Corporate Policies

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Summary of Key Policies

The Legal & Compliance function at KBZ Bank is responsible for the implementation, monitoring and enforcement of the policies below:

Our Board policy outlines the roles and responsibilities of our Board of Directors, and spells out the scope of its authority. In addition, it also makes clear how the Board should be structured, its size and composition, the criteria and procedure for board elections, the duration for which a director may serve, and the procedure for when there is a Board vacancy. Finally, it covers how and how often the performance of the Board as a whole, and of its directors, should be evaluated. More information on this can be found in our Corporate Governance Framework – Section 2. 

The Board of Directors and Officers of the Bank are bound by a formal written conflict of interest policy and a compliance process for implementing the policy. The conflict of interest policy requires Board members and Bank Officers to disclose all substantial commercial interests in the Bank, whether direct or indirect, of their own or of family members. They are obligated to avoid activities that could create conflicts of interest or the appearance of conflicts of interest, and to promptly disclose any matters that may, or has, resulted, in a conflict of interest. A rigorous review and approval process is in place to ensure that the activities that Directors and Bank Officers engage in will not create a conflict of interest. Furthermore, it is a Director’s responsibility to abstain from voting on any matter where they may have a conflict of interest or where their objectivity or ability to properly fulfill their duties to the Bank may be compromised. More information on this can be found  in our Conflict of Interest Policy available in English & Myanmar.

The Bank’s policy on related party transactions prohibits lending to related parties and shareholders holding more than 5% of the voting shares of the Bank, unless the transaction has been:

■ approved by a vote of two thirds or more of the Board, excluding the Director
■ involved is secured by collateral
■ and based on market terms and conditions.

Related parties include those who have a substantial interest in the bank or vice versa, a Director or Officer of the bank or of a corporate body that controls the bank, a relative of or entity controlled by of any of parties previously mentioned, or a person deemed to be related because of a previous or existing relationship with the bank. KBZ Bank also complies with the “Related Party Directive” issued by the Central Bank of Myanmar. More information on this can be found in our Corporate Governance Framework – Section 2.11.

KBZ Bank has a formal orientation process in place to familiarise our newly-appointed directors with the role of the Bank’s Board of Directors, its committees and charters, the Bank’s business activities, the industry, and the regulatory environment. In compliance with directives issued by the Central Bank of Myanmar, all directors also undergo necessary training every two years,  allowing them to serve as effective members of the board. In addition to this, our Directors have access to ongoing internal and external training to ensure they are on top of relevant issues and best practices, and constantly bridging any experience or information gaps in the areas of finance, regulation and risk. Our director-level training initiatives are coordinated by their respective departments, as well as our Learning and Development Department, Legal & Compliance Department, and the Corporate Governance Office. More information on this can be found in our Director Orientation & Continuing Education Program Policy here.

As a private organization, KBZ has formulated and put into place comprehensive instructions to protect investors and prevent insider trading. All KBZ employees, whether part-time, full-time or term-contract, working with the Bank or its representative offices are expected to respect the Bank’s material information and trade secrets. All confidential material information related to the business or financial situation of KBZ Bank must be held in the strictest of confidence, and should never be used without explicit permission. Accessing protected information, or information related to protected information, or disclosing such information prior to publication, is strictly forbidden. More information can be found here.

KBZ takes a zero-tolerance stance against bribery and corruption and is committed to conducting our business honestly and ethically. Any attempt by an employee to bribe, whether to obtain or retain business for the Bank or to obtain or retain an advantage when conducting the Bank’s business, is considered gross misconduct, as is accepting or allowing another person to accept a bribe. This policy applies to all activities of the Bank, and to all levels of staff including our Board, management, part-time and full-time staff, and term-contract hires. We also expect our partners, contractors, and suppliers to uphold similarly high standards of conduct. Anyone who becomes aware of activities that violate this policy is obliged to raise it to management, or report it via the Bank’s whistleblowing channels. Employees who violate this policy will be subject to a formal investigation under the Bank’s Disciplinary Procedure and may be dismissed. We are also bound by the laws of Myanmar, in respect of our conduct both in the country and in other markets and territories. To ensure the highest standards of socially responsible behaviour, KBZ Bank only supports legitimate organisations, and avoids doing business with companies and customers in high-risk sectors, and those whose business activities may negatively impact communities and the environment. More details can be found in our Code of Conduct and Social Purpose Policy.

