, media interactions, digital
content and public awareness campaigns, enhancing the Bank's
visibility while reinforcing transparency, stakeholder confidence
and institutional credibility.

The Bank continued to communicate proactively with customers,
shareholders, regulators, employees and the general public
across Jammu & Kashmir, Ladakh and the rest of the country
through customised and targeted communication initiatives.
Particular emphasis was laid on disseminating information
relating to cyber security, digital safety, financial literacy,
financial inclusion, customer rights, services for senior citizens
and other customer awareness programmes in compliance
with applicable regulatory guidelines. These initiatives not
only fulfilled important consumer awareness obligations
prescribed by the Reserve Bank of India and other regulators
but also contributed towards building an informed and digitally
empowered customer base.

Recognising the increasing significance of digital engagement,
the Bank further strengthened its presence across major social
media platforms including Facebook, X (formerly Twitter),
Instagram, YouTube and LinkedIn through engaging audio-visual
content, financial education initiatives, institutional messaging
and customer engagement campaigns, thereby significantly
expanding its digital outreach and strengthening stakeholder
connect.

Brand Building

Brand building continued to remain an integral component
of the Bank's long-term growth strategy during FY 2025-26.
Building upon its sustained financial performance, record
profitability, strong governance standards, accelerated digital
transformation and growing national recognition, the Bank's
communication strategy remained focused on positioning
Brand J&K Bank as a modern, trusted and forward-looking
financial institution while preserving its enduring legacy of
customer service.

While the Bank continued to enjoy strong brand equity across
the Union Territories of Jammu & Kashmir and Ladakh, focused
initiatives were undertaken to enhance brand visibility and
customer engagement across the rest of the country through
an integrated mix of digital and conventional media. The
communication strategy was designed to reinforce customer
trust, strengthen emotional connect and improve brand recall
among existing as well as emerging customer segments.

During the year, the Bank launched several high-impact
campaigns highlighting its financial strength, digital
transformation, customer trust and inclusive growth initiatives.
As part of its continued focus on people-centric storytelling, the
Bank successfully expanded the second phase of its acclaimed
"Yaadon Ki Jama Poonji" campaign, celebrating the enduring
relationship between the Bank and generations of customers
while showcasing the institution's journey of transformation
and its commitment of creating sustainable value for all
stakeholders.

The Bank continued to maintain a balanced communication
strategy by combining extensive digital campaigns with
high-visibility outdoor branding through airports, railway
stations, transit media, bus shelters, hoardings and other
strategic locations. Simultaneously, in-branch branding
across branches, ATMs, Cash Recycler Machines (CRMs) and
Easy Banking Units (EBUs) was further strengthened through
consistent display of customer awareness material, product
information and corporate identity elements. Continuous
upkeep of signages and branding assets ensured uniformity
in visual identity and further reinforced the Bank's brand
recognition across all touchpoints.

Awards & Certifications received by the Bank
during FY 2025-26

The Bank's unwavering commitment to excellence, innovation,
customer-centricity and sound governance continued to receive
national recognition during FY 2025-26. During the year, the
Bank received several prestigious awards across diverse
areas of banking, reflecting its sustained focus on operational
excellence, financial performance, digital transformation and
information security.

The significant recognitions received during the year include:

•    Second Best Performing Bank under the Private Sector
Banks (Large Category) for FY 2024-25, conferred by the
State Forum of Bankers' Clubs, Kerala (SFBCK).

•    Best MSME Bank - Winner at the MSME Banking Excellence
Awards 2025.

•    Runner-up in the CSR Initiative & Business Responsibility
category at the MSME Banking Excellence Awards 2025.

•    SKOCH Silver Award at the 103^rd SKOCH Summit under the
Financial Performance category for improving the Bank's
financial performance and profitability.

•    Award from the Credit Guarantee Fund Trust for Micro
and Small Enterprises (CGTMSE) for securing the highest
number of guarantees under the CGTMSE Scheme during
FY 2024-25 in the category covering the North-Eastern
Region, Jammu & Kashmir and Ladakh.

•    Four prestigious recognitions at the IBA CISO Summit &
Citations 2025, namely:

-    Cyber Security Transformation of the Year;

-    Cyber Security Compliance Champion;

-    Cyber Security Team of the Year; and

-    Special Prize for Cyber Security Incident Response Mastery.

• The Bank's Chief Information Security Officer (CISO)
was honoured with the ‘CISO of the Year' Award at the
Enterprise Security Connect (ESCON) 2025, South Asia's
premier cybersecurity summit.

These recognitions reflect the Bank's continued pursuit of
excellence across business performance, digital innovation,
cyber resilience, governance and customer service, while
reaffirming the confidence reposed in the institution by
customers, regulators and other stakeholders.

Corporate Social Responsibility &
Environmental, Social and Governance
(CSR & ESG)

Corporate Social Responsibility continues to be an integral
part of the Bank's philosophy of sustainable and responsible
banking. Guided by its CSR Policy and driven by the objective of
creating long-term social value, the Bank remains committed to
contributing meaningfully towards inclusive growth, community
development and environmental sustainability.

