Compliance Function in Banks
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What does RBI's 'Compliance Function in Banks' guidelines (September 2020) mandate as the organisational arrangement for the compliance function?
An independent compliance function headed by a Chief Compliance Officer (CCO) reporting directly to the MD&CEO or the Board Audit Committee, with a minimum assured tenure of 3 years and independence from business lines.
As per Basel Committee (2005), compliance risk arises from failure to comply with which categories of standards?
Laws, regulations, codes of conduct, and standards of good practice (including self-regulatory codes)
Who does the Chief Compliance Officer (CCO) report to as per RBI's 2020 compliance guidelines?
The CCO reports directly to the MD&CEO or the Board Audit Committee, ensuring independence and direct access to senior management.
What are the three consequences of compliance risk as defined by the Basel Committee?
Legal or regulatory sanctions, material financial loss, and reputational loss
What is the minimum assured tenure prescribed for the Chief Compliance Officer (CCO) under RBI's compliance guidelines?
The CCO must have an assured tenure of at least 3 years to ensure stability and independence of the compliance function.
In which year did RBI issue its revised guidelines on 'Compliance Function in Banks'?
September 2020 (RBI circular dated 11 September 2020)
Why must the compliance function be independent from business lines in banks as per RBI guidelines?
Independence from business lines ensures that the CCO and compliance staff can objectively assess regulatory adherence without conflict of interest or commercial pressure.
Which entity's approval is required before a CCO can be prematurely removed from office as per RBI's 2020 compliance guidelines?
Reserve Bank of India (RBI)
More chapters in Module D - Compliance in Banks & Corporate Governance
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