We have implemented policies in place to foster a safe, respectful, inclusive and supportive working environment for everyone.

Commitment to stakeholder rights and our responsibilities

KBZ Bank is committed to respecting and promoting stakeholder rights by treating customers and employees fairly, providing access to responsible banking and financial services, managing conflicts of interest, supporting customers and communities in times of hardship, and understanding potential risks facing vulnerable or marginalized groups. 

To these ends, KBZ Bank provides this Statement in order to: 

■ Provide employees with guidance on the extent of our responsibilities and commitments. 
■ Reaffirming our focus on stakeholder rights and adhering to international operating and governance standards. 
■ Demonstrate to employees and other key stakeholders that KBZ Bank takes stakeholder rights issues seriously. 

The Bank will monitor current and emerging regulations that are most relevant to our operations and supply chain, and will endeavor to ensure that the Bank’s policies and practices are updated as necessary. 
We are dedicated to conducting fair, ethical, and responsible business practices in our interactions with employees, customers, vendors, and communities.

The Human Resource function at KBZ Bank is responsible for the implementation, monitoring and enforcement of the policies below:

KBZ ensures that we are acting in the best long term interests of our customers, our communities, and the Bank, and that we uphold our core values, including teamwork and cooperation, honesty, enthusiasm, mutual trust and respect, integrity, leadership, and dedication. This code sets out the principles and standards of behaviour that we expect of everyone who works for KBZ. It covers all directors, commissioners and senior management as well as employees at all levels, whether part-time, full-time, or on term-contract, working with the Bank and its representative offices. It also includes clear guidelines on gifts and hospitality, private business transactions, and potential incidents of conflict of interest. Violations of this Code, which can be raised to a supervisor or through our existing whistleblowing channels, could result in an employee being disciplined, dismissed, or subjected to legal action. More information on our Code of Conduct can be found here.

In order to ensure that every employees at KBZ Bank is well aware and has the in-depth understanding of the CoC concepts, the Code of Conduct course was provided via the bank’s e-learning platform called “KBZ Bank Learning Academy”. All the employees are required to complete the CoC e-learing modules. The course also includes an assessment section at the end of each chapter and partcipans are required to answer at least 80% of the questions correctly to complete the course.

Image: A screenshot of CoC eLearning course introduction

The Bank is committed to the highest standards of openness, integrity, and accountability. An important aspect of accountability and transparency is a mechanism to enable stakeholders, including employees, vendors, contractors, service providers and customers to voice concerns in a responsible and effective manner, while assuring their confidentiality when they do so. Our Whistleblowing Policy provides various channels (website, hotline and email address) for stakeholders to report questionable behaviour or voice any concerns, and has structures in place that ensure that no individual will be disadvantaged by raising what he or she believes to be legitimate concerns. Having a Whistleblowing Policy in place also allows our management, Audit Committee and Board to intervene on activities that pose financial or reputational risks early. More information on our Whistleblowing Policy is available in both English and Myanmar. 

 **All whistleblowing concerns including, but not limited to, fraud, malpractice, health and safety risk, abuse, exploitation, and violation of the law or KBZ Bank Code of Conduct, are to be directed to the Whistleblowing Officer ([email protected]). Subject to applicable laws and regulations, KBZ Bank will take reasonable steps to protect the confidentiality and anonymity of the Whistleblower.

To foster a safe, respectful, and supportive working environment for everyone, we have implemented a Professional Behavior Policy (PBP) rooted in the heart of our core values: Metta, Thet Ti, and Virya, or loving-kindness, courage, and perseverance. This covers all work premises and work-related events, and all forms of communication. Some references in this policy have been drawn from the recommendations of the Business Coalition for Gender Equality (BCGE), to which we are a party. More information on our Professional Behavior Policy can be found here.

