 "Audit Panel of board at UCBs must improve oversight, risk management: RBI")
The Reserve Bank of India today said the audit panel of the board at urban cooperative banks (UCBs) needs to improve overall oversight and functioning of the regulated entity. The financial sector regulator also flagged the importance of the internal audit function in early detection of irregularities and the need for leveraging technology.
M Rajeshwar Rao, Deputy Governor of the RBI, in his address to directors and chief executives of select UCBs in Lucknow, highlighted the critical role played by urban co-op banks in providing banking services, especially to the unbanked. While stressing the need for effective governance, he also emphasised the importance of a robust and comprehensive risk management framework in ensuring sound banking operations.
As part of the Reserve Bank’s continuing engagement with the Directors of UCBs, the RBI today held a Conference for the Northern Zone in the capital of Uttar Pradesh. The theme of the Conference was ‘Governance in UCBs: Risk Management, Compliance, and Audit’.
On April 5, 2024, Shaktikanta Das, Governor of the RBI, in his statement on monetary policy said banks, NBFCs, and other financial entities must continue to give the highest priority to the quality of governance and adherence to regulatory guidelines. Financial sector players, by and large, operate with public money – be it from depositors in banks and select NBFCs or investors in bonds and other financial instruments. They should always be mindful of this. The Reserve Bank will continue to constructively engage with financial entities in this regard.
Rohit Jain, Executive Director of the RBI, in his special address, underscored the importance of a strong and independent assurance function and the role of the Audit Committee of the Board in improving overall oversight and functioning of the bank. He also elaborated on the areas requiring improvement and the need for further strengthening cybersecurity and operational resilience in the UCBs.
The Conference included sessions on expectations from UCBs in their oversight and assurance function and in building resilient risk management systems. It concluded with an open house interactive session between the participants and senior officers of the RBI.