RBI released guidelines on Compliance functions in banks and the Role of Chief Compliance Officer

New Delhi: The Reserve Bank of India released the guidelines on compliance functions in banks and the Role of Chief Compliance Officer (CCO) on Friday.

 

Banks are required, inter-alia, to have an effective compliance culture, independent corporate compliance function, and a strong compliance risk management program at the bank and group level. Such an independent compliance function is required to be headed by a designated Chief Compliance Officer (CCO) selected through a suitable process with an appropriate ‘fit and proper’ evaluation/selection criteria to manage compliance risk effectively. RBI mentions in Release. 

 

According to the RBI, the CCO shall be appointed for a minimum fixed tenure of not less than 3 years. The Audit Committee of the Board (ACB) / Managing Director (MD) & CEO should factor this requirement while appointing CCO and shall be a senior executive of the bank, preferably in the rank of a General Manager or an equivalent position. 

 

However, the CCO may be transferred/removed before completion of the tenure only in exceptional circumstances with the approval of the Board and internal administrative procedure.The age limit should not be not more than 55 years and overall experience of at least 15 years in the banking or financial services, and the 5 years of experience in the Audit / Finance / Compliance / Legal / Risk Management functions. 

 

There should be good hands in the understanding of industry and risk management, knowledge of regulations, legal framework, and sensitivity to supervisors’ expectations. Further details are mentioned on the official website of the Reserve Bank of India. 

 

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