 "rbi reserve bank of india")
Reserve Bank of India (RBI) Deputy Governor Swaminathan J on Wednesday asked the Non-Banking Financial Companies (NBFCs) to strengthen their governance and assurance functions along with maintaining a constant vigil against potential risks and vulnerabilities, during an interaction.
The conference was held in Mumbai for the Heads of Assurance Functions (i.e., Chief Compliance Officers, Chief Risk Officers, and Heads of Internal Audit) of select NBFCs. The conference was attended by about 280 participants representing more than 100 NBFCs where Deputy Governors M Rajeshwar Rao and Swaminathan J addressed the participants.
In the conference, Swaminathan said that NBFCs are highly exposed to a slew of risks which can affect their financial and operational status like cybersecurity and other risks. He also spoke about the RBI’s expectations on assurance functions.
“He inter alia highlighted cybersecurity and operational risks; credit risks from rule-based credit models; and liquidity risks. He conveyed the Reserve Bank’s supervisory expectations from the regulated entities to ensure independent and meaningful assurance functions as well as fair and transparent conduct towards customers,” an RBI press release said.
Deputy Governor M Rajeshwar Rao also highlighted the role of assurance functions in certain contextual issues such as third-party dependencies and operational risks; customer conduct; and transparency in operations.
Also Read
Further, Rao elaborated on the transformative journey and progress witnessed in the Indian financial landscape, and the contribution of the NBFC sector to it.
Apart from the Deputy Governors, Executive Directors S C Murmu, Saurav Sinha, J K Dash, and Rohit Jain along with other senior officials representing the Regulation and Supervision departments of the RBI also participated in the conference.
The conference included technical sessions on the three Assurance Functions by the Chief General Managers of the RBI. Presentations on best practices and challenges faced were also made by the Heads of Assurance Functions of these select NBFCs.
The event, with the theme ‘Resilient Financial System – Role of Effective Assurance Functions’, is a part of the series of supervisory engagements the Reserve Bank has been organising over the last year with its Regulated Entities.
As part of this series, the conference for the Heads of Assurance Functions of Scheduled Commercial Banks was last held in January 2024.
