Scaling up clean lighting programs with Responsible Banking Solutions

YES BANK Summary Update

The only Greenfield private sector Bank to be set up in the last 15 years Owner Manager - Partner Professional management team with the highest ownership levels among all banks

Knowledge Banking - Key Differentiator for the Integrated product offering with One-Bank customer proposition
Unique Approach to Technology Outsourced model enhancing scalability; cutting edge features driving Retail Consistent Financial Performance FY2009 PAT: INR 3038 million; ROA: 1.52%; ROE : 20.7% Receive the No. 1 Emerging Markets Sustainable Bank of the Year award at the FT/IFC Sustainable Banking Awards Received the Most Innovative Bank in India award at The New Economy Annual Banking & Finance Awards in London Launched YES COMMUNITY, a Responsible Banking initiative across Retail branches nationally

Responsible Banking @ YES BANK

Business does not operate in a vacuum Integrating social and environmental aspects into core business strategy important for long-term growth of the Bank Responsible Banking means adopting a People-PlanetProfit approach to doing business Translates into a critical competitive edge for the Bank Offers inroads to new business segments and client base

Responsible Banking A Differentiated

Approach
Sustainability Zone Evolution of Sustainability New Generation of Sustainability: Integration and Mainstreaming Sustainability: Triple Bottom Line

Pure Profi t

Sustainability Zone combined economic, environmental, s ocial benefit

Sustainability as part of business

CSR based initiatives

Values over Value Pure Philanthropy

Philanthropy focused

Mainstreaming sustainability using multi-stakeholder approach Operate in Sustainability Zone supporting businesses that meet economic, environmental & social objectives Innovative financial solutions to address gamut of development issues sustainable livelihood, food security, climate change, public health, education, information technology, biotechnology etc Using knowledge driven approach and specialised skill sets, human resources to adapt commercial financial services to sustainability space.
YES BANK has leapfrogged traditional philanthropy-based CSR to Responsible Banking finding Business Solutions to Social & Environmental Issues

Responsible Banking Framework

Responsible Banking in Thought Responsible Banking in Action

RESPONSIBLE BANKING (CSR & Sustainability)

Thought Leadership, Advisory, Institutionalization

AGRIBUSINESS, RURAL & SOCIAL BANKING (ASRB)

Credit + Services

MICROFINANCE
Credit + Services

SUSTAINABLE INVESTMENT BANK (SIB)

Business Planning/Structuring, M&A Advisory, Private Placement

FINANCIAL INCLUSION BANKING

Credit, Savings, Re mittances

SOCIALLY RESPONSIBLE INVESTING

Growth Capital

Responsible Corporate Citizenship (RCC)

Internal Engagemen t

YES COMMUNITY

YES SAMPANN DirectLending

Microfinance Institutions Group(MIG)

Alternative Energy& Environment

Social Enterprises

Clean& Sustainable Technologies

SouthAsia Business CleanEnergy Correspondent Fund

Tatva Investment Program

Deal Generation
Other Bank Divisions: Corporate Finance Corporate & Institutional Banking Commercial Banking Business Banking Retail Branches

Deal Generation

Deal Generation

Responsible Banking: Mainstreaming sustainability principles across YES BANK

SELECT RESPONSIBLE BANKING INITIATIVES

Responsible Banking in Thought

A Think Tank incubating new business opportunities to mainstream sustainability Provides thought leadership Establishes partnerships for development - local and international Supports the socially responsible investor community by innovating business approaches to development. Provides Responsible Corporate Citizenship advisory services to businesses, governments and non-profits for

Social Auditing Strategizing CSR practices Socio-environmental engagement Waste management Human capital and employee support analysis Carbon emissions analysis Social enterprise planning and scalability Entrepreneurship development and syndication of funds

Agribusiness, Rural & Social Banking

Innovative financial models Leveraging outreach of stakeholder in Agri Value Chain to overcome last mile issues Customized insurance solutions

Select Partners:

Reaching over 1 million Farmers through these Partnerships

Financing Innovative Agribusiness

Deal Example
Zameen Organic Pvt. Ltd

Fair trade supported company owned by Small Farmers Organizations Network of 6,000 small farmers producing organic cotton in the Vidharbha (Maharashtra) and Adilabad (Andhra Pradesh) regions Provides vital processing and marketing linkage between organic farmers and branding companies
Unique concept of Premium: Farmer Premium and

Community Premium

YES BANK is Zameens Sole Banking Partner

Microfinance
Complementary Two Pronged Approach
Programme
Microfinance Institutions Group (MIG)

Approach
Wholesale Credit partnership with leading Indian MFIs across the country

About the Programme

MIG's product suite includes term loans, loan syndications and rated capital market loan products Mainstreams microfinance by providing access to capital markets that reduce the cost of funds and operations resulting in affordable financial products for the BOP Servicing bottom of the pyramid through a gamut of financial products and services

Direct Intervention Lending directly to BOP clients in urban and rural locations

YES SAMPANN

Fills gap of institutionally sponsored financial services provider servicing needs of low income communities in rural and urban India

Growing Partnerships and Programs to Financially Include 1000s

Microfinance Institutions Group

Multiplier Effect: The Indirect Impact
Institutes specific transactions to position microfinance as a new asset class, appealing to a broad base of investors and lenders, expanding access to capital FIRST Indian bank to undertake innovations in capital market products for microfinance: Capital Market Products Banks have been main source of debt funding for MFIs (term loans) Term loans are relatively expensive they are illiquid

