The Bank’s Philosophy on Code of Governance
State Bank of India is committed to the best practices in the area of Corporate Governance, in letter and in spirit. The Bank believes that good Corporate Governance is much more than complying with legal and regulatory requirements. Good governance facilitates effective management and control of business, enables the Bank to maintain a high level of business ethics and to optimise the value for all its stakeholders. The objectives can be summarised as:
„. To protect and enhance shareholder value.
„. To protect the interest of all other stakeholders such as customers, employees and society at large.
„. To ensure transparency and integrity in communication and to make available full, accurate and clear information to all concerned.
„. To ensure accountability for performance and customer service and to achieve excellence at all levels.
„. To provide corporate leadership of highest standard for others to emulate.
The Bank is committed to:
„. Ensuring that the Bank’s Board of Directors meets regularly, provides effective leadership and insights in business and functional matters and monitors Bank’s performance.
„. Establishing a framework of strategic control and continuously reviewing its efficacy.
„. Establishing clearly documented and transparent management processes for policy development, implementation and review, decisionmaking, monitoring, control and reporting.
„. Providing free access to the Board to all relevant information, advices and resources as are necessary to enable it to carry out its role effectively.
„. Ensuring that the Chairman has the responsibility for all aspects of executive management and is accountable to the Board for the ultimate performance of the Bank and implementation of the policies laid down by the Board. The role of the Chairman and the Board of Directors are also guided by the SBI Act, 1955 with all relevant amendments.
„. Ensuring that a senior executive is made responsible in respect of compliance issues with all applicable statutes, regulations and other procedures, policies as laid down by the GOI/RBI and other regulators and the Board, and reports deviations, if any.
The Bank has complied with the provisions of Corporate Governance as per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 with the Stock Exchanges except where the provisions of these regulations are not in conformity with The State Bank of India Act, 1955 and the directives issued by RBI/GOI. A report on the implementation of these provisions of Corporate Governance in the Bank is furnished below:
Central Board: Role and Composition
State Bank of India was formed in 1955 by an Act of the Parliament, i.e.,
The State Bank of India Act, 1955 (Act). A Central Board of Directors was constituted according to the Act.
The Bank’s Central Board draws its powers from and carries out its functions in compliance with the provisions of SBI Act & Regulations 1955. Its major roles include, among others,
„. Overseeing the risk profile of the Bank;
„. Monitoring the integrity of its business and control mechanisms;
„. Ensuring expert management, and
„. Maximising the interests of its stakeholders.
The Central Board is headed by the Chairman, appointed under section 19(a) of SBI Act; four Managing Directors are also appointed members of the Board under section 19(b) of SBI Act.
The Chairman and Managing Directors are whole time Directors. As on 31st March, 2016, there were nine other directors on the Board who are eminent professionals representing Technology, Accountancy, Finance, Economics and Academics. Thus, Board has the whole time Directors, comprising Chairman and four Managing Directors in office, the composition of the Central Board, as on 31st March, 2016, was as under:
„. four directors, elected by the Shareholders under Section 19(c),
„. three directors, nominated by the Central Government under Section 19(d),
„. one director (official from the Govt. of India), nominated by the Central Government under Section 19(e), and
„. one director (official from the Reserve Bank of India), nominated by the Central Government under Section 19(f).
The composition of the Board complies with provisions laid down in Regulation 17(1) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. There is no inter-se relationship between Directors.
A brief resume of each of the Non-Executive Directors is given in Annexure-I. Particulars of the directorships/memberships held by all the Directors in various Boards/ Committees are given in Annexure-II and the details of their Shareholding in the Bank are mentioned in Annexure-III.
