corporate governance.finaldoc

8/7/2019 Corporate Governance.FINALdoc

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Name: Hania Usmani.

Class :SY.B.B.I.

Roll No:32.

Subject :Corporate Law.

Project On :Corporate Governance.


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Corporate Governance.

Corporate governance is the set ofprocesses, customs,policies, laws, and

institutions affecting the way a corporation (orcompany) is directed,

administered or controlled. Corporate governancealso includes the relationships

among the manystakeholders involved and the goals for which the corporation is

governed. The principal stakeholders are the shareholders, management, and

the board of directors. Other stakeholders include employees,

customers, creditors, suppliers, regulators, and the community at large.

Corporate governance is a multi-faceted subject. An important theme of

corporate governance is to ensure theaccountabilityof certain individuals in an

organization through mechanisms that try to reduce or eliminate theprincipal-

agent problem. A related but separate thread of discussions focuses on the

impact of a corporate governance system in economic efficiency, with a strong

emphasis on shareholders' welfare. There are yet other aspects to the corporate

governance subject, such as the stakeholder and the corporate governancemodels around the world.

There has been renewed interest in the corporate governance practices of

modern corporations since 2001, particularly due to the high-profile collapses of

a number of large U.S. firms such as Enron Corporation and MCI Inc. (formerlyWorldCom). In 2002, the U.S. federal government passed theSarbanes-Oxley Act,

intending to restore public confidence in corporate governance.

Definition

A Board Culture of Corporate Governance, business author Gabrielle O'Donovan

defines corporate governance as 'an internal system encompassing policies, processes and people, which serves the needs of shareholders and other

stakeholders, by directing and controlling management activities with good

business savvy, objectivity, accountability and integrity. Sound corporategovernance is reliant on external marketplace commitment and legislation, plus ahealthy board culture which safeguards policies and processes'.
http://en.wikipedia.org/wiki/Business_processhttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Companyhttp://en.wikipedia.org/wiki/Governancehttp://en.wikipedia.org/wiki/Stakeholderhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/Creditorhttp://en.wikipedia.org/wiki/Accountabilityhttp://en.wikipedia.org/wiki/Accountabilityhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Economic_efficiencyhttp://en.wikipedia.org/wiki/Enron_Corporationhttp://en.wikipedia.org/wiki/MCI_Inc.http://en.wikipedia.org/wiki/MCI_Inc.http://en.wikipedia.org/wiki/Sarbanes-Oxley_Acthttp://en.wikipedia.org/wiki/Business_processhttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Companyhttp://en.wikipedia.org/wiki/Governancehttp://en.wikipedia.org/wiki/Stakeholderhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/Creditorhttp://en.wikipedia.org/wiki/Accountabilityhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Economic_efficiencyhttp://en.wikipedia.org/wiki/Enron_Corporationhttp://en.wikipedia.org/wiki/MCI_Inc.http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act


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Report ofSEBIcommittee (India) on Corporate Governance defines corporategovernance as the acceptance by management of the inalienable rights ofshareholders as the true owners of the corporation and of their own role astrustees on behalf of the shareholders. It is about commitment to values, aboutethical business conduct and about making a distinction between personal &

corporate funds in the management of a company. The definition is drawn fromthe Gandhian principle of trusteeship and the Directive Principles of the IndianConstitution. Corporate Governance is viewed as ethics and a moral duty.

Impact of Corporate Governance.The positive effect of corporate governance on different stakeholders ultimately

is a strengthened economy, and hence good corporate governance is a tool for

socio-economic development

PrinciplesKey elements of good corporate governance principles include honesty, trust andintegrity, openness, performance orientation, responsibility and accountability,mutual respect, and commitment to the organization.

Systemic problems of corporate governance

Demand for information: A barrier to shareholders using goodinformation is the cost of processing it, especially to a small shareholder. The

traditional answer to this problem is the efficient market hypothesis (in

finance, the efficient market hypothesis (EMH) asserts that financial markets

are efficient), which suggests that the small shareholder will free ride on the

judgments of larger professional investors.

Monitoring costs: In order to influence the directors, the shareholdersmust combine with others to form a significant voting group which can pose a

real threat of carrying resolutions or appointing directors at a general meeting.