As of July 2022, we’ve received 98 hours of training and workshops with BCGE conducted for our members of senior management, team leaders, and employees. These trainings played a major role in improving our teams’ understanding and awareness of professional behavior at workplace. 

For example: “Sensitivity in the Workplace: A Workplace for All training” provided a better understanding of individual diversity through broader principles of diversity and inclusion, equality, norms, stereotypes, biases, bullying, harassment, and cultural sensitivity, together with practical tips for top management, HR practitioners and employees for their participation in the journey of inclusivity. 

KBZ Bank believes that all our employees are entitled to a work environment in which they are treated fairly, and free from discrimination based on race/ethnicity, age, gender, religion, sexual orientation, or disability. This extends from hiring and promotion decisions made by managers and evaluation criteria imposed, to deliberate attempts to isolate or exclude individuals based on their personal characteristics.

KBZ Bank does not tolerate any form of unacceptable workplace behaviours such as bullying/harassment, discrimination, violence, sexual harassment, vilification and victimization. 

“Anti-Harassment at the workplace” workshop conducted by Business Coalition for Gender Equality (BCGE) provided the best HR practices from around the world and heard from colleagues about their own struggles, and what KBZ Bank can do to provide a respectful workplace for everyone. We learned about norms and potential discriminatory practices at workplace, Types of workplace harassment with examples and useful tips for preventing or approaches to handle workplace harassment, discrimination, and bullying. In an effort to create a safe and respectful workplace for all, we’ve developed an Anti-Harassment & Non-Discrimination Policy in both English & Myanmar versions. We hope that these resources will help us to continue fostering a positive and inclusive work environment for all employees.

As a pro-family organisation, KBZ Bank provides 14 weeks of paid maternity leave and 15 consecutive days of paternity leave to new parents. Maternity leave can be taken partly before and partly after delivery, depending on the needs of individual employees.

Additionally, we provide new mothers with two hours off each day until their babies are six months old, and also provide dedicated breastfeeding/pumping facilities and refrigerators where possible. The timing for this is mutually agreed upon. More information on our Time-off policy can be found here.

Our Grievance Procedure Policy ensures that all our employees – part-time, full-time and term-contract – have avenues that allow them to raise and resolve grievances. This is to ensure that misunderstandings are quickly cleared up, and harmonious employer-employee relations restored. Grievances can be raised in writing or verbally, and can be raised to managers or the Head of Human Resources. In some instances, they may also be raised to the CEO or the Board of Directors. More information on our Grievance Procedures can be found here.

At KBZ, we care about our employees even after they have completed their service with us. All our permanent confirmed staff officially retire a month before their 60th birthdays to give them time to focus on family and other personal pursuits. In some instances, the Bank may provide staff with the option to remain in service after they turn 60, on a contract basis. The Bank may also choose to retire an employee before their 60th birthday, if necessary. All retired employees are entitled to retirement benefits tied to their number of years of service and, in some instances, special gratuities. More details on our Exit Management/Retirement Policy can be found here.

Where possible, warnings and informal and/or formal counselling will be used to resolve matters prior to any disciplinary action being taken. Where necessary, suspension or more serious actions may be taken, including formal inquiries and hearings. The procedure is intended to be positive rather than punitive, but is cognisant of the fact that sanctions may have to be applied where necessary. Our employees have the right to appeal against the outcome of our inquiries. More information on our Disciplinary Procedure can be found here.

To preserve the integrity of the bank and its processes, KBZ Bank employees are not allowed to accept offers of gifts or hospitality, if the employee deems it to be connected to their work for the Bank and is meant to accrue favorable services or other benefits. In the event that they are unable to decline a gift, it should be declared to the Head of Human Resources. All employees sign our Act of Integrity Policy and Declaration Form when they join the bank, and breaches can lead to disciplinary action. Our No Gift Policy sits in our Code of Conduct, alongside other standards of behaviour that we expect of all our employees. More information on our No Gift policy can be found in English & Myanmar.

