Compliance Policy

8/10/2019 Compliance Policy

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COMPLIANCE POLICY

PRESENTATION BY STAFF

COLLEGE, CHENNAI.


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COMPLIANCE LAWS

BANKING REGULATION ACT

RESERVE BANK OF INDIA ACT

FOREIGN EXCHANGEMANAGEMENT ACT

PREVENTION OF MONEY

LAUNDERING ACTCOMPANIES ACT

INCOME TAX ACT. ETC. ETC


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COMPLIANCE GUIDELINES

RBI

SEBI

IRDA


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COMPLIANCE STANDARDS

VOLUNTARY

IBA

BCSBI

FEDAI

FIMMDA


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CONSEQUENCES OF NON

COMPLIANCE Non observance of these guidelines

would result in penal sanctions or

monitory loss or loss to reputationbesides adverse publicity for thedefaulting banks.


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COMPLIANCE RISK

Compliance Risk, which is a riskarising out of non compliance of

laws, rules and standards, wouldhave adverse impact on earningsand capital and erosion ofstakeholders and customers

confidence and relationship withthe regulators, apart from restrictionson future business opportunities.


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COMPLIANCE RISK

Compliance Risk is also referred toas integrity risk since Banks

reputation is linked to the dealingswith adherence to the principles ofintegrity and fair play.


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COMPLIANCE STARTS AT

THE TOP In order to inculcate the best corporate compliance

culture, the Board as well as the Top Management will leadby example by setting the right tone for others to emulate.

The Top Management shall stress the need for effectivecompliance at every available opportunity in order tohighlight its importance.

The Board members and Senior Management shallparticipate in Compliance Committee activities to ensuredirect involvement in the Bankscompliance efforts.


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COMPLIANCE

MANAGEMENT Compliance Management would involve identifying,

evaluating and addressing legal and reputational risks aswell as monitory losses.

This will enable to study the business lines and activities ofour Bank as a whole and help us to identify the activities inone area of the Bank that may affect the legal andreputational risks of other business lines as well as the Bankas a whole.

Identify where the risk is concentrated.


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COMPLIANCE FUNCTIONS

All the functionaries, irrespective ofthe cadre, shall adhere to all the

applicable laws, rules and standardsprescribed for conducting thebusiness effectively.


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The primary focus of compliance functionshall be on the regulatory compliance,statutory compliance, compliance withfair practice codes and other codesprescribed / suggested by self regulatoryorganizations, government policies,banks internal policies, procedures, rules

and guidelines as well as prevention ofmoney laundering and funding of illegalactivities.


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As the Bank is also engaged in otheractivities, such as insurance, mutual

funds, etc, it is bound by thedirections received from otherregulators (IRDA, SEBI, etc). The

compliance function shall attend tosuch directions also.


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Oversee and ensure that functionwise compliance manuals / check

lists are developed in co-ordinationwith various departments andprovided to the concerned staffassociated with the respective

functions to enable them to preventerrors before they occur anddischarge their duties effectively.


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Be a friend, philosopher and guidefor all the business units and shall

guide the business units for effectivecompliance.Give suitable instructions to ensure

that the level of compliance by the

staff at various levels is reckoned atthe time of their performanceappraisal.


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The compliance function and the auditfunction shall be kept separate without anyoverlapping of their functions.


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1. Compliance and other departments inCentral Office2. Field General Manager offices

3. Regional Offices4. Branches + Extension Counters in India5. Currency Chests6. Central Clearing Offices

7. Star Centres8. Depository Participants9. Overseas branches and RepresentativeOffices10. Lead Bank offices

11. Regional Inspectorates12. Staff Training Centres13. Regional Rural Banks


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COMPLIANCE STRUCTURE

Overall responsibility of the Head of theDepartment / branch / office / unit toensure that all the compliancerequirements relating to their functionsare met without any deviations.

It will be necessary in larger units to havea supportive mechanism to help the

functional head in ensuring effectivecompliance, such units shall nominate anofficial as Compliance Officer .