Supply of accounting information: Financial accounts form a cruciallinkin enabling providers of finance to monitor directors. Imperfections in the

financial reporting process will cause imperfections in the effectiveness of

corporate governance.
http://en.wikipedia.org/wiki/SEBIhttp://en.wikipedia.org/wiki/Efficient_market_hypothesishttp://en.wikipedia.org/wiki/SEBIhttp://en.wikipedia.org/wiki/Efficient_market_hypothesis


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HDFC Bank was incorporated in August 1994, and, currently has an nationwide

network of 1,506 Branches and 3,573 ATM's in

635 Indian towns and cities.

Corporate Governance of HDFC Bank

HDFC Bank's Corporate Governance Policy has been adopted keeping in mind

the importance of attaining fairness for all stakeholders, as well as achievingorganizational efficiency.

HDFC Bank recognizes the importance of good corporate governance, which is

generally accepted as a key factor in attaining fairness for all stakeholders and

achieving organizational efficiency. This Corporate Governance Policy, therefore,

is established to provide a direction and framework for managing and monitoring

the bank in accordance with the principles of good corporate governance.

Code Of Corporate Governance

The Bank believes in adopting and adhering to best recognised corporategovernance practices and continuously benchmarking itself against each suchpractice. The Bank understands and respects its fiduciary role and responsibilityto shareholders and strives hard to meet their expectations. The Bank believesthat best board practices, transparent disclosures and shareholder empowermentare necessary for creating shareholder value.

The Bank has infused the philosophy of corporate governance into all itsactivities. The philosophy on corporate governance is an important tool forshareholder protection and maximisation of their long term values. The cardinalprinciples such as independence, accountability, responsibility, transparency,fair and timely disclosures, credibility etc. serve as the means for implementingthe philosophy of corporate governance in letter and spirit.


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Composition Of Board.

The Composition of the Board of Directors of the Bank is governed by theCompanies Act, 1956, the Banking Regulation Act, 1949 and the listingrequirements of the Indian Stock Exchanges where securities issued by theBank are listed. The Board has strength of 12 Directors as on March 31, 2008.All Directors other than Mr. Aditya Puri, Mr. Harish Engineer and Mr. PareshSukthankar are non-executive directors. The Bank has five independentdirectors and six non-independent directors. The Board consists of eminentpersons with considerable professional expertise and experience in banking,finance, agriculture, small scale industries and other related fields.

None of the Directors on the Board is a member of more than 10 Committeesand Chairman of more than 5 Committees across all the companies in whichhe/she is a Director. All the Directors have made necessary disclosuresregarding Committee positions occupied by them in other companies.

- Mr. Jagdish Capoor, Mr. Keki Mistry, Mrs. Renu Karnad, Mr. Aditya Puri, Mr.Harish Engineer and Mr. Paresh Sukthankar are non-independent Directorson the Board

- Mr. Arvind Pande, Mr. Ashim Samanta, Mr. Gautam Divan, Mr. C. M. Vasudevand Dr. Pandit Palande are independent directors on the Board.

- Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the Boardof the Bank.

- The Bank has not entered into any materially significant transactions duringthe year, which could have a potential conflict of interest between the Bankand its promoters, directors, management and/or their relatives, etc. otherthan the transactions entered into in the normal course of business. TheSenior Management have made disclosures to the Board confirming thatthere are no material, financial and/or commercial transactions between themand the Bank which could have potential conflict of interest with the Bank at

large.


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Board Committes

The Board has constituted various committees of Directors to take informed

decisions in the best interest of the Bank. These committees monitor the

activities falling within their terms of reference. Various committees of the Boardwere reconstituted during the year. The Boards Committees are as follows:

Audit and Compliance Committee

Compensation Committee

Investors' Grievance (SHARE) Committee

Risk Monitoring Committee

Credit Approval Committee

The Premises Committee

Nomination Committee

Fraud Monitoring Committee

Customer Service Committee
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Audit and Compliance Committee

The Audit and Compliance Committee of the Bank is chaired by Mr. Arvind Pande.

The other members of the Committee are Mr. Ashim Samanta, Mr. C. M. Vasudev,Mr. Gautam Divan and Dr. Pandit Palande. All the members of the Committee areindependent directors and Mr. Gautam Divan is a Chartered Accountant and afinancial expert.