Meetings of the Central Board
The Bank’s Central Board has to meet a minimum of six times in a year. During the year 2015-16, twelve Central Board Meetings were held. The dates of the meetings and attendance of the directors are as under
Executive Committee of the Central Board
The Executive Committee of the Central Board (ECCB) is constituted in terms of Section 30 of the SBI Act, 1955. The State Bank of India General Regulations (46 & 47) provide that, subject to the general or special directions of the Central Board, ECCB may deal with any matter within the competence of the Central Board. ECCB consists of the Chairman, the Managing Directors, the Director nominated under Section 19(f) of the SBI Act (Reserve Bank of India nominee), and all or any of the other Directors who are normally residents or may for the time being be present at any place within India where the meeting is held. The ECCB meetings are held once every week. The details of attendance of ECCB Meetings during the year 2015-16 are as under:
Other Board Level
In terms of the provisions of SBI Act and General Regulations, 1955 and Govt./RBI/SEBI guidelines, the Central Board has constituted ten Board Level Committees viz. Audit Committee, Risk Management Committee, Stakeholders Relationship Committee, Special Committee of the Board for Monitoring of Large Value Frauds (Rs.1 crore and above), Customer Service Committee, IT Strategy Committee, Corporate Social Responsibility Committee, Remuneration Committee, Board Committee to Monitor Recovery and Committee for Identification of Wilful Defaulters / Non-Co-operative Borrowers. These Committees provide effective professional support in the conduct of Board level business in key areas like Audit & Accounts, Risk Management, resolution of Shareholders’/Investors’ grievances, Fraud Review and Control, Review of customer service and redressal of customer grievances, Technology Management, Corporate Social responsibilities, Payment of Incentives to Executive Directors and Oversight on Recovery of Loans and Advances. While the Remuneration Committee approves, once in a year, payment of incentives to wholetime Directors, based on Govt. of India guidelines, the other Committees meet periodically, once in a quarter normally, to deliberate on policy issues and/or review domain performance, as per the Calendar of reviews approved by the Central Board.
The Committees also call external specialists, besides drawing upon the services of top executives from the Bank, as and when needed. The minutes and proceedings containing brief reports on the discussions held at the meetings of the Committees are placed before the Central Board.
Audit Committee of the Board
The Audit Committee of the Board (ACB) was constituted on 27th July, 1994 and last re-constituted on the 30th March, 2016. The ACB functions as per RBI guidelines and complies with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 to the extent that they do not violate the directives/guidelines issued by RBI.
Functions of ACB
(a) ACB provides direction as also oversees the operation of the total audit function in the Bank. Total audit function implies the organisation, operationalisation and quality control of internal audit and inspection within the Bank and follow-up on the statutory/ external audit, compliance of RBI inspection. It also appoints Statutory Auditors of the Bank and review their performance from time to time.
(b) ACB reviews the Bank’s financial, Risk Management, IS Audit Policies and Accounting Policies/Systems of the Bank to ensure greater transparency.
(c) ACB reviews the internal inspection/audit plan and functions in the Bank – the system, its quality and effectiveness in terms of follow-up. It also, especially, focuses on the follow up of :
„. KYC-AML guidelines;
„. Major areas of housekeeping;
„. Compliance of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015;
„. Status of implementation of Ghosh Committee recommendations.
(d) It obtains and reviews reports from the Compliance Department in the Bank.
(e) ACB follows up on all the issues raised in RBI’s Annual Financial Inspection Reports under Section 35 of Banking Regulation Act, 1949 and Long Form Audit Reports of the Statutory Auditors and other Internal Audit Reports. It interacts with the external auditors before the finalisation of the annual/quarterly financial accounts and reports. A formal ‘Audit Charter’ or ‘Terms of Reference’ laid down by the Central Board, is in place and updated periodically, the last revision effected from 18th December, 2014.
Composition & Attendance during 2015-16
The ACB has eight members of the Board of Directors, including two whole time Directors, two nonexecutive Directors (nominees of GOI and RBI) and four non-official, nonexecutive Directors. Meetings of the ACB are chaired by a Non-Executive Director (Chartered Accountant). The constitution and quorum requirements, as per RBI guidelines, are complied with meticulously. During the year, eleven meetings of ACB were held to review the various matters connected with the internal control, systems and procedures and other aspects as required in terms of RBI guidelines.
Risk Management Committee of the Board
The Risk Management Committee of the Board (RMCB) was constituted on the 23rd March, 2004, to oversee the policy and strategy for integrated risk management relating to credit risk, market risk and operational risk.
The Committee was last reconstituted on the 30th March, 2016 and has, eight members. The Senior Managing Director is the Chairman of the Committee. RMCB meets a minimum of four times a year, once in each quarter.
During 2015-16, four meetings of the RMCB were held.
