Integrity Pact- Version 1.0, dated 01.04.

2020

INTEGRITY PACT

VERSION 1.0
PREMISES, EXPENDITURE & ESTATE DEPARTMENT

This Policy supersedes and replaces the “Integrity Pact” dated 27.11.2019. This Policy is the property of
Indian Bank, and may not be reproduced or copied, in any form or by any means, in whole or in part,
without prior permission of Indian Bank.

1|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

Policy Certification

Title Integrity Pact

Version 1.0

Owned By: Premises, Expenditure and

Estate Department
Prepared By: Premises, Expenditure and
Estate Department
Reviewed By: Audit committee of Board

Approved By: Board

Effective From: 01 April 2020

Validity 31 March 2021

2|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

Version Control
Version No. Prepared By Approved By Effective Date
1.0 Premises, Expenditure Board 01.04.2020
and Estate Department

Changes during the year:

Date of Issuance Circular No. Circular Name

3|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

Contents
1. Objectives of the Policy: ................................................................................. 5
2. Scope of Application: ...................................................................................... 5
3. Role and duties of Independent External Monitors( IEMs)............................. 6
4. Appointment of IEMs: ..................................................................................... 7
5. Regulatory Reference: .................................................................................... 9
6. Review of the Policy: .................................................................................... 10

4|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

1. Objectives of the Policy:

Central Vigilance Commission (CVC) vide circular dated 05.08.2008, directed Government
Organizations including PSUs to adopt Integrity Pact in major procurement activities. The same is
now extended to Public Sector Banks / Insurance Companies / Financial Institutions as per CVC’s
Circular No. 02/02/2015 dated 25.02.2015. The Commission vide circular No. 02/01/2017 dated
13.01.2017 issued revised Standard Operating procedures in this regard.

CVC vide Circular No. 10/05/09 dated 18.05.2009 have listed the essentials of Integrity Pact, the
Standard Operating Procedure for implementing Integrity Pact. Subsequently the same is modified
vide circular no. 02/01/2017 dated 13.01.2017

2. Scope of Application:

The pact envisages an agreement between the prospective vendors/bidders and the buyer,
committing the persons/officials of both the sides, not to resort to any corrupt practices in any
aspect/stage of the contract. Only those vendors/bidders who commit themselves to such a pact with
the buyer, would be considered competent to participate in the bidding process. In other words,
entering into this Pact would be a preliminary qualification.

The essential ingredients of the Pact include:

 Promise on the part of the Principal (Bank) not to seek or accept any benefit, which is not legally
available.

 Principal to treat all bidders with equity and reason.

 Promise on the part of the bidders not to offer any benefit to the employees of the Principal not
available legally.

 Bidders not to enter into any undisclosed agreement or understanding with other bidders with
respect to prices, specifications, certification, subsidiary contracts etc.

 Bidders not to pass any information provided by Principal as part of business relationship to others
and not to commit any offence under Prevention of Corruption/ Indian Penal Code Act.

 Foreign bidders to disclose the name and address of agents and representatives in India and
Indian Bidders to disclose their foreign principals.

 Bidders to disclose the payments to be made by them to agents / brokers or any other
intermediary.

5|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

 Bidders to disclose any transgressions with any other company that may impinge on the anti
corruption principle.

Integrity Pact, in respect of a particular contract, shall be operative from the date of Integrity Pact is
signed by both the parties till the final completion of the contract. Any violation of the same would
entail disqualification of the bidders and exclusion from the future business dealings.

3. Role and duties of Independent External Monitors( IEMs)

 IEM would have access to all contract documents, whenever required.

 It would be desirable to have a structured meeting of the IEMs with the Chief Executive of the
organization on a quarterly basis including an Annual Meeting to discuss/review the information
on tenders awarded during the previous quarter. Additional sittings, however, can be held as per
the requirement.

 The IEMs would examine all complaints received by them and give their recommendations/views
to the Chief Executive of the organization, at the earliest. They may also send their report directly
to the CVO and the Commission, in case of suspicion of serious irregularities requiring
legal/administrative action. IEMs are expected to tender their advice on the compliance within 10
days as far as possible.

