Compliance Policy of the Bank

Transcription

1 Annexure 1.1 Compliance Policy of the Bank 1. Introduction 1.1 Reserve Bank of India vide Circular No. DBS.CO.PP.BC.06/ / dated has issued comprehensive final guidelines on Compliance and Compliance Function in Banks. RBI has advised that each bank will formulate a Compliance Function for their Bank and put in place a Compliance Policy to manage compliance risk. In accordance with these guidelines, this Compliance Policy aims at establishing a robust Compliance System in our Bank. 2. Compliance Risk 2.1 The Basel Committee on Banking Supervision (BCBS) has published a high level paper on Compliance Risk and the Compliance Function in Banks in April 2005 prescribing certain principles aimed at strengthening Compliance structure in Banks. The paper defines Compliance Risk as the risk of legal or regulatory sanctions, material financial loss or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to its banking activities. 3. Objectives of the Compliance Function The Compliance Function is For monitoring strict observance of all statutory provisions contained in various legislations such as Banking Regulation Act, Reserve Bank of India Act, Foreign Exchange Management Act and Prevention of Money Laundering Act. To monitor observance of other regulatory guidelines issued from time to time To monitor observance of standards and codes prescribed by BCSBI, IBA, FEDAI, FIMMDA, etc. To monitor observance of bank s internal policies and fair practices code. Compliance function shall also cover matters such as observing proper standards of market conduct, managing conflicts of interest, treating customers fairly and ensuring the suitability of customer advice and may extend to tax laws that are relevant to the structuring of banking products or customer advice. The Compliance Function to: 3.1 `Assist the Top Management of the bank in managing effectively the compliance risks faced by the Bank. A-1

2 3.2 Identify statutory and regulatory compliance requirements and other compliance obligations arising out of the fair practices codes and other codes prescribed by self-regulatory organizations, IBA, FEDAI, BCSBI, FIMMDA, IRDA, SEBI, etc., government policies, prevention of money laundering and funding of illegal activities and the Bank s internal policies. 3.3 Define the role and structure of the compliance Department, composition of its staff and their specific responsibilities at HO, controlling offices and branches 3.4 Provide a methodology to proactively identify, document, assess the compliance risks associated with bank s business activities and products. 3.5 Provide a mechanism to ensure that regulatory guidelines/instructions are promptly issued/disseminated within the organization and to monitor Compliance with the regulatory guidelines / instructions. 3.6 Provide procedures to integrate the Compliance risk management framework with the Bank s operational risk management framework. 3.7 Create group / enterprise wide compliance programme covering its Subsidiaries, RRBs etc. 3.8 Provide procedures that compliance responsibilities specific to the foreign branches of the Bank, viz. adherence to applicable laws and regulations of the Host countries are duly carried out. 4. Types of Compliance 4.1 The compliance functions in the Bank shall be divided into three broad Categories Statutory Compliance The Bank has to ensure strict observance of all statutory provisions contained in various legislations such as Banking Regulation Act, Reserve Bank of India Act, Foreign Exchange Management Act, Prevention of Money Laundering Act, etc Regulatory Compliance The bank has to ensure strict observance of other regulatory guidelines issued from time to time by the regulators such as RBI, SEBI, IRDA, etc. Such compliances shall be termed as Regulatory compliance Other Compliances In addition to the statutory and regulatory compliance, the Bank has to comply with standards and codes prescribed by IBA, FEDAI, FIMMDA, etc. and also bank s internal policies and fair practices code. Such compliances are termed as other compliances. A-2

3 5. Organizational Structure The following shall be the Organisational Structure for the Compliance Function Organisational Structure Board of Directors Audit Committee of the Board Executive Director/Chairman and Managing Director Head Office, Compliance Department Compliance Officers at Functional Departments at Head Office Compliance Officers at Circle Offices Compliance Officers at Foreign Branches, Subsidiaries and RRBs Compliance Officers at Domestic Branches 5.1 The Functions of the Various Tiers in the Organizational Structure are detailed below: Board / ACB The Bank recognizes that the compliance starts at the top. In order to inculcate the best corporate compliance culture that emphasizes standards of honesty and integrity, the Board as well as the Top Management will lead by example by setting the right tone for others to emulate The Compliance Policy shall be approved by the Board. The implementation of the Policy and Compliance Function shall be overseen by the Board. The Audit Committee of the Board (ACB) shall A-3

