The Reserve Bank of India (RBI) recently held a conference in Mumbai for the Heads of Assurance Functions (i.e. Chief Compliance Officers (COOs), Chief Risk Officers (CROs) and Heads – Internal Audit of select Urban Cooperative Banks (UCBs).
The conference was attended by nearly 300 participants representing over 120 UCBs. The event, under the theme ‘Resilient Financial System – Role of Effective Assurance Functions,’ was a part of the series of supervisory engagements the RBI has been organising over the last one year with its Regulated Entities (REs) series, Conference for the Heads of Assurance Functions of Scheduled Commercial Banks and Non-Banking Financial Companies (NBFCs) were held earlier.
M Rajeshwar Rao and Swaminathan J, Deputy Governors, RBI, addressed the participants.
S C Murmu, Saurav Sinha, Rohit Jain and Manoranjan Mishra, Executive Directors, along with other senior officials representing regulation, supervision and enforcement departments of the RBI also participated in the conference.
Rao, in his keynote address, delineated the importance of the three assurance functions and the need for ensuring their efficacy and independence.
Highlighting the rising competition from other players in the financial system, he exhorted the CROs to assist the management in monitoring and containing risks in banks’ balance sheets. For the compliance function, he emphasised on adopting a forward-looking and anticipatory approach.
He also encouraged the internal audit function to establish a clear communication channel with other functions within the organisation to enable proactive reporting of significant findings and facilitating/ensuring necessary corrective action.
Swaminathan, in his address, outlined the RBI’s supervisory expectations and asserted that effective assurance functions play a crucial role in safeguarding the financial soundness of banks, as well as upholding the trust of their customers and other stakeholders. He stressed upon the need to identify and manage the emerging risks as well as the changing dynamics of the traditional risks, for which the internal control systems should be continuously updated and strengthened. He emphasised that the RBI would continue to follow its zero-tolerance policy towards poor governance practices, if any, identified in the UCBs in line with its overall approach to the financial sector.
The conference included technical sessions on the three assurance functions (risk management, compliance and internal audit) by the Chief General Managers (CGMs) of the RBI.
