7.

Insurance

1. General
1.1 A Bankers' Indemnity Policy covering cash, Jewels and certain specified securities is
taken by CO: Accounts Department and renewed annually by them. On renewal every year the
details of the policy are communicated to branches through an all branch circular. The circular
inter-alia contains the name and address of the insurance company, policy number, the coverage
available under the policy, the procedure for lodging claim, maintenance of records etc.

2. Coverage of Risk
2.1 Basic Sum and additional sum insured

2.1.1 In respect of the following clauses viz. Para 2.2 to 2.8 the basic cover available is ` 10.00
crore (Rupees Ten crore only), for the Bank as a whole.

2.1.2 Additional cover available in respect of para 2.2 is ` 100.00 crore (loss on premises) and
in respect of para 2.3 (loss in-transit) is ` 25.00 crore.

2.2 The Risks Covered - On Premises

2.2.1 The total cover for the Bank as a whole is ` 100.00 crore (Rupees One hundred and ten
crore only), inclusive of Basic Sum insured ` 10.00 crore.

2.2.2 This cover is available for loss of:-

i. Cash (currency), Jewels and certain specified securities held either during regular
course of business or in Safe Custody at our Branches, Extension counters, Satellite
or Mobile Offices, Banking Service Centres and all offices owned by us.

ii. This insurance covers losses due to earthquake, volcanic eruption, subterranean fire or
any other convulsions of nature, flood, inundation, hurricane, typhoon, strom, tempest,
tornado, cyclone or atmospheric disturbances and terrorism risks.

iii. Gold (Bullion, Coins and Bars) received on consignment basis for gold business and kept
in a specified locker or in cash safe, under dual custody is covered.

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2.2.3 The contents of the lockers and SFVM with branches are not covered under this policy.

2.3 Risk covered for funds/jewels securities in transit

2.3.1 The total cover for the Bank as a whole is ` 35.00 crore (Rupees Thirty five crore only),
inclusive of Basic Sum insured ` 10.00 crore.

2.3.2 This covers loss of money, jewels and securities while in transit in the hands of our
employees, being stolen, made away with or misappropriated or lost to terrorists. Gold (Bullion,
Coins and Bars) in transit between branches of the Bank and from point of import to Banks
premises or to customers place is covered. The journey should commence or end with our Bank.

2.3.3 The policy covers movement of cash by outsourced agency with whom agreement is
executed by the Bank with a restriction of Sum Insured ` 1 crore.

2.3.4 In respect of risk coverage ie. on Premises and In Transit clauses (Para Nos.2.2 and
2.3 respectively) all the Security requirements and guidelines issued by Corporate Office from
time to time should have been adhered to.

2.4 Risk covered on Forgery or alteration

2.4.1 Loss by reason of payment of Forged Cheques, Withdrawal slips, Gift Cheques, Demand
Drafts, Travellers Cheques, Inter-branch/ office Credit Advices, all types of Term/Fixed Deposit
Receipts issued by our Bank and /or by the establishment of any credit on the faith of such
documents.

2.4.2 Cover for loss due to forgery/alteration in Equitable Mortgage documents by our
employees but not by borrowers is available under this policy.

2.4.3 The policy covers loss due to payment of instruments issued by other Banks on
collection basis or other wise including payment of cheques as presenting Banker under Cheque
Truncation environment, provided the other Bank is not having Bankers Indemnity Policy.

2.5 Risk covered on Dishonesty

2.5.1 Loss through dishonest or criminal act of the employee(s) of our Bank in respect of loss
of Money and or Securities where ever committed and whether committed singly or in
connivance with others.

2.6 Risk covered on the Registered Postal Sending

2.6.1 Subject to an individual limit of ` 2,50,000/- for each consignment, Loss due to Robbery
or Theft whilst in transit or intended to be despatched by Registered Insured Post from our office
to the consignee.

2.6.2 Each Post Parcel shall be insured with Post Office.

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2.7 Risk covered on Appraisers

2.7.1 Subject to an individual limit of ` 5,00,000/- for each appraiser, Loss due to infidelity or
criminal acts on the part of the Appraisers, provided they are on the approved list of appraisers
maintained by the bank and further provided that the Bank shall exercise reasonable precaution
and safe guards in the selection in the appointment of such appraisers.