4 review the Compliance Reports on a quarterly basis. A detailed Annual Review shall be placed before the Board. 5.2 CO / Compliance Department The Compliance Department at Head Office shall be responsible for implementing the Policy. The Compliance Department at Head Office will be headed by an executive not less than in the rank of DGM designated as Chief Compliance Officer with overall responsibility for coordinating the identification and management of the bank s compliance risk and supervising the activities of other compliance function staff. He shall not be removed / transferred without the specific approval of the Board. The Bank shall keep informed RBI as well as the Board and the Audit Committee of the Board of the name of the Chief Compliance Officer as also any change thereof as and when it takes place with reasons for change The staff of HO/Compliance Department shall have specialized knowledge of Law, Accountancy and Information Technology and also adequate practical experience in various business lines and Audit/Inspection functions to enable to carry out their duties effectively. Besides they should be provided with suitable training to update them in new products and services as well as in areas of Corporate Governance, Risk Management, Supervisory Practices, etc To start with, HO/Compliance Department will be provided with a Chief Manager assisted by a team of Officers having exposure in Credit/Credit related matters, Legal issues and documentation, Treasury, Information Technology, Risk Management and Banking Operations HO/Compliance Department should submit quarterly report to the ACB and Annual Review to Board to enable the Board members to make an informed judgment on whether the bank is managing its compliance risk effectively HO/Compliance Department shall report promptly to the Board of Directors or the ACB on any material Compliance failure (eg. Failure that may attract a significant risk of legal or regulatory sanctions, material financial loss or loss of reputation) 5.3 Functional Departments at Corporate Office All Heads of Departments at Head Office (DGM s / AGM s / CM s) will be nominated by the General Managers as Compliance Officers for managing Compliance risk pertaining to their functional area Each Department Head should identify an officer, for managing the information system on Compliance Risk and assist the Compliance Officer in coordinating with the CO/Compliance Department. The individual departments shall maintain a comprehensive data of rules and regulations derived from various sources. Apart from the data on Regulatory and Statutory compliances, data on internal policies, rules, guidelines etc. shall be maintained by each A-4

5 functional department. The functional department shall ensure that all regulatory and statutory guidelines are disseminated to field level functionaries for compliance. The functional departments shall also update and circulate all the rules, standards and laws relating to their functional area from time to time Functional Department shall ensure compliances from Zonal Offices / Branches in the respective functional area. Reporting Formats shall be designed in coordination with CO/ Compliance Department for data collection on quarterly basis from Zones/Branches to ensure not only negative assurance based on breaches but also positive assurance based on the extent of compliance to enable them to submit consolidated report to the Chief Compliance Officer on a quarterly basis Each Functional Department shall prepare Function wise compliance manuals as part of the existing operating manuals consisting of compliance issues / checklists duly approved by the Chief Compliance Officer. The same will be provided to the staff associated with the respective functions and such manuals shall be updated at periodic intervals. These compliance checklists will serve as the basis for the quarterly compliance reports to be submitted by Branches / Zones Each Functional Department shall submit a monthly compliance certificate to HO/ Compliance Department Each Functional Department shall submit a detailed quarterly compliance report to CO/Compliance Department relating to their function General Managers in charge of various functions would ensure that appropriate remedial or disciplinary action is taken if breaches are identified Each Functional Department should with the assistance of the Compliance Department, once a year, identify and assess the main compliance risks facing the Bank in their respective functional area and formulate the plans to manage them, to enable CO/ Compliance Department to place Annual Review to Board. 5.4 Field Level Zonal Offices Zonal Offices and Branch Offices play a crucial role in Compliance Function as the products of the bank are delivered and serviced through them. In Zonal Offices the role of Compliance Officers will be performed by the second in command in the Zonal Office. The name of the Compliance Officer shall be reported to HO/Compliance Department. The departmental heads in Zonal Office are equally responsible for managing the Compliance Function pertaining to their functional area and will assist the Compliance Officer by providing inputs relating to their functions The Compliance Officer in the Zonal Office, shall appraise the Zonal Manager the level of Compliance and failures, if any so that the Zonal Manager shall take prompt / corrective action. A-5

6 5.4.3 Compliance Officer in the Zonal Office shall submit the report on breaches / non-compliances immediately to the Chief Compliance Officer at Head Office Compliance Officer shall send a monthly Compliance Certificate to HO/Compliance Department in the format which will be prescribed for this purpose Compliance Officer shall submit the report on status / extent of compliance to HO/Compliance Department at quarterly intervals in the prescribed format. Branches At branches, the Assistant Branch Manager / Officer second in command will perform the role of Compliance Officer. However, in single man branches, the BM/Officer-in-charge of the branch will perform the role of the Compliance Officer The Compliance Officer in each branch shall submit the report on breaches / non-compliances immediately to the Zonal Manager Compliance Officer in each branch shall submit a monthly Compliance Certificate to Zonal Office in the format, which will be prescribed for the purpose Compliance Officer in each branch shall submit the report on status / extent of compliance to the Zonal Office at quarterly intervals in the format which shall be designed by the HO/ Compliance department to enable Zonal Office to submit consolidated report to Head Office. 5.5 Foreign Branches In respect of Foreign Branches in Singapore, Colombo and Jaffna, the respective Chief Executive Officer will designate the officer second in command to perform the role of Compliance Officer. The Compliance Officer will ensure that all regulatory guidelines of the host country and home country are complied with. The branch shall maintain a comprehensive data of rules and regulations issued by their Host country and Home country and will prepare a Compliance Manual for the guidance of staff working in the branches. They shall send a monthly Compliance Certificate to HO/International Division. Besides they shall submit a quarterly report on the status of compliance to the HO/Chief Compliance Officer and HO/International Division in a format to be prescribed for the purpose. 5.6 Regional Rural Banks and Subsidiaries In respect of Subsidiaries and Regional Rural Banks, the Chairman / President of these entities will designate the officer second in command to perform the role of Compliance Officers for the respective entities. The Compliance Officers shall maintain a comprehensive data on rules and regulations pertaining to their operations and prepare Compliance Manual for the guidance of their staff members. They will ensure that all regulations are complied with and will send a quarterly report on the status of compliance to the Chief Compliance Officer at Head Office as well as the respective functional department at Head Office attending to Subsidiaries / RRB s. Besides they shall send an Annual Review of Compliance Risk A-6