The Risk function at KBZ Bank is responsible for the implementation, monitoring and enforcement of the policies below:

KBZ Bank’s comprehensive Credit Risk Policy ensures that the Bank is well-positioned to promote Myanmar’s social and economic development. In 2017, the Bank strengthened its credit processes with the appointment of two high-level committees – the Management Credit Committee (MCC) and the Board Credit Committee (BCC) – tasked to ensure that credit approval is independent, centralised and transparent. A Board Audit and Risk Committee was also established to strengthen governance and asset-liability management.

Internal checks and balances are built into our independent credit approval process, including a post-approval review by internal auditors that ensures the quality of credit appraisals and approval standards are in accordance with the Bank’s rigorous underwriting standards and credit policies. Regular reviews are undertaken at account and portfolio levels, and findings are reported to senior management. ‘Responsible financing’ underpins all our credit risk management activities. 

KBZ Bank maintains an exclusion list that prohibits financing operations that negatively impacts socio-economy or the environment, as well as a list of high-risk business and customer profiles that must be avoided unless approved by the MCC. We effectively manage ‘credit concentration’ risks by diversifying our portfolio and avoiding large exposure to borrowers in similar business or industry sectors.

An effective reporting mechanism is key to allowing detected fraudulent activities to be reported and escalated so that appropriate actions can be taken. KBZ Bank requires all employees to report, in good faith, any suspicion of internal or external fraud, or customer fraud that comes to their attention. The Bank’s Fraud Management Policy and Procedures include information on the data required as well as formal procedures that employees should follow, including channels for fraud reporting from a designated email address and whistleblowing channels. Safeguards for the person who reports suspected fraud in good faith include anonymity for the person who made the report and a no retaliation policy. Findings of the investigation team are reported to the Head of Special Investigation and Chief Risk Officer. The Chief Risk Officer, in turn, reports to the Senior Management and HRD to determine the most appropriate action. Actions arising from fraud investigations include disciplinary procedures, changes to internal controls, and the recovery of losses.

Fraud risk governance is an integral component of corporate governance and our system of internal controls. The Bank’s Fraud Management Policy and Procedure document formalises the process of obtaining information in the case of fraud, as well as the coordinated approach to investigating and implementing corrective action in an appropriate and timely fashion. It also sets down the different roles and responsibilities involved. Management has overall responsibility for supporting and working with the Internal Audit Department, the Fraud Team and other departments and functions involved. Once fraud is detected, Heads of Functions are responsible for ensuring that adequate controls are put in place to prevent the incident from reoccurring. The FRM program is continually evaluated to ensure that it is functioning as intended, and any deficiencies are communicated in a timely manner to the parties responsible for taking corrective action, including senior management and the Board.

KBZPay’s Anti-Fraud Policy is an important part of corporate governance and raises awareness of the risks and consequences of fraud. It provides a framework for identifying, reporting and responding to, and preventing fraud, and promoting policies and procedures that minimise instances of fraud. These activities help ensure organisational, financial, and operational accountability, the effectiveness of internal controls, prevention, detection and investigation of fraud and malpractice, and the promotion of organisational integrity. KBZPay’s Anti-Fraud Policy falls under the Fraud Management Function. However, it is the responsibility of each employee to ensure compliance with its requirements. 

KBZ Bank’s Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) Framework establishes a global framework for the Bank to participate in the international fight against money laundering.

It creates awareness among staff and heads of department about money laundering and the financing of terrorism, and the ways in which these can be effectively combatted.

It also covers the controls in place to ensure that the bank is not an unwitting vehicle for such activities. These include: (1) Enhanced due diligence (EDD) procedures, such that we do not serve anyone on the sanctions lists issued by the UN, the EU, the US (including the Office of Foreign Asset Control (OFAC)) and all applicable local regulatory sanctions lists in the jurisdictions in which KBZ Bank operates; (2) Implementation of Oracle Financial Services Analytical Applications (OFSAA), a globally-renowned, industry-grade AML/KYC tool recognised by FATF as best-in-class, to bolster our ability to counter financial crime; and (3) A robust Know Your Customer (KYC) system, involving REFINITIV World Check database for conducting extensive risk assessment on high risk or suspicious transactions, persons countries and delivery channels.