2.8 Risk covered on Tiny Deposit Agents

2.8.1 Subject to an individual limit of ` 5,00,000/- for each agent, Loss due to theft, robbery or
hold-up whilst in the custody of Tiny Deposit agents or due to infidelity or criminal act on the
part of Tiny Deposit Agents, provided each such agent is a regular part-time commercial agent of
the bank and or appointed after full scrutiny about their credentials guaranteed by two reliable
individual persons.

2.9 Insurance Cover for Cash held in Automated Teller Machines

2.9.1 Insurance cover is available for Automated Teller Machines (ATM) related risks as an
extension cover of Bankers Indemnity Policy in respect of the following risks of loss of cash for a
total sum insured limit of ` 60 lakhs so as to cover any one loss/series of losses occurring due to a
series of events involving one or more ATM.

i. Loss of cash and/or items for deposit and

ii. Unauthorised taking of cash and /or items for deposit as defined in the policy subject to
its terms & conditions and exception clause.

iii. Loss of contents (cash, cheques etc.) handled / deposited in ATM by customers / branch
due to damage of ATMs owned by the Bank are covered. Outsourced ATMs are not
covered under this policy.

iv. Fraudulent withdrawal of cash from ATMs and loss due to misuse of ATMs or ATM
cards / Debit Cards / Credit Cards by any person including staff members upto
`5,00,000/- per card without any deduction under excess clause.

v. Monetary loss on account of disputed claim where the party (user of ATM) claims to
have not received cash, but as per banks record ie. journal log etc. cash is paid to the
party.

vi. Loss due to system error of wrong reversal (credit) after disbursing cash ie., party has
drawn the amount.

vii. Cover for all fraudulent transactions through misuse of Debit Cards and Credit Cards at
Point of Sale (POS) and all fraudulent transactions through Internet and e-com as well
by any person including staff members upto ` 5,00,000/- per card without any deduction
under excess clause.

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viii. Cover for all fraudulent transactions including Mail order and Telephone order
transaction irrespective of nature of fraud (allegedly done by fraudsters) which have
gone through the security level in card present and non present environment through
misuse of debit cards and credit cards at POS.

ix. Cover for cash transactions done by Business Correspondents engaged by the Bank in
four villages upto ` 50,000/- per day per person.

2.10 Extension of cover for risks under computerised accounting environment

2.10.1 Extension of cover for risks under computerised accounting environment is available
under the Bankers Indemnity Policy.

2.10.2 The Policy also covers risk under off-line transactions (i.e. processing transactions
through computers during period of no connectivity to main server) upto a maximum of ` 50,000
per transaction.

2.11 Loss of Safe Keys by employees due to theft or burglary

2.11.1 The policy provides cover for cost of replacement of safe keys (including related locks),
lost by employees due to theft or burglary, either in transit or at their residences, subject to a
maximum of ` 50,000/- with deduction of 5% as excess for claims exceeding ` 25,000/-.

2.12 Banking Service Centre

2.12.1 The policy cover is extended to Banking Service Centres (BSC) for any loss in premises,
in transit, loss due to forgery or alteration, dishonest or criminal acts of employees without any
excess clause.

2.13 Extension of cover to Mobile and Internet Banking

2.13.1 The policy covers all fraudulent transactions through Mobile and Internet Banking by
any person including staff members.

3. Procedure for claim

3.1 Initial reporting on the occurrence of loss
3.1.1 Branches should immediately upon the occurrence of loss or upon detection of any loss
or any events or acts that are likely to cause a loss to the bank notwithstanding the
non-determination of the magnitude, real nature and the extent of loss at that point of time,
report immediately to the insurance company at the address given in the circular issued by
CO:Accounts Department giving all available details and without fail endorse copies of such
initial report to

a. CO: Accounts Department

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b. CO: Vigilance Department

c. CO: Banking Operations Department
d. Zonal Office concerned

3.2 In the case of Dacoity, Terrorism the first reporting is to be done to the nearest
branch/office of the Insurance Company and in addition reporting is to be done to its Divisional
Office also.

3.3 It should be noted that for such initial report there is no standard form and the branches
have to write in the Bank's letter head furnishing available details in full to the insurance
company.

3.4 Zonal Office shall submit the claim form to the Insurance Company duly filled in and
signed by the branch after getting clearance from CO: Accounts Department and send a copy to
branch. Basic details such as, Clause under which the loss is covered, Date of loss, Amount of
loss i.e. modus operandi should be furnished without fail.