 For ensuring the desired transparency and objectivity in dealing with the complaints arising out of
any tendering process, the matter should be examined by the full panel of IEMs jointly as far as
possible, who would look into the records, conduct an investigation, and submit the joint
recommendations to the Management.

 IEM should examine the process with integrity, they are not expected to concern themselves with
fixing of responsibility of officers. Compliance alleging malafide on the part of any officer of the
organization should be looked into by the CEO of the concerned organization.

 The role of IEMs is advisory, would not be legally binding and it is restricted to resolving issues
raised by an intending bidder regarding any aspect of the tender which allegedly restricts
competition or bias towards some bidder. At the same time, it must be understood that IEMs are
not consultants to the Management. Their role is independent in nature and the advice once
tendered would not be subject to review at the request of the organization.

 Issues like warranty/guarantee etc. should be outside the purview of IEMs.

 All IEMs should sign non-disclosure agreements with the organizations in which they are
appointed. They would also be required to sign a declaration of absence of conflict of interest.

 A person acting as an IEM shall not be debarred from taking up other assignments such as
consultancy with other organizations or agency subject to his declaring that his/her additional

6|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

assignment does not involve any conflict of interest with the existing assignment. In case of any
conflict of interest arising at a later date from any entity wherein he is or has been a consultant,
the IEM should inform the CEO and recuse himself/herself from that case.

 All organizations may provide Secretarial assistance to IEM for rendering his/her job as IEM.

 In case of any misconduct by an IEM, the MD/CEO should bring it to the notice of the
Commission detailing the specific misconduct for appropriate action at the Commission’s end.

 The role of the CVO of the organization shall remain unaffected by the presence of IEMs. A
matter being examined by the IEMs can be separately investigated by the CVO in terms of the
provisions of the CVC Act or Vigilance Manual, if a complaint is received by him/her or directed to
him/her by the Commission.

 The committee of General Managers at Corporate Office, consists of GM / DGM- Department

Head (DH) - Expenditure, GM /DGM (DH) – ITD, GM/DGM (DH) - DBD and GM/DGM (DH) -
Inspection and Chief Compliance Officer of the Bank will be the competent authority to take any
decision on the report submitted by IEM, if the matter is referred for bank’s decision.

4. Appointment of IEMs:
 CVC proposes to maintain a panel of names for appointment as IEMs in Ministries / departments
/ organizations. Organizations can also forward a panel of suitable persons to the Commission by
following the norms of the Commission. After due scrutiny and verification of the applications and
documents by the CVC, the applicants will be shortlisted for empanelment by the commission.

 The commission would not consider the name of an officer /executive who is either serving or
who has retired from the same organization

 The IEM appointed should be eminent personalities of high integrity and reputation. The
Commission would invite application from willing interested persons and maintain a panel of
persons eligible to be appointed as IEM. The Commission may make independent and discreet
background check before including a name in the panel.

 The choice of IEM should be restricted to officials from the Government and Public Sector
Undertakings who have retired from position of the level of Additional Secretary to the Govt. of
India and above or equivalent Pay Scale, and for Public Sector Undertakings, Board Level
Officers in Scheduled A Companies, Public Sector Banks, Insurance Companies and financial
Institutions. Officers of the Armed forces who have retired from the Rank equivalent of Lt.
General and above may also be considered for appointment.

 For appointment as IEM, the organization has to forward a panel of suitable person to the
Commission. This panel includes those who are in the panel maintained by the Commission or
they may propose names of other suitable persons for appointment as IEMs. While forwarding
the panel of suitable person, the Organization would enforce detailed bio data in respect of all

7|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

names proposed. The details would enclose postings during the last 10 years before
superannuation, special achievements, experience, etc. in Govt. Sector. It is desirable that the
persons proposed possess domain experience of the PSU activities or the relevant field with
which they may be required to deal.

 The Commission would not consider the name of an officer /

Executive who is either serving or who has retired from the same Organization to be an IEM in
that organization, although they may have served in the Top Management.

