KEY MANAGEMENT TEAM
SHYAM SRINIVASAN
Managing Director & Chief Executive Officer
SHALINI WARRIER
Executive Director
Harsh Dugar
Executive Director
VENKATRAMAN VENKATESWARAN
Group President & CFO
ASHUTOSH KHAJURIA
Chief Mentor & off.on spl. duty
AJITH KUMAR K K
Chief Human Resources Officer
NANDAKUMAR V
EVP & Head - Branch Banking
JOHNSON K JOSE
EVP & H-OS & CNTLR-TXNBKG & Fedserv
DIVAKAR DIXIT
Head-Credit (CB, BUB, RTL & Agri)
KAPIL BHATIA
EVP & Country Head - CIB
PITCHAI MAHALINGAM
EVP & Chief Internal Auditor
SANJESH KUMAR
Head - Credit (CIB)
LAKSHMANAN V
EVP & Head-Treasury (Treasurer)
SUNIL KUMAR K N
EVP - Chief Legal & Compliance Officer
BIJU K
SVP & Chief Vigilance Officer
DAMODARAN C
SVP & Chief Risk Officer
SAMIR PRAVINBHAI RAJDEV
SVP & Company Secretary
M V S MURTHY
Chief Marketing Officer
SOUVIK ROY
AEVP & Head-Investor Relations
ESG Governance
At Federal Bank, we align our business strategies with a Board-approved ESG Policy for sustainable development and responsible banking. The Board oversees our approach, targets, and impacts on the Environment, People, and Economy. ESG information is reviewed and approved by the Board, including material topics. A dedicated ESG team, headed by a senior executive, coordinates and implements our Bank’s initiatives and strategies.
We closely monitor ESG scores from different rating agencies and actively engage in assessments. Our goal is to make progress across all E, S, & G aspects and practices to create positive impacts and mitigate risks, thus ensuring overall growth and development.
Board of Directors
Risk Management Committee/CSR Committee of the Board
ESG Committee
Controller of ESG/Chief Risk Officer
Head of ESG
ESG Team/Functional Owners
Risk Management Committee
Board-level Committee to oversee preparedness for managing ESG risks in operations and portfolio
CSR Committee
Board-level Committee to oversee CSR initiatives and projects aimed at promoting sustainability
E&S/ESG Committee
Executive-level Committee, headed by the MD & the CEO, provides focussed guidance on material aspects related to ESG and coordinates all ESG initiatives in alignment with the Board-approved strategies and policies. The Committee also addresses risks associated with lending operations as mentioned in the ESMS Policy. It also assesses the organisation’s business practices and performance on sustainability and ethical issues based on the ESG Policy. The Committee reports to the RMC of Board.
Responsible Business Conduct
At Federal Bank, we ensure the highest standards of responsible business conduct and have defined our commitments in our ESG Policy. Our policy commitments align with the National Guidelines on Responsible Business Conduct (NGRBC) issued by the Ministry of Corporate Affairs, the Business Responsibility and Sustainability Reporting Framework (BRSR) issued by SEBI, and IFC Performance Standards issued by the World Bank Group.
We have established policies, controls, and procedures to embed responsible business conduct commitments throughout our activities and business relationships. We allocate responsibilities across different levels to ensure compliance with these commitments. Our Bank’s senior management is crucial in integrating these commitments into our overall strategies, operational policies, and procedures. However, we conduct due diligence to identify, prevent, and mitigate any adverse impacts on human rights, environment, and society.
Human Rights
In alignment with our ESG Policy, we endeavour to champion human rights through responsible lending and through our agreements with our partners for sustainable practices, encompassing issues related to human rights, child labour, forced labour, environmental considerations, and more. The service-level agreements with approved agencies, through which all security personnel are employed, contain covenants regarding human right standards, labour standards, forced labour, child labour, non-discrimination, and harassment, including sexual harassment.
Our Diversity, Equity, and Inclusion (DE&I) Policy aims to support our focus to uphold human rights and provide a workplace free from discrimination. To demonstrate firm commitment and reverence for the human rights of our workforce and stakeholders, we arrange awareness sessions for our employees regarding human rights matters. Additionally, we aim to maintain a female employee ratio of more than 40%. Although our commitments are not designed specifically around human rights standards, we ensure upholding all human rights.
We are committed to mitigating complaints and grievances by fostering an increasingly positive work environment and implementing a comprehensive review mechanism. This is done to facilitate the timely resolution of issues on human rights. We have established a well-defined procedure enabling employees to submit written complaints, queries, suggestions, or grievances concerning any human rights violation occurring within our premises or operations.