7 Assessment identifying main compliance risks facing them and steps taken to manage them to HO/Compliance Department under copy to the respective Functional Department. 6. Compliance Process and Procedure 6.1 Bank shall ensure independence of the Chief Compliance Officer and the other staff in the Head Office, Compliance Department to avoid conflict of interest and the compliance staff should primarily focus on the compliance functions. However, in Branches / Zonal Offices / Functional Departments, compliance staff may perform some other duties other than Audit / Inspection duty while ensuring that there is no conflict of interest. 6.2 The compliance functionary should be looked at as a friend, philosopher and guide by the business units. There should be close coordination and partnership between compliance and Business operations functions. To achieve this purpose, the Chief Compliance Officer will be a member of the various interdepartmental committees in the bank. Chief Compliance Officer shall be a special invitee to all meetings of the Board, Audit Committee of the Board and other Board Level Committees. 6.3 Chief Compliance Officer shall have access to all information he requires and have the right on his own initiative to communicate with any staff member of the Bank and obtain access to any records or files necessary to carry out his responsibilities. 6.4 The Chief Compliance Officer shall be empowered to conduct compliance review investigations whenever required and to request assistance from the specialists within the Bank. The authority to use external experts for the purpose of investigation shall be left to the discretion of the Chief Compliance Officer with the permission of CMD. 6.5 The Chief Compliance Officer shall be free to report to ED / CMD on any irregularities or possible breaches disclosed by its investigations without fear of disfavour from management or other staff members. The compliance function shall also have the right of direct access to the Audit Committee of the Board (ACB). 6.6 The Chief Compliance Officer shall be a participant in the Quarterly Discussions held with RBI. In case no quarterly meeting is held, he shall meet the Chief General Manager, DBS, in charge of the bank at Central Office of RBI once in every quarter of the year to discuss compliance issues. 6.7 All regulatory and statutory guidelines, circulars / letters received from RBI and Government of India at the CMD s Secretariat will be forwarded to the concerned functional department under copy to HO/Compliance Department to enable HO/Compliance Department to follow up with the respective functional department as to its compliance. 6.8 All functional departments at Head Office will ensure that appropriate instructions / circulars based on the guidelines of RBI/GOI as the case may be, pertaining to their functions are promptly issued to the field level functionaries for compliance. Copies of such circulars should be sent to HO/Compliance Department for vetting with a view to ensure compliance with the regulatory guidelines. A-7

8 6.9 CO/Compliance Department shall follow up on a weekly basis compliance of all guidelines / Circulars / letters from RBI and GOI by the functional departments and submit a weekly status report on action taken on the guidelines / letters / circulars to the ED/CMD. Further a monthly note on Status with regard to Compliance of various directions of Reserve Bank of India / Government of India is placed to ACB/Board CO/Compliance Department shall monitor timely submission of regulatory returns by the controlling offices through a system of monthly / quarterly Return calendar which will indicate the returns / reports to be submitted by each branch / controlling office / functional department along with the due date of submission CO/Compliance Department shall serve as reference point for the Bank s staff for operational departments for seeking clarifications / interpretation of various regulatory and statutory guidelines With a view to create awareness and educate staff on the Compliance Function, the training programmes conducted by IMAGE / Staff Training Centres should include suitable sessions on compliance and compliance risk management Staff Accountability shall be examined for all compliance failures. Bank shall endeavour to design a suitable system to give due weightage to the record of compliance during performance appraisal of the staff CO Compliance Department shall at frequent intervals interact with Legal Department, Operational Risk Department and Audit and Inspection Department to take stock of the latest developments. 7. Compliance Risk Management 7.1 To start with, HO/Compliance Department in coordination with Risk Management and Audit Department will identify and document the compliance risk associated with the Bank s business activities / products and formulate procedure for measuring the compliance risk and compliance testing. 7.2 The compliance risks in all new products and processes should be thoroughly analysed and appropriate risk mitigants by way of necessary checks and balances should be put in place before launching. The Chief Compliance Officer should be a member of the new product committee to ensure that the new products / processes have clearance from all perspectives including compliance. All new products shall be subjected to intensive monitoring for the first six months of introduction by the relevant functional department to ensure that the indicative parameters of compliance risk are adequately monitored and reported to HO/Compliance Department. 7.3 The Compliance Department in coordination with Operational Risk Support Group shall categorize the compliance issues as High, Medium, and Low risks and subject such issues to the Frequency and Severity tests. This would enable the Bank to focus on the compliance issues that demand appropriate attention to mitigate the risks. A-8