Stakeholders Relationship Committee
In pursuance of Regulation 20 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Stakeholders Relationship Committee (SRC) [earlier known as Shareholders’/ Investors’ Grievance Committee of the Board (SIGCB), formed on the 30th January, 2001] was formed to look into the redressal of security holders complaints regarding transfer of shares, non-receipt of annual report, nonreceipt of interest on bonds/declared dividends, etc. The Committee was last reconstituted on 30th March, 2016 and has, five members and is chaired by a Non-Executive Director. The composition of the Committee and its role complies with the SEBI guidelines. The Committee met four times during 2015-16 and reviewed the position of complaints.
Number of shareholders’ complaints received so far (during the year): 1085
Number of complaints not solved to the satisfaction of shareholders: Nil
Number of Pending Complaints: Nil
Name and designation of Compliance officer: Shri Anil Kumar Gupta, General Manager (Compliance) & Compliance Officer.
Special Committee of the Board for Monitoring of Large Value Frauds (Rs.1 crore and above)
The Special Committee of the Board for monitoring of Large Value Frauds (Rs.1 crore and above) (SCBMF) was constituted on 29th March, 2004. The major functions of the Committee are to monitor and review all large value frauds with a view to identifying systemic lacunae, if any, reasons for delay in detection and reporting, if any, monitoring progress of CBI/ Police investigation, recovery position, ensuring that staff accountability exercise is completed quickly, reviewing the efficacy of remedial action taken to prevent recurrence of frauds and putting in place suitable preventive measures. The Committee was last reconstituted on the 30th March, 2016 and has, eight members. The Senior Managing Director on the Committee is the Chairman. The Committee met four times during 2015-16:
Customer Service Committee of the Board
The Customer Service Committee of the Board (CSCB) was constituted on 26th August 2004, to bring about ongoing improvements on a continuous basis in the quality of customer service provided by the Bank. The Committee was last reconstituted on 30th March, 2016 and has, seven members. The Senior Managing Director on the Committee is the Chairman. During the year 2015-16, four meetings of the Committee were held.
IT Strategy Committee of the Board
With a view to tracking the progress of the Bank’s IT initiatives, the Bank’s Central Board constituted a Technology Committee of the Board on 26th August, 2004. The Technology Committee has been renamed as IT Strategy Committee of the Board w.e.f. 24th October, 2011. The Committee has played a strategic role in the Bank’s technology domain. The Committee is entrusted with the following roles and responsibilities:
(i) approving IT strategy and policy documents, ensuring that the management has put an effective strategic planning process in place;
(ii) ensuring that the IT Organisational structure complements the business model and its direction ;
(iii) ensuring IT investments represent a balance of risks and benefits and that budgets are acceptable;
(iv) evaluating effectiveness of management’s monitoring of IT risks and overseeing the aggregate funding of IT at the Bank level; and
(v) reviewing IT performance measurement and contribution of IT to businesses (i.e. delivering the promised value).
The Committee was last reconstituted on the 30th March, 2016 with six members and is chaired by a Non- Executive Director. The Committee met five times during 2015-16.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee (CSRC) was constituted on the 24th September, 2014 as a measure of good corporate governance to review the activities undertaken by Bank under Corporate Social Responsibility Policy.
The Committee was last reconstituted on the 30th March, 2016 and has, six members. The Senior Managing Director on the Committee is the Chairman. During the year 2015-16, four meetings of the Committee were held.
Remuneration Committee of the Board
The Remuneration Committee was constituted on 22nd March, 2007, for evaluating the performance of Whole Time Directors of the Bank in connection with the payment of incentives, as per the scheme advised by Government of India in March, 2007. The Committee was last reconstituted on 30th March, 2016. The Committee has four members consisting of (i) the Government Nominee Director, (ii) the RBI Nominee Director and (iii) two nonexecutive Directors – Shri M.D. Mallya and Shri Deepak I. Amin. The Committee scrutinised and recommended payment of incentives to whole time Directors for the year ended 31.3.2015.
Board Committee to Monitor Recovery
In terms of Govt. of India advices, a Board Committee to Monitor Recovery was constituted by the Central Board at its meeting held on 20th December, 2012 for oversight on Recovery of Loans and Advances. The Committee was last reconstituted on 30th March, 2016 and has six members consisting of Chairman, four Managing Directors and the Govt. Nominee Director. The Committee met four times during the year and reviewed the NPA management and large NPA accounts of the Bank.
