RBI issues guidelines for appointment of CCO in banks


FINANCE | Sept 12, 2020:

Reserve Bank of India (RBI) has issued guidelines for appointment of Chief Compliance Officer (CCO) in banks to ensure a uniform approach with regard to compliance and risk management culture across the banking industry.

RBI has said that the CCO must be appointed for a minimum fixed period of three years. The person should be a senior executive of the bank, preferably in the rank of a general manager or an equivalent position or he could also be recruited from outside.

Further, there shall not be any responsibility which brings elements of conflict of interest, especially the role relating to business. He must not be a member of any committee which brings his/her role in the conflict with responsibility as member of the committee, including any committee dealing with purchases/sanctions.

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"The CCO and compliance function shall have the authority to communicate with any staff member and have access to all records or files that are necessary to enable him/her to carry out entrusted responsibilities in respect of compliance issues. This authority should flow from the compliance policy of the bank," read a circular issued by RBI on September 11.

As per the circular, no vigilance case or adverse observation from the RBI should be pending against the candidate identified for appointment as the CCO.

Selection of the candidate for the post of the CCO should be done on the basis of a well-defined selection process and recommendations made by the senior executive-level selection committee constituted by the board for the purpose.