There are clearly allocated duties and responsibilities within the bank to ensure that policies and procedures are managed effectively, with full commitment and compliance.

The policy is reviewed at least once a year to keep pace with local and international developments in regulations and the market.

For more about our AML/CFT controls, click here.

The Bank adopts prudent underwriting standards where all credit facilities granted are based on an assessment of the debt/financing servicing ability of the borrower. When collateral is involved, it is subject to both a maximum lendable margin and maximum portfolio cap based on the collateral types spelt out in the Bank’s internal guidelines. The lendable margin applies a haircut to the value of the collateral as a safety measure against volatility of the collateral’s value. The portfolio cap helps avoid concentration risk. Any breach to the lendable margin and portfolio cap is considered a breach of credit underwriting standards and must be supported with proper justification and approved by the appropriate approving authority as specified in the guidelines.

As part of the Bank’s commitment to responsible financing, credit is only extended to businesses within the Bank’s target markets and business sectors. All credit products are subject to a Product Development Document (PDD) which is approved internally, and whose performance is tracked. The PDD is the principal document approving the management plan for a credit offering to the Bank’s defined target market. It operates within the framework of the Bank’s approved risk appetite, is aligned with the Bank’s credit policies, and is supported by the systems authorised by the Bank.

The Corporate Affairs function at KBZ Bank is responsible for the implementation, monitoring and enforcement of the policies below:

The bank’s Social Purpose Policy  guides KBZ Bank’s philanthropic activities , our overall approach to doing business, and our approach to establishing and cultivating relationships with our key stakeholders.

It outlines our three Social Purpose Pillars, which capture the areas we are most concerned about, and where we believe we can have the greatest impact: 

■ Climate change mitigation through education
■ Talent development for the future of Myanmar
■ An inclusive society and workplace

These pillars are mapped to the United Nations’ Sustainable Development Goals (SDGs) and the Myanmar Sustainable Development Plan (MSDP) to ensure compliance and adherence to only the highest national and global causes and standards. They guide our approach to people, products, partnerships and policies, and also shape our approach to charitable giving. 
Oversight of the Policy’s implementation is the responsibility of the Social Purpose & Impact Partnership Committee. The Committee was formed in December 2019 to bring transparency, expertise, objectivity, and good corporate governance to KBZ Bank’s charitable giving. It takes into consideration the concerns and opinions of the Myanmar government, the Central Bank of Myanmar, the international community, our investors, customers and employees, as well as KBZ’s financial interests, and ensures compliance with local and global regulations. More information on this can be found here.

All charitable contributions and support provided by KBZ Bank are intended solely as an expression of goodwill and a sign of KBZ Bank’s commitment to the communities in the regions in which it operates. In the same spirit, and in accordance with local practice, KBZ Bank’s local offices may also make seasonal donations to religious centres in the neighbourhoods where they operate with no expectations of anything. We only support legitimate organisations with a strong implementation track record or positive references that seek to benefit all the people in their communities and whose objectives are exclusively humanitarian and politically neutral. All our partners and projects must pass  the stringent evaluation of the Social Purpose and Impact Partnership Committee. Our support may take the form of financial donations, gifts in the form of food or other goods, or practical assistance from KBZ Bank employees, for example by sharing their time and/or expertise. These contributions are always transparent and accurate records of all support and contributions are recorded and tracked. Further details can be found in our Social Purpose Policy.

Selected Activities Undertaken

At KBZ Bank, we prioritise the comfort, safety and security of our customers and our employees. 

We observe high levels of office hygiene, and have the necessary resources in place to meet our health and safety commitments including hand sanitisers at all our banking counters and scheduled pest control spraying.

For the safety of both customers and our employees, we have CCTVs and alert systems in all our branches, and restrict the kind of items that can be brought into them. For cash safety, customers are reminded to check their cash before leaving the counters. Where necessary, our staff is available to assist in safely transporting cash to customers’ vehicles. Customer safety comes in addition to our responsibility as a bank to ensure the security of money with comprehensive anti-fraud and anti-corruption measures, and strict adherence to CBM controls and policies.