Review Committee for Identification of Wilful Defaulters / Non-Co-operative Borrowers
The Committee was constituted by the Central Board in terms of RBI instructions. The Managing Director- CBG is the Chairman of this Committee and any two independent Directors are members.
The role of this Committee is to review the Order of the “Committee for Identification of Wilful Defaulters/ Non-Co-operative Borrowers” (a Committee comprising Dy. Managing Director and Senior Executives of the Bank to examine the facts and record the fact of the Borrower being a Wilful Defaulter/Non-Co-operative Borrower) and confirm the same for the Order to be considered final.
Nomination Committee of the Board:
In terms of RBI guidelines, the Bank constitute a Nomination Committee comprising of three independent Directors, as and when required, to carry out necessary due diligence and arrive at the ‘fit and proper’ status of candidates filing nominations for election as Directors by shareholders.
In terms of the provisions of SBI Act and General Regulations 1955, at every centre where the Bank has a Local Head Office (LHO), Local Boards/Committees of Local Boards are functional. The Local Boards exercise such powers and perform such other functions and duties delegated to them by the Central Board. As on 31st March, 2016, Local Boards at Eight LHOs and Committees of the Local Boards at the remaining Six LHOs were functional. The Minutes and Proceedings of the meetings of Local Boards/Committees of Local Boards are placed before the Central Board.
The remuneration of the whole-time Directors and the Sitting Fees paid to the Non-Executive Directors for attending the meetings of the Board/Committees of the Board are as prescribed by GOI from time to time. No remuneration, other than the Sitting Fees for attending Board and/or its Committee meetings, is paid to Non-Executive Directors. With effect from 20th July, 2015, Sitting Fees of Rs. 20,000/- (earlier Rs.10,000/-) is paid for attending the Meetings of the Central Board and Rs. 10,000/- (earlier Rs.5,000/-) for attending the meetings of Other Board level Committees. Sitting fees are, however, not paid to the Chairman and Managing Directors of the Bank and GOI Nominee/RBI Nominee Directors. Details of Sitting fees paid during the year 2015-16 are placed in Annexure-IV.
Compliance with Bank’s Code of Conduct
The Directors on the Bank’s Central Board and Senior Management have affirmed compliance with the Bank’s Code of Conduct for the financial year 2015-16. Declaration to this effect signed by the Chairman is placed in Annexure-V. The Code of Conduct is posted on the Bank’s website.
Developments during the year
The Bank has introduced a ‘Performance Evaluation Process’ for evaluation of the performance of the Directors, Chairman, Board and its Committees and the same was taken on record by the Central Board.
In an effort to keep the Directors abreast with better understanding of Corporate Governance, the Bank took the following initiatives during the year:
1. Looking to the multiple and varied demands being currently placed on the Boards of banks and concerns regarding governance, a two days Strategy Meet (8th and 9th May, 2015) on a short term ‘Vision 2018’ road map was organised for the Board in Bangalore to enable it to appreciate the recent changes and determine critical areas and actionables for Board Governance. A blend of brain storming sessions on various current issues in banking environment especially focusing on effective, incisive and transparent governance with insight in International trends, thinking and best practices followed by Boards of premier institutions, was presented by eminent professionals with domain expertise in areas like Governance, Risk, HR, Technology etc.
The Board during the meet laid down its aspirations and set goals for Business Growth and Key financial parameters and each individual Business Group had to come up with monitorable action plans with specific targets and milestones. The detailed Action Plan with specific timelines and ownership and the progress report thereafter giving the status of implementation of the various strategic initiatives was put up to Central Board.
2. (i) Two Directors participated at programme on Corporate Governance and Director Excellence conducted by Dr. Colin Coulson-Thomas, a renowned Corporate Governance Expert, from 9th to 11th March, 2016 at Malaysia, organised by Quest on the FRONTIER PTE LTD.
(ii) Two Non Executive Directors participated at Programme for Non Executive Directors on the Boards of Public Sector Banks with an aim to bring about an awareness and understand various Regulatory, supervisory and governances issues relating to Banks from 17th to 19th March, 2016, organised by Centre for Advances Financial Research and Learning (CAFRAL) at Delhi.
