Whistle Blower Policy

Preface

The Bank has adopted the Code of Conduct and Ethics Policy, which lays down the principles and standards that should govern the actions of the Bank and its employees. Any actual or potential violation of the Code, howsoever insignificant or perceived as such, would be a matter of serious concern for the Bank. The role of employees in pointing out such violations of the Code cannot be undermined. Accordingly, this Whistle blower Policy (“the Policy”) has been formulated with a view to provide a mechanism for employees of the Bank to raise concerns on any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.

Objective

The Bank is committed to adhere to the highest standards of ethical, moral, and legal conduct of business operations. To maintain these standards, the Bank encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. This policy aims to provide an avenue for employees to raise concerns on any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.

Policy

The Whistle blower policy intends to cover serious concerns that could have grave impact on the operations and performance of the business of the Bank. The policy neither releases employees from their duty of confidentiality in the course of their work, nor is it a route for taking up a grievance about a personal situation.

Definitions

• “Disciplinary Action” means any action that can be taken on the completion of /during the investigation proceedings including but not limited to a warning, imposition of fine, suspension from official duties or any such action as is deemed to be fit considering the gravity of the matter
• “Employee” means every employee of the Bank (whether on roll or off roll)
• “Protected Disclosure” means a concern raised by a written communication made in good faith that discloses or demonstrates information that may evidence unethical or improper activity. Protected Disclosures should be factual and not speculative in nature
• “Whistle blower” is someone who makes a Protected Disclosure under this Policy
• “Whistle Officer” or “Whistle Committee” means an officer or Committee of persons who is/are nominated/ appointed to conduct detailed investigation of the disclosure received from the whistle blower and recommend disciplinary action. Audit Controller is nominated as Whistle Officer
• The Whistle Committee includes as below: -
  • Chairman
  • Chief Risk Officer
  • Chief Human Resource Officer
  • Chief Compliance Officer
  • Audit Controller
• “Bank” means, “Shivalik Small Finance Bank Ltd.”
• “Good Faith” An employee shall be deemed to be communicating in ‘good faith’ if there is a reasonable basis for communication of unethical and improper practices or any other alleged wrongful conduct
• Good Faith shall be deemed lacking when the employee does not have personal knowledge on a factual basis for the communication or where the employee knew or reasonably should have known that the communication about the unethical and improper practices or alleged wrongful conduct is malicious, false, or frivolous.
• “Policy or This Policy” means, “Whistle blower Policy.”

Scope

Various stakeholders of the Bank are eligible to make Protected Disclosures under the Policy. These stakeholders may fall into any of the following broad categories:

• Employees of the Bank
• Employees of other agencies deployed for the Bank’s activities, whether working from any of the Bank’s offices or any other location.
• Contractors, vendors, suppliers, or agencies (or any of their employees) providing any material or service to the Bank
• Customers of the Bank
• Any other person having an association with the Bank

A person belonging to any of the above-mentioned categories can avail of the channel provided by this Policy for raising an issue covered under this Policy.

The Policy covers malpractices and events which have taken place/suspected to take place involving:

• Abuse of authority
• Breach of contract
• Negligence causing substantial and specific danger to public health and safety
• Manipulation of Bank data/records
• Financial irregularities, including fraud or suspected fraud or Deficiencies in Internal Control and checkor deliberate error in preparations of Financial Statements or Misrepresentation of financial reports
• Any unlawful act whether Criminal/Civil
• Proliferation of confidential/propriety information
• Deliberate violation of law/regulation
• Wastage/misappropriation of Bank funds/assets
• Breach of Bank Policy or failure to implement or comply with any approved Bank Policy

Policy should not be used in place of the Bank grievance procedures or be a route for raising malicious or unfounded allegations against colleagues.

Guiding Principles

To ensure that this Policy is adhered to, and to assure that the concern will be acted upon seriously, the Bank will:

• Ensure that the Whistleblower and/or the person processing the Protected Disclosure is not victimized fordoing so
• Treat victimization as a serious matter, including initiating disciplinary action on person/(s) indulging invictimization
• Ensure complete confidentiality
• Not attempt to conceal evidence of the Protected Disclosure
• Take disciplinary action if anyone destroys or conceals evidence of the Protected Disclosure made/to bemade
• Provide an opportunity of being heard to the persons involved especially to the Subject

Anonymous Allegation

Whistle blowers must put their names to allegations as follow-up questions and investigation may not be possible unless the source of the information is identified. Disclosures expressed anonymously will ordinarily NOT be investigated.