During FY 2025-26, the Bank implemented a wide range of CSR
initiatives across the Union Territories of Jammu & Kashmir and
Ladakh, focusing on healthcare, education, skill development,
livelihood promotion, environmental sustainability, disaster
relief and community welfare. These initiatives were aimed at
improving the quality of life of underprivileged and vulnerable
sections of society while promoting sustainable development
and strengthening community resilience.

The Bank also continued to support projects promoting
renewable energy, environmental conservation and resource
efficiency as part of its broader commitment towards
environmental stewardship and responsible business practices.
Alongside its CSR initiatives, the Bank continued to strengthen
the integration of Environmental, Social and Governance (ESG)
considerations into its governance framework and business
practices, reinforcing its commitment to sustainable value
creation for all stakeholders.

Through these initiatives, the Bank remained steadfast in its mission
of "Serving to Empower", creating meaningful social impact while
strengthening its relationship with the communities it serves. The
Bank's CSR interventions also contributed towards enhancing
stakeholder trust, strengthening brand equity and advancing the
national agenda of inclusive and sustainable development.

The disclosures relating to the composition and meetings of the
CSR & ESG Committee of the Board, together with the Annual
Report on CSR activities as prescribed under the Companies Act,
2013 and the Companies (Corporate Social Responsibility Policy)
Rules, 2014, form part of this Annual Report as Annexure-I. The
Bank's CSR Policy can be accessed athttps://www.jkb.bank.in/
sites/default/files/10453 JK Bank CSR Policy 4.0.pdf.

Corporate Governance

The Bank is committed to upholding the highest standards of
corporate governance and it constantly benchmarks itself with
the best national and global governance and disclosure practices.
The Report on Corporate Governance for fiscal 2026 along with
General Shareholder Information forms part of this Integrated
Annual Report. M/s. D K Pandoh & Associates, Company Secretaries
(ICSI Firm Registration No. S2016JK420900), Secretarial Auditor
of the Bank, has issued a certificate confirming compliance with the
provisions of corporate governance by the Bank for FY 2025-26, as
stipulated in Regulations 17 to 27 and clauses (b) to (i) of Regulation
46(2) and paragraphs C, D and E of Schedule V to the SEBI Listing
Regulations. The said certificate is attached along with the Report
on Corporate Governance, which forms part of this Integrated
Annual Report. The corporate governance framework of the
Bank incorporates all the mandatory requirements as prescribed
in the SEBI Listing Regulations. The Bank has also adopted the
non-mandatory requirements recommended in the SEBI Listing
Regulations, as detailed in the Report on Corporate Governance,
which forms part of this Integrated Annual Report.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year
is presented in a separate section forming part of this report.

Whistle Blower Policy & Vigil Mechanism

The Bank has a Whistle Blower mechanism in place which
enhances transparency in the organisation by encouraging the
employees/Directors/other specified stakeholders to report any
wrongdoing, which comes to their knowledge in the day-to-day
performance of their duties or interaction with other fellow-
colleagues/Bank staff without fear of retaliation, victimisation
and unfair-treatment. The Bank has formulated the "Whistle
Blower Policy” to guarantee them protection from any adverse
departmental proceedings.

The Policy is compliant to regulatory requirements under
Section 177 (9) of the Companies Act 2013, and SEBI Listing
Regulations. The policy document is available on the Bank's
official website under link:https://jkb.bank.in/sites/default/
files/2025-05/WB.pdf

Further, the mechanism adopted by the Bank encourages
the Whistle Blower to report genuine concerns or grievances
and also provides for direct access to Chairman of the Audit
Committee of the Board, in exceptional cases.

The grievance under Whistle Blower mechanism can be lodged
on the Bank's official website under link:https://jkb.bank.in/
whistle-blower/public/

It is hereby affirmed that the Bank has not denied any of its
personnel access to the Chairman of the Audit Committee of
the Board and that the policy contains adequate provisions for
protecting whistle blowers from unfair termination and other
unfair prejudicial employment practices.

In the FY 2025-26, four (04) complaints received under Whistle
Blower Mechanism were placed before the Audit Committee of
Board.

Protected Disclosure Scheme

The Bank in line with the RBI prescribed framework, has devised
a Policy Document on the "Protected Disclosure Scheme.”
The complaints under the Scheme cover the areas such as
corruption, misuse of office, criminal offences, suspected/actual
fraud, failure to comply with existing rules and regulations such
as Reserve Bank of India Act, 1934, Banking Regulation Act
1949, etc. and acts resulting in financial loss/operational risk,
loss of reputation, etc. detrimental to depositors' interest/public
interest. Reserve Bank of India (RBI) will be the Nodal Agency to
receive complaints under the Scheme.

The complaint under the Scheme should be sent in a closed/
secured envelope addressed to The Chief General Manager,
Reserve Bank of India, Department of Banking Supervision,
Fraud Monitoring Cell, Third Floor, World Trade Centre, Centre
1, Cuffe Parade, Mumbai 400005. The envelope should be
superscripted "Complaint under Protected Disclosures Scheme
for Banks”. Complaints can also be made to RBI through e-mail:
dbspd@rbi.org.in by giving full details as specified above.

