COMPLIANCE FUNCTIONS 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 66 rapid-fire Q&A cards.
What is the primary objective of a compliance function in a bank?
The primary objective is to ensure that the bank adheres to all applicable laws, regulations, codes of conduct, and standards of good practice, thereby protecting the bank from legal and reputational risks.
What is the role of the Senior Management in a bank's compliance framework?
Senior management implements compliance policies approved by the Board.
Which RBI circular formally mandated banks to appoint a Chief Compliance Officer (CCO)?
RBI's Guidelines on Compliance Function in Banks (2007, revised subsequently) mandated the appointment of a Chief Compliance Officer to head an independent compliance function reporting to the MD & CEO or Board.
What is meant by 'regulatory compliance calendar' in banking?
A schedule tracking all regulatory reporting and submission deadlines.
What is the meaning of 'compliance risk' in the context of banks?
Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation that a bank may suffer as a result of its failure to comply with laws, regulations, rules, and codes of conduct.
What is a 'breach of compliance' in a bank and how is it handled?
A compliance breach is escalated, investigated, and remediated with root cause analysis.
Who does the Chief Compliance Officer (CCO) typically report to in an Indian bank?
The CCO typically reports directly to the MD & CEO and has a direct reporting line to the Board or its Audit Committee to ensure independence from business lines.
What is the significance of the RBI's Master Direction on KYC for bank compliance?
It mandates customer identification, due diligence, and ongoing transaction monitoring.
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