(iii) A presentation in regard to Roadmap for implementation of INDAS in Banks was arranged through M/s Kalyaniwalla & Mistry, a leading Chartered Accountant firm.
The familiaristaion programme of directors are available on our website – www.sbi.co.in /www.statebankofindia. com under link Corporate Governance.
Attendance at the Annual General Meeting
The last Annual General Meeting (AGM) for the year 2014-15, held on 2nd July, 2015, was attended by 8 Directors, viz., Smt. Arundhati Bhattacharya, Shri P. Pradeep Kumar, Shri B. Sriram, Shri V.G. Kanan, Shri Rajnish Kumar, Shri Harichandra Bahdur Singh, Shri S.K. Mukherjee, Shri M. D. Mallya and Shri Sunil Mehta. AGM (2013-14) was held on 3rd July, 2014 and AGM (2012- 13) was held on 21st June, 2013. All three AGMs were held in Y. B. Chavan Centre, Mumbai at 3.00 p.m. and no Special Resolutions were passed in the previous three AGMs. No resolution was required to be passed through Postal Ballot during the last year and no resolution is proposed to be conducted through Postal Ballot.
„. The Bank has not entered into any materially significant related party transactions with its Promoters, Directors or Management, their subsidiaries or relatives, etc., that may have potential conflict with the interest of the Bank at large.
„. The Bank has complied with applicable rules and regulations prescribed by stock exchanges, SEBI, RBI or any other statutory authority relating to the capital markets during the last three years. No penalties or strictures have been imposed by them on the Bank.
„. The Whistle Blower Policy of the Bank is based on the norms of Government of India resolution on Public Interest Disclosure & Protection of Informer (PIDPI). The Policy is an internal reporting mechanism available to all staff of the Bank to act as a ‘Whistle Blower’ to expose any unethical, corrupt practices of their co-workers, seniors/ superiors in the Bank. However, PIDPI complaint as applicable to customers are dealt with in line with Government of India guidelines 2004, which designated Central Vigilance Commission for dealing with complaints.
„. Policy on materiality of related party transactions and policy for determining ‘material’ subsidiaries are available on the bank’s website-www.sbi.co.in/ www.statebankofindia.com under link corporate governances-policies.
„. The Bank has complied with the Corporate Governance requirements specified in Regulation 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C , D and E of Schedule V to the extent that the requirements of the Clause do not violate the provisions of State Bank of India act 1955, the rules and regulations made there under and guidelines or directives issued by the Reserve Bank of India.
Means of Communication
The Bank strongly believes that all stakeholders should have access to complete information on its activities, performance and product initiatives. Annual, half-yearly and quarterly results of the Bank for the year 2015-16 were published in the leading newspapers of the country. The results were also displayed on the Bank’s website (www. sbi.co.in and www.statebankofindia. com). The Annual Report is sent to all shareholders of the Bank. The Bank’s website displays, interalia, official news releases of the Bank, the Bank’s Annual Reports, Half-yearly and quarterly results and details of various product offerings. Every year, after the annual and half-yearly results are declared, a Press- meet is held on the same day, in which the Chairman makes a presentation and answers the queries of the media. This is followed by another meeting to which a number of investment analysts are invited. Details of the Bank’s performance are discussed with the analysts in the meeting. after declaring quarterly results, press notifications are issued .
General Shareholder Information
The Annual General Meeting of the Shareholders
Date: 30.06.2016, Time 03.00 p.m Venue: Y. B. Chavan Centre, Mumbai
Financial Calendar : 01.04.2015 to 31.03.2016
Period of Book Closure : 07.06.2016 to 11.06.2016
Dividend : Rs.2.60 per share
Payment Date : 22.06.2016
Listing of securities on Stock Exchanges :
BSE Limited Mumbai and National Stock Exchange, Mumbai. GDRs listed on London Stock Exchange (LSE). Listing fees have been paid upto date to all Stock exchanges, including LSE.
Stock Code/CUSIP :
Stock Code 500112 (BSE) SBIN (NSE) CUSIP US 856552203 (LSE)
Share Transfer System : Share transfers in Physical form are processed and returned to the shareholders within stipulated time. Quarterly Share transfer audit and reconciliation of Share Capital audit are regularly carried out by an independent Company Secretary.
