RBI asks banks' audit heads to take pre-emptive steps to mitigate risks

Reserve Bank of India’s Deputy Governor M Rajeshwar Rao has asked heads of assurance functions – compliance, risk, and internal audit – of banks to initiate pre-emptive measures to mitigate risks.

The Assurance Functions should work in collaboration with each other and avoid silos within the banks to provide a holistic assurance to stakeholders, said M Rajeshwar Rao, Deputy Governor, RBI, in his keynote address at the Conference of Heads of Assurance Functions. The theme of the Conference was ‘Resilient Financial System – Role of Effective Assurance Functions’. The conference was held on January 12, 2024, in Mumbai.

RBI today in a statement said this conference was part of the series of supervisory engagements kicked-off by the Governor in May 2023 with the Conference for the Directors of Public and Private Sector Banks on the theme of ‘Governance in Banks – Driving Sustainable Growth and Stability’.

Swaminathan J, Deputy Governor, RBI outlined the Reserve Bank’s supervisory expectations and asserted that supervision is effective when supported by effective Assurance Functions.

He urged the Assurance Functions to play the role of conscience keepers of their institutions. These functions should maintain strong independence and a proactive alert stance to identify and mitigate emerging risks for ensuring the stability of the financial institutions and the resilience of the broader financial system.

The Conference included technical sessions on the three Assurance Functions by the Chief General Managers of the Reserve Bank and Presentations on Best Practices by Heads of Assurance Functions of select Scheduled Commercial Banks.

The Conference concluded with an open house interaction of the participants with the Executive Directors of the Reserve Bank.