Protection to Whistle blower

• If one raises a concern under this Policy, he/she will not be at risk of suffering any form of reprisal or retaliation. Retaliation includes discrimination, reprisal, harassment, or vengeance in any manner. Bank's employee will not be at the risk of losing her/ his job or suffer loss in any other manner like transfer, demotion, refusal of promotion, or the like including any direct or indirect use of authority to obstruct the Whistle blower's right to continue to perform his/her duties/functions including making further Protected Disclosure, as a result of reporting under this Policy. The protection is available provided that:
  • The communication/disclosure is made in good faith
  • He/She reasonably believes that information, and any allegations contained in it, are substantially true; and
  • He/She is not acting for personal gain
  Anyone who abuses the procedure (for example by maliciously raising a concern knowing it to be untrue)will be subject to disciplinary action, as will anyone who victimizes a colleague by raising a concern through this procedure. If considered appropriate or necessary, suitable legal actions may also be taken against such individuals. However, no action will be taken against anyone who makes an allegation in good faith, reasonably believing it to be true, even if the allegation is not subsequently confirmed by the investigation.
• The Bank will not tolerate the harassment or victimization of anyone raising a genuine concern. As a matter of general deterrence, the Bank shall publicly inform employees of the penalty imposed and disciplinary action taken against any person for misconduct arising from retaliation. Any investigation into allegations of potential misconduct will not influence or be influenced by any disciplinary or redundancy procedures already taking place concerning an employee reporting a matter under this policy. Any other Employee/business associate assisting in the said investigation shall also be protected to the same extent as the Whistle blower.

Accountabilities – Whistle blowers

• Bring to early attention of the Bank any improper practice they become aware of. Although they are not required to provide proof, they must have sufficient cause for concern. Delay in reporting may lead to loss of evidence and also financial loss for the Bank
• Avoid anonymity when raising a concern
• Follow the procedures prescribed in this policy for making a Disclosure
• Co-operate with investigating authorities, maintaining full confidentiality
• The intent of the policy is to bring genuine and serious issues to the fore and it is not intended for petty Disclosures. Malicious allegations by employees may attract disciplinary action
• A whistle blower has the right to protection from retaliation. But this does not extend to immunity for involvement in the matters that are the subject of the allegations and investigation
• Maintain confidentiality of the subject matter of the Disclosure and the identity of the persons involved in the alleged Malpractice. It may forewarn the Subject and important evidence is likely to be destroyed
• In exceptional cases, where the whistle blower is not satisfied with the outcome of the investigation carried out by the Whistle Officer or the Committee, he/she can make a direct appeal to the chairman of the Bank

Accountabilities – Whistle Officer and Whistle Committee

• Conduct the inquiry in a fair, unbiased manner
• Ensure complete fact-finding
• Maintain strict confidentiality
• Decide on the outcome of the investigation, whether an improper practice has been committed and if so by whom
• Recommend an appropriate course of action - suggested disciplinary action, including dismissal, and preventive measures
• Record Committee deliberations and document the final report

Rights of A Subject

• Subjects have the right to be heard and the Whistle Officer or the Committee must give adequate time and opportunity for the subject to communicate his/her say on the matter
• Subjects have the right to be informed of the outcome of the investigation and shall be so informed in writing by the Bank after the completion of the inquiry/ investigation process

Management Action on False Disclosures

An employee who knowingly makes false allegations of unethical & improper practices or alleged wrongful conduct shall be subject to disciplinary action, up to and including termination of employment, in accordance with Bank rules, policies and procedures. Further this policy may not be used as a defense by an employee against whom an adverse personnel action has been taken independent of any disclosure made by him and for legitimate reasons or cause under Bank rules and policies.

Procedure for Reporting & Dealing with Disclosures

For more details, refer to the procedure for reporting & dealing with disclosures given in Annexure A.

Access to Reports and Documents

All reports and records associated with ‘Disclosures’ are considered confidential information and access will be restricted to the Whistle blower, the Whistle Committee and Whistle Officer. ‘Disclosures and any resulting investigations, reports or resulting actions will generally not be disclosed to the public except as required by any legal requirements or regulations or by any corporate policy in place at that time.

Retention of Documents

All Protected Disclosures in writing or documented along with the results of investigation relating there to shall be retained by the Bank’s Record Retention and Maintenance Policy.

Reports

A quarterly status report on the total number of complaints received during the period, with summary of the findings of the Whistle Committee and the corrective actions taken will be sent to the CEO of the Bank.

Bank’s Powers

The Bank is entitled to amend, suspend, or rescind this policy at any time. Whilst, the Bank has made best efforts to define detailed procedures for implementation of this policy, there may be occasions when certain matters are not addressed or there may be ambiguity in the procedures. Such difficulties or ambiguities will be resolved in line with the broad intent of the policy. The Bank may also establish further rules and procedures, from time to time, to give effect to the intent of this policy and further the objectiveof good corporate governance.

Amendment of Policy

Any amendments to this policy will be approved by the Nomination and Remuneration Committee (NRC) ofthe Board of Directors of the Bank.

For any deviation in policy & exceptional approvals can be considered on basis of recommendation by skip level & approval from CEO.