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CENTRAL OFFICE DEPARTMENTS

FILED GENERAL MANAGERS

OFFICE

REGIONAL OFFICES

WILL DESIGNATE A CHIEF / SENIOR

MANAGER TO BE THE COMPLIANCE

OFFICER


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STAFF TRAINING CENTRES:

The Head of Training Centers shall be the

Compliance Officer of the respectivecenters.

In respect of Compliance function, he

shall report directly to the Head ofCompliance under advice to the

Principal, Staff College, Chennai.


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In order to avoid conflict of interest,Compliance Department shall overseethe compliance aspects of InspectionDepartment in Central Office as well asRegional Inspectorates.

Inspectorates. However, it shall be theprimary responsibilities of the heads ofthese offices to ensure complianceaspects relating to their functions.


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COMPLIANCE COMMITTEE

The Operational Risk ManagementCommittee (ORMC) formed under

Operational Risk ManagementPolicy shall also act as ComplianceCommittee to address important

compliance issues relating to theBank.


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COMPLIANCE DEPARTMENT

IDENTIFYING AND ASSESSING ON A PROACTIVEBASIS THE COMPLIANCE RISKS ASSOCIATED WITHTHE BANKS VARIOUS BUSINESS ACTIVITIES

advising the management on theapplicable laws, rules and standards,

coordinating in establishing writtenguidance to staff

assessing the appropriateness of internalprocedures and guidelines

promptly following up any identified

deficiencies


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COMPLIANCE DEPARTMENT

monitoring compliance with the policy byperforming regular and comprehensive compliancerisk assessment and testing,

exercising any specific statutory responsibilities

serving as focal point for the Banksstaff for seekingclarifications /

liaising with relevant external bodies,

formulating necessary formats for reporting


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PROCESS FLOW & PROCEDURE

Compliance is ensured by way of selfassessment in respect of each aspect atperiodical intervals and as an ongoingbasis.

On the basis of self-assessment,necessary certificates shall be submittedto the reporting authorities

the primary ownership of compliance ,data integrity , accuracy and its reportingshall lie with the concerned Compliance

Officer


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COMPLIANCE CERTIFICATES

The formats of certificates and periodicityshall be provided by the Head ofCompliance

The certificates furnished by theCompliance Officers are subject toscrutiny by the Inspectors during theinternal inspection.

The Head of Compliance shall formulatethe methodology and the reportingformats for the Compliance Officers tocarry out the self-assessment and

submission of the certificates.


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IDENTIFICATION, ASSESSMENT,

MONITORING & RISK MANAGEMENT Compliance Department shall, on a pro-active

basis, identify, assess the compliance risksassociated with the business activities, products

and processes and shall document the same.

The Compliance Officers in departments and inRegional Offices shall assist in identifying thecompliance issues relating to their field of

activity and document them.

They shall take steps to mitigate the risks incoordination with Compliance Department.


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UPDATES

Compliance Department shallperiodically circulate the instances

of compliance failures amongst thestaff with proper guidelines toprevent such instances.


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INSPECTION REPORTS

Inspection and audit reports, including

the annual inspection reports, concurrent

audit reports, Long Form Audit Reports, RBIInspection Reports, AFI, RMs Visit reports,

etc are the key feedback mechanism for

the Compliance Department to assess the

level of compliance and the areas ofcompliance failures in the branches /

departments / units.


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CATEGORISATION

Compliance Department shall categorizethe compliance issues as High,Mediumor Lowrisks and also subject such issue to

the Frequency and Severity tests. Thiswould enable the Bank to mobilizeresources and focus on the complianceissues that demand appropriate attention

to mitigate the risks.


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REPORTING

Head of Compliance shall submit amonthly report on the position ofcompliance to the senior management /

CMD. A quarterly report on the complianceposition shall be placed to ACB.

Annual Review on compliance functionshall be prepared and placed before ACB.


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ROLE OF INTERNAL AUDIT /

INSPECTION It shall identify the areas where there is

need for improvements and also point outthe critical failures in compliance function.

The Internal Audit / Inspection ofbranches / departments / offices /units shall cover the veracity of thecompliance certificates submittedby them.


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GUIDANCE, EDUCATION,

TRAINING & COMMUNICATIONAdequate training commensurate

to the requirement of the functions

carried out shall be provided by theStaff College in coordination withCompliance Department.

Compliance Policy

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