The terms of reference of the Audit Committee are in accordance with Clause 49of the Listing Agreement entered into with the Stock Exchanges in India, and interalia includes the following:

Overseeing the Banks financial reporting process and ensuring correct,adequate and credible disclosure of financial information;

Recommending appointment and removal of external auditors and fixing oftheir fees;

Reviewing with management the annual financial statements before submissionto the Board with specialemphasis on accounting policies and practices, compliance with accounting


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standards and other legal requirements concerning financial statements;

Reviewing the adequacy of the Audit and Compliance functions, including theirpolicies, procedures, techniques and other regulatory requirements; and

other terms of reference as may be included from time to time in clause 49 ofthe listing agreement.

The Board has also adopted a charter for the Audit Committee in connection withcertain United States regulatory standards as the Banks securities are also listedon the New York Stock Exchange.

Compensation Committee

The Compensation Committee reviews the overall compensation structure and

policies of the Bank with a view to attract, retain and motivate employees,

consider grant of stock options to employees, reviewing compensation levels of

the Bank's employees vis- -vis other banks and industry in general. The Bank's

compensation policy provides a fair and consistent basis for motivating and

rewarding employees appropriately according to their job / role size,performance,

contribution, skill and competence.

Mr. Jagdish Capoor, Mr. Ashim Samanta, Mr. Gautam Divan and Dr. Pandit

Palande are the members of the Committee. The Committee is chaired by Mr.

Jagdish Capoor. All the members of the Committee other than Mr. Capoor are

independent directors.

Investors' Grievance (SHARE) Committee

The Committee approves and monitors transfer, transmission, splitting and

consolidation of shares and bonds and allotment of shares to the employees


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pursuant to Employees Stock Option Scheme. The Committee also monitors

redressal of complaints from shareholders relating to transfer of shares, non-

receipt of Annual Report, dividends, etc.

The Committee consists of Mr. Jagdish Capoor, Mr. Aditya Puri and Mr. GautamDivan. The Committee is chaired by Mr. Capoor. The powers to approve share

transfers and dematerialization requests have been delegated to executives of the

Bank to expedite the process of share transfers..

As on March 31, 2009, 41 instruments of transfer representing 2,312 shares were

pending. These have since been processed. The details of the transfers are

reported to the Board of Directors from time to time.

During the year under review 197 complaints were received from the

shareholders. All the complaints were attended to and as at 31st March 2009 no

complaints remained unattended. Besides 10,409 letters were received from the

shareholders relating to change of address, nomination requests, ECS Mandates,

queries relating to annual report, amalgamation, request for revalidation of

dividend and fractional warrants and other investor related matters.

Risk Monitoring Committee

The Committee has been formed as per the guidelines of Reserve Bank of India

on the Asset Liability Management / Risk Management Systems. The Committee

develops Bank's credit and market risk policies and procedures, verifies

adherence to various risk parameters and prudential limits for treasury

operations and reviews its risk monitoring system. The Committee also ensuresthat the Bank's credit exposure to any one group or industry does not exceed the

internally set limits and that the risk is prudentially diversified.

The Committee consists of Mrs. Renu Karnad, Mr. Aditya Puri Mr. C. M. Vasudev


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and Mr. Paresh Sukthankar (inducted as member of the Committee w.e.f. January

14, 2009). The Committee is chaired by Mrs. Renu Karnad.

Credit Approval Committee

The Credit Approval Committee approves credit exposures, which are beyond the

powers delegated to executives of the Bank. This facilitates quick response to the

needs of the customers and speedy disbursement of loans.

The Committee consists of Mr. Jagdish Capoor, Mr. Aditya Puri, Mr. Keki Mistry

and Mr. Gautam Divan. The Committee is chaired by Mr. Capoor.

The Premises Committee

The Premises Committee approves purchases and leasing of premises for the

use of Bank's branches, back offices, ATMs and residence of executives in

accordance with the guidelines laid down by the Board.

The Committee consists of Mrs. Renu Karnad, Mr. Aditya Puri, Mr. Ashim

Samanta and Dr. Pandit Palande. The Committee is chaired by Mrs. Renu Karnad.

