Deputy governor MK Jain, who is in charge of banking and non-banking supervision departments, said that the regulator has imposed penalties of Rs 122.9 crore on 70 occasions between January and July this year.
The compliance culture in Indian banks is far from satisfactory and some of the big losses suffered on account of frauds could have been avoided if it was in place, the Reserve Bank of India's (RBI) deputy governor MK Jain said on August 20.
Jain, who is in charge of banking and non-banking supervision departments, said that the regulator has imposed penalties of Rs 122.9 crore on 70 occasions between January and July this year.
“Subsequent to the financial crisis, the focus on compliance has gone up significantly, especially in the area of Know Your Customer, Anti-money Laundering, suitability and appropriateness of banking product offered to specific customer. In this context, despite benefits offered, the compliance culture of Indian banks is far from satisfactory,” Jain said.
A number of scams have left Indian lenders with a pile of losses in recent years. Jain said that some of these big losses could have been avoided if good compliance culture was ingrained in the bank.
“However, fear of fines and penalties will not be enough to keep up with the evolving nature of regulations, but a financial management system with built in control which makes compliance an everyday practice that enable organisations to operate at greater efficiency,” Jain said.
A good compliance culture can lower the organisational and individual risks, bring more confidence among employees and improve transparency, he added.The Great Diwali Discount!
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