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Abm Compliance Functions in Banks
Define Compliance Function in banking.
Independent function identifying, assessing, monitoring and reporting compliance risk to Board, ensuring operations align with laws, regulations, RBI directives and internal policies.
Why did RBI tighten compliance framework post-2020?
Landmark failures: Yes Bank, PNB-Nirav Modi (LoUs), ICICI-Videocon. RBI mandated independent, board-supervised Compliance Function led by dedicated CCO.
What legal act governs suspicious transaction reporting in banks?
Prevention of Money Laundering Act (PMLA), 2002. Banks must report STRs/CTRs to FIU-IND under Sections 12 and 13.
What was the PNB-Nirav Modi scam's compliance failure?
Fraudulent Letters of Undertaking (LoUs) issued via SWIFT without CBS entries. RBI subsequently mandated SWIFT-CBS integration.
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