9 7.4 Inspection / Audit findings should serve as a feedback mechanism for the Compliance Department for assessing the areas of compliance breaches / failures. For this purpose the HO/Audit Department should include compliance aspect as a part of the inspection reports for the inspectors / concurrent auditors to verify the level of compliance. The HO/Audit Department should keep the HO/Compliance Department informed of audit findings related to compliance. 7.5 CO/Accounts Department should include compliance aspects as a part of the auditor s report for the Statutory Auditors to verify the level of compliance at Zonal Office and Head Office functional Departments and the audit findings related to compliance should be kept informed to the HO/Compliance Department CO/Compliance Department shall periodically circulate the instances of compliance failures among staff along with preventive instructions. 7.7 CO/Compliance Department shall carry out an annual compliance risk assessment in order to identify and assess major compliance risks faced by them and prepare a plan to manage the risks. The Annual Review shall broadly cover the following aspects covering all functional areas of the Bank s activities. All Functional Departments shall provide inputs in preparing this Annual Review: Compliance failures, if any during the preceding year and consequential losses and regulatory action as also steps taken to avoid recurrence of the same. List of all major regulatory guidelines issued during the preceding year and steps taken by the bank to ensure compliance. Independence of compliance function. Scope of compliance procedures and processes. System of internal control to minimize compliance risk. Compliance with fair practices codes and adherence to standards set by self-regulatory bodies and accounting standards. Progress in rectification of significant deficiencies pointed out in the internal audit, statutory audit and RBI inspection reports and position of implementation of recommendations made therein. Strategy for the next year including restructuring of compliance department, if necessary, posting/transfer/training of staff. The report of the Annual Review shall be placed before the Board. 8. Reporting Structure Reporting Level Branches Reporting To Zonal Office Monthly Compliance Certificate Quarterly Compliance Report Annual -- A-9

10 Reporting Level Reporting To Monthly Quarterly Annual Zonal Offices Foreign Branches RRBs/ Subsidiaries HO/Functional Departments HO/Compliance HO/Compliance HO/Compliance HO/Compliance under copy to HO/International Division HO/Compliance under copy to HO/Functional Departments HO/Compliance ACB / Board ED/CMD Compliance Certificate Compliance Certificate -- Compliance Certificate Status report on compliance of various directions of RBI / GOI Weekly Compliance status of RBI / GOI letters / directions Compliance Report Compliance Report Compliance Report Compliance Report Compliance Report Annual Review of Compliance Risk Assessment Annual Review of Compliance Risk Assessment Annual Review of Compliance Risk Assessment Besides the above, the above functionaries have to report major breaches / non-compliances if any immediately to HO/Compliance Department under copy to respective Functional Department so that corrective steps are taken promptly. 8.2 The Formats for the above reports will be designed by HO/ Compliance Department in consultation with various Functional Departments and advised to the Zones / Branches. 9. Annual Review by Internal Audit 9.1 The activities of the compliance function should be subject to Annual Review by the Internal Audit. Compliance Risk shall be included in the risk assessment methodology of the internal audit function and the audit programme shall cover the adequacy and effectiveness of the bank s compliance function including testing of controls commensurate with the perceived level of risk. 9.2 The report of the Annual Review shall be placed before the Board. 10. Cross Border Issues 10.1 As regards our branches in Singapore, Colombo and Jaffna, it shall be ensured that they comply with applicable laws and regulations in the respective jurisdictions and that the organization and structure of the compliance function and its responsibilities are consistent with local legal and regulatory requirements. It is the responsibility of the designated Compliance Officers of the respective branches to ensure that individuals with the appropriate local knowledge and expertise carry out compliance A-10

11 responsibilities specific to each jurisdiction. HO/International Division will oversee these functions in coordination with the Foreign Branches and report compliance to HO/Compliance Department. 11. Disclosure 11.1 Non-compliance with any regulatory guidelines and administrative actions initiated against the Bank along with corrective steps taken to avoid recurrence of the lapses should be disclosed in the annual report of the Bank Discomfort conveyed to the Bank on any issue by any regulator other than RBI, shall be brought to the notice of RBI. 12. Modifications and Review The Policy shall be reviewed once in a year and modified, if necessary, to suit the needs of the Bank and to comply with Revised Guidelines issued by RBI from time to time A-11

12 Annexure 1.8 Branch Level Quarterly Compliance Report (as on ) Sl. No A 01.b 01.c 01.d 01.e 01.f 01.g 01.h Deposits Whether branch is complying with the guidelines of RBI as conveyed by various Head Office Circulars with regard to Adherence to Know your Customer / Anti Money Laundering /Combating of Financing terrorism/ Obligation of Banks under PMLA,2002 guidelines at the time of opening of new accounts.(h) Know Your Customer: Branch has to follow the general guidelines for opening new accounts as per the Customer Acceptance policy (CAP) and Customer Identification Procedure (CIP) vide HO/O&M Circular No. Genl.03 Dated and also follows the guidelines in obtaining additional documents as stipulated before opening of accounts in the name of proprietary concern as contained in HO/Inspection Department Cir No 75 dated Whether the same is complied with?(m) Branch has to prepare a profile for each new customer based on Risk categorisation as per the format given in Annexure 2 to the above cited circular. Whether the same is complied with?(m) Whether branch is scanning UN Caution List published in CBS Help Desk with the name of the new customer while opening the accounts?(m) Whether the Branch has completed Risk Categorisation of all existing accounts and also assigns the risk rating while opening new accounts as per Banks KYC Policy contained in Appendix I of O & M Cir. GENL.03 Dated and HO/ Inspection Department Cir DEP.32 dated and O&M Genl. 051/ dated (M) Whether the threshold limit is fixed for all the existing accounts and also for the new accounts opened (based on the risk perception) for monitoring vide HO/O & M Circular Genl.26/ dated ?(M) Review of Risk categorization is to be carried out once in 6 months and customer identification data is to be updated once in five years in case of Low Risk Customers and once in two years in case of medium and high risk customers (HO / O&M Cir. DEP.45 dated ). Whether the same is complied with?(m) Anti Money Laundering: Whether the branches are following the guidelines under Prevention of Money Laundering Act, Obligation of Banks as given in HO/AML Cir. Genl. 18 dated ?(H) A-12