3.5 Branches should follow the below mentioned guidelines, in order to process the claims
by the Insurance company and settle without any delay:

i. lodge claim only in eligible cases,

ii. properly furnish the required details in the claim form by mentioning the appropriate
clause under which it is covered,

iii. submit the reply to the queries raised by surveyor / insurance company,

iv. have effective follow up with the surveyor / insurance company and

v. monitor all the cases and report to CO : Accounts Department. Preparation and submis-
sion of claim is centralized at Zonal Offices.

3.6 Zonal Offices shall lodge the claims after getting the claim forms cleared by
CO:Accounts Department without any delay and monitor and report to CO : Accounts Depart-
ment on each claim regularly.

3.7 Basic details such as Date of loss, Details of loss ie. modus operandi should be furnished
without fail in the covering letter, while sending the claim form.

3.8 The branches should furnish full break up details namely date(s) and amount of each
individual loss to CO: Accounts Department so that the liability of the insurance company can be
assessed. If such details are not available at that point of time, branches should furnish them
without fail as soon as they are available.

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3.9 It is mandatory that one copy of the claim form with enclosures should also be
submitted to the nearest Divisional Office of the Insurance Company. This will enable them to
appoint a surveyor/investigator to assess the loss. All correspondence with the Insurance
Company should contain full address of the Branch / Zonal Office.

3.10 The branch / zonal office concerned should follow-up the claim with the Insurance
Company periodically for early settlement.

3.11 Branches should seek instructions from the CO: Vigilance Department / CO:Banking
Operations Department, for the purpose of reimbursing to the customers before settlement of the
claim by the Insurance Company.

" Branches in Chennai and Kancheepuram Zones need not follow this procedure (It is enough if they submit a set of
claim form to the Insurance Companys Claims Hub at Chennai).

3.12 Police Complaint

3.12.1 A written complaint to the Police should be lodged immediately on such occurrence of
loss or detection thereof whether or not such occurrence causes immediate loss and take all
practicable steps to recover the property / money lost and to apprehend the guilty person(s). The
complaint should be registered and the FIR acknowledgment of Police should be obtained and
sent along with the claim form.
3.12.2 Branches should ensure that the FIR is in standard police stationery with printed serial
number.
3.12.3 The RBI guidelines for reporting fraud cases are given below:
i. All the cases of the value of below ` 3 crore, but above ` 1 lakh which involve outsiders
(private parties) and bank staff should be reported by the Zonal Manager to a senior
officer of the State CID / Economic Offenses Wing of the State concerned.
ii. For cases of below ` 1 lakh, but above ` 10,000/-, the cases should be reported to the
local Police Station by the Branch Manager concerned.
iii. All cases of value below ` 10,000 involving Bank officials should be reported to the Zonal
Manager, who would scrutinize each case and then direct the concerned Branch on
whether it should be reported to the local Police Station for further action.
iv. Cases of ` 3 crore and upto ` 15 crores

v. Where staff involvement is prima facie evident, the complaint is to be lodged with CBI,
Anti Corruption Branch (ACB)

vi. Where staff involvement prima facie is not evident, complaint is to be lodged with CBI,
Economic Offenses Wing (EOW).

vii. Cases of ` 15 crore and above Complaint is to be lodged with Banking Security & Fraud
Cell (BS&FC) of CBI.

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3.12.4 Branches should effectively follow up with the police authorities and obtain the Final
Investigation Report. As this report is considered to be a primary document for settlement of
claim, branches should ensure that the same is obtained and forwarded to the insurance
company at the earliest.
3.12.5 Forensic report

Wherever forgery of signature is involved, a Forensic Report is required by the Insur-

ance Company to confirm forgery. Branches should ensure that the same is obtained and
forwarded to the insurance company at the earliest.

3.13 The fullfilment of the above basic requirements as narrated in sub para 3.1 to 3.12 is the
personal responsibility of the Branch Management. Failure to report to the Insurance Company
and to the Police in time may result in the rejection of the claim by the Insurance Company.

3.14 No loss except trade / loan losses due to fraud by the borrowers which are covered
should be construed or interpreted by the branches as non-admissible under the policy and hence
all eligible losses covered under this policy, should be reported to the Insurance Company in the
manner prescribed above, without any omission. The admissibility or otherwise of a claim will
be decided by the Insurance Company.

