India CEOs of foreign banks will be now responsible for regulatory and statutory compliance- Reserve Bank of India

In an effort to tighten regulatory oversight on foreign banks operating in India, the Reserve Bank of India has decided that chief executive officers (CEOs) of foreign banks would be responsible for regulatory and statutory compliance in respect of all operations in India.

Reserve Bank of India has observed that Indian operations of foreign banks functioning in India as branches of the parent banks generally do not have a separate Audit Committee vested with the responsibility of examining and reviewing inspection/audit reports for their compliance.



Most foreign banks in India operate on the ‘line functioning’ system. Under this system Business Heads/Units report directly and are being answerable to their ‘Functional Heads’ located overseas and not to the Chief Executive Officer (CEO) of Indian operations.

In this context, RBI has notified on that for all foreign banks operating in India, the Chief Executive Officer would be responsible for effective oversight of regulatory and statutory compliance as also the audit process and the compliance thereof in respect of all operations in India.



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