What changed
RBI issued a circular on October 4, 2011, directing foreign banks to adapt the comprehensive review calendar prescribed for Indian public and private sector banks. Foreign banks must identify relevant review areas, formalize them in a board-approved policy, and review the policy annually.
What it means for you
Foreign banks in India now have flexibility to tailor review areas to their operations, but must ensure board or local management committee approval and annual policy updates. The CEO remains accountable for regulatory compliance and audit oversight, reinforcing governance standards.
What you must do
- Identify review areas relevant to your bank's India operations based on the earlier circular for Indian banks.
- Formalize these areas into a policy and get it approved by the Board or Local Management Committee.
- Review the policy annually, adding or deleting areas based on experience.
- Ensure reviews are presented to the Local Management Committee or CEO.
- Confirm CEO responsibility for regulatory compliance and audit oversight as per the May 2011 circular.
Who it affects
All foreign banks operating in India, Chief Executive Officers of foreign banks, Local Management Committees of foreign banks
Do foreign banks need to follow the same review calendar as Indian banks?
No, the full calendar for Indian banks is not directly applicable. Foreign banks must identify their own relevant review areas and get them approved by the board or local management committee.
How often should the review policy be updated?
The policy must be reviewed annually, with areas included or deleted based on the bank's experience.
Who is responsible for compliance oversight in foreign banks?
The Chief Executive Officer is responsible for effective oversight of regulatory and statutory compliance, as well as the audit process, for all India operations.