Compliance Function and Role of Chief ComplianceOfficer in NBFCs
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 purpose of the compliance function in an NBFC?
The compliance function ensures that an NBFC adheres to all applicable laws, regulations, codes of conduct, and internal policies to prevent legal and regulatory risk.
What is the tenure typically prescribed for a CCO in an NBFC?
Minimum three years to ensure continuity and independence.
Who is responsible for heading the compliance function in a large NBFC?
The Chief Compliance Officer (CCO) is responsible for heading the compliance function and ensuring the NBFC operates within the regulatory framework prescribed by RBI.
Which RBI framework mandates a dedicated CCO for upper-layer NBFCs?
Scale-Based Regulation (SBR) framework mandates a dedicated CCO.
What is the minimum qualification typically expected for a CCO in an NBFC?
The CCO is expected to be a senior official with adequate knowledge of regulatory requirements, risk management, and banking operations, often at the General Manager level or equivalent.
What is the key principle governing the independence of the CCO in an NBFC?
CCO must be independent of business lines and free from conflicts.
Can the CCO of an NBFC simultaneously hold a position in the business or revenue-generating department?
No, the CCO must be independent of business functions to avoid conflicts of interest; the role requires functional independence from profit-generating activities.
What is the second line of defence in an NBFC's compliance risk framework?
The compliance function itself constitutes the second line of defence.
Video classes for this chapter
Compliance Function and Role of Chief ComplianceOfficer in NBFCs Part 1
Compliance Function and Role of Chief ComplianceOfficer in NBFCs Part 2
Compliance Function and Role of Chief ComplianceOfficer in NBFCs Part 1
Compliance Function and Role of Chief ComplianceOfficer in NBFCs Part 2
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