Registrar and Transfer : M/s Datamatics Financial Services Limited
Agent and their Unit Address : Plot B-5, MIDC Part B, Cross Lane, Marol, Andheri (E), Mumbai 400 093.
Board Phone Numbers : 022-6671 2001 to 10 (between 10 a.m. to 1.00 p.m. and 2 p.m. to 6.00 p.m.)
Direct Numbers : 022-6671 2198 / 6671 2199
E-mail address : firstname.lastname@example.org
Fax : (022) 6671 2204
Address for Correspondence : State Bank of India, Shares & Bonds Department, Corporate Centre, 14th Floor, State Bank Bhavan, Madam Cama Road, Nariman Point, Mumbai 400 021.
Telephone Numbers : (022) 2274 0841 to 2274 0848 Fax : (022) 2285 5348
E-mail Address : email@example.com, / firstname.lastname@example.org
Name of the debenture trustees with full contact details (Capital Instruments issued in INR)
IDBI Trusteeship Services Limited, Asian Building, Ground Floor, 17, R.Kamani Marg, Ballard Estate, Mumbai-400 001 Fax Number: 91-22-6631 1776
e-Initiative: In accordance with SEBI Regulation, we are issuing annual report in electronic form to those shareholders whose e-mail addresses are available.
To meet various requirements of the investors regarding their holdings, the Bank has a full-fledged Department - Shares & Bonds Department - at Mumbai and Shares & Bonds Cells at the 14 Local Head Offices. The investors’ grievances, whether received at the Bank’s offices or at the office of the registrar and transfer agents, are redressed expeditiously and monitored at the Top Management level.
Capital Augmentation during FY 2015-16
Pursuant to the approvals from the Reserve Bank of India and the Government of India under Section 5(2) of the SBI Act, 1955, the Bank raised the undernoted equity capital:
„. During the previous financial year, the Bank received application money of Rs. 2969,99,99,977.08 (Rupees two thousand nine hundred sixty nine crore ninety nine lacs ninety nine thousand nine hundred seventy seven and paise eight only) including share premium amount of Rs. 2959,95,22,965.08 (Rupees two thousand nine hundred fifty nine crore ninety five lakh twenty two thousand nine hundred sixty five and paise eight only) from Government of India against Preferential Issue of 10,04,77,012 equity shares of Rs.1 each to GoI. The equity shares were allotted on 01.04.2015.
„. The Bank also received application money of Rs. 5392,99,99,834.30 (Rupees five thousand three hundred ninety two crore ninety nine lakh ninety nine thousand eight hundred thirty four and paise thirty only) including share premium amount of Rs. 5373,34,40,444.30 (Rupees five thousand three hundred seventy three crore thirty four lakh forty thousand four hundred forty four and paise thirty only) from Government of India against Preferential Issue of 19,65,59,390 equity shares of Rs.1 each to GoI, on 29.09.2015.
We may also add that, the Bank has issued and allotted Basel III compliant Tier 2 bonds of INR 10,500 crore, issued for 120 months (10 year bullet) by way of private placement in four tranches.
The Instrument has been rated as “CARE AAA” by CARE Ratings and “ICRA AAA” by ICRA Limited.
Outstanding Global Depository Receipts (GDR)
At the time of issue of GDRs in 1996, two-way fungibility was not permitted by the Government/RBI, i.e., if the holder of GDR desired to obtain the underlying equity shares of the Indian Company then such GDR was to be converted into shares of the Indian Company, but not vice versa. Later, two-way fungibility of ADRs/GDRs was permitted by the Government of India/RBI. The Bank has permitted two-way fungibility to the Bank’s GDR programme. The Bank had 1,44,59,324 GDRs as on 31.03.2016 representing 14,45,93,240 shares.
The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares
SBI has the distinction of making uninterrupted dividend payment to the shareholders for the last many years.
Share Price Movement
The movement of the share price and the BSE Sensex/ NSE Nifty is presented in the following tables. The market capitalisation of the Bank’s shares had a weightage of 2.71% in BSE Sensex and 2.13% in NSE Nifty as on 31.03.2016.