Nomination Committee

The Bank has constituted a Nomination Committee for recommending theappointment of independent / non-executive directors on the Board of the Bank.The Nomination Committee scrutinizes the nominations for independent / non-

executive directors with reference to their qualifications and experience. Foridentifying 'Fit and Proper' persons, the Committee adopts the following criteriato assess competency of the persons nominated:

Academic qualifications, previous experience, track record; and

Integrity of the candidates.


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For assessing the integrity and suitability, features like criminal records, financialposition, civil actions undertaken to pursue personal debts, refusal of admissionto and expulsion from professional bodies, sanctions applied by regulators orsimilar bodies and previous questionable business practices are considered.

The members of the Committee are Mr. Arvind Pande, Mr. Ashim Samanta and Dr.Pandit Palande. The Committee is chaired by Mr. Arvind Pande. All the membersof the Committee are independent directors.

Fraud Monitoring Committee

Pursuant to the directions of the Reserve Bank of India, the Bank hasconstituted a Fraud Monitoring Committee, exclusively dedicated to themonitoring and following up of cases of fraud involving amounts of Rs.1 croreand above. The objective of this Committee is the effective detection of fraudsand immediate reporting thereof to regulatory and enforcement agencies ofactions taken against the perpetrators of frauds.

The terms of reference of the Committee are as under:

Identify the systemic lacunae, if any, that facilitated perpetration of the fraudand put in place measures to plug the same;

Identify the reasons for delay in detection, if any, reporting to topmanagement of the Bank and RBI;

Monitor progress of CBI / Police Investigation and recovery position;

Ensure that staff accountability is examined at all levels in all the cases offrauds and staff side action, if required, is completed quickly without loss of

time;

Review the efficacy of the remedial action taken to prevent recurrence offrauds, such as strengthening of internal controls;

Put in place other measures as may be considered relevant to strengthenpreventive measures against frauds;


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The members of the Committee are Mr. Jagdish Capoor, Mr. Aditya Puri, Mr. KekiMistry, Mr. Arvind Pande and Mr. Gautam Divan (inducted as member of theCommittee w.e.f. January 14, 2009). The Committee is chaired by Mr. JagdishKapoor.

Customer Service Committee

The Committee monitors the quality of services rendered to the customers and

also ensures implementation of directives received from RBI in this regard. The

terms of reference of the Committee are to formulate comprehensive deposit

policy incorporating the issues arising out of death of a depositor for operations

of his account, the product approval process, the annual survey of depositor

satisfaction and the triennial audit of such services.


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The members of the Committee are Mr. Keki Mistry, Mr. Arvind Pande, Dr. Pandit

Palande and Mr. Harish Engineer (inducted as member of the Committee w.e.f.

January 14, 2009). The Committee is chaired by Mr. Arvind Pande.

Ownership Rights

Certain rights that a shareholder in a company enjoys :

To transfer the shares.

To receive the share certificates upon transfer within the stipulated period

prescribed in the Listing Agreement.

To receive notice of general meetings, annual report, the balance sheet andprofit and loss account and the auditors' report.

To appoint proxy to attend and vote at the general meetings. In case themember is a body corporate, to appoint a representative to attend and vote atthe general meetings of the company on its behalf.

To attend and speak in person, at general meetings. Proxy cannot vote on

show of hands but can vote on a poll.

To vote at the general meeting on show of hands wherein every shareholderhas one vote. In case of vote on poll, the number of votes of a shareholder isproportionate to the number of equity shares held by him.

As per Banking Regulation Act, 1949, the voting rights on a poll of ashareholder of a banking company are capped at 10% of the total voting rightsof all the shareholders of the banking company.

To demand poll alongwith other shareholder(s) who collectively hold 5,000shares or are not less than 1/10th of the total voting power in respect of anyresolution.

To requisition an extraordinary general meeting of any company byshareholders who collectively hold not less then 1/10th of the total paid-upcapital of the company.


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To move amendments to resolutions proposed at meetings .

To receive dividend and other corporate benefits like rights, bonus shares etc.

as and when declared / announced.

To inspect various registers of the company .

To inspect the minute books of general meetings and to receive copies thereofafter complying with the procedure prescribed in the Companies Act, 1956.

To appoint or remove director(s) and auditor(s) and thus participate in themanagement through them.

To proceed against the company by way of civil or criminal proceedings.

To apply for the winding-up of the company.

To receive the residual proceeds upon winding up of a company.

