Compliance risk is the risk of legal or regulatory sanctions, material financial loss or loss of reputation. UCB may suffer as a result of its failure to comply with the laws, regulations, rules and codes of conduct applicable to its activities, reserve Bank of India Said in a circular.
As part of the overall framework of Corporate Governance RBI stated, compliance function plays an important role.
Therefore, keeping in view the principles of proportionality, it has been decided to introduce certain principles, standards and procedures for compliance work in UCBs.
“The compliance function will ensure strict adherence to all statutory and regulatory requirements for UCBs, including standards of conduct, managing conflicts of interest, treating customers fairly and ensuring the suitability of customer service,” it said.
The Board-approved compliance policy should clearly state its compliance philosophy, requirements on compliance culture, the structure and role of compliance work, and the role of the Chief Compliance Officer, the UCB said.CCO,
The CCO should be appointed for a minimum fixed tenure of at least 3 years.
However, in exceptional cases, the Board/ Board Committee may relax the minimum tenure of one year, provided proper succession planning is put in place, the circular said.
The circular states that the policy will be reviewed at least once a year. PTI nkd nkd ABM ABM