Our Environment and Social Management System (ESMS) Policy offers comprehensive guidelines for conducting thorough due diligence to identify and evaluate potential risks and impacts associated with human rights violations within the lending portfolio. Likewise, the sustainable procurement policy serves as the authoritative document to govern the necessary due diligence process for assessing potential risks and impacts related to human rights violations concerning our vendors and suppliers.
Policies and Codes of our Bank can be accessed at
https://www.federalbank.co.in/our-commitments
Building Trust through Ethics
At Federal Bank, we firmly believe that the ethical values that our Bank demonstrates reflect the honesty and integrity with which we serve our customers. We recognise that ethics cannot be limited to a one-time event but must be embedded into the fabric of our organisation. By cultivating a culture that values ethics and transparency, we strive to create an environment where ethical considerations are at the forefront of decision-making.
The Code of Corporate Governance and the Code of Conduct for the Board of Directors and the Management speaks about conflict of interest. The Code details dos and don’ts to be followed by the Directors and Management of our Bank to avoid conflict of interest with our Bank.
During FY 2022-23, our Bank did not enter into any materially significant transactions with our related parties, which could lead to a potential conflict of interest between our Bank and these parties, other than transactions entered into with them in the ordinary course of our business. A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is placed before the Audit Committee of the Bank for their review on a quarterly basis. No transactions were entered into with related parties, which were not in the ordinary course of the business of our Bank, or which were not on an arm’s length basis. The approved policy of our Bank on Related Party Transactions is available on our website. We adhere to a policy of half-yearly disclosure of related party transactions to the stock exchanges, demonstrating our commitment to transparency, accountability, and good corporate governance practices.
All our governance body members are duly aware of our Anti-Bribery and Corruption Policy (ABC) and its procedures. This policy emphasises the importance of conducting thorough risk assessments and due diligence when engaging with new partners, vendors, and contractors. It is imperative that we establish suitable contractual terms and governance arrangements tailored to the level of risk involved. Therefore, all third-party partners are required to complete a comprehensive due diligence questionnaire during the onboarding process. This questionnaire, section-wise, covers every aspect of our ABC policy. Some sections specifically address the party’s interactions with government entities, their anti-corruption opinions, and any prior legal infractions they may have encountered. Our policy on combating financial crimes affirms our commitment to refrain from making any political contributions. This policy is publicly available online and can be accessed through the given link:
https://www.federalbank.co.in/documents/10180/412885500/FCC+Policy-+Abridged.pdf/defa58dd-c090-a997-36be-23c0aa415318?t=1680584816373
Grievance Handling and Risk Management Mechanisms
Employees
Our Bank has established a Federal Bank Employee’s Grievance Redressal Forum to address employee grievances, allowing direct submission of concerns by employees at all levels. An external expert ensures impartiality within the forum. We have also implemented the Protected Disclosure Scheme (PDS), also known as the Whistle Blower Policy which enables various stakeholders including directors, employees, customers, and the public to report irregularities. Genuine complaints are accepted through various channels, ensuring confidentiality.
Whistleblowers are protected, and their identity remains confidential, safeguarded against adverse actions. We promote awareness of the PDS through preventive vigilance classes and internal communication. Facility to provide information is unrestricted for all personnel, and our Bank’s PDS policy is easily accessible online. The Vigilance Department conducts thorough investigations into PDS complaints and reports the findings to the Managing Director & CEO. Quarterly reports are presented to the Audit Committee of the Board, ensuring transparency and accountability.
Customers
At Federal Bank, we have a robust grievance redressal mechanism. Through this, our customers can approach us, and we address customer concerns, queries, and service requests. Our Bank’s Grievance Redressal Policy*, which is publicly available, outlines various escalation options for addressing customer concerns. Additionally, in accordance with regulatory guidelines, a Grievance Redressal Procedure** is displayed at all branch outlets and is accessible to the public.
Our customers can report any negative impacts or issues they encounter in our Bank’s processes and services through the procedures outlined in the Grievance Redressal Policy. We promptly address these reported issues by internally escalating them to the relevant teams or departments for necessary corrections, remedial measures, and compensation. We determine customer compensation based on our Bank’s Customer Compensation Policy***.
We have established effective grievance mechanisms to address customer grievances, queries, and suggestions. A dedicated team analyses these concerns, identifies root causes, and implements necessary improvements in processes and products. A quarterly root cause analysis is conducted and shared with the Customer Service Committee of the Board, showcasing examples of grievances and corresponding remedial measures. To evaluate customer satisfaction and measure our Bank’s Net Promoter Score (NPS), we have been conducting annual Customer Satisfaction Surveys since 2019. As per regulatory requirements, the results of the same are communicated to our Board members for informational purposes.
