Corporate Governance Report and Management
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Bank’s philosophy on Corporate Governance
The Bank has embraced and abided by the best corporate governance processes, ensuring the principle of fairness, equity, transparency, accountability and dissemination of information while upholding the highest ethical standards. Effective management with a high level of corporate ethics has been made possible by good governance procedures, which have also increased value for all stakeholders.
2
Board of Directors
SIDBI has been established under SIDBI Act 1989 (an act of the Parliament). SIDBI is governed by SIDBI Act, 1989 and SIDBI Regulation, 2000. Thus, provisions of SIDBI Act are preferred over the applicability of the regulations 15 to 27 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as SIDBI is a body corporate under specific act (SIDBI Act 1989) and is not a company under the Companies Act.
SIDBI Act 1989 provides for a fifteen-member Board of Directors comprising:
The Board, as on March 31, 2022, comprised twelve Directors, including Chairman & Managing Director (CMD), two DMDs, two Central Government Officials, 3 nominees of three largest shareholders viz. SBI, LIC and NABARD & four directors co-opted by the Board. The Central Government is yet to appoint the three directors prescribed under the Act.
Changes in the composition of the Board of Directors of the Company - Click here
Meeting of the Board of Directors and Annual General Meeting:- Click here
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Committees of the Board of Directors
As per section 12 of SIDBI Act, 1989 read with Regulations 5,6,7 of SIDBI General Regulations, 2000, the Board of SIDBI has constituted various Committees with the distinct role, accountability and authority, in order to facilitate expeditious consideration and focussed decision-making on the affairs of the SIDBI.
Meetings of the Committees are convened by the chairman of the committees from time to time at the head office of the Small Industries Bank, or at such other place in India as may be specified in the notice convening the meetings. Sufficient notice is given for such meetings as per the SIDBI General Regulations 2000.
Total amount of debt securities being more than ₹500 crore, as per amended LODR 2015 (“Listing Regulations”), the corporate governance norm as per the LODR has become applicable to SIDBI (a high-value debt listed entities) on comply or explain basis until March 31, 2023. Accordingly, some of the committees viz. (i) Audit Committee of Directors (ii) Nomination and Remuneration Committee (iii) Risk Management Committee have to be reconstituted and their functions reviewed in line with the SEBI LODR 2015. Also, one Stakeholder Relationship and Shareholders’/ Investors’ Grievance Committee has to be constituted as per the LODR 2015. The management is taking necessary steps to be compliant with the regulation by the stipulated timeframe in consultation with the controlling Ministry of Finance, DFS.
The Constitution of various Committees - Click here
4
Remuneration of Directors
SIDBI is an all India Financial Institution constituted under SIDBI Act 1989, as per which, all the whole time directors (CMD and 2 DMDs) are appointed by the Central Government, Ministry of Finance, Department of Financial Services which, inter alia, fixes the remuneration of such Whole-Time Directors through the appointment orders/pay fixation orders. The members of the Board, apart from receiving Directors’ remuneration, in case of CMD and Whole-Time Directors, do not have any material pecuniary relationship or transaction with the company, its promoters or its subsidiary, which in the judgement of Board may affect independence of judgement of Directors. Fees and allowances of directors and members of the Executive Committee and other committees are governed by section 12A of SIDBI Act, 1989 read with SIDBI General Regulations, 2000.
Remuneration of Non-Executive Directors (Independent) / Nominee Directors / Government Nominee Directors:
During FY 2021-22, SIDBI paid sitting fees to the Non-Executive Directors excluding Government. The sitting fees of ₹40,000/- and ₹20,000/- per meeting was paid for attending the Board and Committee of Directors meeting, respectively. Further, additional sitting fee of ₹10,000/- and ₹5,000/- per meeting was also payable for Chairing the Board and Committee of Directors Meeting, respectively.
Remuneration of Whole-Time Directors:
During FY 2021-22, the remuneration, inclusive of perquisites, paid to the Whole-Time Directors of the Bank was ₹49.22 lakh to Shri Sivasubramanian Ramann, Chairman and Managing Director, ₹44.30 lakh to Shri V. Satya Venkata Rao, Deputy Managing Director and ₹42.32 lakh to Shri Sudatta Mandal, Deputy Managing Director.
As per the disclosure made by the Directors of the Bank, none of them hold any share of SIDBI as on March 31, 2022.
There are no Stock options being held by the Directors of the Company.
No loan has been granted to any of the whole time directors of the Bank.
No performance linked incentives was applicable for FY 2022.
Whole time directors are appointed by Central Government for a period of 3 years or till further orders whichever is earlier.
2 Government nominee directors are appointed by Central Government can continue till the time changes are effected by Central Government.
Nominee directors are appointed by 3 largest shareholders and GoI as applicable and can continue till the time changes are effected by respective shareholders/Central Government respectively.
Co-opted directors are appointed for a period 3 years.
No notice period/severance fee is applicable.
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General Body Meeting
The details of last 3 AGMs held are as below:
Ordinary Resolutions were passed as per the regular agenda items and no special resolution was passed in any of the last 3 AGMs. Further, no operational process was involved with regard to postal ballot.
Means of Communication
SIDBI’s quarterly/half yearly/yearly financial results are published in the leading Hindi and English newspapers. The financial results for FY 2021-22 were published in Financial Express (7 editions) and Jansatta (Hindi in Lucknow). The financial results, Press releases and other official news releases are displayed on SIDBI website (www.sidbi.in).
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General Shareholder Information:
SIDBI’s equity shares are not traded and hence not listed on either of NSE/BSE and at the same time SIDBI is governed under SIDBI Act. However, SIDBI on account of being a high value debt listed entity, the provisions of SEBI (LODR) Regulations, 2015 have become applicable for compliance of applicable provisions.
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