YES BANK arranged first rated bond issuance of an MFI in the world in the form of Commercial Paper & Non-Convertible Debentures of INR 2000 mn (USD 40 mn)

Enabled cost reduction for the MFI to the extent of 300 bps
Securitisation of receivables originated by MFI MFI receivables recognised as an asset class

Structured Products

Generated interest among institutional investors Potential incremental access to capital for industry of USD 12-14bn annually, impacting 60-70mn clients

Supporting Entrepreneurs
One person at a time
Sameer started a Ceramic & Glassware business 5 yrs ago in Chembur. Presently in his 2nd Loan Cycle 1st Loan: Rs 25,000 for 5 months 2nd Loan: Rs 37,000 for 8 months Repayment: Weekly (1st loan) / Fortnightly (2nd loan) Has used the Loan for Sourcing additional stock from Firozabad & increasing inventory. Earlier, faced problems of stock shortage due to lack of capital
Sameer Khan, 28 yrs Married, has 3 yr. old son A YES SAMPANNite

Monthly Household Surplus: Rs 13,318 Wants to expand his business on the wholesale side and stock other ceramic material apart from mugs, glasses & cups

I hope to grow my business with YES SAMPANNs support it feels like home, I dont have to anywhere else to fulfill my financial needs

Sustainable Investment Banking (SIB)

M&A Advisory

Business Restructuring

Private Equity Raising

JV Advisory

Renewable Energy
Deal Example
56% of the 700 million rural Indian residents lack access to electric power; Government wants to deliver electricity to all of them by 2012 50% of it from renewable resources (wind, power, solar & biogas)*

YBL focused on addressing Indias energy

Private Equity

M&A

Advisory

deficiency & reducing reliance on fossil fuels Raised USD 47 mn for Greenko, a renewable Raising Restructuring energy player, through private placement of through thrust on renewable energy equity shares with Global Environment Fund, one of the worlds largest environment focused funds, for expansion of their hydro power generation assets
Business

*Source: Pernick, R. & Wilder, C (2007) The Clean Tech Revolution, Harper Collins

Socially Responsible Investing

Promoting funds Buy-Side advisory services to global Financial Sponsors Tailor made investment advise based on sector focus, investment size of the fund, having India in the geographic focus Focused on building proprietary deal pipeline for the fund Current Mandate - Exclusive India Advisor for U.S.-based GEFs Emerging Markets fund for clean energy and environment investments in India.

Key Highlights South Asia Clean Energy Fund (SACEF)

Size of Fund Size of Investment Investment Cap Minimum Investor Commitment USD 200 million USD 3.0 - 15 million 10% in a single portfolio company USD 2.0 million

Fund Sponsor
Fund Life

GEF and YBL

Commitment period 5 years Remaining life 5 years with two 1 year extension periods

Developing semi-commercial models to scale up the LaBL program

A TERI and YES BANK Partnership

TERI-YES BANK LaBL Financing Program

Objectives of the program: Research and survey exisiting LaBL sites to uncover best practices, lapses, socio economic conditions, availability of lighting fuel etc. Develop 2-3 semi-commercial models for the LaBL campaign Pilot the commercial models through grant funding to assess viability over a 2-3 month period Finalize the models and co-fund scale up with other commercial banks and financial institutions

TERI-YES BANK LaBL Financing Program

Key Findings

Entrepreneurs with other lucrative business interests are not fully committed to making model successful in their village
Entrepreneurs reputation and standing in the village determines the SLCS models success Villagers typically spend INR 100-150 per month on lighting Entrepreneurs are charging INR 3.5 on average for renting the lanterns for 1 night

90% of respondents still rely on kerosene lanterns for their alternative lighting needs
Electricity theft is high in those villages where state allocates electricity for agricultural needs Mobile phone usage in rural India is extremely high. This unlocks the possibility of entrepreneur earning

TERI-YES BANK LaBL Financing Program

Financing options currently being explored: Microfinance loan to SLCS entrepreneurs/SHG
Backed by FD from TERI and/or LaBL Partner Disbursement and relationship on ground to be managed by partner MFI Payback period typically 12-18 months

School financing model

Lending to schools with an entrepreneurial bent of mind Model enables school children to take home a lantern after school Rent for lantern is added onto school fees

Community financing
Entrepreneur collects refundable deposits from community Community deposits parked at MFI Bank lends to entrepreneur against community deposit

TERI-YES BANK LaBL Financing Program

Benefits of commercialization of clean lighting models: Gradual shift away from grant and subsidy model for greater scalability Creates accountability amongst stakeholders entrepreneur, user,

Generate a profit and loss/balance sheet track record for models and attract PE and Institutional investment in the future
Create interest from commercial banking and finance community in investing in small and large scale clean lighting ventures

Successfully Positioned
Emerging Markets Sustainable Bank of the Year for Asia 2008 for excellence in creating environmental, social and financial value across its operations. Best Corporate Social Responsibility Practice Award, Social and Corporate Governance Awards, 2007, in recognition of innovative strategies to implement CSR practices within the business focus of the Indian Corporate sector.

Trade Finance Deal of The Year, 2007 in recognition of innovative structured rural financing solutions.
The first bank to be recognized by the CII-ITC Sustainability Awards in 2009 Environment Leadership Award, in recognition of outstanding contributions made through working in partnerships to improve the environment and quality of life for the people of Asia.

THANK YOU