13 Sl. No. 01.i 01.j 01.k 01.l 01.m 01.n 01.o 01.p 01.q 01.r 01.s Branches have to verify the Cash Transaction Report(CTR) generated by CDC and a monthly compliance Certificate has to be submitted to Zonal Office. Whether the same is complied with?(m) Branches should submit Suspicious Transaction Report (STR) immediately to Zonal Office in case of transactions found of suspicious nature, whether Cash or non-cash or a series of transactions integrally connected. Whether the same is followed?(m) Branches have to file STR in case of aborted transactions after making enquiry. Whether the same is complied with?(m) Whether the branch is filing the Counterfeit Currency report (CCR) immediately as and when counterfeit currency is detected or defrauding the bank by forged high value securities, etc. is detected?(m) Branch should ensure correct Classification of Staff a/c, Senior Citizens a/cs and NRI accounts while opening the accounts so that correct interest is applied. Whether branch is complying with the same?(h) Scanning of Signatures: Branch should ensure scanning the signatures covering all Customer Identification File (CIF) / account holders and link them to the respective accounts in the system on the day of the opening of account without fail and submit daily certificate to Zonal Office through IP message vide Cir No Admin 95/ dated of HO, Inspection Department.Whether the same is complied with?(m) Branch should ensure that correct rate of Interest and margin are applied to loan deposits as per HO guidelines. Whether the same is complied with?(l) Branch should explain the advantages of nomination and getting the nomination forms from the depositors at the time of opening accounts. Whether the branch is complying with the same?(l) As per RBI cir /245 dated , branches should insist on atleast one of the officially valid documents as provided in PMLA rules or utility bills for KYC purposes apart from the certificate from employer for opening bank account of salaried employees of corporates and other entities. Whether the same is complied with? (M) Payment against withdrawal slips: Branches should follow the guidelines on payment against withdrawal slips by SB account holders as stipulated in HO, Inspection Department Cir No 05/ dated and Dep.62/ dated With effect from vide HO: O&M Division Cir No 21/ dated Branches should use the redesigned withdrawal slips only and thereafter the numbered withdrawal slips stocks available with the branches should be destroyed as per guidelines. Whether the same is complied with?(m) Credit Cards :- Whether branch has adhered to all KYC norms while issuing credit cards?(h) A-13

14 Sl. No. 02.a 02.b 02.c 02.d 02.e 03.a As per Para 2.27 (n) of RBI Master Circular on Interest Rates, Savings Bank a/cs should not be opened in the name of Govt. Departments depending on budgetary allocation. However as per para 2.27 (n) (ii) organisations listed in Annexure 3 of the RBI Master Circular are exempted from this prohibition. Also refer Para Nos. 2.4 and 3.1 in Chapter V of the manual of Instructions Deposits. Whether branch is following the same?(m) NRO Account :- Whether branch is following the Operational guidelines of RBI Master Circular on Non- Resident Ordinary (NRO) a/c dated , while handling transactions in NRO accounts?(m) Branch has to follow the guidelines as contained in Chapter 4 of the manual of Instructions on Deposits with regard to maintaining and operations of inoperative and scarcely operative accounts and the guidelines given in the Cir DEP-33/ dated on Inoperative accounts. Whether the same is complied with? (L) An annual review of accounts in which there are no operations for more than one year is to be undertaken by the branches as per HO: O&M Cir Dep.06/ dated Whether the same is complied with? (L) Branch should ensure that Antivirus is installed in all the nodes and the server and the same is updated. Whether the same is complied? (M) Customer Service :-Code of Bank`s commitment to customers - Reporting of breaches Whether the branch is complying with bank`s commitment to customers since failure to comply with or fulfil any commitments or any obligations made to the customers or to BCSBI, in full or in part thereof shall constitute a Breach? Whether the branch reports any breach made in the Code of Commitment to customers immediately to their Zonal Manager / Code Compliance Officer? (Every code Compliance Officer (in our Bank, Zonal Manager) shall maintain a register to keep a record of all such breaches made by the branches in their jurisdiction. Code Compliance Officer should report the breach made in the commitment made to customers within 48 hours and the remedial action taken if any, with their comments to the Principal Code Compliance Officer at Head Office. Whether branch is complying with the above?(m) A-14

