Preamble

NOMINATION & REMUNERATION POLICY

The Board of Directors (the “Board”) of Airtel Payments Bank Limited on the recommendation of the Nomination & Remuneration Committee (the “Committee”) has approved and adopted this Nomination & Remuneration Policy (the “Policy”) in compliance with the provisions of Section 178 of the Companies Act, 2013 and rules made thereunder and the applicable RBI guidelines.

Objectives

The main objectives of this Policy are:-

• To lay down the criteria and terms and conditions with regard to identifying persons who are qualified to become directors (executive and non-executive including Independent directors), Key Managerial Personnel (“KMP”) and persons who may be appointed in senior management positions.
• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage for the Bank.
• To determine remuneration of directors, KMPs and other senior management personnel’s keeping in view all relevant factors including industry trends and practices.
• To provide for rewards linked directly to their effort, performance, dedication and achievement of Bank’s targets.

Directors and Key Managerial Personnel

A. Attributes, qualifications and diversity

The Committee shall be responsible for identifying a suitable candidate for appointment as director or as KMP of the Bank.

The Board shall consist of such number of Directors as is necessary to effectively manage the Bank of the size and nature as of Airtel Payments Bank Limited, subject to compliance with the provisions of Companies Act, 2013, Banking Regulation Act, 1949 and the applicable rules, regulations and circulars thereto and the Articles of Association of the Bank. The Board shall strive to have an appropriate combination of Executive, Non-Executive and Independent Directors.

While evaluating a person for appointment / re-appointment as director or as KMP, the Committee shall consider and evaluate number of factors including but not limited to knowledge, integrity, skills, abilities (ability to exercise sound judgement), professional experience, personal accomplishment, age, understanding of the sector / industry in which the Bank operates, marketing, technology, finance and other disciplines relevant to the business etc. and such other factors that the Committee might consider relevant and applicable from time to time towards achieving a diverse Board.

The Committee shall ensure that the proposed director satisfies the following additional criteria:-

·       Eligible for appointment as a director on the board of the Bank and is not disqualified in terms of Section 164 and other applicable provisions of the Companies Act 2013.

·       Is not disqualified in terms of Section 10A and 16 of the Banking Regulation Act 1949. In addition to this, the WTD/MD should not be disqualified as per section 10B of the Banking Regulation Act, 1949.

·       Has attained minimum age of 25 years and is not older than 70 years.

·       Does not hold directorship, including any alternate directorship, in more than 20 companies (including private and public limited companies) or 10 public/ deemed public limited companies incorporated in India.

·       Will be able to devote sufficient time and efforts in discharge of duties and responsibilities effectively. While evaluating a person for appointment / re-appointment as an independent director, the Committee shall ensure that the proposed appointee satisfies the following additional criteria:-

·       Meet the baseline definition and criteria of “independence” as set out in Section 149 of the Companies Act, 2013 and other applicable laws.

·       Should not hold the position of independent director in more than Seven Indian listed companies and if serving as whole-time director or Managing Director in any Indian listed company, then in not more than three Indian listed companies.

·       Should not hold any board / employment position with a competitor in the geographies where the Bank is operating. However, the Board may in special circumstances waive this requirement.

The appointment, re-appointment and/or remuneration of the Board members, may be subject to the approval of Reserve Bank of India as per the applicable provisions of banking laws.

Senior Management

While evaluating a person for appointment / re-appointment in a senior management position, various factors including individual’s background, competency, skills, abilities (viz. leadership, ability to exercise sound judgement), educational and professional background, personal accomplishment, age, relevant experience and understanding of related field viz. marketing, technology, finance or such other discipline relevant to present and prospective operations of the Bank shall be considered.

Senior Management means personnel of the Bank who are members of its core management team excluding Board of Directors and shall comprise of all members of management one level below the executive directors, including all functional heads.

Board Members

B. Remuneration Policy

The overall limits of remuneration of the board members including executive board members (i.e. managing director, whole-time director, executive directors etc.), if paid, will be governed by the Banking Regulation Act, 1949, RBI guidelines on Compensation of Whole Time Director/ Chief Executive Officer/ Risk takers and Control function staff, etc., RBI guidelines on Compensation to Non- executive Directors of Private Sector Banks and other applicable laws including the Companies Act, 2013, to the extent applicable.

Within the overall limit approved by the Reserve Bank of India and/or shareholders, on the recommendation of the Committee, the Board shall determine the remuneration. The Board can determine different remuneration for different directors on the basis of their role, responsibilities, duties, time involvement etc.

Independent Directors

“Pursuant to the provisions of applicable laws, the Board has approved the following remuneration for Independent Directors: 

(i) Remuneration - Compensation in the form of fixed remuneration of Rs. 10,00,000 (Rupees Ten Lakhs Only) per annum to each Independent Director on proportionate basis. 

