of Integrity
Federal Bank is strongly dedicated to maintaining the highest standards of governance, ethics, and integrity. To safeguard the security and stability of our banking services, we adopt best-in-class banking practices and maintain strong institutional governance and risk frameworks. These frameworks and practices undergo periodic review to adapt to the evolving operating environment.
Federal Bank upholds robust governance principles ingrained in sound management practices, legal compliance, and the highest standards of transparency and ethics. Our stakeholder engagement fosters a culture of ethical behaviour, individual accountability, and transparent disclosure at all levels.
Our well-informed Board of Directors, empowered by established systems and procedures, provides strategic direction for long-term value creation for all stakeholders. We champion sustainable business practices and prioritise creating a safe and healthy work environment to be the employer of choice.
Recognising the value of diversity, we ensure that our Board’s composition reflects a variety of perspectives aligned with our evolving needs. This enhances the Board’s effectiveness and upholds the highest corporate governance standards. The Board works efficiently through various committees formed.
We have implemented a Code of Corporate Governance and Code of Conduct for the Board of Directors and the Management. All members of the Board and the Senior Management Personnel shall affirm compliance with it on an annual basis. We also have a Code of Ethics and Business Conduct for employees, which provides guidelines on standards of business conduct. The primary focus of the Code of Ethics and Business Conduct is achieving business success in ways that demonstrate respect for people and the planet, and uphold values and high standards of ethics.
We maintain a zero-tolerance policy towards any instances of unethical behaviour. To ensure adherence to ethical standards, we ensure that all employees and Directors are well-versed in our Code and strictly adhere to its principles. Moreover, we have implemented a range of policies to effectively address crucial areas such as anti-bribery and corruption, fraud prevention, protection for whistleblowers, and the prevention of insider trading, among other significant concerns.
We have a Board-approved Whistle Blower Policy named the Protected Disclosure Scheme (PDS), where various stakeholders can lodge complaints/disclosures under the policy. The Whistleblower has assured secrecy of identity and confidentiality of the complaint/ disclosure lodged under the policy. 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.
The Board embodies a diverse spectrum of professionalism, knowledge, expertise, and experience pertinent to the banking sector. In discharging its responsibilities and providing effective leadership, the Board upholds corporate values, promotes an ethical culture, endorses sustainability, and leverages innovation. Independent Directors play a pivotal role in upholding Corporate Governance standards and ensuring fairness in decision-making. Drawing upon their expertise in various domains, they offer independent judgment on matters concerning strategy, risk management, controls, and business performance.
The Bank’s Board comprises of highly experienced and competent individuals of notable integrity. They possess strong financial acumen, strategic astuteness, leadership qualities, and are committed to the Bank, devoting sufficient time to meetings and preparation.
The Board has complete access to all information within the Bank. All the meetings are conducted as per a well-designed and structured agenda and in line with the compliance requirement under the Companies Act, 2013, SEBI Listing Regulations and applicable Secretarial Standards prescribed by ICSI.
The composition of the Board adheres to relevant provisions outlined in the Companies Act, 2013, along with the accompanying rules, the SEBI Listing Regulations, the Banking Regulation Act, 1949, guidelines issued by the Reserve Bank of India (RBI), as amended periodically, and the Articles of Association of the Bank.
BOARD TRAINING
To enhance the collective knowledge, skills, and expertise of the highest governance body on sustainable development, our Bank organised various familiarisation programmes for our Directors.
0
Training and Awareness Programmes Held for the Board
0%
Directors in Respective Categories Covered by Awareness Programmes
BOARD PERFORMANCE EVALUATION
Following the provisions of the Companies Act, 2013, Regulation 17 (10) and other applicable regulations of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board is mandated to conduct an annual performance evaluation. This evaluation encompasses the performance of the Board as a whole, individual Directors, and the functioning of its various committees for the relevant year. To initiate the evaluation process, a structured questionnaire is developed, considering inputs from the Directors. The questionnaire covers various aspects of the Board’s functioning, including the adequacy of its composition and committees, Board culture, and the execution of specific duties, obligations, and governance. The evaluation is carried out internally. The outcome of the Board evaluation is treated with utmost confidentiality. Please refer to Page 115 of the Board’s Report for details regarding the evaluation process and the Directors’ views.
BOARD REMUNERATION POLICIES
The remuneration proposed for Executive Directors (EDs) by the Nomination, Remuneration, Ethics and Compensation Committee (NRC) and Board, undergoes a two-step approval process. It is approved by the Reserve Bank of India (RBI) and the shareholders of our Bank. The voting results of the General Meeting/Postal Ballot, including the remuneration approvals, can be accessed on our Bank’s website and stock exchanges. Furthermore, in the case of Independent Directors, any proposed fixed remuneration must also receive approval from the shareholders. The NRC and Board put forward this proposal, and it is subject to the shareholders’ scrutiny and endorsement.
COMPENSATION
The ratio of the annual total compensation for the organisation’s highest-paid individual to the median annual total compensation for all employees (excluding the highest-paid individual) is 27.69. The ratio of the percentage increase in annual total compensation for the organisation’s highest-paid individual to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual) is 0.60.
FRAUD REPORTING
Along with the other reporting done to the Board/Board Committee of the Bank, various reports on fraud cases reported to the RBI by the Bank are placed before the Board/Board Committee as per regulatory guidelines.
Further, the Bank has formulated the Protected Disclosure Scheme (PDS)/Whistle blower policy which enables various stakeholders, including Directors, employees, customers, and the public to report irregularities. Cases reported under PDS are placed before the respective Board Committee.
During FY 2023-24, Bank reported 12,240 fraud cases with an aggregate amount involved of H 127.77 Crore to the RBI. These cases were duly placed before the Board/ Board Committee. Further, complaints received by the Bank under PDS/Whistle blower policy are duly placed before the respective Board Committee.
There were no confirmed cases of corruption during the year. We do not make any political contributions.
BOARD COMMITTEES
To work on making informed decisions and specific recommendations in our Bank’s best interests, Federal Bank has established various Committees of Directors to monitor the activities falling within their terms of reference, including all the amendments made in the regulatory laws from time to time and presented it to the Board. These committees are responsible for making informed decisions in their scope. The details of the Committees are noted in the ‘Board Committee and its Terms of Reference’ in the Corporate Governance Report Section of this Annual Report.
Audit Committee
Risk Management Committee
Stakeholders Relationship Committee
Human Resource Committee of the Board
Special Committee of the Board for Monitoring and Follow-up Cases of Fraud
Customer Service, Marketing Strategy and Digital Banking Committee
Credit, Investment and Raising Capital Committee
Nomination, Remuneration, Ethics & Compensation Committee
Review Committee of the Board on Non-Cooperative Borrowers and Identification of Wilful Defaulters
Information Technology and Operations Committee
Corporate Social Responsibility Committee
Certifications achieved
- Information Security Management System
- Business Continuity Management System
- Payments Card Industry Data Security Standard
Note:
The Committees are established as per relevant provisions of the Companies Act, 2013 (the Act) and relevant rules made thereunder, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Banking Regulation Act, 1949, the guidelines issued by the Reserve Bank of India, as amended, from time to time and the Articles of Association of the Bank (‘the extant laws’).