The policy document is available on the intranet page of the
Bank as well as on the Bank's official website under linkhttps://
jkb.bank.in/sites/default/files/9815 PDS 3.0.pdf

It is hereby affirmed that no unfair treatment will be meted
out to a complainant by virtue of his/her having reported a
Disclosure under this Policy. The Bank, as a policy, condemns
any kind of discrimination, harassment, victimisation or any
other unfair employment practice being adopted against
complainant(s). Complete protection will, therefore, be given
to complainant(s) against any unfair practice like retaliation,
threat or intimidation of termination/suspension of service,
disciplinary action, transfer, demotion, refusal of promotion,
including any direct or indirect use of authority to obstruct
the complainant's right to continue to perform his/her duties/
functions including making further Disclosure under the policy.
In FY 2025-26, the Bank has not received any complaint under
the "Protected Disclosure Scheme”.

Risk Management

A well-defined and comprehensive risk management framework
of our Bank is based on a clear understanding of different
risks, accepting various risks, disciplined risk assessment,
measurement & continuous monitoring. The Bank has put in
place a Risk Management and Risk Appetite Framework (RAF)
that articulates the risk appetite and drills down the same into
a limit framework for various risk categories. Risk appetite
defines the levels and types of risk that are acceptable, within
risk capacity, in order to achieve strategic objectives and
business plans. The risk appetite framework, which is approved
by the Board, bolsters effective risk management by promoting

sound risk-taking through a structured approach, within
agreed boundaries. The key components of the Bank's Risk
Management architecture rely on the risk governance structure,
comprehensive processes and internal control mechanism based
on approved policies and guidelines. The Bank's risk management
processes are guided by way of policies adopted appropriately
for various risk categories, independent risk oversight and
periodic monitoring by Board of Directors, Committee of the
Board of Directors (Integrated Risk Management Committee
of Board) and Senior Management Committees - Credit Risk
Management Committee, Market Risk Management Committee,
Operational Risk Management Committee and Asset Liability
Committee (ALCO). The policies approved from time to time by
Board of Directors, Committee of Board (IRMC) form the basis
for governing framework for each type of risk. The Board sets
the overall risk appetite and philosophy for the Bank and has
an oversight of all the risks assumed by the Bank. The Bank's
Risk Management framework focuses on the management
of key areas of Risk such as Credit, Market, Operational Risk,
Liquidity Risk and Pillar II risks, quantification of these risks,
wherever possible. The risk management function in the Bank
strives to proactively anticipate vulnerabilities in the business
operations through quantitative or qualitative examination of
the embedded risks for effective and continuous monitoring
and control. An independent risk management function ensures
that risk is managed through a risk management architecture as
well as through policies and processes approved by the Board
of Directors. The risk management policies and procedures
established are updated on continuous basis in compliance to
RBI guidelines and benchmarked to the best practices. The Board
of Directors with its Committee-Integrated Risk Management
Committee (IRMC) reviews risk management policies of the Bank
pertaining to credit, market, liquidity, operational & Pillar II risks
that includes strategic risk and reputational risk, Internal Capital
Adequacy Assessment Process (ICAAP) and stress testing. The
Committee is chaired by an Independent Director. The details
of the said Committee and its Terms of Reference are set out
in Report on Corporate Governance, which forms part of this
Integrated Annual Report.

The Senior Management Committees - Credit Risk Management
Committee (CRMC), Operational Risk Management Committee
(ORMC) and Market Risk Management Committee (MRMC) for
credit risk, operational risk and market risk operate within
the broad risk management framework of the Bank to assess
and minimise these risks. The Bank has an independent Risk
Management Vertical headed by the Chief Risk Officer (CRO),
who reports to IRMC of Board and monitors the development
and implementation of methodologies for risk identification,
assessment, measurement, monitoring and mitigation for
all risks. Business Continuity Plan (BCP) also forms part of
risk management function in the Bank. Treasury activities
are separately monitored by mid office which reports to Risk
Management Vertical. The Bank has Stress Testing Policy to
measure impact of adverse stress scenarios on the adequacy
of capital. The stress scenarios are idiosyncratic, generic and a
combination of both.

Business Continuity Planning (BCP)

The Bank's Business Continuity Management (BCM) programme
is aligned with the ISO 22301:2019 standard for Business
Continuity Management Systems and is developed with
reference to applicable regulatory guidance issued by the
Reserve Bank of India. The programme is periodically reviewed
through internal assessments, external audits and regulatory
examinations to ensure it remains current and effective.

The Bank's BCM ensures operational resilience, which is central
to the Bank's ability to protect its customers, employees and
stakeholders while sustaining critical services through periods
of disruption. Governance of the programme rests with the BCP
Committee, which is responsible for oversight, direction and
monitoring of continuity preparedness across the Bank. This is
underpinned by a Board-approved BCM Policy that sets out the
framework, standards and minimum requirements applicable to
all business and support functions.

A defined organisational structure enables the Bank to respond
to disruptive events in a coordinated and time-bound manner,
and to recover, resume and restore critical operations. Distinct
teams are assigned clear mandates spanning crisis response,
disaster recovery, and the technical and functional aspects of
restoring business as usual operations, as summarised below.

These structures, together with the Bank's programme of
periodic drills, provide the assurance needed to sustain
uninterrupted service delivery to customers through disruptive
events and beyond.

