Updated: September 12, 2020 11:27:45 am
The Reserve Bank of India (RBI) on Friday directed banks to set up an independent corporate compliance function headed by a designated chief compliance officer (CCO) selected through a suitable process with an appropriate ‘fit and proper’ selection criteria to effectively manage compliance risk.
It said the CCO should be appointed for a fixed tenure of not less than three years. The audit committee of the board (ACB) and managing director and CEO of the bank should factor this requirement while appointing CCO. “The CCO may be transferred or removed before completion of the tenure only in exceptional circumstances with the explicit prior approval of the board after following a well-defined and transparent internal administrative procedure,” the RBI said in a notification to the commercial banks.
The CCO should be a senior executive of the bank, preferably in the rank of a general manager or an equivalent position (not below two levels from the CEO). The CCO could also be recruited from market, the central bank added.
According to the RBI, the bank should also develop and maintain a quality assurance and improvement programme covering all aspects of the compliance function.
The quality assurance and improvement programme shall be subject to independent external review periodically (at least once in three years). “A prior intimation to the Department of Supervision, RBI, should be provided before appointment, premature transfer or removal of the CCO,” the RBI said.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.