3.14.1 However if the total loss is below ` 20000/- claim should not be lodged, except for the
following (please refer Excess Clause given under para no.4 below):
i. claims pertaining Fraudulent withdrawal of cash from ATMs and loss due to misuse of
ATMs or ATM cards /Debit Cards / Credit Cards by any person including staff members
up to ` 5,00,000/- per card,
ii. all fraudulent transactions through misuse of Debit Cards and Credit Cards at Point of
Sale (POS) and all fraudulent transactions through Internet & E-com by any person
including staff members up to `5,00,000 per card,
iii. claims in respect of Banking Service Centres and
iv. Loss of Safe Keys by employees.

3.15 Branches should furnish full and correct particulars of the loss and also of any subse-
quent recoveries to the Insurance authorities, as well as to CO: Accounts department.

3.16 Branches should inform CO: Accounts department as soon as full recovery of loss is
made or if the customer has withdrawn the complaint based on which insurance claim is made.

3.17 Maintenance of Records

3.17.1 Branches should maintain a register of claims containing full details of each claim. This
register, along with the serially numbered files and all other relevant records and vouchers

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should be kept under the personal custody of the Branch Manager and must be properly handed/
taken over by the outgoing/incoming Branch Managers, while on transfer as in the case of other
branch documents.

3.18 Survey Report

3.18.1 Branches should extend full co-operation to the surveyor(s) appointed by the Insurance
Company on proper identification, during their visit to the branch to assess the loss. As the
Survey report is the prime document to process and settle the claim branches should ensure
early completion of survey and submission of survey report to the Insurance Company by the
surveyor(s).

3.19 Follow-up
3.19.1 Zonal Offices/Branches shall follow-up directly with the Insurance Company concerned
for settlement of the claims, by submitting the copy of documents/papers as required by the
Insurance Company. Zonal Offices/Branches shall also follow-up with the nearest Divisional
Office of the Insurance Company, to whom a copy of the claim is furnished, for appointment of
Surveyor / investigator. It is also essential to ascertain that the surveyor / investigator has filed
his / her report to the Insurance Company after completion of survey.

3.20 In case of claims pending even after submission of all the required papers/documents,
the same shall be informed to CO: Accounts Department, so that they could take up with the
insurance company.

4. Excess Clause
4.1 Under this clause, the Bank has to bear the first ` 20,000/- of each and every loss in
respect of items referred in Para 2.2 to 2.8 above.

4.2 As such, losses below ` 20,000/- shall not be reported to the insurance company unless it
is coming under exceptions to applicability of excess clause listed below.

4.3 In respect of loss due to terrorism risks, an excess of 0.5% of total sum insured subject to
the maximum of ` 25,000/- for each and every claim is applicable.

4.4 The aggregate losses incurred by the Bank by acts of one employee shall be treated as a
single loss.

4.5 The excess clause will not apply to:

4.5.1 losses arising due to Dacoity.
4.5.2 claims pertaining to Fraudulent withdrawal of cash from ATMs and loss due to misuse
of ATMs or ATM cards /Debit Cards / Credit Cards by any person including staff members.

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4.5.3 all fraudulent transactions through misuse of Debit Cards and Credit Cards at Point of
Sale (POS) and all fraudulent transactions through Internet & e-com as well by any person
including staff members.
4.5.4 Banking Service Centres within the overnight retention limit.
4.5.5 loss of safe keys by employees due to burglary/theft while in transit or within the office
or at their residence, for claims upto ` 25000/-.
4.5.6 loss arising due to fraudulent transactions through Mobile and Internet banking .

4.6 Under the agreement, the Bank also has to bear a certain portion of each loss, extra
precautions should be taken to protect the properties insured. Strict compliance of the instruc-
tions from various departments of Corporate Office and from Zonal Offices has to be ensured.

5. Exceptions
5.1 The insurance Company shall not be liable in respect of

5.1.1 Losses resulting wholly or partially from any negligent act or omission of our
employees.

" Note: Since negligence which results in a fraud/forgery is considered to be an adverse factor for settlement of a claim,
branches should take utmost care and caution by strictly adhering to the KYC Norms at the time of opening of an
account, collection of cheques, issue of cheque books and while allowing operations in an account by withdrawal slip or
otherwise by strictly adhering to the rules and regulations prescribed in the manual and circulars for various accounts.

5.1.2 Loss of money and/or securities and/or personal property confined to the care of the
Bank, normal value and description of which have not been ascertained by the Bank before loss.

5.1.3 Losses due to any acts or omissions committed by the employee(s) concerned after the
discovery of a loss in which the said employee(s) was/were involved.