Succession Planning

Robust succession planning remains integral to the Bank's
governance framework, ensuring seamless continuity of
leadership and uninterrupted institutional performance.
Recognising that certain roles are pivotal to the Bank's
sustained growth and strategic direction, the Bank places strong
emphasis on ensuring that such positions are held by individuals
possessing the requisite skills, experience, and leadership
capability. Proactive identification and readiness of successors

for these critical roles is essential to eliminating leadership gaps
and preserving organisational stability. Accordingly, the Bank
has instituted a comprehensive Succession Planning Policy
applicable to Senior Management.

The Policy establishes a dual-horizon framework - encompassing
both immediate and long-term succession requirements -
designed to enable a well-governed and orderly transition
process. In order to strengthen this framework and align it with
industry best practices, the Bank had, in the past, engaged the
services of an external consultant to assist in formulating its
succession planning approach. The consultant's engagement
enabled the Bank to adopt structured assessment tools and
rating-based evaluation models, which have since supported
the identification of potential successors and the formulation
of a comprehensive, objective succession plan. The Nomination
& Remuneration Committee (NRC), together with the Board of
Directors, exercises continuous oversight of the succession
planning framework, periodically reviewing its adequacy and
effectiveness. The process entails a systematic identification of
the competencies and capabilities required for key leadership
positions, followed by a rigorous assessment of potential
successors using the aforementioned tools, and the design
of focused development interventions to bridge identified
competency gaps. In line with this approach, successors for
Senior Management positions are identified well in advance of
any vacancy arising, thereby enabling a smooth and effective
transition of leadership responsibilities.

Business Responsibility and Sustainability
Report (BRSR)

In terms of Regulation 34(2)(f) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, top 1000 Listed
Entities based on their market capitalisation as on March 31,
every year are required to submit their Business Responsibility
and Sustainability Report (BRSR) on the environmental, social
and governance disclosures as a part of the Annual Report.
The Bank's BRSR for FY 2025-26 along with the reasonable
assurance from SR Asia Private Limited is available on the
website of the Bank athttps://jkb.bank.in/Investor/financial-
information/annual-reports. The report of BRSR Core is annexed
and forms part of this Integrated Annual Report.

Confirmation on Child Labour/Forced Labour

The Bank does not engage in any form of child labour/forced
labour/involuntary labour and does not adopt any discriminatory
employment practices.

Information under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013

The Bank has constituted an Internal Complaints Committee
(ICC) for the Prevention, Prohibition and Redressal of Sexual
Harassment of Women at Workplace, which addresses complaints

of women employees posted at the Corporate Headquarters
and women officers in the rank of Chief Manager and above
across the Bank. In addition, Internal Committees have been
constituted at the Divisional level to address complaints of
women employees below the rank of Chief Manager posted in
their respective divisions.

These Committees have been duly constituted in accordance
with the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
and the Rules framed thereunder. The Bank, through these
Committees, is committed to providing a safe and dignified
workplace and ensuring that all complaints are addressed
promptly, fairly and in a time-bound manner.

During the year under review, three (3) complaints were received
by the Committees. The Committees conducted due inquiries in
accordance with the provisions of the Act, ensuring adherence
to the principles of natural justice by providing adequate
opportunity to both the complainants and the respondents to
present and defend their respective cases. All three complaints
were disposed of within the statutory time limit of 90 days.

Employee accidental deaths

During the year 2026, there were no occurrences of employee
accidental death at the workplace.

Loans, Guarantees & Investment in Securities

Pursuant to Section 186(11) of the Act, the provisions of Section
186 of the Act, except sub-section (1), do not apply to a loan
made, guarantee given, or security provided by a banking
company in the ordinary course of its business. The particulars
of investments made by the Bank are disclosed in schedule 8 of
the financial statements as per the applicable provisions of the
Banking Regulation Act, 1949.

Contracts or Arrangements with Related
Parties

Considering the nature of the industry in which the Bank
operates, transactions with related parties of the Bank are in the
ordinary course of business and are also at arm's length basis.
There was no materially significant related party transaction
entered by the Bank with Promoters, Directors, Key Managerial
Personnel or other persons which may have a potential conflict
with the interests of the Bank. The policy on Related Party
Transactions and dealing with related parties as approved by the
Audit Committee and the Board of Directors is uploaded on the
official website of the Bank and the link for the same is below:
https://jkb.bank.in/sites/default/files/95%20Upload%20RPT.pdf

Statement of related party transactions under sub section
(1) of Section 188 of the Companies Act, 2013 is annexed as
Annexure 5 to this report.

Information under Insolvency and Bankruptcy
Code, 2016

The Bank as on March 31, 2026 has cases under the IBC
resolution, the details whereof along with existing status is
tabulated as under:

*Out of the four accounts, three accounts were NPA accounts and one account,
i.e. UEE Electricals Engineers Pvt Ltd was standard account.

Frauds reported by the Bank

The Bank during the financial year 2025-26 has detected/
reported 25 cases of frauds to the Reserve Bank of India
involving an amount of H170.17 crores.

Also in FY 2025-26, fraud amount was revised in three fraud cases,
one pertaining to FY 2023-24 & two cases pertaining to FY 2024-25
by an amount of H13.85 Lacs, H21.52 Lacs and H1.01 Lacs respectively.
The fraud amount in these cases was thus respectively revised to
H109.43 lacs, H211.94 Lacs, & H8.18 Lacs respectively after fresh
claims were received and settled by the Bank.