In 2020, KBZ Bank was also at the forefront of the national response to the global pandemic, deploying a range of initiatives to help clients, customers, and employees stay informed, safe and financially protected. More information on this can be found here.

The Operations function is responsible for monitoring and ensuring that the bank’s Customer Health  and Safety measures and actions are aligned with its values.

When selecting suppliers and contractors, the Bank takes into consideration the type, nature, complexity, risk, value and objective of what is being procured, as well as market conditions. Our vendor management team works with the respective VCs/Business functions to select and document evaluation criteria, and assigns a weight to each criterion. This criteria is then applied consistently across all quotations or proposals received. At least two quotations or proposals from reputed vendors and service providers are sourced. 

To be considered, vendors must be a registered company or partnership firm that has been in the same line of business for at least the last three years. They should also have supplied and installed at least three similar systems in the industry, have support services in or near the Myanmar region, and should not have been blacklisted by any regulatory authority in their home country or elsewhere. Vendor quotations or proposals are confidential, revealed only on a need to know basis, and in accordance with any applicable NDAs or contracts. Any deviation from this rule must be properly justified and endorsed by the vendor management team head or the procurement head, whichever is more appropriate.

The proposal that is lowest in price while meeting or exceeding all conditions as set in the Request For Proposal will be selected.

The Operations function is responsible for monitoring and ensuring that the bank’s Supplier and contract selection measures and actions are aligned with its values.

KBZ Bank embraces environmental best practices within our business, and continuously seeks ways to reduce our carbon footprint, from waste reduction and recycling, to using our water and energy resources wisely. Our push towards digital banking, through products like KBZPay, and by using e-signatures, email approvals, and G-suite cloud storage make banking paperless. We ensure lights and air conditioners are switched off when not in use and we recycle both waste and spare parts.

Since 2019, KBZ worked with RecyGlo, which provides innovative recycling solutions, to conduct a waste audit at our headquarters and Family Office, and to put into place more responsible practices. The intention is for this pilot project to eventually be rolled out nationwide. We now have expanded to 5 more locations in 2022.  

The Operations function is responsible for monitoring and ensuring that the bank’s Environmental friendly value chain measures and actions are aligned with its values. 

KBZ Bank’s community outreach reflects the areas we believes are important for the future of Myanmar, and where we feel we can make the biggest impact, specifically:

– Climate change mitigation through education

– Talent development for the future of Myanmar

– Promoting an inclusive society and workplace

Some of our initiatives include creating green facilities for communities, participating in disaster relief efforts, sponsoring scholarship programmes, supporting medical missions that improve lives, and actively promoting gender equality. 

To further our goal of financial inclusion for all of Myanmar, KBZ Bank staff regularly engage with communities to promote our ewallet KBZPay, which is giving thousands access to financial services for the first time. We also host financial inclusion workshops and raise awareness on banking product security on social media. Beyond that, we collaborate with universities, and offer internship opportunities in our Bank.   

To ensure that the bank’s interaction with communities is aligned to its values, KBZ Bank formed a  Social Purpose and Impact Partnership Committee (SPIPC) in December 2019. The SPIPC is responsible for reviewing all requests for donations, grants, or funds.

The Corporate Affairs function is responsible for monitoring and ensuring that the bank’s Interaction with communities measures and actions are aligned with its values.

Our anti-corruption programmes and procedures are geared towards ensuring the highest ethical standards and apply to all employees, directors, agents, consultants, contractors, and any other person or body associated with the Bank, within all regions, areas, and functions.

All new employees are trained on our anti-corruption policy as part of their induction process, and then annually as part of KBZ’s compliance training. The training is designed to promote a genuine understanding of our anti-corruption policies and compliance with it. The training is focussed on promoting a genuine understanding of our anti-corruption policies and compliance with it.

Our zero-tolerance approach to bribery and corruption is also communicated to all our suppliers, contractors, agents, and other partners at the outset of our relationship, and as needed thereafter. The Bank’s internal control systems and procedures are subject to regular audits to ensure their effectiveness in countering bribery and corruption.

The Legal & Compliance function is responsible for monitoring and ensuring that the bank’s anti-corruption measures and actions are aligned with its values.