Page 59 - BANKING FINANCE MARCH 2024

RBI CIRCULAR

disbursement from April 1, 2023 shall be reckoned Streamlining of Internal Compliance
for this purpose.
monitoring function – leveraging use of
4. All other provisions of the aforesaid circulars shall re-
main unchanged. technology
January 31, 2024
Guidelines on import of gold by Tariff
Rate Quota (TRQ) holders under the In- 1. RBI had recently carried out an assessment in select
Supervised Entities (SEs) of the prevailing system in
dia-UAE CEPA as notified by–The Interna- place for internal monitoring of compliance with regu-
tional Financial Services Centres Author- latory instructions and the extent of usage of techno-
logical solutions to support this function. It is seen that
ity (IFSCA) SEs have adopted varying levels of automation to sup-
January 31, 2024 port this function, ranging from use of macro-enabled
spreadsheets to workflow-based software solutions. The
1. Attention of Authorised Dealer Category – I (AD Cat- review brought out that automation of the compliance
egory – I) banks is invited to A.P. (DIR Series) Circular monitoring process in SEs remains a work in progress
No.04 dated May 25, 2022, in terms of which AD Cat- with various aspects of this function being carried out
egory-I banks have been permitted to remit advance with significant manual intervention. There is, thus, a
payment on behalf of Qualified Jewellers as notified by need to implement comprehensive, integrated, enter-
International Financial Services Centres Authority prise-wide and workflow-based solutions/ tools to en-
(IFSCA) for eleven days for import of gold through In- hance the effectiveness of this function.
dia International Bullion Exchange IFSC Ltd (IIBX).
2. Such a solution/ tool should, among other things, pro-
2. Further, attention of AD Category-I banks is invited to vide for effective communication and collaboration
Notification No.44/2023 dated November 20, 2023 is- among all the stakeholders (by bringing business, com-
sued by DGFT, in terms of which, valid Tariff Rate Quota pliance and IT teams, Senior Management, etc. on one
(TRQ) holders under the India-United Arab Emirates platform); have processes for identifying, assessing,
(UAE) Comprehensive Economic Partnership Agreement monitoring and managing compliance requirements;
(CEPA) as notified by the IFSCA have been permitted to escalate issues of non-compliance, if any; require re-
import gold under specific ITC(HS) codes through IIBX cording approval of competent authority for devia-
against the Tariff Rate Quota (TRQ). tions/ delay in compliance submission; and have a uni-
3. Accordingly, it has been decided that subject to the di- fied dashboard view to Senior Management on com-
rections as mentioned in A.P. (DIR Series) Circular No.04 pliance position of the Regulated Entity (RE) as a whole.
dated May 25, 2022, AD Category-I banks may allow The RE, based on the size and complexity of its opera-
valid TRQ holders under the India-UAE CEPA to remit tions, may decide on the tools/ mechanism it would
advance payment for eleven days for import of gold prefer to deploy for monitoring of compliance and de-
through IIBX against the TRQ. velopment of the unified dashboard.

4. AD Category-I banks may bring the contents of this cir- 3. Accordingly, REs are advised to carry out a comprehen-
cular to the notice of their constituents and customers sive review of the existing internal compliance track-
concerned. ing and monitoring processes and institute necessary
changes to existing systems or implement new systems
5. The directions contained in this Circular have been is-
latest by June 30, 2024.
sued under Section 10(4) and Section 11(1) of the For-
eign Exchange Management Act (FEMA), 1999 (42 of 4. An appropriate monitoring mechanism may also be put
1999) and are without prejudice to permissions/approv- in place to review the progress of its implementation.
als, if any, required under any other law. 5. Please acknowledge receipt.

54 | 2024 | MARCH | BANKING FINANCE