15 Sl. No. 03.b Whether the branch is following the guidelines on Customer service as enumerated in Cir. Dep 34/ dated on Master Circular on Customer service and observance of the guidelines given by HO: CSC vide their Cir No GENL:49/ dated on `Incognito and other visits to Branches of the Commercial Banks conducted by Reserve Bank of India to assess the level of customer service` and circular on compliance of various guidelines based on Govt./ RBI / BCSBI directions Avoiding Customer Complaints vide Cir No.34/ dated by HO:CSC? (M) 03.c 03.d Policy on General management of the Branch: Whether Branch has taken steps to implement the Policy for general Management of the branches vide Cir Dep.37 / dated on Policy for general Management of the branches?(l) Branch Managers are advised to ensure effective implementation of Customer Centric Policies of the Bank viz. ƒn Cheque Collection Policy,Compensation Policy,Complaint / Grievance Redressal Policy and Policy on collection of dues and security Repossession and should be implemented in letter and spirit including the functioning of Joint Customer Service Committee Meetings at Branch level vide HO:CSC Cir 14/ dated by HO:CSC. Whether the branch ensures strict compliance of the same to avoid any adverse comments from BCSBI during their incognito visits? (M) 04.a 04.b 04.c 04.d 05 Monthly Joint customer Service Committee (MJCSC):- Whether the branch has adhered to the following guidelines (04.a to 04.c)? Monthly Joint Customer Service committee should be formed at each branch.(l) This committee (MJCSC) should include customers including senior citizen preferably from Depositors, MSME, woman representative and pensioner (in branches where there are pension a/cs). (L) The committee(jcsc) should meet on 15 th every month(next working day) in case of holiday) without fail in a month to study complaints / suggestions, cases of delay / difficulties faced by customers, etc. and the minutes of the meeting should be sent to Zonal Office before 20th of every month.(l) For Metro Branches: Whether the branch has formed the `Marketing Committee` (in the metro branches only) as per HO/Marketing Cir NO. Admin 67 Dated ?(L) Display of Comprehensive Notice Board: Whether the branch has displayed in the Banking Hall the Compehensive Notice Board listing out various products and services offered by the Bank, which has been supplied by the HO, Customer Service cell, vide their letter dated ?(L) A-15

16 Sl. No. 06.a Returns :- Whether branch submits the following returns on or before the due date? i. E-TDS Return form 24Q/26Q/27Q (qrly) to Tax Information Network Facilitation Centre (TIN-FC). ii. Compliance of filing of Quarterly E-TDS Return to Zonal Office. iii. Statement of Recoveries made in Bank of Thanjavur (BOT) - NRR Accounts (qrly) to Zonal office. iv. Tax Audit Reports - BS 11 & 11 A Returns and rectification of TDS deficiencies reported in TAF IX A & IXB of BS 11 & 11 A (annual) to Zonal Office.(H) 06.b 07.a 07.b 07.c 07.d 07.e 07.f 08.a Whether branch has complied with the guidelines contained in the Circular No Admin 25/ dated on Tax Deducted at Source (TDS) adhering strict compliance to the relevant TDS provisions under the income tax Act,1961? (H) Cash Management :- Is the branch equipped with Ultra violet lamp for detecting counterfeit notes?(h) Whether the Counterfeit banknote detected is branded with a stamp `counterfeit Banknote Impounded` in a uniform size (5 cm x 5cm) as per Para 2 of the RBI Master Circular on Detection and Impounding of counterfeit Bank notes?(h) Whether the counterfeit bank note detected in the cash received is being forwarded to local Police for investigation and filing of FIR?(H) Whether a copy of the FIR is sent to ZO for onward submission to the Forged (Counterfeit) Bank note Vigilance Cell at Head Office? (H) Forged Notes Reporting: Branches should report on a monthly basis the figures of forged notes detected by them to RO/RBI in their jurisdiction. (L) Branch shall insist on quoting of PAN by customers/non-customers in respect of Cash Deposits aggregating Rs.50000/- or more (Refer HO:BOD Cir. No. Dep.38 dated on Compulsory quoting of PAN by customers for specified Banking Transactions as required under I.T. Act 1961) and verify the correctness of the PAN quoted in the documents or to obtain a declaration in Form-60 or Form-61. Whether the same is complied with?(l) Whether the branch is keeping readily available the RBI / HO guidelines on the various designs and security features of banknotes to distinguish forged note from the genuine one? (Available in the Help Desk Intranet Home -> Customer Centric Services of the Bank -> INFORMATION / AWARENESS)(L) A-16

17 Sl. No. 08.b a Whether the Branch is stocking their ATMs with good quality genuine banknotes only, as disbursement of counterfeit banknotes through the ATMs would be treated as an attempt to circulate counterfeit banknotes by the bank?(m) Exchange of Soiled / Cut & Mutilated Notes: Whether the branch is strictly following the RBI`s clean note policy and issue only good and reissuable notes to the general public?(l) In order to facilitate quicker exchange facilities, whether the branch is freely exchanging and accepting the following types of soiled and cut notes over the branch counters on all working days? Whether the branch after adjudicating mutilated notes, affix Pay / Paid / Reject stamp with name of the bank and branch duly signed by Branch Manager on the currency note to avoid further circulation?(l) Branches with ATM: (Branches having no ATM please report Not applicable to this compliance requirement) Whether the following information is displayed prominently at the ATM locations for lodging ATM related Complaints`? a. Display the procedures and contact information, and also made available at all ATM sites, the uniform template circulated by IBA for lodging of complaints relating to ATM Transactions as per HO/Zone instructions; b. Information that complaints should be lodged at the branches where customers maintain account to which ATM card is linked; c. Telephone numbers of help desk/contact persons of the ATM owning bank to lodge complaint / seek assistance.(m) 12.b 12.c Whether the availability of on-line complaint registration facility for speedy settlement of failed ATM withdrawal transactions has been displayed in the notice board for the information of the staff and customers (Refer cir GENL:79/ ed of HO:O&M)(L) Whether the branches are complying with the guidelines given in HO:O & M cir Dep 08/ date on Internet Banking operations and HO O& M Cir No 06 / dated on Mobile Banking?(M) A-17