5.1.4 Losses resulting directly or indirectly from trading (actual or fictitious) whether in the
name of the Insured or otherwise and whether or not within the knowledge of the Insured, and
notwithstanding any act or omission on the part of any employee in connection therewith
whether acting within the scope of authority or not or with any account recording the same.

5.1.5 Loan Losses including Housing Loan, Vehicle Loan, Consumer Loans etc. are not
covered. However, the Policy covers Forgery or alteration in Registered / Equitable Mortgage,
internal credit advices and loan documents / securities, if any, by our Banks employees (but not
by borrowers).

5.1.6 Excess cash wrongly dispensed by ATM on account of machine error.

5.1.7 Loss or damage due to machine break down or mechanical failure.

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6. Retroactive clause
6.1 Under this clause, any loss not sustained within a retroactive period of not exceeding
three years prior to the date of discovery of any such loss is not covered under the policy. The
current policy for the financial year 2013-14, covers losses occurred on or after 01/04/2010 and
reported subsequently. Losses occurred prior to 01.04.2010 are not eligible for claim with any of
the insurance companies.

7. Shifting of Branch Premises

7.1 Advance intimation of shifting of premises should be sent to the Insurance Company
with the following details:
7.1.1 Date of Shifting
7.1.2 Amount of cash and jewels that will be carried on each occasion
" Note: Care should be taken not to move valuables worth more than `25 crore in any one transit.

7.1.3 Address of the new premises.

8. Cash carried by our officers to shandies, cattle markets etc.,

8.1 All cash transits by the Bank's authorised employees in connection with the Bank's
business are also covered irrespective of the fact that such monies are drawn from Bank by way
of debits to loan accounts, SB accounts and suspense accounts etc. However, instructions as to
the procedure in such matters have to be taken from CO: BOD.

9. Cash collections by Agricultural Assistants and Authorised

Employees

9.1 The cash collected by our authorised employees are covered by the policy even though
such cash collected remains overnight in the houses of such collectors due to inability to remit
such sums into the bank before the close of business of the branches on the same day.

10. Registered postal sending - Precautions

10.1 If the weight of the parcel received differs form the original weight of the parcel, the
seals should be examined and the discrepancies in the seals and the packing should be recorded.

10.2 The wrappers of the parcel and the weight at the time of opening should be noted and
duly authenticated by Postal Officials.

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10.3 A monetary notice of claim should be served by 'Registered Post acknowledgment due'
(RPAD) on the competent authority of the Postal Department.

10.4 A certificate of pilferage should be obtained from the Postal Authorities.

10.5 The remitting branches need to ensure recording of proper weight by Postal
Authorities.

11. Special instructions

11.1 Branches should strictly operate within the limit fixed for cash-in-transit since the risks
are higher when cash is in transit.

11.2 During the Cash-in-transit, overnight retention (on the specific approval of the
competent authorities) of cash in a branch on the way is also covered. It is, however, to be noted
that such cash accepted by such retaining branches and kept inside the strong rooms must either
be recorded in the cash balance book of such branches or in the alternative, accepted by the
branches for safe custody with declared value by strictly adopting the normal procedure for such
acceptance under safe custody. It is to be further noted that such cash held under the safe
custody and the existing value of Cash, gold bullion and Jewels, put together, of the retaining
branch does not exceed the insured limit of ` 110.00 crore.

11.3 The policy is extended to cover the Internet Kiosk Centre known as Banking Service
Centre (BSC) for Loss in premises, in transit, loss due to forgery or alteration, dishonest for
criminal act of employees without any excess. The maximum overnight retention limit for the
BSCs per day shall be ` 10000/-. The Cash movement from/to BSC by a single employee is
allowed.

11.4 Separate Insurance Policies have been taken by CO: Premises, Expenditure & Estate
Department to cover properties and equipments of our Bank and Circulars are being issued by
them every year. Branch has to follow the instructions and guidelines given therein.

11.5 Branches shall follow-up with the Insurance Company for appointment of surveyor,
completion of survey and settlement of the claims by submitting the copy of documents/papers
as required by the Insurance Company/Surveyor and inform CO: Accounts Department about
the status of the claim.

12. Need for updation of the guidelines issued by Corporate Office

12.1 In addition to the guidelines enumerated above, branches should refer to the circular
issued every year by CO: Accounts Department regarding Bankers' Indemnity Policy and be
guided accordingly. They should incorporate the changes, if any, in the Manual at the
appropriate places. The circular issued every year should be preserved as a Branch Document
and made available to the inspecting officials.

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