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Yes it is mandatory as you also have 2 questions while applying, one is on your last year’s ratings and the other is whether have you informed your manager on applying.
Manager will not get any notification when you apply, however hiring manager will reach out to your manager if you get selected.
If you wanna leave on good terms better to inform.
If your manager is understanding, he will be okay, if not he can say he might not be able to release a critical resource like you, and your selection can be terminated….!