(ii) Profit-linked commission – Since the Company does not have sufficient profits to pay commission to non-executive independent directors, no commission is payable to Independent Directors, at present. 

(iii) Sitting Fees – The independent directors will be entitled to receive sitting fees of INR 100,000/- for every meeting of Board or Committee (excluding meeting of independent directors) thereof. 

If a director recommend / nominate an alternate director to attend a Board/Committee meeting, such alternate director shall not be entitled to sitting fee for the relevant meeting. 

(iv) Reimbursement of Expenses -All Independent non-executive directors shall be entitled to reimbursement of the following expenses: 

·  Return air fare by business class from the usual place of residence to venue of the meeting via the most efficient route. 

·   If the journey commences from some other destination, an amount equivalent to above will be reimbursed. 

·   Accommodation and expenses for meeting day(s) plus one day required to arrive or depart one day ahead or one day later due to flight schedule. 

·   Local transportation will be either provided by the Bank or reimbursed. 

·   All reasonable incidental expenses incurred for official purposes. 

(v) Communication 

·   1 ipad (replaceable every three years) 

·   1 4G GSM Sim for ipad with national data roaming facility. The total cost that will be borne by the Bank for all telecom services shall not exceed INR 300,000 p.a. (INR 25,000 per month). 

·   Airtel Payments Bank email id for official communication (optional)”

Executive Board Members (Chairman, Whole- time Director, Executive Directors etc.) and Part-time Chairman

The remuneration (including revision in the remuneration) of executive board members and part-time Chairman, if any, shall be approved by the Board on the basis of the recommendation of the Nomination & Remuneration Committee.

The remuneration payable to executive board members shall consist of

(a) Fixed Pay, which is payable monthly, and shall include basic pay, contributions to retirement benefits, house rent allowance or company- leased accommodation (as may be applicable) and other allowances as per the Bank’s policy

(b) Variable Pay (paid at the end of Financial Year) directly linked to the performance of the individual employee (i.e. achievement against pre-determined KRAs), his / her respective Business Unit and the overall Bank’s performance

(c) Long term incentive / ESOPs (d) Any other payments including joining bonus and severance pay as may be decided by the Nomination and Remuneration Committee from time to time.

The revision of remuneration and variable pay of the executive board members and part-time Chairman would be subject to prior RBI approval as per the applicable provisions of banking laws.

Remuneration to Key Managerial Personnel (other than Chairman, Managing Director Whole-Time Director and Executive Directors), Senior Management and Other Employees

The remuneration of Key Managerial Personnel (other than chairman, managing director whole time director and executive director) and other employees, shall be as per the compensation and appraisal policy of the Bank.

The remuneration payable to key managerial personnel (other than chairman, managing director and whole time director), senior management and other employees shall consist of (a) Fixed Pay, which is payable monthly and include basic pay, contributions to retirement benefits, house rent allowance or company- leased accommodation (as may be applicable) and other allowances as per the Bank’s policy (b) Variable Pay (paid at the end of Financial Year) directly linked to the performance of the individual employee (i.e. achievement against pre-determined KRAs), his / her respective business unit and the overall Bank performance (c) Long term incentive / ESOPs as may be decided by the Committee from time to time.

Malus / Clawback

The deferred/variable remuneration (including Long Term incentive) of directors, KMPs and other senior management personnel’s shall be subject to malus/clawback arrangements in the event of negative contributions of the Bank and/or the relevant line of business in any year.

A malus arrangement permits the Bank to prevent vesting of all or part of the amount of a deferred remuneration, however, it does not reverse vesting after it has already occurred. A clawback, on the other hand, is a contractual agreement between the employee and the Bank in which the employee agrees to return previously paid or vested remuneration to the Bank under certain circumstances

Under Malus and/or clawback arrangement, the Bank, at the discretion of Nomination & remuneration Committee / Board of Directors, shall have the power to prevent vesting of all or part of the amount of remuneration (including deferred/variable remuneration) or reduce, withhold, cancel, claw back such remuneration or impose further conditions in certain circumstances including

(a)       Significant drop in performance of Individual / Business / Bank;

(b)        Disciplinary Action against the Individual;

(c)        Resignation of the Individual prior to the payment date;

(d)        Directions/ approval of any authority governing the Bank;

In the event of failure of the directors, KMPs and other senior management personnel’s to pay back the amount under this clause, the Bank shall have the right to take necessary action as per the Bank Policy.

Disclosures by the Bank

This Policy shall be disclosed in the Bank's annual report and on website of the Bank as per the applicability under the Act.

General

CHRO, the Managing Director/CEO and Company Secretary are jointly authorized to amend the Policy to give effect to any changes / amendments notified by Ministry of Corporate Affairs and Reserve Bank of India w.r.t. any matter covered by this policy. The amended policy shall be placed before the Board for noting and ratification. Any question and clarification relating to this Policy should be addressed to the Company Secretary.