The rights mentioned above are prescribed in the Companies Act, 1956 andBanking Regulation Act, 1949, whereever applicable, and should be followed onlyafter careful reading of the relevant sections. These rights are not necessarilyabsolute.

Promoters Right (HDFC LTD.)

The Memorandum and Articles of Association of the Bank provides the followingrights to HDFC Limited, promoter of the Bank:

The Board shall appoint non-retiring Directors from amongst the Directorsnominated by HDFC Limited with the approval of shareholders, so long as HDFC


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Limited and its subsidiaries, singly or jointly hold not less than 20% of the paid-up share capital of the Bank.

HDFC Limited shall nominate either a part-time Chairman and the ManagingDirector or a full time Chairman, with the approval of the Board and the

shareholders so long as HDFC Limited and its subsidiaries, singly or jointly holdnot less than 20% of the paid-up share capital of the Bank.

Under the terms of Banks organisational documents, HDFC Limited has a right tonominate two directors who are not required to retire by rotation, so long asHDFC Limited, its susbsidiaries or any other company promoted by HDFC Limitedeither singly or in the aggregate holds not less than 20% of paid up equity sharecapital of the Bank. At present, the two directors so nominated by HDFC Limitedare the Chairman and the Managing Director of the Bank.

Key Shareholders Rights

HDFC Limited, Bennett, Coleman & Co. Ltd. and its group companies (the

promoters of erstwhile Times Bank Limited) and Chase Funds had entered into a

tripartite agreement dated November 26, 1999 for effecting amalgamation of

Times Bank Limited with the Bank. Under this Agreement, Bennett Coleman

Group has a right to nominate one Director on the Board of the Bank as long asits holding exceeds 5% of the share capital of the Bank. Currently, as on March

31, 2008, the Bennett Coleman Group holds 4.57% of the share capital of the Bank

and Mr. Vineet Jain who represented the Bennett Coleman Group on the Board

has since resigned as a Director of the Bank.

Dividend Policy

Bank has had a track record of moderate but steady increases in dividend

declarations for the last 10 years and dividend payout ratio in the last few years

has been in the range of 20-25 %. Your Bank's dividend policy is based on the

need to balance the twin objectives of appropriately rewarding shareholders with

cash dividends and of retaining capital to maintain a healthy capital adequacy

ratio to support future growth. In line with this policy and recognisation of healthy


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performance during 2007-08, your directors pleased to recommend a dividend of

85% for the year ended on March 31,2008 as against 70% for the year ended

March 31, 2007. This dividend shall be subject to distribution tax to be paid by the

Bank but will be tax-free in the hands of the members.

Fair Practice Code For Lending.

The Bank has adopted the following fair practices code in relation to its lendingactivities:

Applications for loans and their processing

The bank would have loan application forms for retail advances and creditcards. These would include information about the fees/charges, if any,payable for processing, the amount of such fees refundable in the case of nonacceptance of application, pre-payment options and any other matter whichaffects the interest of the borrower, so that a meaningful comparison with thatof other banks can be made and an informed decision can be taken by theborrower.

As part of the wholesale banking business, the bank has various segments towhich credit facilities are provided for their business requirements. Theseinclude a wide range of customers and range from small & mediumenterprises to large corporate borrowers. The bank has a process foridentification of target customers to whom facilities can be provided based oncustomer selection and risk assessment for that segment. Thus, the focus ison contacting prospective customers and encouraging them to avail ofbanking services from HDFC Bank based on the incremental value we canadd to a customer's business, rather than customers making applications tothe Bank for facilities / services. Thus, for the wholesale banking segment, we

do not have any standardized application forms to be submitted byprospective customers.

The bank would give an acknowledgement for receipt of all retail loanapplications. Time-frame within which loan applications will be processedwould be indicated in the acknowledgement of such applications.


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The bank would verify the loan applications within a reasonable period oftime. If additional details / documents are required, it would intimate theborrowers immediately.

In the case of all borrowers seeking loans, the bank would convey in writing,the main reason/reasons which, in the opinion of the bank after dueconsideration, have led to rejection of the loan applications. In case theproposal does not meet the internal risk parameters of the bank, the borrowerwould be intimated accordingly.