Dematerialization of Shares and Liquidity:
Bank’s equity shares are compulsorily traded in the electronic form.
As on 31st March 2016, 767,36,51,516 shares representing 98.85% of total equity capital were held in electronic form.
Commodity price risk or foreign exchange risk and hedging activities
The Bank currently deals in over-thecounter (OTC) currency derivatives and exchange traded currency derivatives. Currency derivatives dealt by the Bank are Forwards, Currency Futures, currency swaps and currency options. Derivatives are used by the Bank, both for trading as well as for hedging of balance sheet items. The hedging products are offered to Bank’s customers to hedge their exposures and the Bank also enters into derivative contracts for cover of such exposures.
The bank also runs an Option Book in USD/INR, which is managed through various types of loss limits and Greek limits. As on 31st March, 2016, there is no breach in loss limits or greek limits.
Derivative transactions carry the following two risks:
i) market risk i.e., the probable loss the Bank may incur as a result of adverse movements in exchange rate and
ii) credit risk i.e., the probable loss the Bank may incur if the counterparties fail to meet their obligations.
The Bank’s “Policy for Derivatives” approved by the Board prescribes the market risk parameters (cut-loss triggers, open position limits, duration, modified duration, PV01, etc.) as well as customer eligibility criteria (credit rating, tenure of relationship, limits and customer appropriateness & suitability policy (CAS) etc.) for entering into derivative transactions. Credit risk is controlled by entering into derivative transactions only with counterparties satisfying the criteria prescribed in the Policy. Appropriate limits are set for the counterparties taking into account their ability to honour obligations and the Bank enters into International Swap & Derivative Association (ISDA) agreement with each counterparty.
Bank also gets exposed to foreign exchange risk and commodity risk on account of customer transactions. Bank is only into Gold Banking Business as far as Commodity Risk is concerned. and these are undertaken on behalf of customers only. The Bank has laid down policies and systems & procedure in place to manage the risk within prescribed risk limits. The Bank has a world class Dealing Room manned by well trained and experienced dealers to do the cover operations and hedging.
The Bank’s Market Risk Management Department (MRMD) identifies, measures, monitors market risk associated with derivative transactions. The back office operations are handled by GMU, Kolkata.
Brief Resumes of the Non-Executive Directors on the Board as on 31st March, 2016
Shri Sanjiv Malhotra
(Date of Birth: 1st October, 1951) Shri Malhotra has 41 years of Global Banking and Finance experience in senior positions in Risk Management, Corporate and Investment Banking, Consumer Finance and Micro Enterprise lending, Private Equity.
Shri M.D. Mallya
(Date of Birth: 09th November, 1952) Shri Mallya was Chairman & Managing Director of Bank of Maharashtra. Shri Mallya worked towards turnaround of the Bank, more particularly by strengthening Technology, HR and Organisational Structure.
Shri Mallya was also Chairman & Managing Director of Bank of Baroda during May, 2008 to November, 2012. His inspiring leadership and innovative strategic steps initiated, resulted in the Bank achieving excellent performance and receiving wide recognition in the form of many laurels and accolades.
Shri Sunil Mehta
(Date of Birth: 22nd August, 1957) Shri Sunil Mehta has over 33 years of proven leadership experience in Banking, Insurance, Financial Services and Investments with Citibank and AIG.
As Country Head of AIG for 13 years, Shri Mehta was responsible for setting up in India and overseeing ten businesses covering Life & Non-Life Insurance, Private Equity, Asset Management, Real Estate, Home & Consumer Finance, Software Development, Mortgage Guaranty and Aircraft Leasing. Shri Mehta worked at Citibank for 18 years in various senior positions which included Head of the Corporate Bank in India and Senior Credit Officer.
He is currently Chairman & MD, SPM Capital Advisers Private Limited and is a Board Member and Senior Adviser to other notable organizations as well.
Shri Mehta is also closely associated with several not for profit organizations.
He is past Chairman of the American Chamber of Commerce (AMCHAM) India, United Way of India & Mumbai and Action for Ability Development & Inclusion (formerly The Spastics Society of North India). Shri Mehta is on the Board of The Asia Society amongst other not for profit organizations. He is a Fellow Chartered Accountant from the Institute of Chartered Accountants of India and an alumni of the Wharton School of Management, University of Pennsylvania, USA.
