| Corporate Governance - Model code of
Conduct
Need and objective of the Code
Clause 49 of the Listing agreement entered into with the Stock
Exchanges, requires, as part of Corporate Governance the listed entities to lay down a
Code of Conduct for Directors on the Board of an entity and its Senior Management. The
term "Senior Management" shall mean personnel of the company who are members of
its core management team excluding the Board of Directors. This would also include all
members of management, one level below the Executive Directors including all functional
heads.
Bank's Belief System
This Code of Conduct attempts to set forth the guiding principles on
which the Bank shall operate and conduct its daily business with its multitudinous
stakeholders, government and regulatory agencies, media and anyone else with whom it is
connected. It recognizes that the Bank is a trustee and custodian of public money and in
order to fulfill fiduciary obligations and responsibilities, it has to maintain and
continue to enjoy the trust and confidence of public at large.
The Bank acknowledges the need to uphold the integrity of every
transaction it enters into and believes that honesty and integrity in its internal conduct
would be judged by its external behavior. The bank shall be committed in all its actions
to the interest of the countries in which it operates. The Bank is conscious of the
reputation it carries amongst its customers and public at large and shall endeavor to do
all it can to sustain and improve upon the same in its discharge of obligations. The Bank
shall continue to initiate policies, which are customer centric and which promote
financial prudence.
Philosophy of the Code
The code envisages and expects
Adherence to the highest standards of honest and ethical conduct,
including proper and ethical procedures in dealing with actual or apparent conflicts of
interest between personal and professional relationships.
Full, fair, accurate, sensible, timely and meaningful disclosures in
the periodic reports required to be filed by the Bank with government and regulatory
agencies.
Compliance with applicable laws, rules and regulations.
To address misuse or misapplication of the Bank's assets and
resources.
The highest level of confidentiality and fair dealing within and
outside the Bank.
A. General Standards of conduct
The Bank expects all Directors and members of the Core Management to
exercise good judgement, to ensure the interests, safety and welfare of customers,
employees and other stakeholders and to maintain a cooperative, efficient, positive,
harmonious and productive work environment and business organization. The Directors and
members of the Core Management while discharging duties of their office must act honestly
and with due diligence. They are expected to act with that amount of utmost care and
prudence, which an ordinary person is expected to take in his/ her own business. These
standards need to be applied while working in the premises of the Bank, at offsite
locations where business is being conducted whether in India or abroad, at Bank-sponsored
business and social events, or at any other place where they act as representatives of the
Bank.
B. Conflict of Interest
A "conflict of interest" occurs when personal interest of any
member of the Board of Directors and of the Core management interferes or appears to
interfere in any way with the interests of the Bank. Every member of the Board of
Directors and Core Management has a responsibility to the Bank, its stakeholders and to
each other. Although this duty does not prevent them from engaging in personal
transactions and investments, it does demand that they avoid situations where a conflict
of interest might occur or appear to occur. They are expected to perform their duties in a
way that they do not conflict with the Bank's interest such as :
Employment /Outside Employment - The members of the
Core Management are expected to devote their total attention to the business interests of
the Bank. They are prohibited from engaging in any activity that interferes with their
performance or responsibilities to the Bank or otherwise is in conflict with or
prejudicial to the Bank.
Business Interests - If any member of the Board of
Directors and Core Management considers investment in securities issued by the Bank's
customer, supplier or competitor, they should ensure that these investments do not
compromise their responsibilities to the Bank. Many factors including the size and nature
of the investment; their ability to influence the Bank's decisions, their access to
confidential information of the Bank, or of the other entity, and the nature of the
relationship between the Bank and the customer, supplier or competitor should be
considered in determining whether a conflict exists. Additionally, they should disclose to
the Bank any interest that they have which may conflict with the business of the Bank.
Related Parties - As a general rule, the Directors
and members of the Core Management should avoid conducting Bank' s business with a
relative or any other person or any firm, Company, association in which the relative or
other person is associated in any significant role. Relatives shall include :
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Father
Mother (including step mother)
Son's Wife
Daughter (including step daughter)
Father's father
Father's mother
Mother's mother
Mother's father
Son's son
Son's son's wife
Son's daughter
Son's daughter's husband
Daughter's husband
Daughter's son
Daughter's son's wife
Daughter's daughter
Daughter's daughter's husband
Brother (including step brother)
Brother's wife
Sister (including step sister)
Sister's husband
If such a related party Transaction is unavoidable, they must fully
disclose the nature of the related party transaction to the appropriate authority. Any
dealings with a related party must be conducted in such a way that no preferential
treatment is given to that party.