Loan appraisal and terms/conditions

The bank would ensure that there is proper assessment of credit applicationmade by borrowers. The assessment would be in line with the bank's creditpolicies & procedures and relevant regulatory guidelines.

The bank would convey to the borrower the credit limit along with the termsand conditions thereof and obtain the borrower's acceptance of these termsand conditions, given with his full knowledge on record.

In respect of approved credit proposals, terms and conditions and othercaveats governing credit facilities given by the bank would be reduced in

writing and duly certified by a bank official. A copy of the loan agreementalong with a copy each of all enclosures quoted in the loan agreement may befurnished to the borrower if asked for.

The sanction letter or the loan agreement would stipulate if the credit facilitiesare solely at the discretion of the bank. The bank may disallow facilities thatinvolve drawings beyond the sanctioned limits, honouring cheques issued forthe purpose other than specifically agreed to in the credit sanction, anddrawing on a borrowal account on its classification as a non-performing assetor on account of non-compliance with the terms of sanction. Further the bankdoes not have an obligation to meet additional requirements of the borrowerson account of growth in business etc. without proper review of credit limits.

Any increase/additional limits/changes in facilities requested by the customerwould be considered by the Bank based on its internal policies andassessment and the Bank is not under any obligation to accede to thespecific request of the borrower.

In the case of lending under consortium arrangement, the bank would


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endeavour to evolve procedures to complete appraisal of proposals in a timebound manner to the extent feasible, and communicate its decisions onfinancing or otherwise within a reasonable time, in co-ordination with othermembers of the consortium.

Disbursement of loans including changes in terms and conditions

The bank would ensure timely disbursement of loans sanctioned inconformity with the terms and conditions governing such sanction. It wouldgive notice of any change in the terms and conditions including interest rates,service charges etc.

Revisions to the Bank's PLR are notified through the Bank's website. They are

also covered in leading financial newspapers. Any revisions in this areapplicable to all PLR linked facilities from the date of PLR revision. Forfacilities linked to other benchmark rates, these are revised as per prioragreement with the customer, the process for which is covered in thesanction letter duly accepted by the customer on the loan agreement. For allother facilities, any change in interest rates is with prior intimation to thecustomer. All revisions in other fees and charges are also informed to thecustomer in advance.

Post disbursement supervision

The bank would carry out post-disbursement supervision in accordance withnormal banking practice, the terms of sanction, and the guidelines issued bythe Reserve Bank of India from time to time.

Before taking a decision to recall / accelerate payment or performance underthe agreement or seeking additional securities, the bank would give notice toborrowers, as specified in the loan agreement or a reasonable period, if no

such condition exits in the loan agreement.

The bank would release all securities on receiving payment of loan orrealisation of loan subject to any legitimate right or lien for any other claimthat it may have against borrowers. If such right of set off is to be exercised,borrowers shall be given notice about the same with full particulars about theremaining claims and the provisions under which the bank is entitled to retain


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the securities till the relevant claim is settled/paid.

General

The bank would refrain from interference in the day-to-day affairs of theborrowers except for what is provided in the terms and conditions of the loansanction documents (unless new information, not earlier disclosed by theborrower, has come to the notice of the bank). This however does not implythat the bank's right of recovery and enforcement of security under law aswell as appointment of nominee directors, where required, is affected by thiscommitment.

The bank would not discriminate on grounds of sex, caste and religion in thematter of lending. However, this does not preclude the bank fromparticipating in credit-linked schemes framed for weaker sections of society.

In the matter of recovery of loans, the bank would not resort to undueharassment or use of force.

In case of receipt of request for transfer of borrowal account, either from theborrower or from a bank/financial institution, which proposes to take- over theaccount, the consent or otherwise i.e., objection of the bank, if any, would beconveyed within 21 days from the date of receipt of request.

.

Corporate Governance Ratings.

The bank was among the first four companies, which subjected itself to aCorporate Governance and Value Creation (GVC) rating by the rating agency, TheCredit Rating Information Services of India Limited (CRISIL).The rating provides an independent assessment of an entity's currentperformance and an expectation on its "balanced value creation and corporategovernance practices" in future. The bank has been assigned a 'CRISIL GVC


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Level 1' rating, which indicates that the bank's capability with respect to wealthcreation for all its stakeholders while adopting sound corporate governancepractices is the highest.

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