Page 54 - Banking Finance July 2021

RBI CIRCULAR

Regional Office of Department of Supervision, Management Committee (of the Board) by March 31,
Reserve Bank of India. 2022. The Board shall decide the membership, scope
of work and frequency of meeting of the Risk
c. The Board shall put in place adequate policies to
safeguard the independence of the CRO. The CRO Management Committee.
shall have direct reporting lines to MD/CEO or 5. UCBs meeting the prescribed criteria as on March 31,
Board or Risk Management Committee of Board 2021 shall appoint / designate a CRO by March 31,
(RMC). In case the CRO reports to the MD/CEO, 2022. UCBs which may fulfill the criteria at the end of
the Board or the RMC shall meet the CRO, without the current or subsequent financial years shall appoint
the presence of the MD & CEO, at least on a / designate a CRO within a period of six months from
quarterly basis. the end of the financial year concerned.
d. The CRO shall not have any reporting relationship 6. A copy of this circular should be placed before the
with the business verticals and shall not be given Board of Directors of the bank at its next meeting.
any business targets. Further, there shall not be
any ‘dual hatting’ i.e. the CRO shall not be given (Manoranjan Mishra)
any other responsibility such as CEO, COO, CFO, Chief General Manager
Chief of the Internal Audit, etc.
e. In UCBs that follow committee approach in credit Liberalised Remittance Scheme for
sanction process for high value proposals, if the Resident Individuals – Reporting
CRO is one of the decision makers in the credit
sanction process, he shall have voting power and RBI/2021-22/56
all members who are part of the credit sanction June 17, 2021
process, shall individually and severally be liable for
all the aspects, including risk perspective related 1. Attention of all Authorised Dealer Category - I (AD
Category - I) banks is invited to A. P. (DIR Series) Circular
to the credit proposal. If the CRO is not a part of
the credit sanction process, his role will be limited No. 106 dated May 23, 2013, in terms of which, AD
Category -I banks were required to upload the data in
to that of an adviser.
respect of number of applications received and the total
f. In UCBs which do not follow committee approach amount remitted under the Liberalised Remittance
for sanction of high value credits, the CRO can only Scheme (the Scheme) on Online Return Filing System
be an adviser in the sanction process and shall not (ORFS).
have any sanctioning power.
2. It has now been decided to collect this information
g. All credit products shall be vetted by the CRO from through XBRL system instead of the ORFS.
the angle of inherent and control risks.
3. Accordingly, AD Category – I banks shall upload the
3. The CRO shall support the Board in establishing an requisite information on XBRL system on or before the
integrated risk management system, capable of fifth of the succeeding month from July 01, 2021
identifying, measuring and monitoring all types of risks onwards. The XBRL site can be accessed through URL
on an ongoing basis. This will include developing the https://xbrl.rbi.org.in/orfsxbrl. User ids are being issued
organisational risk appetite and a framework that will separately. In case no data is to be furnished, AD banks
translate the Board’s strategy into clearly laid down shall upload ‘nil’ figures.
monitorable risk limits at the aggregate and at granular
levels. The CRO shall also be involved in actual 4. The directions contained in this circular have been
monitoring and mitigation of risks. issued under Sections 10(4) and 11(1) of the Foreign
Exchange Management Act, 1999 (42 of 1999) and are
4. It is emphasized that the primary responsibility of risk without prejudice to permissions / approvals, if any,
management lies with the Board. In order to focus the required under any other law.
required level of attention on various aspects of risk
management, UCBs meeting the eligibility criteria (R. S. Amar)
specified in para 1 above are advised to set up a Risk Chief General Manager

54 | 2021 | JULY | BANKING FINANCE