Streamlining of Internal Compliance monitoring function – leveraging use of technology: RBI
RBI had recently carried out an assessment in select Regulated Entity (RE) of the prevailing system in place for internal monitoring of compliance with regulatory instructions and the extent of usage of technological solutions to support this function. The central bank noted that REs has adopted varying levels of automation to support the Internal Compliance monitoring function, ranging from use of macro-enabled spreadsheets to workflow-based software solutions. The review brought out that automation of the compliance monitoring process in REs remains a work in progress with various aspects of this function being carried out with significant manual intervention. Hence, RBI has come out with directions to enhance the effectiveness of this function. The directions are issued to Scheduled Commercial Banks, Small Finance Banks, Payments Banks, Primary (Urban) Co-operative Banks, Upper and Middle-Layer Non-Banking Financial Companies, All India Financial Institutions (EXIM Bank, NABARD, NaBFID, NHB and SIDBI) among others.