18 Sl. No. 13 Collection of Taxes i. The authorized branches for collection of Direct taxes should observe the guidelines given in the Master Circular on collection of Direct taxes- OLTAS by RBI dated 01/07/2011 ; ii. The authorized Branches should transfer the taxes collected to the Focal branch on the same day ; iii. The authorized Branches should give a running serial number (extending through a financial year i.e.1st April to 31st March) in all the challans (both paid by cash & cheque) and in the Daily Main scroll Branches authorised to collect Central Excise and Service Tax through EASIEST should ensure that the structurally valid assessee code is verified at the time of accepting the challans.(m) Whether the Nodal/Focal branches transfer the collections received from branches to Nagpur Link cell branch, Nagpur within the permissible period of remittance (i.e.t+3 or T+5 + put through day or T+1 in case of e- payments) for remittance to RBI?(H) Pension payments: Whether the branch is following all operational guidelines with regard to payment of pension as per RBI Master Circular on Disbursement of Pension by Agency Banks?(L) Whether the branch adheres to the following guidelines? i. Quarterly compliance certificate to be submitted by Link branch to Zonal Office for pension reimbursements and claiming of Turnover commission. ii. Compliance certificate to be submitted by branches to Zonal Office for receipt of Life Certificate in November every year from all pensioners in the format prescribed; iii. As directed by the standing committee on Customer service, branches are permitted to obtain Life certificates (in duplicate) submitted by the pensioners of other branches also (Refer HO:CGT cir No 43/ dated ). iv. Quarterly statement, furnishing age wise pension pending position and other details of pension payment to HO/ CGT department within the next fortnight by the branches/zo.(h) 18 Claiming of Agency Commission for handling Government Transactions: Whether Nodal / Link branches are submitting the claims for agency commission (claims duly audited and certified by the External Auditors) for handling government transactions in time to avoid leakage of income? (M) A-18

19 Sl. No a 20.b 20.c 21 Wire Transfers Whether Branch is obtaining originator information while handling wire transfers and complying with the guidelines in RBI circular BC.No.77/ / dated While handling electronic payments like RTGS, NEFT, NECS & ECS branch should follow the guidelines enumerated in HO:BOD cir No Genl.68/ dated Whether the same is complied with?(l) E-governance With effect from 1st September 2011, except for petty cash, deal with disbursal / payments only through direct credit to accounts. This will include payments to the staff, vendors, suppliers and disbursement of loans and payments towards installments and investments (Refer HO:CGT circular CRA.87/ dated ).Whether the same is complied with? (L) RBI vide circular DBOD.BP.BC.No.114/C.469(81) - 91 dated April 19, 1991 in terms of which demand drafts, mail transfers, telegraphic transfers and travelers cheques for Rs.50,000 and above should be issued by banks only by debit to the customers account or against cheques or other instruments tendered by the purchaser and not against cash payment. These instructions were extended to retail sale of gold/silver/platinum (vide RBI circular DBOD.No.IBS.1816/ /98-99 dated February 4, 1999).CO:BOD vide circular No.HO:CRA:73/ dated on Misuse of Banking Channels - Issue and Payment of Demand Drafts for Rs.50,000/- and above reiterated the above RBI guidelines and any deviation/non compliance of the guidelines will be viewed seriously. Whether the same is complied with? (M) To make large value payments of Rs.1 Crore and above it is mandatory to be routed through electronic payment mechanism w.e.f for the following types of transactions. a. All payment transactions of Rs. 1 Crore and above between the RBI regulated entities such as banks, primary dealers and NBFCs. b. All payments of Rs.1 Crore and above in RBI regulated markets such as money market, Government securities market and foreign exchange market. Whether the same is followed?(m) 22 Safe Deposit Locker Facility Whether the branch is following the operational guidelines of RBI in their Circular DBOD.No.Leg.BC 78/ / dated with regard to Safe Deposit Locker / Safe custody Article Facility and Access to Safe Deposit Locker / Return of SC A-19

