RBI holds conference for heads of assurance functions at Urban Co-operative Banks

According to RBI press release, this conference, attended by about 300 participants representing more than 120 UCBs, focused on enhancing the resilience of the financial system through effective assurance functions.

With the theme 'Resilient Financial System - Role of Effective Assurance Functions,' the event is part of a series of supervisory engagements the RBI has organized over the last year with its regulated entities.

Similar conferences for Heads of Assurance Functions of Scheduled Commercial Banks and Non-Banking Financial Companies were held earlier.

Deputy Governors M Rajeshwar Rao and Swaminathan J addressed the participants, along with Executive Directors S C Murmu, Saurav Sinha, Rohit Jain, and Manoranjan Mishra, along with other senior officials representing the Regulation, Supervision, and Enforcement departments of the RBI.

In his keynote speech, Rao emphasised the significance of the three Assurance Functions and stressed the importance of ensuring their effectiveness and independence.

Recognising the growing competition in the financial sector, he urged Chief Risk Officers to help management monitor and mitigating risks on banks' balance sheets.

Regarding the compliance function, he emphasised the need for a forward-looking and anticipatory approach. Additionally, he encouraged the Internal Audit Function to establish clear communication channels within the organisation to facilitate proactive reporting of significant findings and ensure necessary corrective action.

In his speech, Swaminathan outlined the Reserve Bank's supervisory expectations and emphasized the crucial role that effective assurance functions play in maintaining the financial stability of banks and preserving trust among customers and stakeholders.

He highlighted the importance of identifying and managing emerging risks, as well as adapting to the changing dynamics of traditional risks. He stressed the need for continuous updates and the strengthening of internal control systems to address these challenges.

Additionally, he reiterated the Reserve Bank's zero-tolerance policy towards poor governance practices identified in UCBs, aligning with its overall approach to the financial sector.

The conference included technical sessions on the three Assurance Functions--Risk Management, Compliance, and Internal Audit--conducted by the Chief General Managers of the RBI.

Presentations on best practices and challenges were also made by the heads of assurance functions of select UCBs.

The conference concluded with an open house interaction, allowing participants to engage directly with the RBI's Executive Directors and the Chief General Manager in Charge of the Department of Supervision.

This session provided an opportunity for further discussion on issues and insights, fostering collaboration to strengthen UCBs' assurance functions. (ANI)