Abm 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 67 rapid-fire Q&A cards.
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.
Name the foundational RBI Circular on Compliance Function.
DBS.CO.CFMC.BC.No.1/23.04.001/2020-21 dated 11-September-2020, applicable to all Scheduled Commercial Banks except RRBs.
What are the three pillars of CIA Framework in cyber resilience?
Confidentiality (protect sensitive data), Integrity (ensure accuracy/tamper-proof), Availability (maintain system functionality against DDoS/ransomware).
What action did RBI take against HDFC Bank for IT compliance failures?
December 2020: banned sourcing new credit cards and launching digital products. Partially lifted August 2021 after IT compliance strengthening.
What are the minimum eligibility criteria for a Chief Compliance Officer?
Age ≥35 years; 15 years banking/financial services experience; minimum 5 years in Audit/Finance/Compliance/Legal/Risk functions; no disciplinary action in preceding 3 years.
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