Our Bank’s Marketing Department mitigates risks associated with negative media coverage and rumours across various media channels such as print, electronic, and social media. The Marketing Department collaborates with an external PR agency to effectively handle potential crises. Furthermore, we utilise a social media monitoring tool called ‘FedHive’ to actively monitor and address real-time issues on online platforms. This approach enables our Bank to:
-
Anticipate and prevent adverse media comments whenever possible
-
Disseminate our Bank’s official response in cases where the news has already been published or aired
Shareholders
The Stakeholders Relationship Committee of our Bank is responsible for addressing any significant concerns raised by shareholders. Upon receiving these concerns, the Committee takes appropriate actions to redress the complaints and prevent the recurrence of similar issues in the future. There were no investor complaints pending as on April 01, 2022. During fiscal 2022-23, our Bank received eight (8) complaints from the members. Our Bank attended to all the complaints, and none were pending or remained unsolved to the satisfaction of the members as of March 31, 2023.
Fraud Risk Management and Controls
Federal Bank has responsibly set up a Committee of the Board for monitoring and follow up of cases of fraud. The major functions of this Committee would be to monitor and review all frauds of ₹100 Lakh and above. Fraud Risk is managed by our Bank, methodically in line with the robust Fraud Risk Management Policy of the Bank, which covers all significant aspects like various mitigation measures, and the surveillance mechanism which complements prevention, detection, investigation and monitoring of internal and external frauds. The public and employees are made aware about different fraud prevention techniques.
Preventive Vigilance Workshop is a flagship programme designed flawlessly by Vigilance Department for employees. The Programme explicates different gaps that miscreants exploit to perpetrate fraud in the banking industry. It also ensures the delivery of strategies to avert such frauds. Customer awareness of fraudulent activities is another area that our Bank covers through various effective communication channels, including SMS, E-Mails, Posters at branches, Ribbon Messages on the Bank’s website, and the Internet Banking Webpage.
Internal Control Mechanisms
Our Bank, through the years, has developed and stabilised an effective internal control system. This system is calibrated to our Bank’s risk appetite and aligned with our operations’ scale, size and complexity. The scope and authority of the internal audit function are defined in the Audit and Inspection Policy of our Bank, duly approved by the Board of Directors. We have a robust system towards escalating the audit findings to appropriate levels in the hierarchy of the Management. This system also ensures that discussions are held in various committees, covering corrective actions to reduce the incidence of audit findings, with adequate implementation follow up.
Tax Strategy
At Federal Bank, our priority is to ensure regular and effective communication with the tax authorities we operate with. We understand that transparency is crucial in addressing general tax concerns, and we seek guidance from reputable organisations, such as the Indian Bank Association, whenever necessary.
Stakeholders are encouraged to direct tax implementation inquiries to their respective tax team managers and escalate matters to the Head of the Taxation Department or Chief Financial Officer for further assistance. Our organisation’s anonymous Whistle Blower reporting system allows individuals to report any potential misconduct without fear of retaliation.
While our Board of Directors and Audit Committee monitor the policy execution, specific responsibilities are assigned to the executives within the organisation to ensure effective oversight of the tax policy implementation. Our integrated tax approach strongly emphasises transparency, risk management, and compliance through appropriate planning, controls, and dispute resolution.
We strategically leverage the opportunity to pay income tax at a reduced rate of 22% by forgoing specific exemptions*, choosing 25.168% instead of the higher 34.944%. In FY 2021-22, Bank claimed a deduction of Rs. 3.89 Crore under section 80LA, but only 50% was eligible as it was the 7th year of claiming. In FY 2022-23, our International Banking Unit (IBU) at Gift City recorded a loss, making it ineligible for any deduction. While we received no government financial assistance, we were honoured to receive a financial incentive of ₹ 19.10 Crore from the Ministry of Electronics & Information Technology for UPI & Rupay Debit Card Transactions during FY 2022-23. These strategic financial choices exemplify our commitment to optimising benefits while complying with regulations, delivering exceptional services to our valued customers.
Strong Corrective Action Mechanism
Federal Bank operates under strict regulatory framework to ensure financial stability and protect consumer interests. We have a strong Corrective Action Mechanism to provide a structured approach for instances of non-compliance. By adhering to it, we aim to reinforce our commitment to regulatory compliance and maintain the trust and confidence stakeholders. We strongly address all issues with resilience by implementing solid corrective measures, which include:
- Certification requirements and review of employee qualifications
- Evaluation of staff accountability
- Enhancement of e-mail surveillance and transaction monitoring
- Establishment of a value framework for clear compliance reporting
- Conduction of ‘Conduct and Ethics’ workshops for the top management
