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 State Bank of India
has laid down this Code for its Directors on the Central
Board and its Core Management (Core Management means
top executives of the Bank at the level of General
Managers).
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.
III. Philosophy
Of The Code
The Code envisages
and expects -
a) 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.
b) full, fair and accurate disclosures in the periodic
reports required to be filed by the Bank with government
and regulatory agencies.
c) compliance with applicable laws, rules and regulations.
d) to address misuse or misapplication of the Bank's
assets and resources.
e) 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 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-
a. 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.
b. 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.
c. 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:
- Spouse
- Father
- Mother (including
step-mother)
- Son (including
step-son)
- 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 and accurate 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
1. 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
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.
- 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.
- 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.
- 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.
- 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
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.
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
- 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 the 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. (This
stipulation does not apply to the Chairman, the
Managing Directors and the Core Management.)
- 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. (This does
not prevent the Managing Director, Chief General
Manager and Core Management from using DO Letterheads
or visiting cards with SBS's logo thereon).
- 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.
V.Waivers
- Any waiver
of any provision of this Code of Conduct for a
member of the Bank's Board of Directors or a member
of the Core Management must be approved in writing
by the Board of Directors of the Bank.
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.
I have received
and read the Bank's Code of Conduct and agree to
comply with the same.
Name:
Signature:
Place & Date:
