| Last Modified : Apr 26, 2007 11:22 AM |
customer relations --> MODEL POLICY/CODES --> CORPORATE GOVERNANCE - CODE
OF CONDUCT
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| Corporate Governance - Code Of Conduct |
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| I. 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. Senior Management has been defined
to include personnel who are members of its Core Management and functional heads excluding the
Board of Directors.
Accordingly the Bank has laid down this Code for its Directors on the Board and
its Core Management (individual bank will decide on the composition of Core Management). |
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| II. 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 recognises that-the
Bank is a trustee and custodian of public money and in order to fulfil its 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 behaviour. 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 endeavour 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. |
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| III. Philosophy Of The Code |
The Code envisages and expects -
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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.
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full, fair, accurate, sensible, timely and meaningful disclosures in the
periodic reports required to be filed by the Bank with government and regulatory agencies.
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compliance with applicable laws, rules and regulations.
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to address misuse or misapplication of the Bank’s assets and resources.
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the highest level of confidentiality and fair dealing within and outside the
Bank.
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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 the 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-
Ø 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.
Ø Business Interests - If any member of the Board of Directors and Core
Management considers investing 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.
Ø 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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Spouse
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Father
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Mother (including step-mother)
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Son (including step-son)
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Son’s wife
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Daughter (including step-daughter)
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Father’s father
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Father’s mother
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Mother’s mother
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Mother’s father
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Son’s son
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Son’s son’s wife
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Son’s daughter
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Son’s Daughter’s husband
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Daughter’s husband
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Daughter’s son
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Daughter’s son’s wife
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Daughter’s daughter
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Daughter’s daughter’s husband
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Brother (including step-brother)
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Brother’s wife
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Sister (including step-sister)
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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:
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using corporate property, information or position for personal gain;
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soliciting, demanding, accepting or agreeing to accept anything of value from
any person while dealing with the Bank’s assets and resources;
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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
1. Bank’s Confidential Information
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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 to 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.
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This responsibility includes the safeguarding, securing and proper disposal of
confidential information in accordance with the Bank's policy on maintaining and managing records.
This obligation extends to confidential information of third parties, which the Bank has rightfully
received under non-disclosure agreements.
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To further the Bank’s business, confidential information may have to be
disclosed to potential business partners. Such disclosure 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.
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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.
2. 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 that 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.
Ø 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.
Ø Directors and the 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. |
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| IV. 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
Ø Attend Board meetings regularly and participate in the deliberations and discussions
effectively.
Ø Study the Board papers thoroughly and enquire about follow-up reports on definite time
schedule.
Ø Involve actively in the matter of formulation of general policies
Ø Be familiar with the broad objectives of the Bank and the policies laid down by the
Government and the various laws and legislations.
Ø Ensure confidentiality of the Bank’s agenda papers, notes and Minutes.
(b) Don’ts
Ø Do not interfere in the day to day functioning of the bank
Ø Do not reveal any information relating to any constituent of the Bank to anyone.
Ø Do not display the logo / distinctive design of the Bank on their personal visiting cards /
letter heads.
Ø 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.
Ø Do not do anything, which will interfere with and / or be subversive of maintenance of
discipline, good conduct and integrity of the staff.
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V. Waivers
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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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| I have received and read the Bank's Code of Conduct and agree to comply with
the same. |
Name :
Signature :
Place & Date : |
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