In the case of any other transaction or situation giving rise to
conflicts of interests, the appropriate authority should after due deliberations decide on
its impact.
C. Applicable Laws
The Directors of the Bank and Core Management must comply with
applicable laws, regulations, rules and regulatory orders. They should report any
inadvertent non - compliance, if detected subsequently, to the concerned authorities.
D. Disclosure Standards
The Bank shall make full, fair, accurate, timely and meaningful
disclosures in the periodic reports required to be filed with Government and Regulatory
agencies. The members of Core Management of the bank shall initiate all actions deemed
necessary for proper dissemination of relevant information to the Board of Directors,
Auditors and other Statutory Agencies, as may be required by applicable laws, rules and
regulations.
E. Use of Bank's Assets and Resources
Each member of the Board of Directors and the Core Management has a
duty to the Bank to advance its legitimate interests while dealing with the Bank's assets
and resources. Members of the Board of Directors and Core Management are prohibited from:
Using Corporate property, information or position for personal gain,
Soliciting, demanding, accepting or agreeing to accept anything of
value from any person while dealing with the Bank's assets and resources,
Acting on behalf of the Bank in any transaction in which they or any
of their relative(s) have a significant direct or indirect interest.
F. Confidentiality and Fair Dealings
(i) Bank's confidential Information
The Bank's confidential information is a valuable asset. It includes
all trade related information, trade secrets, confidential and privileged information,
customer information, employee related information, strategies, administration, research
in connection with the Bank and commercial, legal, scientific, technical data that are
either provided to or made available each member of the Board of Directors and the core
Management by the Bank either in paper form or electronic media to facilitate their work
or that they are able to know or obtain access by virtue of their position with the Bank.
All confidential information must be used for Bank's business purposes only.
This information includes the safeguarding, securing and proper
disposal of confidential information in accordance with the Bank's policy on maintaining
and managing records. The obligation extends to confidential of third parties, which the
Bank has rightfully received under non-disclosure agreements.
To further the Bank's business, confidential information may have to
be disclosed to potential business partners. Such disclosures should be made after
considering its potential benefits and risks. Care should be taken to divulge the most
sensitive information, only after the said potential business partner has signed a
confidentiality agreement with the Bank.
Any publication or publicly made statement that might be perceived or
construed as attributable to the Bank, made outside the scope of any appropriate authority
in the Bank, should include a disclaimer that the publication or statement represents the
views of the specific author and not the Bank.
(ii) Other Confidential Information
The bank has many kinds of business relationships with many companies
and individuals. Sometimes, they will volunteer confidential information about their
products or business plans to induce the Bank to enter into a business relationship. At
other times, the Bank may request that a third party provide confidential information to
permit the Bank to evaluate a potential business relationship with the party. Therefore,
special care must be taken by the Board of Directors and members of the Core Management to
handle the confidential information of others responsibly. Such confidential information
should be handled in accordance with the agreements with such third parties.
The Bank requires that every Director and the member of Core
Management, General Managers should be fully compliant with the laws, statutes, rules and
regulations that have the objective of preventing unlawful gains of any nature whatsoever.
Directors and members of Core Management shall not accept any offer,
payment, promise to pay or authorization to pay any money, gift or anything of value from
customers, suppliers, shareholders/ stakeholders etc that is perceived as intended,
directly or indirectly, to influence any business decision, any act or failure to act, any
commission of fraud or opportunity for the commission of any fraud.
Good Corporate Governance Practices
Each member of the Board of Directors and Core Management of the Bank
should adhere to the following so as to ensure compliance with good Corporate Governance
practices.
(a) Dos
Attend Board meetings regularly and participate in the deliberations
and discussions effectively.
Study the Board papers thoroughly and enquire about follow-up reports
on definite time schedule.
Involve actively in the matter of formulation of general policies.
Be familiar with the broad objectives of the Bank and policies laid
down by the Government and the various laws and legislations.
Ensure confidentiality of the Bank's agenda papers, notes and
minutes.
(b) Don'ts
Do not interfere in the day to day functioning of the Bank.
Do not reveal any information relating to any constituent of the Bank
to anyone.
Do not display the logo / distinctive design of the Bank on their
personal visiting cards / letter heads.
Do not sponsor any proposal relating to loans, investments, buildings
or sites for Bank's premises, enlistment or empanelment of contractors, architects,
auditors, doctors, lawyers and other professionals etc.
Do not do anything, which will interfere with and/ or be subversive
of maintenance of discipline, good conduct and integrity of the staff.
Waivers
The matters covered in this Code of Conduct are of the utmost
importance to the bank, its stakeholders and its business partners, and are essential to
the Bank's ability to conduct its business in accordance with its value system.
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