Frauds reported by Auditors

During the year under review, no fraud was reported by the
statutory auditors under Section 143 (12) of the Companies Act,
2013 to the Ministry of Corporate Affairs, Govt. of India.

Consolidated Financial Statements

Pursuant to Section 129 of the Companies Act, 2013, the Bank
has prepared Consolidated Financial Statements of the Bank, its
Subsidiary (JKB Financial Services Ltd.) and also its Associate
(J&K Grameen Bank) which shall be laid before shareholders
at the 88th Annual General Meeting of the Bank along with
Bank's Financial Statements under sub-section (2) of Section
129 i.e. Standalone Financial Statements of the Bank. Further,
pursuant to the provisions of Accounting Standard (AS) 21 -
Consolidated Financial Statements notified under Section 133
of the Companies Act 2013, read with Rule 7 of the Companies
(Accounts) Rules 2014 issued by the Ministry of Corporate
Affairs, the Consolidated Financial Statements of the Bank along
with its Subsidiary/Associate for the year ended March 31, 2026
form part of this Annual Report. The statement in form AOC-1
pursuant to first proviso to sub-section (3) of Section 129 read
with Rule 5 of Companies (Accounts) Rules 2014 is annexed as
Annexure-4 to this report.

Statutory Auditors

The Statutory Central and Branch auditors of the Bank are
appointed by the Comptroller & Auditor General of India (C&AG)
pursuant to Section 139 (5) of the Companies Act, 2013. The
Bank had four (4) Statutory Central Auditors appointed by the
C&AG of India for the year under report as given below:

1.    M/s Gupta Gupta & Associates LLP, Chartered Accountants.

2.    M/s JCR & Co LLP, Chartered Accountants.

3.    M/s Dhar Tiku & Co, Chartered Accountants.

4.    M/s Gupta Sharma & Associates, Chartered Accountants.

Statutory Central Auditor's Report

For the FY 2025-26, there are no qualifications, reservation or
adverse remarks made by the Statutory Central Auditors in the
audit report.

Fees paid to Statutory Auditors

The details of total fees (excluding taxes), for all services, paid by the Bank on a consolidated basis to the Statutory Central Auditors
for FY 2025-26 are tabulated below:

fAmni inf in

Comments of C&AG

The Comptroller and Auditor General of India has issued Comments under Section 143 (6) of the Companies Act, 2013 on the Standalone
and Consolidated Financial Statements of the Bank for the year ended March 31, 2026 and the same are enclosed as Annexure - 6.
The Bank's replies to the comments are furnished below

ON THE STANDALONE FINANCIAL STATEMENTS

Secretarial Auditors & Secretarial Audit
Report

Pursuant to Section 204 of the Companies Act 2013, your Bank
has appointed CS Dhaman Kumar Pandoh, Proprietor of M/s D
K Pandoh & Associates, Company Secretaries as its Secretarial
Auditor to conduct the Secretarial Audit of the Bank for the
FY 2025-26. The Bank provided all assistance and facilities to
the Secretarial Auditor for conducting the audit. The report of
Secretarial Auditor for the FY 2025-26 is annexed to this report
as Annexure 3.

The appointment of M/s D K Pandoh & Associates,
Practicing Company Secretaries (ICSI Firm Registration No.
S2016JK420900), as Secretarial Auditor of the Bank was
recommended by the Audit Committee and the Board of
Directors of the Bank at their respective meetings held on July
25, 2025 and subsequently approved by the Shareholders in
the Annual General Meeting held on August 26, 2025, at an
overall audit fees of H90,000 (Rupees Ninety Thousands) per
annum in addition to out of pocket expenses, outlays and taxes
as applicable, to conduct secretarial audit of the Bank for a
period of 5 (Five) years i.e. from FY 2025-26 till (and including)
FY 2029-30.

Compliance with Secretarial Standards

The Bank is in compliance with all applicable Secretarial
Standards as notified from time to time.

Change in the nature of business

During the year under review, there has been no change in the
nature of business of the Bank.

Plan and Status of Ind AS implementation

RBI vide Circular DBR.BP.BC. No.29/21.07.001/2018-19 dated
22nd March, 2019 deferred implementation of Ind AS till further
notice. However, RBI requires all banks to submit Proforma Ind
AS financial statements every half year. Accordingly, Bank
is preparing and submitting the Proforma Ind AS financial
statements through Ind AS Project steering committee every
half year after getting approval of the MD & CEO.

On April 27, 2026, the Reserve Bank of India issued the final
directions on Expected Credit Loss (ECL), along with a Statement
on Feedback Received from stakeholders. These were issued
following the draft directions released for public consultation
on October 7, 2025 and subsequent internal deliberations by
the RBI. The final directions incorporate select changes and
provide additional clarifications vis a vis the draft, including
on the application of prudential floors, ECL computation for
purchased or originated credit impaired (POCI) assets, and the
determination of the effective interest rate (EIR), reflecting a
calibrated refinement in the final directions. These directions
are applicable w.e.f. 1^st April 2027. RBI mandates banks to
develop a forward-looking ECL framework that compels banks
to recognise credit stress at an early stage - well before it
crystallises into non-performing status.