Shri Deepak I. Amin
(Date of Birth: 20th April, 1966) Shri Amin holds a B.Tech. in Computer Science from IIT Bombay and M.S. in Computer Science from University of Rhode Island, USA. Shri Amin was the co-founder and CEO of Covelix, Inc. a Seattle and India based international software consulting (acquired by Emtec Inc.) Prior to this, Shri Amin was the founder and CEO of vJungle, Inc., a web services software infrastructure company, which was acquired by Streamserve, Inc. Shri Amin also worked at Microsoft for many years as a lead engineer in Microsoft Windows Networking teams and was a senior engineer in the original Internet Explorer browser team at Microsoft, USA. Shri Amin is on the Technology Advisory Board of Grameen Foundation of Nobel Laureate Dr. Muhammad Yunus providing scalable financial and technology solutions for improving financial inclusion of the world’s poorest women.
Shri Tribhuwan Nath Chaturvedi
(Date of Birth: 15th January, 1959) Shri Tribhuwan Nath Chaturvedi is a Director nominated by the Central Government u/s 19(d) of the SBI Act, w.e.f. 29th August, 2013, for a period of three years. Shri Chaturvedi is a Practicing Chartered Accountant and Senior Partner in T N Chaturvedi & Co., Chartered Accountants, New Delhi and has wide experience and expertise in the area of Finance & Accounts, Taxation and Corporate Laws. Shri Chaturvedi earlier served as Shareholder Director on the Board of Punjab National Bank for a period of three years (27th December, 2008 to 26th December, 2011). He was also appointed by Governor of Uttar Pradesh as Director on the Board of New Okhla Industrial Development Authority (NOIDA) for a period of three years from 30.06.2004 to 11.06.2007.
Dr. Girish Kumar Ahuja
(Date of Birth : 29th May, 1946) Dr. Girish Kumar Ahuja is a Director nominated by the Central Government u/s 19(d) of the SBI Act, w.e.f. 28th January, 2016, for a period of three years. Dr. Ahuja is a Chartered Accountant and academician having 44 yrs of consultancy experience in international and domestic taxation, joint ventures, etc. He has expert knowledge in Direct Taxes and having Doctorate in Financial Sector Reforms - Capital Market Efficiency and Port Folio Investment.
Dr. Pushpendra Rai
(Date of Birth : 02nd June, 1953 ) Dr. Pushpendra Rai is a Director nominated by the Central Government u/s 19(d) of the SBI Act, w.e.f. 28th January, 2016, for a period of three years, has about 37 years of professional experience in national and international institutions.
As a member of the Indian Administrative Service for more than 21 years, he was responsible for formulating policy; preparing the program and budget; determining implementation strategies; monitoring implementation; and evaluating staff performance for a diverse set of institutions like rural and industrial development agencies, power generation and distribution departments, petroleum companies and intellectual property offices. He has also worked as the National Project Director - UNDP/WIPO; Member, Governing Council, National Institute of Design; Member Secretary, Foreign Investment Promotion Council; Executive Director, National Renewal Fund; National Negotiator at WTO/ WIPO and Secretary General, Quality Council of India.
Subsequently, Dr. Rai worked at the World Intellectual Property Organization, Geneva (UN), for 16 years, handling assignments like extending technical cooperation, promoting the economic aspects of IP and asset creation; leading the Development Agenda process and heading the Regional Office for Asia Pacific at Singapore.
Dr. Rai has a Ph.D. from IIT, Delhi; postgraduate degrees from Harvard University and the University of Lucknow and has lectured extensively in various parts of the world.
Ms. Anjuly Chib Duggal
(Date of Birth: 27th August, 1957) Ms. Anjuly Chib Duggal is a Director, nominated by the Central Government, u/s 19(e) of SBI Act w.e.f. 3rd September, 2015. Ms. Anjuly Chib Duggal is Secretary, Financial Services, Ministry of Finance, Govt. of India.
Dr. Urjit R. Patel
(Date of Birth: 28th October, 1963) Dr. Urjit R. Patel is a Director, nominated by the Central Government, u/s 19(f) of SBI Act w.e.f. 6th February, 2013. Dr. Urjit R. Patel is Deputy Governor, Reserve Bank of India.