 A person may be appointed as an IEM in a maximum of three Organizations at a time.

 A maximum of three IEMs may be appointed in Navaratna PSUs and a maximum of two IEMs
and other Public Sector Undertakings, Public Sector Banks, Insurance Companies and Financial
Institutions.

 The appointment of IEM would be for an initial tenure of 3 years and could be extended for
another term of 2 years on a request received by the Commission from the organization
appointing the IEMs. An IEM can have a maximum tenure of 5 years in an organization with an
initial term of 3 years and another term of 2 years.

 Age should not be more than 70 years at the time of appointment/extension of tenure.

 Remuneration payable to the IEMs by the organization concerned would be equivalent to that
admissible to an Independent Director in the organization and in any case should not exceed Rs.
20,000/- per sitting. Remuneration being paid to existing IEMs may not be changed to their
detriment for the duration of their tenure.

 The terms and conditions of appointment, including the remuneration payable to the IEMs, should
not be included in the Integrity Pact or the Notice Inviting Tender. This may be communicated
individually to the IEMs concerned.

5) Threshold limits for Procurements/contracts:

The Threshold limits are valid for one year and subject to review within this period/as found
necessary.
The following threshold limits are considered:

Details of works covered Threshold limits – Rs.

Procurement of IT related works /
Software / Hardware /
Equipments/Machineries / New
Construction works / Purchase of
300 Lakh
new property / Other Non-IT
procurements / Consultancy
services / Financial Inclusion related
works / others

8|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

 Only new procurement / construction / purchase of property / consultancy contracts / financial

inclusion works may be brought in the ambit of Integrity Pact.

 The renewal of AMC / Addition / Up-gradation / Modification of software may also be excluded
from the ambit of Integrity Pact as it involves interaction with the Original Equipment
Manufacturer (OEM) for the work.

 The principal (Bank) reserves the right to get all details of sub-contractors employed by the main
contractor, before the appointment the sub-contractors.

 Integrity Pact format will form a part of the tender document itself.

 The pact begins when both parties have legally signed it. It expires for the Contractor 12 months
after the last payment under the contract and for all other bidders 6 months after the contract has
been awarded. If any claim made / lodged during this time, the same shall be binding and
continue to be valid despite the lapse of this pact as specified above, unless it is discharged /
determined by Committee of General Managers formed for the purpose of dealing matters with
Integrity Pact.

 This agreement is subject to Indian Law. Place of performance and jurisdiction is the Registered
Office of the Principal, i.e. Chennai.

 Changes and supplements as well as termination notices need to be made in writing. Side
agreements have not been made.

 If contractor is a partnership or a consortium, this agreement must be signed by all partners or

consortium members.

 On behalf of Bank, the Integrity Pact will be signed by the Authorized Official at the level of Chief
Manager and above duly approved by GM/DH of the department concerned, with the contractor.
In case of projects at Zonal level, Zonal Manager is the competent authority to sign the Integrity
Pact with the contractor.

5. Regulatory Reference:
All organizations implementing IP would undertake a periodical review and assessment of
implementation of IP and submit progress report to the Commission. CVOs of all organizations would
keep the Commission posted with the implementation status through their Annual report and Special
reports, wherever necessary.

It is called upon to make sincere and sustained efforts to imbibe the spirit and principles of the IP and
carry it to its effective implementation.

9|Page
 Integrity Pact- Version 1.0, dated 01.04.2020

6. Review of the Policy:

The committee of General Managers at Corporate Office, consists of GM / DGM (DH) -Expenditure,
GM / DGM (DH) – ITD, GM / DGM (DBD) and GM / DGM (DH) - Inspection and Chief Compliance
Officer of the Bank will be the competent authority for accepting any
deviations/waiver/additions/deletions in any clause in the Integrity Pact agreement to be entered with
the prospective vendor/bidder and on Threshold Limits.

This committee will also decide on the request if any, from the Zonal Office for any deviations / waiver
/ additions / deletions in any clause in the Integrity Pact agreement.MD & CEO is authorized to modify
the policy related to operational issues.

10 | P a g e