The Bank had undertaken a preliminary diagnostic analysis of
the GAAP differences between Indian GAAP vis-a-vis Ind AS. The
Bank has also identified and evaluated data gaps, processes and
system changes required to implement Ind AS. The Bank is in
the process of implementing necessary changes in its IT systems
wherever required and other processes in a phased manner.

Bank has in place a dedicated Team to ensure ECL
Implementation in the Bank and is in process of procuring
dedicated IT Solution for same.

Material changes and commitments affecting
financial position of the Bank

There are no material changes and commitments, affecting the
financial position of the Bank which has occurred between the
end of the financial year of the Bank i.e. March 31, 2026 and the
date of the Directors' Report i.e. August 29, 2026.

Ratings of various debt instruments

The Credit Rating and change/revision in the Credit Ratings for
various debt instruments issued by the Bank from time to time,
are provided in the Corporate Governance Report forming part
of the Annual Report.

Employee Remuneration

The statement containing particulars of employees as required
under Section 197(12) of the Companies Act, 2013 read with
Rule 5 (2) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is given in "Annexure 2"
forming part of this report.

Compensation Policy

The Bank has in place a Compensation Policy which provides
the framework for compensation payable to the WTDs/CEO,
MRTs, Control Function Staff, Non-Executive Directors and Non¬
Executive Chairman. This Policy has been framed in line with
the guidelines issued by RBI vide its circular dated 04.11.2019
(covering WTDs/CEO, MRTs, and Control Function Staff) and
relevant RBI directives governing the compensation of Non¬
Executive Directors. The policy is not fully operational due to
non-approval of ESOP/ESOS by the shareholders of the Bank.
It shall be fully implemented once the approval in this regard is
received from the shareholders.

The policy is available at the below mentioned link:

https://www.ikb.bank.in/Investor/corporate-governance-

policies

Statutory Disclosures

The disclosures to be made under sub- section (3) (m) of Section
134 of the Companies Act, 2013 read with rule (8) (3) of the
Companies (Accounts) Rules, 2014 by your Bank are explained
as under:

A.    Conservation of energy

The Bank remains committed to environmental
sustainability and reducing its carbon footprint through
the adoption of energy-efficient technologies and digital
transformation initiatives. Our technology investments
continue to support not only operational excellence and
customer convenience but also our broader Environmental,
Social and Governance (ESG) objectives.

The continued expansion of digital banking channels, data-
driven operations, automation initiatives, and cloud-based
platforms has significantly reduced dependency on paper-
based processes and physical interactions. Advanced digital
service delivery through mobile banking, internet banking,
digital lending journeys, and enterprise workflow platforms
has enabled the Bank to conduct operations more efficiently
while minimising environmental impact.

During the year, the Bank undertook a comprehensive
refresh of its desktop infrastructure across branches and
offices by replacing legacy desktop systems with modern,
energy-efficient computing devices. These new-generation
desktops are compact, space-saving, consume significantly
lower power, and offer enhanced processing capabilities.
The initiative not only improves employee productivity
and user experience but also contributes towards reduced
electricity consumption and supports the Bank's long-term
ESG and sustainability goals.

B.    Technology Absorption

At J&K Bank, technology continues to remain a strategic
enabler for business growth, operational resilience,
customer experience enhancement, and innovation. During
FY 2025-26, the Bank undertook several transformative
initiatives aimed at strengthening digital capabilities,
modernising core technology infrastructure, improving
service reliability, and harnessing the power of analytics
and artificial intelligence for data-driven decision making.
These initiatives have further strengthened the Bank's
digital foundation while enhancing customer service,
operational efficiency, governance and risk management.

Our key achievements in technology absorption are
categorised as follows:

(i) Enhancing Digital Customer Experience

The Bank continued to invest in customer-centric digital
capabilities to provide a seamless and enriched banking
experience across channels.

• Enhancements in mPay Delight+: Our flagship mobile
banking application, mPay Delight+, received several
significant feature enhancements across Android and
iOS platforms. New capabilities introduced during the
year include Credit Card integration and management
services, digital cheque book request functionality,
Re-KYC services, and integration with various social
security and government-backed welfare schemes.

These enhancements further strengthen the Bank's
"Bank-in-a-Pocket" proposition and improve customer
convenience through self-service digital banking.

•    Digital Lending Platform: The Bank successfully
rolled out a cloud-hosted end-to-end Digital Lending
Platform covering loan origination, underwriting,
disbursement, and servicing processes. Leveraging
Straight-Through Processing (STP) and real-time
integrations with external ecosystems such as credit
bureaus, GST databases, Income Tax systems, and
Account Aggregators, the platform significantly
reduces turnaround times while delivering a seamless
borrowing experience across Retail, MSME, and
Agriculture loan segments.

•    Employee to Customer Engagement Platform

(ECEP): The Bank implemented a comprehensive
Employee to Customer Engagement Platform to
create a unified view of customer relationships
across sales, service, and marketing functions. The
platform facilitates intelligent lead management,
targeted campaigns, customer segmentation, and
omni-channel customer engagement while leveraging
artificial intelligence for personalised interactions and
improved customer service outcomes.

