The Reserve Bank of India (RBI) advised banks to have a forward-looking perspective of risks and initiate pre-emptive measures to mitigate risks. The central bank also asserted that supervision is effective when supported by effective assurance functions.
Deputy governors M Rajeshwar Rao and Swaminathan J addressed the Heads of Assurance Functions (i.e., Chief Compliance Officers, Chief Risk Officers and Heads of Internal Audit) of all Scheduled Commercial Banks (SCBs) in a conference in Mumbai on January 10. The theme of the Conference was ‘Resilient Financial System – Role of Effective Assurance Functions’.
“In his keynote address, deputy governor M Rajeshwar Rao outlined the regulatory expectations from the assurance functions and urged them to have a forward-looking perspective of risks and initiate pre-emptive measures to mitigate risks,” RBI said in a press release.
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Deputy Governor Swaminathan J outlined the Reserve Bank’s supervisory expectations and asserted that supervision is effective when supported by effective assurance functions.
“This is part of the series of supervisory engagements kicked-off by the Governor in May 2023 with the Conference for the Directors of Public and Private Sector Banks on the theme of ‘Governance in Banks – Driving Sustainable Growth and Stability,” the RBI said.
DG Rao further exhorted banks to work in collaboration with each other and avoid silos within the banks to provide a holistic assurance to stakeholders. DG Swaminathan urged banks to play the role of conscience keepers of their institutions, maintain strong independence and a proactive alert stance to identify and mitigate emerging risks to ensure the stability of the financial institutions and the resilience of the broader financial system.
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