The Reserve Bank of India (RBI) on Friday laid down guidelines for appointment of chief compliance officer (CCO) in banks to ensure uniform approach with regard to compliance and risk management culture across the banking industry.
The CCO should be appointed for a minimum fixed period of three years in the rank of a general manager or not below two levels of the rank of CEO, the RBI said in a circular.
“Such an independent compliance function is required to be headed by a designated CCO selected through a suitable process with an appropriate ‘fit and proper’ evaluation/selection criteria to manage compliance risk effectively,” the RBI said.
Further, there shall not be any “dual hatting”, the RBI said. In other words, the CCO “shall not be given any responsibility which brings elements of conflict of interest, especially the role relating to business”.