(ii) Driving Process Automation and Efficiency

The Bank continued its journey towards operational

excellence by adopting enterprise-wide automation and

modern service management capabilities.

•    Implementation of Enterprise IT Service
Management (ITSM) Solution: During the
year, the Bank implemented a state-of-the-
art Enterprise IT Service Management (ITSM)
platform to establish standardised and automated
management of technology services across the
organisation. The solution provides an integrated
framework covering Incident Management, Problem
Management, Change Management, Service Request
Management, Knowledge Management and Service
Level Monitoring.

The platform enables centralised tracking of
technology operations, faster incident resolution,
improved governance, enhanced service quality, and
optimised utilisation of IT resources. By introducing
industry-standard service management practices, the
Bank has enhanced operational resilience, reduced
downtime, strengthened accountability, and improved
overall service delivery to internal and external
stakeholders.

•    Enterprise Application Performance Monitoring: To

further improve digital service reliability and customer
experience, the Bank introduced a comprehensive
Application Performance Monitoring framework for
critical business applications and digital channels.
The solution provides round-the-clock monitoring of

key platforms including Core Banking System (CBS),
Mobile Banking, Internet Banking, UPI, Payment
Systems and other customer-facing services.

The platform enables proactive identification of
performance bottlenecks, faster fault detection and
resolution, real-time visibility into application health,
and improved service availability. This initiative
significantly strengthens the Bank's ability to deliver
uninterrupted digital banking services and enhances
customer experience across all critical channels.

(iii)    Strengthening Core Infrastructure and Fostering
Innovation

The Bank continued to modernise its technology
backbone through strategic investments in scalable,
resilient, and high-performance infrastructure.

•    Core Banking Transformation - Redis Enterprise
Cache Implementation: As part of the Bank's long¬
term "Hollow the Core" strategy, a Redis Enterprise
in-memory caching platform was introduced to
optimise Core Banking System (CBS) performance.
The solution creates a synchronised high-speed cache
layer containing frequently accessed customer and
account information, thereby offloading a substantial
volume of non-financial enquiry and data retrieval
requests from the CBS database.

By reducing repetitive query loads on the Core
Banking platform, the initiative improves transaction
processing efficiency, enhances system scalability,
lowers infrastructure stress, and significantly
improves response times experienced by customers
across digital channels including Mobile Banking,
Internet Banking, UPI and API-based services. This
initiative represents an important milestone in
the Bank's gradual transition towards a modern
composable banking architecture.

•    Desktop Infrastructure Modernisation: The

Bank completed a large-scale refresh of desktop
infrastructure through deployment of modern,
secure, and high-performance endpoint devices
across its branch and office network. The initiative
improved user productivity, enhanced cybersecurity
posture through migration to contemporary
operating systems, ensured compliance with evolving
technology standards, and provided a future-ready
computing environment for employees.

(iv)    Data, Analytics and Artificial Intelligence:

Recognising data as a strategic enterprise asset, the Bank
undertook significant investments to build advanced
analytics capabilities and foster a data-driven culture.

•    Data Insights and Analytics Platform: The Bank
established a cloud-native Data Insights and Analytics
Platform to consolidate enterprise-wide data from

core banking systems, digital channels, customer
interactions, lead management systems, contact
centre operations, and external data sources into a
unified analytics ecosystem.

The platform has enabled the deployment of
multiple Artificial Intelligence and Machine Learning
driven use cases spanning customer growth,
risk management, service excellence, cross-sell
opportunities, customer segmentation, forecasting,
customer retention, complaint analytics, liquidity
management, and portfolio monitoring. The solution
empowers business units with predictive insights
and real-time decision support, enabling proactive
identification of opportunities and risks.

The initiative is expected to deliver long-term benefits
through enhanced revenue generation, improved
customer engagement, better risk management,
optimised cash and liquidity planning, accelerated
digital adoption, and stronger business decision¬
making. Furthermore, it lays the foundation for the
Bank's transformation towards an AI-enabled and
data-driven operating model while strengthening
alignment between business, technology, and
analytics functions.

C. Foreign Exchange Earnings and Outgo

The Foreign Exchange earned in terms of actual inflows

during the year and the Foreign Exchange outgo during

the year in terms of actual outflow. During the Year ended

March 31, 2026 the Bank earned H1493.30 lacs and spent

H128.36 lacs.

1.    Except as reported in para 16 (m) of Schedule 18, no
significant and material orders were passed by the
regulators or courts or tribunals impacting the going
concern status of the Bank's operations in future.

2.    No Stock options were issued to the Directors of your
Bank.

3.    There has been no change in the nature of business
of the Bank.

4.    Being a banking company, the disclosures relating
to deposits as required under Rule 8 (5)(v) & (vi) of
the Companies (Accounts) Rules, 2014, read with
Section 73 and 74 of the Companies Act, 2013 are not
applicable.

5.    There is no application or proceeding pending against
the Bank under the Insolvency and Bankruptcy
Code, 2016 during the year under report. Banks and
Financial institutions presently do not come within
the purview of IBC 2016.

6.    There was no instance of one-time settlement with
any other Bank or financial institution during the year
under report.

Annual Return

I n accordance with the provisions of Companies Act,
2013, the Annual Return of the Bank for the financial year
2025-26 in the prescribed Form MGT-7 is available on the
official website of the Bank at:https://jkb.bank.in/investor/
financials/annualReturns.