20 Sl. No. 23 Special Deposit Scheme 1975 :- Under the Special Deposit scheme the following are to be complied :- i. A quarterly statement to be submitted to RBI informing the details of operative accounts held with the Bank. ii. Interest is to be paid annually, every year on 1st January on the balances held in the account during the previous calendar year. iii. Whenever payments are made to any depositor, the same has to be claimed from RBI. iv. Turnover commission for payments to be claimed from RBI. Whether the Branch has complied with the above four items and sent periodical data to Zonal and Head Office?(L) Annual Information Return under section 285 BA of the Income Tax Act: Vide HO, Banking Operations Department Cir. Dep.15/ dated Branches have to update the records relating to data pertaining to Savings Bank accounts where aggregate credit by cash deposit during the financial year is Rs.10 lakhs and above, by logging into the web page in the CBS Help Desk. Reconciliation Whether branch adheres to the following RBI time frame norms in respect of reconciliation of inter-branch entries? A) High value entries of Rs.5 lakh & above to be reconciled within 2 months. B) Remittance entries (DD/MT/TT) to be reconciled within one month. C) All other entries to be reconciled within six months.(m) Loans & Advances :-Companies Act 1956 : As per Sec.77A (1) of the Companies Act, 1956 banks should not provide loans to companies for buy- back of shares/securities. Whether branch is adhering to this?(h) 27.a 27.b 27.c Loans to Directors Unless sanctioned by the Board of Directors / Management Committee, Branches should not grant loans and advances aggregating Rs.25 lakhs and above to directors of other banks or any firm in which any of the directors of other banks holds substantial interest.(m) Branches should not grant loans and advances aggregating Rs.25lakhs and above to any relatives of their own Chairman/Managing Director or other Directors and any relatives of the CMD/ Directors of other banks.(m) Advances of less than Rs.25 lakhs sanctioned to relatives of CMD / Directors or any relatives of CMD / Directors of other banks to be reported to Board. Whether Branch adheres to the above guidelines (27.a to 27.c)?(M) A-20

21 Sl. No a 30.b 30.c 30.d 30.e 30.f 30.g 30.h Banks should not extend finance for setting up of new units producing / consuming Ozone Depleting Substances (ODS). Whether branch is complying with the same?(l) Whether the branch is complying with the stipulations laid down in Para of RBI`s Master Circular on Loans & advances - Statutory and other restrictions while granting advances against Sensitive Commodities under Selective Credit Control (SCC)?(M) Branches should not sanction loans / finance the following (30.a to 30.g) as per RBI guidelines Loans against certificate of deposits. Finance for construction of buildings meant purely for Govt./Semi-Govt. offices including Municipal/ Panchayat offices.(m) Finance for the projects undertaken by Public Sector Entities, which are not corporate bodies.(m) Loans against partly paid shares.(h) Loans to partnership / proprietorship concerns against the primary security of shares and debentures (vide para 3.1).(M) Advances against FDRs / Term Deposits of other banks (vide Para 3.3 of RBI circular)(m) Whether the guidelines contained in Chapter 10 of the manual of Instructions on Conventional Advances are strictly adhered to while advancing against bank`s own FCNR (B) Accounts Branches should not grant / renew loans in excess of Rs.100lakh against FCNR (B) deposits w.e.f vide RBI Cir.RBI/ /462 A. P. (DIR Series) Circular No.66 April 28, Whether it is complied with?(m) 31 Banks shall adhere to the following restrictions of RBI Master Circular on Loans & advances- Statutory and other restrictions :- i. Guidelines for financing of Infrastructure projects given in para to be followed ; ii. Para of RBI Master Circular gives guidelines for issue of Bank Guarantees in favour of Financial Institutions and for extending credit facilities against guarantees issued by other banks ; iii. Para of RBI Master Circular stipulates guidelines to be followed while purchasing / negotiating / discounting / rediscounting of genuine commercial / trade bills ; A-21

22 Sl. No. iv. Banks are prohibited from granting any advance against bullion/primary gold. Whether branch is following the above guidelines?(m) a 36.b 37.a 37.b 37.c 37.d 37.e 37.d Whether branch is ensuring that the borrowers have obtained prior permission from government / other statutory authorities while appraising loan proposals involving real estate? (H) Banks should not sanction loans for acquisition of / investing in Small Savings instruments including Kisan Vikas Patras. Whether the branch is adhering to the same?(l) Bank Guarantees Whether all data relating to outstanding guarantees issued by the branch have been entered in the `Exim Bill Module`?(M) Whether branch is complying with the guidelines on `Fair Lending Practices code` which is published in the Bank`s website? All information relating to charges/fees/processing should be disclosed in the loan application form (Refer HO:Credit Division Cir No. ADV.141 Dated )? Whether the same is complied with?(l) Whether branch is maintaining `Loan applications receipt/disposal register` and the same is updated regularly?(l) Banks to adhere to the following RBI guidelines (37.a to 37.e): Loans against security of shares should not exceed the limit of Rs.10 lakh per individual if the securities are held in physical form and Rs.20 lakh per individual if the securities are in demat form.(m) Advances to individuals for subscribing to IPOs should not exceed Rs.10 lakh.(m) Banks should not finance NBFCs for further lending to individuals for subscription to IPO.(M) Banks should not extend finance to corporates for investment in other companies` IPOs.(M) Banks should not accept shares and debentures as collateral security for a secured loan to a NBFC.(M) Margins on advances against shares/issue of guarantees :- Whether branch is applying a uniform margin of 50% and maintaining a minimum cash margin of 25% (within the margin of 50%) in respect of guarantees for capital market operations?(m) A-22