Unclaimed Deposits

Jammu & Kashmir Bank Limited operates as a scheduled
commercial bank under the regulatory oversight of the
Reserve Bank of India. Pursuant to RBI's extant guidelines,
any deposit that has remained dormant and unclaimed by
the account holder for 10 (ten) consecutive years is required
to be moved by the Bank into the Depositor Education and
Awareness ("DEA") Fund, which is administered by the RBI.

In line with the RBI's Depositor Education and Awareness
Fund Scheme, 2014, and subsequent amendments issued
thereunder, the Bank carries out periodic transfers of all
such long-outstanding, unclaimed deposit balances to the
DEA Fund. The quantum transferred during the year under
review, together with the running total held with the DEA
Fund as on the balance sheet date, has been disclosed under
the relevant notes forming part of the financial statements.

Account holders whose balances stand transferred to the
DEA Fund are not deprived of their right to the funds -
they may approach the Bank at any point in time to lodge
a claim for the amount, along with interest as applicable
under RBI norms. To facilitate this, the Bank has published
a detailed claim procedure and a dedicated search portal
on its official website and has also equipped its branch
network to assist customers in retrieving such balances.

In addition, the Bank is an active participant on the RBI's
centralised web portal - Unclaimed Deposits - Gateway to
Access information ("UDGAM") - which enables members
of the public to search for unclaimed deposits/accounts
across multiple banks at a single place. Customers and
their legal heirs can use the UDGAM portal to locate any
unclaimed balances lying with the Bank and thereafter
approach the respective branch to complete the claim/
settlement process as per the Bank's laid-down procedure.

Directors Responsibility Statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013,
the Board of Directors hereby state that:

(a)    I n the preparation of the annual accounts, the
applicable accounting standards had been followed
along with proper explanation relating to material
departures;

(b)    accounting policies have been selected and applied
consistently. Reasonable and prudent judgements
and estimates have been made so as to give a true
and fair view of the state of affairs of the Bank at the
end of the financial year and of the profit and loss of
the Bank for that period;

(c)    proper and sufficient care has been taken for the
maintenance of adequate accounting records
in accordance with the provisions of the Act for
safeguarding the assets of the Bank and for preventing
and detecting fraud and other irregularities;

(d)    the annual accounts have been prepared on a going
concern basis;

(e)    internal financial controls have been laid down to
be followed by the Bank and such internal financial
controls are adequate and operating effectively; and

(f)    proper and adequate systems are in place to ensure
compliance with the provisions of all applicable laws
and that such systems are adequate and operating
effectively.

Adequacy of Internal Financial Controls related to
Financial Statements

The Bank has adequate internal controls and processes in
place with respect to its financial statements which provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements
in accordance with Generally Accepted Accounting
Principles. These controls and processes are driven
through various policies, procedures and certifications.
The control environment of the Bank is adequate enough
to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of the Bank's
financial statements. The processes and controls are
reviewed periodically.

Requirement for maintenance of Cost Records

The cost records as specified by the Central Government
under section 148(1) of the Companies Act, 2013 are not
required to be maintained by the Bank.

CEO & CFO Certification

In terms of Regulation 17(8) of the Listing Regulations,
the certification by the Mr. Amitava Chatterjee, Managing
Director and Chief Executive Officer and Mr. Ketan Kumar
Joshi, Chief Financial Officer of the Bank on the financial
statements and internal controls relating to financial
reporting has been obtained and was placed before the
Board in its meeting dated 05th May, 2026

Divergence in asset classification and provisioning
for NPAs

Based on the condition mentioned in RBI circular, no
disclosure on divergence in asset classification and
provisioning for NPAs is required with respect to RBI's
supervisory process for the year ended March 31, 2026.

Customer complaints and grievance redressal

Details of customer complaints and grievance redressal is
reported in Schedule 18 - Notes on Accounts of the Financial
Statements, which form part of the Annual Report.

Compliance with Maternity Benefit Act, 1961

The Bank has complied with the applicable provisions
of Maternity Benefit Act, 1961 for female employees of
the Bank with respect to leaves and maternity benefits
thereunder.

Acknowledgements

The Directors thank the valued customers, Shareholders
and well-wishers of the Bank in India and abroad for
their goodwill, patronage and support. The Directors
acknowledge with gratitude the valuable and timely
advice, guidance and support received from Government
of India, Government of UTs of Jammu & Kashmir and
Ladakh, Reserve Bank of India, Securities and Exchange
Board of India (SEBI), Insurance Regulatory Development
Authority (IRDA), NABARD, SIDBI, IBA, FIMMDA, FEDAI,
Stock Exchanges, Ministry of Corporate Affairs, Registrar

of Companies, Comptroller & Auditor General of India,
Depositors, Financial Institutions and the Central Statutory
Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation of
the valuable contribution of the members of the staff at
all levels for the progress of the Bank during the year and
look forward to their continued cooperation in realisation
of the corporate goals in the years ahead.

For and on behalf of the Board of Directors

S. Krishnan    Amitava Chatterjee

Part-Time Chairman    MD & CEO

Place: Chennai    Place: Jammu

Date: August 29, 2026    Date: August 29, 2026